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Bend Bubble 2

• January 01, 2010
• 9:15

  BendBubble2 Now Redirects to BendBlogs.com

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  Thanks Bend & all others for a great 3 year run.
• December 19, 2009
• 15:03

  BB2 - Read Only

   » ‎ Bend Bubble 2

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  NEWSFLASH:
  
  Cascade Bancorp Announces Withdrawal Of Common Stock Offering
  6:00pm EST
  
  Cascade Bancorp announced that it has withdrawn its registration statement with respect to the public offering of $93 million of its common stock. The Company plans to continue to pursue capital raising opportunities once market conditions become more favorable. On October 29, 2009, the Company entered into securities purchase agreements with David F. Bolger (Mr. Bolger) and an affiliate of Lightyear Fund II, L.P. (Lightyear) for the purchase and sale of an aggregate of $65 million of shares of the Company's common stock. Mr. Bolger and Lightyear are permitted to terminate those securities purchase agreements on December 31, 2009. Lightyear and Mr. Bolger have indicated a willingness, under certain conditions, to amend these arrangements in order to provide the Company additional time to implement a capital raise.
  
  
  
  Hi All...
  
  Turned off comments, a little late. I'll take down the blog at years end. Also got an XML download of the blog, which clocked in at just over 80 megs. Not sure if that includes comments... seems like it should, at that size. Maybe try to upload it to a file storage site.
  
  Rest assured, Bend is still #1!
  
  Bend reports nation’s biggest home decline in Q3
  December 18, 2009, 1:37PM1. Bend reports nation’s biggest home decline in Q3:
  
  Yes, prices are still falling the Bend. They tumbled 5.6 percent between the second and third quarter, the biggest decline in the country. Las Vegas was right behind Bend, down 5 percent. That’s according to the IHS Global Insight “House Prices in America” report out today. Much of the nation is starting to emerge from the depths of the housing recession. But the Northwest, late to the housing bubble, continues to be the last to see the price declines wash through. IHS still considers much of the Northwest to be overvalued. Of the top 20 overvalued markets, nine are in Oregon or Washington. The Portland-Vancouver market ranks worst in Oregon at No. 7. Corvallis is No. 9, Salem is No. 10 and Bend is No. 19. IHS says home prices nationally halted a two-year slide in the third quarter, rising .2 percent from the second quarter. California led the way with a 2.1 percent increase. Nationwide, the U.S. housing market is down 10.7 percent from the 2007 peak. Despite the upbeat news, IHS also warned of potential troubles ahead given the still high unemployment rate and the temporary boost the market got from the federal tax credit.
• November 22, 2009
• 7:59

  Bend Bubble 2 -- The Final Curtain

   » ‎ Bend Bubble 2

  Tags:  Final Post   [edit]

  Welp partners, it's been a hell of a ride.
  
  A 3 year ride to be exact. As it started on Sunday December 17, 2006, so shall it end. This time for real.
  
  Why? Well, I suppose in part for the same reason the original & kick-ass Bend Bubble Man shut his down: You just get caught up in other things. It's hard to keep up sometimes.
  
  And I suppose I was much more interested in "Calling The Top", than cataloging the long, slow, agonizing demise. Face it, store closure after store closure, foreclosure after foreclosure, perp walk after perp walk, BK after BK, suicide after suicide... it can get monotonous & depressing.
  
  But I suppose mainly it's because, to paraphrase a retarded asshole:
  
  Mission Accomplished.
  
  Yeah, The Bubble proper is over. We're not in a bubble anymore. Haven't been for awhile. We're in the deflationary phase. Well into it. And unfortunately for a lot of folks, it's not even close to over.
  
  This thing will be an "L" shaped recovery, At Best. At Best.
  
  "But, Bend is still one of the most overvalued RE markets in the country!", you say.
  
  True. Especially true if by "overvalued" you mean "it has the farthest still to fall", because Bend is not even close to a "bottom".
  
  And I can't help but keep quoting the word "bottom", because I see a painful and very long-lasting decline as the horizontal part of that "L" bottom. The sharp downdraft may be over... now the teeth-pulling life-sucking slow bleed-out begins. That's what I mean by "bottom". This thing is far from being over.
  
  Just a quick review of where we've been:
  
  So, as stated, we were here in Dec 2006. Gloom-and-dooming pretty well. Raising more hackles than awareness. Most of the comments have progressed with almost textbook precision over the past 3 years in parallel with the 5 Stages of Grief:
  
  

  1. Denial
  2. Anger
  3. Bargaining
  4. Depression
  5. Acceptance

  Woo... we took it hard in the Denial & Anger phase. There were some upset Realtors & Builders that this blog even existed.
  
  Bargaining? "OK, fine... there is a slowdown, but we'll bounce back better than ever!" Costa, DuBois, and many other Kool-Aid addicts are still riding that horse.
  
  We've hit Depression & Acceptance. Perhaps another reason to shut'er down...
  
  I started this thing to raise awareness that something is severely wrong with the mindset of Bend. It went beyond the Bubble here, although it was almost certainly a root cause. Ironically, it was best stated by one of our best known RE cheerleaders, Mike Hollern:
  
  Developer Mike Hollern blames the Doctrine of Bend Exceptionalism – the peculiar notion that Bend is so special that it’s immune to outside economic forces. “We were overwhelmed by the amount of money pouring in,” Hollern told Costa. “We thought that we were different from the rest of the country. It turned out that we are not so much [different].”
  
  I talk about this pretty extensively in my Feb 29, 2009 post.
  
  The Doctrine of Bend Exceptionalism
  
  What a great term for something so widespread, so insidious, and so economically deadly to a place, that even it's main proponent could no longer deny it's lethality to his company, his town, his region, his World.
  
  The Doctrine of Bend Exceptionalism encapsulates So Much of what is wrong with this country. We have been convinced, All Of Us, that We Are Owed More. Always More. More. More. More. Never Less. No Matter What. No Matter The Cost. We are God's Chosen Flock. We have a Date With Destiny. We Are Rightful Heirs To A Kingdom. Nothing is to good for us.
  
  1 house? Pathetic. I have 2.
  
  2? I have 3, and I've never been to 1 of them.
  
  3? What a loser, I have 5, none are rented out, and I only make $22K/yr!
  
  And so it goes.
  
  Our problem is not so much economic, as it is pathological. I know people don't like to hear that, even on this blog, because it goes after everyone, it is not analytical and it's fatalistic in a way.
  
  But it's true. We've got an extreme case of Cultural Hedonism. We're a nation of Narcissists.
  
  We've learned that All Our Whims (not "Needs") Should Be Satisfied. No Matter What. Now.
  
  "What the f**k does this really have to do with the housing bubble?", you ask.
  
  Hmmmm... let's see.
  
  It's still going on in case you're interested. The above one-upping and keeping up with the Jonese, was the Consumer Side.
  
  But we're starting to find that the Producer Side was at least as Greedy, Corrupt and Criminal. Think it's just Tami Sawyer, or 1031 Assf**kers? Think again:
  
  13 indicted in Bend real estate case
  By Jeff Manning, The Oregonian
  
  In the largest fraud case so far to arise out of Oregon's real estate boom and bust, a federal grand jury on Friday indicted 13 people on a variety of bank fraud and conspiracy charges stemming from the 2008 collapse of a Bend real estate development company.
  
  The grand jury indicted Desert Sun Development founder Tyler Fitzsimons and several of his former employees as well as two mortgage brokers, former loan officers with West Coast Bank and Umpqua Bank, and others.
  
  Banks loaned about $41 million to Desert Sun or its employees through a series of falsified loan applications and ultimately lost $19 million on those loans, prosecutors allege.
  
  The Oregonian first broke the story of the problems at Desert Sun in May 2008. The grand jury charged Fitzsimons, a 31-year-old Prineville native, with multiple counts of bank fraud, conspiracy to commit bank fraud, money laundering and making false statements to banks. Also charged were three other former executives of the now defunct company, Jeremy Kendall, Shannon Egeland and Garret Towne. "The conduct alleged in these indictments is typical of what has caused so much havoc in the mortgage and financial sectors," said Kent Robinson, acting U.S.Attorney in Portland.
  
  Fitzsimons, Egeland and Towne declined comment. Kendall and the numerous other defendants could not be reached.
  
  Desert Sun, a developer of both residential and commercial real estate projects, embodied the land-rush mentality that arose during the economic boom.
  
  Desert Sun offered to build at cost new homes for its employees and certain friends and family. In return, the company said it wanted to split profits 50-50 with the owner should they choose to sell their homes.
  
  In central Oregon's red hot housing market, it seemed like a sure moneymaker. More than 30 people signed up. Financial institutions like Columbia River Bank, the now-defunct Community First Bank, West Coast Bank and U.S. Bancorp eagerly participated, lending $16 million to participants.
  
  Desert Sun clerks and construction workers making $20,000 a year soon found themselves on the hook for mortgages of up to $400,000. According to the indictment, Desert Sun executives helped falsify loan applications, forged employees' names and put thousands of dollars into the workers' individual bank accounts to make them seem more credit-worthy than they actually were.
  
  Desert Sun got the construction loan proceeds. But it never built many of the promised homes. Some participants found themselves owing hundreds of thousands of dollars with nothing but a vacant lot to show for it. In addition to the Desert Sun employees, the grand jury indicted Bend resident Jeffrey Sprague, 46, who was a loan officer with West Coast Bank. He and Barbara Hotchkiss, a loan processor who worked with him, were charged with bank fraud for allegedly helping prepare and submit false loan applications.
  
  Also charged were two Bend mortgage brokers, Shaun Little, 41, and Del Barber Jr., 44, for allegedly participating in the scheme.
  
  Barber has already been banned from the mortgage business by state regulators for unrelated violations. Prosecutors appear to be sending a strong signal with these indictments that they intend to crack down hard on even relatively minor transgressions.
  
  Among the indicted was Terri Ausbrooks of Bend, who was among the victims of the Desert Sun home loan program. She found herself more than $300,000 in debt for a house that Desert Sun never built.
  
  Yet, the grand jury charged Ausbrooks with bank fraud for overstating her income and not listing a debt she owed to Fitzsimons in her loan application.
  
  Inflated loan applications abounded during the real estate boom. The biggest, most respected banks in the industry began to accept "stated income" loans, sometimes called "liar loans" because they allowed the borrowers to list whatever earnings they saw fit.
  
  Apart from the home ownership program, prosecutors also leveled additional charges against Fitzsimons, Egeland and Kendall for allegedly defrauding a number of banks in a series of commercial construction loans.
  
  Prosecutors allege that Desert Sun repeatedly secured construction loan draws from a number of different banks based on phony construction progress reports. Without the falsified reports, the banks wouldn't have released the money.
  
  Robert Brink, 58, then a loan officer at Umpqua Bank, allegedly helped Fitzsimons pull off the scheme. The grand jury charged Brink with making false statements to the bank, alleging on five different occasions Brink filed bogus construction inspection reports with the bank.
  
  "The economic hit that a community like Bend takes in a case like this one is very real," said Arthur Balizan, special agent in charge of the FBI in Oregon, which helped investigate the case along with the IRS and the Oregon Division of Finance and Corporate Securities.
  
  "When a development company collapses under the pressure of fraud – as alleged in this case –we are left with millions of dollars in losses, empty lots and abandoned buildings. Everyone loses."
  
  And there is just so much more of this to come. Remember the local piece where an appraiser basically stated that he stopped getting hired because he would not produce fraudulent appraisals at the BEHEST OF LOCAL RE BROKERS?
  
  Yeah, when you HAVE TO commit fraud to survive in your business, you know that you & your industry are well & truly F**KED. RE in Bend is STILL 100% F**KED.
  
  But not Garden Variety F**ked.
  
  F**ked Long & Hard for the rest of our lives.
  
  And it is due to the people, mortgage & RE brokers, appraisers, The F**king Media, CACB, COBA, and every other cheerleading fraudster that made a buck from this disaster.
  
  Let me inject another Bully story that has just come up this morning:
  
  Homes for auction, buyer be prepared
  It’s been a busy year on the Deschutes County Courthouse steps, where foreclosure auctions are conducted. Few auctions end in a sale, but every once in a while, a fantastic deal comes along. Of course, you need to have the money on you.
  
  By Andrew Moore / The Bulletin
  
  

  Before the housing bubble, Paul Helikson, a Bend-based process server, would conduct foreclosure auctions on the Deschutes County Courthouse steps every Friday at 1 p.m. On a busy day, there might be five auctions.

  Now, Helikson conducts foreclosure auctions every day at 10 a.m., 11 a.m. and 1 p.m., with an average of 20 homes on the block each day.

  With more than 3,100 notices of default — a filing that initiates foreclosure proceedings — recorded in Deschutes County so far this year, Helikson is busy. By comparison, there were 221 notices of default filed in 2006.

  But where there’s crisis, there’s opportunity. Usually gathered on the courthouse steps along with Helikson are a small band of investors ready to scoop up properties for cents on the dollar.

  They have to pay cash on the spot if they win. They also have to do their research, as a home sold at auction is sold as is, meaning broken pipes, missing appliances and even tax liens are their headaches if they submit the winning bid.

  “Caveat emptor fully applies to all the auctions we do, and I think that’s the biggest thing,” Helikson said.

  Helikson estimates only 3 percent of the auctions he conducts end with a sale, with the remainder either postponed or concluded without a buyer, meaning the property is turned over to the borrower’s lender.

  Occasionally, however, a gem — a home in a good neighborhood or priced far below market value — goes under the gavel.

  “There are (incredible deals), said Gene Norton, a Bend investor who’s been attending auctions for the last three months. “But you have to do your research ... it’s a pretty interesting scenario.”

  Foreclosure process

  Generally, a notice of default is filed against a borrower by the lender’s trustee after the borrower is 90 days delinquent on his or her loan, said Tami MacLeod, an attorney with Karnopp Petersen in Bend who specializes in foreclosures.

  The notice must be sent to the borrower via certified mail as well as physically served to the property. On occasions when the home is vacant, the notice is posted on the property after the third attempt. The notice also must run once a week for four weeks in a local general circulation newspaper.

  In addition to notifying the borrower that his or her loan is delinquent, the notice also lists a time, date and location for a sale of the property by auction if the loan is not brought current.

  By law, the trustee must wait 120 days from the date the borrower is notified to conduct the sale. Therefore, the sale is set roughly 150 days in advance of the filing date, in case there are delays in notifying the borrower, MacLeod said.

  During those 150 days, borrowers can attempt to remedy their default by bringing the loan current, either by catching up their payments or by working out a loan modification with their lender. A borrower also can sell the home to satisfy the default.

  In cases where the likely sale amount is less than the loan amount — which has become common in the last two years due to the steep depreciation of home values — the borrower also can work out what’s called a short sale with the lender, whereby the lender agrees to forgive the amount of the loan not satisfied by the sale.

  In years past, such forgiveness was treated as income by the Internal Revenue Service, but the rule was relaxed by Congress in 2007 and applies through 2012.

  If there is no remedy for the loan in default, the home or property goes to auction.

  Auction process

  Before the auction, the trustee, in consultation with the lender, sets a minimum bid, according to Helikson, who is hired by trustee companies to conduct their auctions. The amount is either posted a few days before the auction or, in some cases, is phoned in to Helikson minutes before the auction.

  Most trustee companies have Web sites where they list foreclosure auction properties and their minimum bids. A prominent site is www.usa-foreclosure.com.

  Generally, the minimum bid is the amount of the outstanding loan plus any interest, late fees, lien amounts or costs the trustee accrues arranging the auction. By law, banks can’t ask for more than that, MacLeod said.

  However, Ryan Strasshofer, a principal with Gorilla Capital, a Eugene-based company that buys homes at foreclosure auctions in Deschutes County and 14 other counties in Oregon, said more lenders are discounting their minimum bids to entice buyers.

  “(Banks) are essentially trying to recoup as much money as they can and are using trustee sales more than ever before to get rid of these properties,” Strasshofer said. “They are maxed out on inventory and would rather take $50,000 at auction than spend $20,000 to clean (a house) up and list it to make $60,000.”

  Strasshofer said his company, which also operates in Idaho and Arizona, has purchased homes at auction for as little as 30 cents on the dollar.

  “The fact is that with most notes out there, the note is worth more than the value of the property,” Strasshofer said.

  MacLeod confirmed that she’s noticed more banks lowering their minimum bid to less than what they’re owed on the mortgage.

  “I saw one where the (minimum) bid was $100,000 less than what was owed,” she said.

  Walter Molony, a spokesman with the National Association of Realtors, said the foreclosure auction market nationwide remains small, comprising only 1 percent of sales volume, he said.

  While foreclosure auction prices may sound appealing to some, MacLeod warns anyone interested in purchasing a home in a foreclosure auction to research the property as much as possible. This can be difficult considering it’s impossible to authorize an appraisal without the owner’s permission.

  “Bidders on the steps need to be careful about it (because) these are not your typical sales,” she said. “Odds are you have never set foot inside the house, have no idea what condition it’s going to be in ... and it’s not uncommon for people to strip their houses (before they leave), so it’s a buyer-beware situation.”

  Said Strasshofer, “We put a lot of time into research.”

  Reading the scripts

  Helikson said a common misconception among people new to the process is that bidding starts at zero, which is never the case.

  When the hour of the auction begins, Helikson begins reading the “scripts,” as he calls them, the legal documents that announce the sale, identify the property and spell out the terms, mainly that a successful bidder has to pay in cash and is purchasing the property with no guarantees.

  Helikson speeds through these, having nearly memorized them in the 20 years he has conducted foreclosure auctions.

  The “script” also calls for any interested bidders to pre-qualify for an auction. In other words, bidders must prove to Helikson they have the money on their person and can turn it over immediately after the sale is concluded. Only cash or cashier’s checks are accepted.

  “Most people know what the (minimum) bid will be and come with that plus a buck,” MacLeod said.

  But sometimes, knowing how much cash to bring can be a quandary for bidders if the minimum bid is not made known until minutes before the auction or if they suspect a bidding war might break out.

  In such cases, bidders usually bring a cashier’s check for what they guess will be the minimum bid amount as well as cashier’s checks in smaller increments that they can add on.

  Helikson doesn’t make change, so any amount submitted over the winning bid is returned when the title is transferred, which must occur within 10 days of the sale, MacLeod said.

  As Helikson works his way through his auction scripts, a familiar refrain is, “Going once, going twice, going three times, going back to beneficiary,” meaning the property has not sold and becomes the property of the lender.

  Another familiar refrain is the announcement of a postponement. Banks often postpone auctions because they are still sorting through a short-sale offer or some other contingency, MacLeod said.

  But banks can’t postpone an auction forever. If they have not conducted an auction within 180 days of the auction sale date listed on the default notice, they are required to rescind the notice and start the whole process over, MacLeod said.

  If a home isn’t sold at auction, the lender takes ownership.

  Tom Unger, a Portland-based spokesman with Wells Fargo Bank, said the bank tries to list a property after the auction “as soon as possible.” Unger said some homes are easier to list than others depending on what sort of cleanup needs to be performed, but the goal is to get houses listed with a local real estate brokerage quickly.

  Molony, with the National Association of Realtors, pegs the number of bank-owned properties currently sold nationwide at 20 percent of all properties.

  Sheree MacRitchie, a Bend Realtor who will assume the presidency of the Central Oregon Association of Realtors in 2010, said the number in Bend is roughly 35 percent.

  Foreclosure impact

  Helikson, whose company also serves notices of default to borrowers, estimates half of the notices he serves are on vacant homes, indicating to him they were either purchased by investors or homeowners who have walked away from their home.

  Of the remaining half, 25 percent are served to owners still in their homes and the other 25 percent on renters living in a home that is being foreclosed on.

  There have been lots of investors who have defaulted on homes, said Helikson. He can tell because he’ll recognize the same name on different properties. Some names he’s read 10 or 15 times, he said.

  He said he doesn’t feel sorry for them, but he does feel for the families that have lost their homes.

  On occasion, homeowners will come to their home’s auction to witness the event but generally do so quietly, Helikson said.

  “They’re wanting closure, or want to know how long they have to move out, but typically people aren’t too mad because the process has been drawn out so long,” Helikson said.

  The flip side, he notes, is all the homes that go through foreclosure re-enter the market at prices that are more affordable, which helps the community in the long run.

  “First-time homebuyers are doing very well in this market,” Helikson said.

  The median price of a single-family home in Bend rose in October to $220,000 on sales of 175 homes, the most in any month since August 2006, according to the Bratton Report, a monthly real estate sales analysis released by the Bend-based Bratton Appraisal Group.

  Median prices for single-family homes in Bend have twice dipped below $200,000 in the last six months. At the market’s peak in May 2007, the median price was $396,000.

  The collapse of the housing bubble also has helped Helikson’s company, Tri-County Legal Process Services. It has doubled in size the last two years, from approximately six employees to 12. Helikson estimates he conducts 75 percent of the county’s foreclosure auctions.

  Another company that conducts foreclosure auctions in Deschutes County is Central Oregon Legal Services.

  MacLeod’s firm, Karnopp Petersen, also conducts some foreclosure auctions for Bank of the Cascades.

  Strasshofer said Gorilla Capital is the state’s largest buyer of homes from foreclosure auctions. While the company is profit-driven — its goal is to resell properties within 30 days after purchasing them at auction with a markup of as little as 10 percent of the purchase price — the company helps communities by quickly converting foreclosures into occupied homes, he said.

  Gorilla, whose business model is dependent on volume, often resells its homes to buyers who have secured traditional financing, which includes many first-time homebuyers, Strasshofer said.

  “We’re getting these things cleaned up and back on the market,” he said.

  For investors like Norton, homes purchased at a foreclosure auction can be lucrative as rental properties. That’s because most of the rent is positive cash flow since there’s no underlying mortgage to service after buying the home with cash. Also, because of the discounted purchase price, the homes have a better chance to be sold at a profit as the market rebounds and home prices increase, Norton said.

  “You have opportunities for short-term gains and long-term gains,” he said. “You make a little bit of money while waiting to make larger sums of money later, and that might take eight to 10 years, so you have to be prepared, (but) I’m a very conservative investor. The best deals may still be down the road.”

  Nationally, more than 14 percent of homeowners were behind on their mortgage payments or in foreclosure in the third quarter, the Mortgage Bankers Association reported Thursday, indicating many more foreclosed homes could yet hit the market.

  In Deschutes County, the pace of notices of default filings appears to be slackening, though it’s not yet a trend. There were 310 notices of default filed in September, 261 in October and 180 through Nov. 19.

  With unemployment figures still high and affecting a broad group of homeowners beyond those who took out risky loans, Helikson looks to remain busy for a while.

  “The thing that sticks out the most is a year and a half ago, it was usually lower-end homes (at auction) and now it’s homes over the whole spectrum,” Helikson said. “There’s not a community that hasn’t been affected by this, from million-dollar homes to $100,000 homes to business complexes to apartment complexes. The whole spectrum is being foreclosed on.”

  The Doctrine of Bend Exceptionalism. Look what it's got us. 20 homes a day getting foreclosed. Don't buy the bulls**t that Bend isn't shrinking. It is. BIG TIME.
  
  Bend Exceptionalism: We're Always Right. Doing what we're doing CANNOT be wrong, because we are God's Chosen People. So this isn't STEALING or FRAUD or MONEY LAUNDERING. No. I'm Tami Sawyer (YOUR NAME HERE), so this is OK.
  
  Our Exceptionalism validates, buttresses, and finally supports our LIES & OUR CRIMES.
  
  Guaran-f**king-tee you that Tami Sawyer, Sun Development, Epic Air, and 1031 Butt-F**kers (and a hell of a lot I'm not including) ALL thought they were doing nothing wrong. Maybe that changed a little when the FBI came calling.
  
  Narcissism. Exceptionalism. Egoism. Hubris. Belief that we are better than anyone else, we deserve the best of everything, NOW, and no cost is too high to get it.
  
  That was how this bubble got started by both consumers (RE buyers) and producers (fee earning intermediaries). It is also the philiosophy fueling the Current Bubble... which I will try to talk about later.
  
  I tended to never broach this Narcissism subject, because it struck many as WRONG for this blog. Maybe they're right. It's a really amorphous term with no really strong direct link to the creation of the RE-Asset Bubble in this country.
  
  But it is my belief that it is the CORNERSTONE of the creation of the bubble. And it's CULTURAL. It's become PART OF THIS COUNTRY'S ETHOS.
  
  Which makes me think we have more Bubbles to face in the future.
  
  I wanted to divert next into something that I call The 1% Business Plan.
  
  Bend is The Home of The 1% Business Plan. What is it?
  
  Well, you know that if you are starting a business, you map out your idea, the finances, and all the niggly details about what you think will happen, right?
  
  And there are always the "unknowns". How much demand, the costs of items, the ups, the downs, various projections, and all that. Pretty standard.
  
  But most places plan for something like, say a 20-25% downturn as their "PESSIMISTIC" scenario. A real ball breaker.
  
  Conversely, they plan for similar sized (maybe slightly more... these are business people, they're supposed to be optimistic) upside, say 25-30%.
  
  This is Everywhere Else.
  
  Not Bend.
  
  No. In Bend the Pessimistic Scenario is PLUS 20% EVERY YEAR FOREVER. That's the DOWN SIDE.
  
  The upside starts at 40% a year, and typically goes up from there.
  
  Yes. In Bend, +20% is the new DOWN. Even when things are falling apart.
  
  Maybe this concept is best explained by... surprise... a Bully article!
  
  Over next 10 years, Central Oregon expected to see strong job growth
  Economists say it will be fastest rate in the state
  

  State economists estimate that 11,000 new jobs will spring up in Central Oregon by 2018, while the state as a whole will see an increase of about 163,000 total jobs.

  Job growth in Central Oregon’s three counties — Deschutes, Jefferson and Crook — is expected to rise the fastest in the state, increasing from 2008 staffing numbers by 14 percent, to 92,340 jobs. That’s compared with statewide growth estimated at about 9 percent.

  “Over the last 10 years, Central Oregon has grown tons faster than the state,” said Carolyn Eagan, Central Oregon’s regional economist, who helped compile the projections for the region. “There was nothing to me that would indicate that wouldn’t happen after the recession.”

  The region could use some of those jobs today. The three counties suffer from some of the state’s highest unemployment. In September, the latest data available on a county level, seasonably adjusted unemployment rates were 15.9 percent, 15.9 percent and 19.7 percent in Deschutes, Jefferson and Crook counties, respectively.

  The state, in its job growth projections, didn’t say when those jobs could be expected to start showing up — only how many are expected to be added, in total, over the years leading to 2018. But state economist Tom Potiowsky, in a speech last week in Bend, said he didn’t expect any job growth to occur until, at earliest, 2011 or 2012.

  According to Tuesday’s Oregon Employment Department estimates, the education and health services industry is projected to grow the most in the three counties: by more than 2,900 positions, or a 29 percent increase, to nearly 13,000 total jobs. Both the professional and business services industry, and the food and beverage industry should grow by about 18 percent.

  Construction will likely continue to lag behind other industries, growing at only 1 percent. Eagan said that construction statewide was at an unsustainable level before the recession, adding that it’s unclear whether the state will reach those levels again.

  The projections — used to track job openings, the size of industries and the fastest-growing industries — are released every two years. This most recent projection uses 2008 employment levels as a starting point.

  State economists make projections based on factors such as input from the industries and staffing patterns they observe, Eagan said. The projections track jobs in nearly a dozen general industries: everything from manufacturing to leisure and hospitality to government services.

  These forecasts can vary, depending on the stability of the economy, Eagan said. When economists made projections based on 2006 staffing levels, they estimated Central Oregon would have about 100,000 jobs in 2016, she said. After the 2008 job losses, the area is now expected to staff about 92,000 positions by 2018.

  Besides the creation of new jobs, the state also expects 21,112 positions to open up because people will either retire or move to a different line of work.

  Only one industry, information, is expected to decline by 2018. Most others, such as manufacturing, government, leisure and hospitality, and trade, transportation and utilities are expected to grow by between 9 and 14 percent.

  During 2008, 4,113 people who worked in construction filed for unemployment insurance, more than any other industry. More than 3,200 people from the manufacturing industry and 1,800 people from retail trade filed for benefits.

  U.S. Sen. Jeff Merkley, D-Ore., co-sponsored legislation Tuesday to reauthorize the Economic Development Administration, an agency that aims to promote economic development in communities whose unemployment rate for the past two years is at least 1 percent higher than the national average or whose per capita income is 80 percent or less than that of the national average, according to a news release from Merkley’s office. The Economic Development Administration has created an estimated 392,000 jobs nationwide since its last authorization, according to the release, and has funded 11 projects in Oregon, totaling $10.58 million, since 2007.

  Note that the SLOPE OF BEND GROWTH was NOT ALTERED ONE IOTA.

  No. Growth, my friend, is STILL HERE. Despite the fact that... there... is... no... growth.

  No, what we'll do is simply slide the Still Ridiculously Optimistic Growth Projections down just a bit on the Y-axis. So.... instead of 100K, we're down to 92K. But for the love of Christ, MAKE SURE WE STILL HAVE GROWTH!

  This is The Bend Way. Always Exceptional.

  This is why The Most Pessimistic Plans are for PLUS 20%. That's The Worst that could happen. The upside is UNBOUNDED really.

  Hence, The 1% Business Plan. Bend is The Home of Unbounded Business Failures, because a smaller & smaller number of entrepreneurs are actually even remotely close to the True Crux of Bend Growth... which is honing in on MINUS 20%.

  This brings me to another idea:

  Too Big To.... EXIST.

  We've heard a lot now about the astronomical costs of saving firms that are "Too Big Too Fail". These costs will ultimately bankrupt this country, but that's another blog...

  But I don't hear much about what seems to be the Inevitable Conclusion to this idea: Too Big To Exist.

  How do we "cure" Too Big To Fail? Well, it seems the only Sure Way is to not let it happen in the first place.

  But, doesn't that mean some sort of Quasi-Socialism? Some sort of "invisible" government hand moderating, or flat out quashing success, and possibly nurturing failure, if for no other reason than to serve as a dampener to a firm that may be endangering our "National Stability" because of it's size & importance?

  Have we actually reached the Limits of Capitalism?

  I find this to be a fairly facinating question. It is strating to seem like that "Cowboy Capitalism" (fairly unregulated) seems to breed "concentration" of wealth, assets, and opportunity.

  This flies in the face of the "democratization" of opportunity that it seemed the internet would make all but inevitable, only a few years back. I was utterly convinced of this in 2000.

  I thought The Big would get smaller. Much smaller. Competition would come out of the woodwork. Regulation would be like trying to herd a swarm of bees. The elephants would fall.
  

  Wrong.

  Bank deposit concentration has increased enormously over the past 2 decades.

  Increased Concentration in Banking: Megabanks and Their Implications for Deposit Insurance
  

  During the past two decades, the U.S. banking industry has experienced an unprecedented wave of consolidation, marked by a substantial decline in the number of insured depository institutions and the emergence of banking behemoths with assets totaling in the hundreds of billions of dollars. This unparalleled concentration of assets and deposits among a handful of megabanks has important implications for deposit insurance. Most importantly, the Federal Deposit Insurance Corporation (FDIC) now faces a situation in which the failure of even a single megabank could overwhelm the resources immediately available to the deposit insurance system and expose both the banking industry and the government (i.e., taxpayers) to huge potential liabilities. This article highlights the current structure of the banking industry, examines the threat that this structure poses to the deposit insurance funds, and suggests possible approaches for dealing with megabanks and the increasing concentration of insured deposits.
  

  And banking is just one industry in which this has happened.

  Virtually the entire chain of financial services has been joined into one huge inter-linked system in which all the participants either sink or swim.

  Is this Too Big To Exist? Or is it that the inexorable binding linkages of successful firms are flawed, and the entire system is bound to implode & destroy itself?

  I don't know honestly. It does seem inevitable that Like Everything Else, the FDIC will ultimately fail & have to be bailed out to save its industry. They will try to extort premiums from members, which will weaken their insureds balance sheets, which will increase failures, resulting in a vicous Drag-Me-To-Hell scenario of failure & bailout.

  I just know there is something Deliciously Ironic in the idea that all the Too Big To Fail firms will at some point be subjected to a Too Big To Exist philosophy that will shape up over the next coming years in our beloved government.

  This will alter the very idea of Capitalism in this Country. Many firms are too big to exist. Perhaps it's true of everything.

  I wanted to mention something briefly that just irks me....

  What's Been Destroyed In Bend By The Bubble

  A lot has changed since the inception of this blog in this town. Increasing prices seems to do funny things to people.

  Things that are "OK" at one price point, are torn down at another. Prosperity has a price. Especially if you are in the way of a Tear Down.

  Increasing prices for homes in Bend accomplished much of what Bend's Monied Gentry truly wanted to happen in the first place: Apartments, low-income housing, and vast swaths of trailer parks were either converted to high-priced condos, or bulldozed altogether.

  A similar fate awaited much of Bend's undeveloped land on the fringe of the City.

  We've popularized (I like to think) the term STD, or Siberian Tract Development.

  This is typically an amalgam of dense-development, low-to-no quality slave-labor huts that are best suited to cooking meth, growing Mary Jane, and finally blowing up in a fireball of decapitated Maxicans, tiara's, satin proms dresses, and f**king 75 kids and infants.

  And worse still, the 1977 Mercury Grand Marquis Station Wagon in the garage cannot house the survivors.

  Sure, this sounds like standard issue s**t for Madras (and La Pine) for the last 50 years, but the immense fields of STD s**t shacks populating the East side (mostly) have made this a common occurence in our own beloved Bend.
  

  This is a real monkey in the wrench for people like Costa who are summarily thrashing the Exceptionalism Doctrine for all it's worth.
  

  But worse, is that after all the Meth-Cooking-Mexicans have burned these s**tholes to the ground in what is really a public service... we are stuck with these ass-end of the World s**thole homes that I wouldn't let a maggot live in... on postage stamp lots.

  Ummmm... didn't we all COME HERE for The Scenery?

  Didn't we all come here to Breathe The Air In The Wide Open Spaces?

  Didn't we come here so that when we look out our window, we DO NOT SEE INTO OUR NEXT DOOR NEIGHBORS KITCHEN, GAT DAMN IT!

  I mean, WHAT THE F**K.

  This is just another reason this f**king Bubble PISSES ME OFF.

  This place has been CUT UP into ANT-SIZED plots of dirt, NEVER TO BE UNDONE, in an attempt to profit as much as is humanly possible from what is now an asset that only a F**KING PSYCHOPATH would want -- a house. But not just a house, a house that is practically INSIDE the f**king house next door.

  F**k you f**king builders, and the Bend City Councilor SELL OUT MOTHERF**KERS for doing this. There is no UNDO button for this. These s**tholes will act as a blight FOR DECADES on this town.

  You greedy f**ks have cut up "paradise" (that's 1 STD above the mean), and made it a checkerboard of s**t. The entire East side of Bend is going to morph into a decrepit pile of crap. Also happening to SW Bend, and (HORROR OF HORRORS), some sections of West Bend (yes, I put Tetherow in that bucket).

  The pathetic afterbirth of Measure 37, and it's bastard bitch, Measure 49, can only serve to make this worse in EVERY WAY.

  Of course, the Bully has given us a steady stream of GREEDY-ASS-CUNT-MOTHERF**KERS who want to, INCREDIBLY, build trailers, air-drop rusted out Chevy Citations, and God Knows What The F**k Else onto their pristine, undivided, and dare I say, picturesque farm land, and replace it with something NO ONE F**KING WANTS ANYMORE.

  Of course, the Bully portrays these people as VICTIMS:

  
  

  Awaiting decisions in a land use limbo
  One of the goals of Measure 49 was to streamline development claims made under Measure 37. With a key deadline looming, though, the law's meaning is still debated, and families like the Bolkens are increasingly frustrated.
  
  But they could not sell the old house to their 41-year-old son because a zoning change on their land in 1979 prevented them from dividing the property. “By selling the one lot to our son, that would clear all our debts,” Olaf Bolken said. Instead, Torfinn Bolken chips in to help pay the mortgage, and Olaf said he has to count the payments as rental income.
  

  Oh man. What a f**kin' load.

  Poor f**king OLAF can't anally f**k the US Tax Code for all it's worth, so the Poor F**ker has to hold onto his PRISTINE FARM LAND BOUGHT FOR NEXT TO NOTHING, instead of subdivide it like a Narcissistic Greedy F**king Douche, thereby increasing his own net worth by 50 F**KING CENTS while wrecking everything around him.

  Yeah, I feel REAL BAD for Olaf.

  If Costa had his way, EVERYONE WOULD BE AN OLAF, and Cent OR would be a tax-evasion PARADISE.

  But... yeah, that's right. This f**king place would be, instead of an outdoor paradise, a checkboard s**thole of trailers, medieval-slingshotted motherf**king rusted out GMC Gremlins, hurled into low-Earth orbit and abandoned whereever OLAF-FUELED F**KSTICKS have cut up their pastures for Meck-mobbed insanity. F**KERS.

  Costa, do you REALLY want to allow any dumbass hick douche to cut up their land, and house half of f**king GUATAMALA on thier dirt farm?

  THINK, MC FLY. THINK.

  Our f**king free public lands (Drake Park, the River, Taco Salsa, aka "Meth-N-More", and our forests) are already overrrun with the 3 worst demographic groups on this planet: Motherf**king lazy-ass meth-cooking Mexicans, Murderous Bums, and 800 lb White Trash Single Mothers. To date, we've contained this cancerous scourge to where it should be:

  Deschutes River Woods.

  But these little nipper f**ks are devious, and all they need is 50 sq ft, and f**king 2,000,000 mexicans will invade & be living right next to Legitimate White People.

  Think about it Costa, you brain-dead motherf**ker.

  Again, Narcissim, Greed, Obsession With Self. That's ALL this is. F**k you, as long as I get mine. Not a brain cell anywhere concerned with the after-effects. Who cares what the costs are. Just GIMME. Now!

  I can live with the RUDE SUV DRIVING CALI-BANGER ASSHOLES.

  But we're all going to destroy this place we love, one subdiv at a time. And that s**t cannot be undone, driven out, or f**king exterminated. We're going to have to live with that for a long damn time.
  

  I guess I couldn't possibly go out without at least mentioning the Mother Of All Boondoggles, JUNIPER RIDGE.

  In a piece that can only be filed under "I Guess You Never Know", The Incredible Hulce has allowed a piece titled "General Custer & Juniper Ridge" to somehow slip by her martini-addled editorial radar.

  While it is far past time for the City of Bend to acknowledge that Juniper Ridge (JR) has failed to meet even minimal objectives in seven years, they are more likely to pursue "business as usual" because only taxpayer money is at stake. The purpose of this editorial is to explain in clear and simple business terms why everything associated with JR that could possibly go awry did go wrong, and why Juniper Ridge is now a tainted brand just like Ford's Edsel of decades ago.

  Holy F**king Crap!

  Yes, this is in the current Cascade Business Buttf**ker. Incredible.

  Author Scott Siewert goes into a play-by-play of the utter failure that is Juniper Ridge.

  And I can only assume that "Scott Siewert" is a pseudonym for someone I can't quite put my finger on right now....

  Siewert goes on to just tear JR a new corn chute, and predicts it's complete demise only after, of course, swallowing as much money as Drew Bledsoe swallows donkey cum. That's a lot of f**king money.
  

  Read the piece. Yes, throw The Incredible Hulce a f**king bone, and read her useless rag. This one article is actually a no-holds-barred look at the only place ON EARTH where a City deluded by it's own munificience manages to turn a$1 piece of s**t volcano rock strewn Superfund s**thole tract of 1,500 acres, into a sure-thing CITY of BEND BANKRUPTCY.

  Believe it. Only in Bend. Nowhere else on EARTH are the elected officials STUPID ENOUGH to somehow turn an enormous FREE FINANCIAL ASSET (at bubbles peak, at least) into a complete City-wide bankruptcy in less time, than Bend Oregon.

  Thank you, you selfish dumbf**k City Councilors.

  What's the difference between a SELFISH f**ker and a STUPID f**ker?

  Nothing. That little dicotomy is what will bring down this country.

  Now, just a little summary of where we are & where we might go in the financial markets.

  Well first, on the macro-scale, my super-duper, never-fail prediction for the stock market is.... {drumroll!}

  
  

  meh

  
  

  I mean, we're not extremely over or under valued from a L/T perspective.

  

  DJIA, 80 year chart.

  We're still in the dead middle of that trend line. Fair Value just floated above 10K for the first time ever 2-3 weeks ago.

  If this were a "normal" economy, maybe there'd be reason to be at least hopeful.

  But I have a sneaking suspicion that the damage from the Bubble imploding, and possibly the even worse side-effects of trying to AVOID ANY PAIN AT ALL COSTS, NO MATTER HOW HIGH under the Obama-Jeebus, will actualy make the current "fair value" a pipe dream in a scant few years.

  I actually think we'll be re-visiting the lower band of that trend line before all is said & done.

  That's why I am out of stocks for the foreseeable future. No IRA money, no taxable money. Nut'n.

  Stocks aren't quite in a bubble, but they are much like RE: Stuck ina temporary holding pattern on a long, slow bleedout to horribly low levels.

  So why the "meh"?

  Well, at some point, in the far distant future, you actually will be able to make money in US stocks again. Not today, mind you. Not tomorrow. But someday. And when we break through to the horrible depths only touched briefly on a statistical basis way back in 1982, it will be one hell of a ride up. To...ohhhh.... I'd say a triple off the low, over the course of 10 years.

  So 12K on the DJIA in 2025.

  So don't buy stocks now. Or RE.

  But there's an even Bigger Bubble out there.

  US Government debt. This is the Ponzi scheme that is making MADOFF look like a piker.

  It's really remarkable in it's simplicity. And it's evil.

  See, you & me, are going to be sheered by the US Gov't over the coming decades. Our taxes are going to go apes**t. That's because today, our government is borrowing trillions to effect the largest Corporate Welfare Program the World has ever seen, or will ever see in the current living generations lifetime.

  They are borrowing the money from our kids, loaning it to corporations, and requiring them to buy T-bonds, which pay interest via taxes.

  It is incredible. The amount being transferred is staggering. It's trillions.

  This is why in the midst of the most dire, job-crushing recession in 100 years, stocks are headed up. They are making billions on this Ponzi scheme.

  But much like the FRAUD-U-NET RE Bubble, at some point even this Government-sponsored fraud must collapse on itself.

  And there are 2 outcomes: We pay or we start shooting.

  There is a hell of a good chance that we will go to war (and LOSE) over this currently collapsing RE Bubble. Yes. People will die because of this.

  From the smallest scale (Tami Sawyer), to the largest (China has nukes), people want to get their money. And when you steal a few hundred grand, you just get a little alone time in the slammer.

  But when TRILLIONS are on the line, the slants get their guns. And nukes.

  You watch.

  The US bond market will be the trigger for our next war. Watch for it to implode, that's the signal that you need to "Get Your Ass To Mars".

  And with its collapse will come the dominant theme for the next generation: STAGFLATION.

  It's a ways off now, because we are in the throes of deflation. But I have the feeling that Obama-Jeebus-Bernanke will be unable to turn off the spigot in time. They've already admitted as much. They are projecting low rates ad infinitum.

  So what do you do when deflation rules the roost, stocks, bonds and RE are all a bust for the forseeable future, what to do?

  Gold seems one possible play.

  I read that (especially with gold at $1,150/oz), and I say "TOP!".

  Which is why I'm still not crazy about gold. What I like more is "stuff".

  Copper, non-ferrous mineral, timber, coal, water. Stuff. Basic stuff. I like the materials stocks. But they've had a hell of a run already, and they may well get knocked when the market as a whole is re-valued lower.

  But if there is going to be some sort of Next Bubble, seems like they would be a good pick.

  Basic Materials, Defense, and choice Pharma.

  We're going to war, and old f**kers are going to live long enough to watch their spawn die.

  Besides that, it's slim pickins'. I guess buy toys from the foreclosed on. Cars, trucks, stuff. People are going to leave Bend in droves for years, and they will want to sell their s**t. WTF... buy it. There's nothing else to do with your money.
  

  So, that's the MACRO.

  The Regional?

  California is going down.

  Yes, the topic that caused almost as much loathing as all my Narcissism Yammering, was the idea that Cali in it's entirety, is becoming a second-rate piece of s**t.

  Seems logical, the state is following the path of it's citizens.

  But think about it: Cali is a VC fueled economy, full of horribly over-priced trailers about to be overrun by the Mexican hordes.

  Cali is only considered to BE a paradise, because it has BEEN a paradise.

  Is Haiti a paradise? F**k no. Jamaica? No.

  Paradise is what you make it. Something we've all learned from hbm.

  WHich I guess brings me to a little aside about weather, scenery and all the s**t that makes a place "home".

  I always said that bland places like Iowa would do the best in this current economy, because they never participated in the upside, they won't get killed in the downturn.

  hbm always said he'd rather be dead in Bend than alive in Iowa.

  But really, when I think back on my life, and the myriad of places I've lived, the weather, the scenery, and all the other externality bulls**t that is so overly touted as an ABSOLUTE reason for moving to a place like Bend, somehow pales in comprison to the reasons that I truly enjoyed some of the places I've lived.

  It was always friends or family that made a place. Not weather.

  I love the place I went to college because of all the good times & friends I had there.

  You could throw me in the middle of a cornfield to camp with my siblings, and I'd probably have a better time than I would camping alone in Yosemite.

  Not only does scenery NOT pay the bills, it is cold & unfeeling. It's very nice to be in a new surrounding for a bit, and I've had some of the greatest times of my life out in the bush.

  But being around people you enjoy is 100X more important in the long run.
  

  Assholes can make paradise a total s**thole, as has been demonstrated many times over by the equity locust invasion this place has suffered. Which is why I sometimes question the wisdom of moving to a place because of the outdoor activities.

  I know more than one person (couple) that drank the Visit Bend Kool-Aid, moved here, bought at the top, and are now drowning in debt and DESPISE THIS PLACE. And they went out every weekend & did something real fun.

  But they have had it. They want out.

  'Course they can't get out. Bank won't short sale till they default, and once they default they can't get a job cuz they got fired when Epic/Cessna/Unicom/Equity Group/whoever went broke and stole their last paycheck & 401K.

  But that's trivialities.

  I think a lot of people go through life think all the external pieces of their environment are what count most; no, it's people. And on that mark, Bend is below average. And it will be until there are no H2 Hummer driving Cali-cunts who cut me off on Wall. F**king cunts.

  Hmm. Anyway, back to the business at hand. I suppose it only really matters that Cali is taking a financial bath in that Where Cali goes, so goes Oregon. 18-24 months later.

  And if you want to see where we are going in the future, read this piece from Calculated Risk, "Unemployment Rate Increases in 29 States in October".

  Even more interesting is this chart with the highst, lowest & most recent unemployment rates for all 50 states.

  

  Click to enlarge...

  You can see that California is suffering the highest unemployment EVER. It is maxed out.

  Oregon is not far behind, of course, at #7.

  This bodes ill for us. As recently as a year ago, COVA, Visit Bend, and all those other marketing schills were selling California Billionaires as Cent OR's economic saviors. F**king ridiculous.

  The facts: Bend unemployment will probably hit 20% one of these years. I guess that's pretty bad. But worse, it will NEVER go down. It will probably stay persistantly high. Why? People won't leave!

  They've drank the Kool-Aid and actually think things are going to turn around here. They will not. Things are going to get far worse.

  "Hey, but what about that Olive Garden? They must know something we don't!"

  What about Gottschalks? What about Cessna? Oregon Woodwork?
  

  This place is an investment S**THOLE. Anything doing Bend-based business is a MIRAGE. When I came here, a business broker told me 80% of the businesses in Bend were TECHNICALLY INSOLVENT, being kept alive solely by spousal welfare.

  There are very precious few companies actually making any money in Bend.

  You want to know the Best Investment for anyone living in Bend? Buy a tankful of gas AND LEAVE.

  People think that this blog & it's commenters are Broken Clock Bears, and are full of s**t. OK. Fine. Take a sec to read a few pieces from someone who really knows how to throw down.

  Wall Street's 2012 meltdown sweepstakes
  Don't say we didn't warn you this time -- a new crash is dead ahead
  
  By Paul B. Farrell, MarketWatch
  

  LOS ANGELES (MarketWatch) -- It's coming in 2012: Another, bigger meltdown of Wall Street's "too-greedy-to-fail" banks. No, this is not another fanatical warning about that Dec. 21, 2012 end-of-days prediction based on the Mayan calendar, though you may well ask "Who will survive?"

  Here is what's happening: History is repeating itself. Wall Street's soul-sickness is setting up a new meltdown. Dead ahead. Be prepared.

  My track record speaks for itself. Back on March 20, 2000, my column headline read: "Next crash? Sorry, you'll never hear it coming." Bull's eye: The dot-com bubble popped at 11,722. The economy collapsed. A 30-month recession. Markets lost $8 trillion. Today the market is still below that 2000 peak. Factor in inflation and Wall Street's "too-greedy-too-fail" banks have lost about 30% of your retirement nest eggs in this decade. Incompetent? Clueless? No, Wall Street is a bunch of crooks without consciences.

  Since 2000, my columns have covered many warnings of major debt accumulation, market meltdowns, and the psychological failings of Wall Street's greedy, myopic brains. Last June we summarized 20 predictions made between 2000 and 2007 warning of a subprime meltdown coming. Oddly, no one seemed to be listening to all the warnings from leading minds like Buffett, Grantham, Gross, Faber, Shilling, Roubini, Fed governors, and many more. Was that a repeat of 2000 with no one listening?

  Suddenly it hit me: It's just the opposite: Everyone is listening and everybody knew a crash was coming -- but we were in a trance, including Washington's bosses. Bernanke, Bush, Paulson, Greenspan all heard it. So did Wall Street, and Main Street.

  Unfortunately America's collective brain was addicted to the adrenaline rush of gambling in a risky bull. The euphoria is intoxicating. We were caught up in a game of musical chairs, squeezing out every last dollar of return, blind to the catastrophe ahead until caught by surprise. Unfortunately, Wall Street lacked a moral compass and stole trillions from American taxpayers. Today, the only lesson Wall Street has learned is "greed is good." Now the beginning of the end has become a moral tragedy that is setting the stage for an implosion of Wall Street, capitalism and our economy circa 2012.

  Everyone's still listening, still in a trance

  Yes, another meltdown is coming; it's inevitable. This time, I've decided to do more periodic updates -- a watch list of alerts, warnings and predictions. Just like the updates done for over a decade, except this time we're more aware that few in power will listen, not Wall Street, not Washington, not Corporate America. But you must.

  Recently a bright idea came to me: a new way to present these predictions. My wife was working all day at a hospital in Templeton, Calif., so I parked myself in the Café Vio in nearby Paso Robles, with two huge briefcases of research files on bubbles, debt, derivatives, behavioral economics and lots more. While trying to make sense of the materials, the headlines themselves started telling a fascinating story. Here's an edited montage of their staccato warnings. Read fast and "feel" the message:

  Financial Times: "Second Great Depression [is] still possible."

  The economy's "spiral is captured in a Titanic metaphor ... unsinkable."

  BusinessWeek: "Next bubble could come sooner than you think."

  From Reinhart and Rogoff: "This time is different." But it never is.

  Bloomberg: "Citi's 'near death' hoard signals lower profits."

  Citi hoarding $244 billion in cash "as if another crisis were on way."

  Wall Street Journal: "Three decades of subsidized risk."

  Gasparino's "The Sellout:" Greed, mismanagement killed financial system.

  SeekingAlpha: "Crisis lessons forgotten in new speculation."

  We prop up trash stocks Fannie Mae, Freddie Mac, AIG; learned nothing.

  USA Today: "Wall Street bailouts ... business as usual"

  Warning: "Too big to fail" protections guarantee another crash down the road.

  Boston.com: "Why capitalism fails ... why it will happen again."

  Economist says American capitalism "contains seeds of own destruction."

  MarketWatch: "Einhorn bets on major currency 'death spiral.'"

  Hedger bet against Lehman. Now against dollar. Says "break up too-big-to-fail" banks.

  Forbes: "Be prepared for worst ... repeating Great Depression."

  Expect "GD2" says Congressman Ron Paul, author, "The Revolution," "End the Fed."

  New Republic: "Next financial crisis coming; we made it worse."

  Former IMF economist: "Bernanke soft landing, sowing seeds of next crisis."

  Wall Street Journal: "The economy is still at the brink."

  Moral hazard: No CEOs of failed banks indicted ... even paid millions.

  BusinessWeek: "What happens if the dollar crashes?"

  Trade wars break out, banks collapse. Cheap dollars are killing us.

  Pimco Investment Outlook: "On the course to a new normal."

  Gross's "new normal:" spending, stocks down, savings up, banks riskier.

  Economix, New York Times: "Finance gone wild."

  Simon Johnson: Wall Street's "pathological" power over Washington.

  Vanity Fair: "Wall Street lays another egg."

  Ferguson: "Math models ignored history, human nature," failed, repeating.

  Clusterstock: "10 bubbles in the making."

  Fed's toxic debt, gold, emerging markets, ETFs, China, securitization, more!

  Rolling Stone: "The great American bubble machine."

  Taibbi: Goldman's a giant vampire stealing trillions with "gangster economics."

  Temasek Hedge: Roubini predicts bubble, hates equities.

  Economist sees "bigger bubble than before" as Fed wastes taxpayer trillions.

  CNN/HuffPost: "Wall Street made mess, big bucks on clean-up."

  Michael Lewis says "they're too powerful ... we're in for day of reckoning."

  Vanity Fair: "Wall Street's toxic message: capitalism failed."

  Stiglitz: Wall Street writes self-serving rules, puts global economy at risk.

  MarketWatch: "Wasting our chance to fix the banking system."

  America's got a "banking system that's just a ticking time bomb."

  Mother Jones: "Could cap'n'trade cause new meltdown?"

  Yes, and Goldman sees huge profits if this $1 trillion market is created.

  Fortune: "We owe what? The next crisis, America's debt."

  Yes, "chronic deficits are putting America on the path to fiscal collapse."

  Time: "America and its deficits: Are we broke yet?"

  Justin Fox, author, "Myth of the Rational Market:" "We'll soon find out."

  HuffPost.com: "Main Street jobs? First kill Wall Street jobs."

  "Looting of America" author: Wall Street got rich destroying Main Street.

  The Nation: "Creative destruction

• November 01, 2009
• 4:37

  Bend Finally Get's It's Perp Walk

   » ‎ Bend Bubble 2

  Tags:  Most Overpriced Housing market in   [edit]

  I don't know about you, but I'm just about to pee myself with excitement over the Tami Sawyer perp walk!
  
  I mean, how long have we been waiting for this? Years? For an honest-to-God, real Bend realtor to give us the walk of shame we've been waiting for? Seems like forever.
  
  But, unless Sawyer gives up the ghost between now & Nov 6, she'll be going to do some time in the pokey for not telling Judge Stranglenuts where she put kindly old Doc Redwine's retirement money.
  
  Of course, both Sawyer and hubby both think they are above the law, since they got bigger fish to fry with the FBI. Hmmm... that ain't right either. They ARE the bigger fish to fry, and they are going to get cooked by the FBI.
  
  They think that gives them special rights, like telling Stranglenuts & Red-whine that they ain't gonna help them get their cash back.
  
  And of course, Sawyer's lawyer probably convinced them they'd never serve a minute in the old Corn Chute Parade Of Assshole Wideners.
  
  So wait for it folks... by next Sat. We might get our long-awaited Perp.
  
  OK, moving on from Tami Sawyers inevitable ass-reaming in prison....
  
  I keep trying to find people who are as worried about what is going on as I am.
  
  It is clear to me that the US has taken the "No Pain" exit-strategy from our already fleeting Great Recession. This is that strategy in a nutshell:
  
  Despite the fact that DEBT was the Root Cause of what is pretty much acknowledged as the worst economic meltdown in a generation, we have taken the following remedial actions:
  
  1) Cash for Clunkers: A failed program, that cost far more on a per-vehicle basis than anyone is willing to admit, and did almost nothing except make it's participants more indebted than they were before.
  
  2) $8,000 tax credit to home buyers. This program is the most insidious of all. It's plays on peoples ignorance in thinking that they are getting a good deal, when really they are just indebting themselves to buy a house that has had it's price artificially inflated by the credit they are receiving.
  
  3) The vast billions spent on "job-creation". Wow. This one is just mind-boggling in it's scale. What is happening on this one is so incredible, it deserves a little expansion...
  
  See... they are counting every single person who even receives a nickel from the Obamanator Largess, as a "new job".
  
  Doesn't matter what they do or for how long, it's a "job".
  
  And the shysters getting the money, are almost certainly being encouraged to "shade the truth" about everything having to do with dispensing this money.
  
  So what is really happening, is plain to see: There's a terrible overcounting of the "benefits"of the Obama-Jeebus's turning water to wine going on.
  
  We're spending trillions -- TRILLIONS -- on fake jobs that don't even exist.
  
  Since the jobs are fake, you can bet your ass the "Recovery" is fake.
  
  We are simply experiencing the effects of a "Bloody Mary" recovery; a quick jolt of that which ails ye. A shot-glass of trillions that we are borrowing from ourselves (well... our kids), so that we might put off our ills just one more day.
  
  Here's a quick eye-opener from my best-est politico buddy, Ron Paul:
  
  Be Prepared for the Worst
  
  The large-scale government intervention in the economy is going to end badly.
  

  Any number of pundits claim that we have now passed the worst of the recession. Green shoots of recovery are supposedly popping up all around the country, and the economy is expected to resume growing soon at an annual rate of 3% to 4%. Many of these are the same people who insisted that the economy would continue growing last year, even while it was clear that we were already in the beginning stages of a recession.

  A false recovery is under way. I am reminded of the outlook in 1930, when the experts were certain that the worst of the Depression was over and that recovery was just around the corner. The economy and stock market seemed to be recovering, and there was optimism that the recession, like many of those before it, would be over in a year or less. Instead, the interventionist policies of Hoover and Roosevelt caused the Depression to worsen, and the Dow Jones industrial average did not recover to 1929 levels until 1954. I fear that our stimulus and bailout programs have already done too much to prevent the economy from recovering in a natural manner and will result in yet another asset bubble.

  Anytime the central bank intervenes to pump trillions of dollars into the financial system, a bubble is created that must eventually deflate. We have seen the results of Alan Greenspan's excessively low interest rates: the housing bubble, the explosion of subprime loans and the subsequent collapse of the bubble, which took down numerous financial institutions. Rather than allow the market to correct itself and clear away the worst excesses of the boom period, the Federal Reserve and the U.S. Treasury colluded to put taxpayers on the hook for trillions of dollars. Those banks and financial institutions that took on the largest risks and performed worst were rewarded with billions in taxpayer dollars, allowing them to survive and compete with their better-managed peers.

  This is nothing less than the creation of another bubble. By attempting to cushion the economy from the worst shocks of the housing bubble's collapse, the Federal Reserve has ensured that the ultimate correction of its flawed economic policies will be more severe than it otherwise would have been. Even with the massive interventions, unemployment is near 10% and likely to increase, foreigners are cutting back on purchases of Treasury debt and the Federal Reserve's balance sheet remains bloated at an unprecedented $2 trillion. Can anyone realistically argue that a few small upticks in a handful of economic indicators are a sign that the recession is over?

  What is more likely happening is a repeat of the Great Depression. We might have up to a year or so of an economy growing just slightly above stagnation, followed by a drop in growth worse than anything we have seen in the past two years. As the housing market fails to return to any sense of normalcy, commercial real estate begins to collapse and manufacturers produce goods that cannot be purchased by debt-strapped consumers, the economy will falter. That will go on until we come to our senses and end this wasteful government spending.

  Government intervention cannot lead to economic growth. Where does the money come from for Tarp (Treasury's program to buy bad bank paper), the stimulus handouts and the cash for clunkers? It can come only from taxpayers, from sales of Treasury debt or through the printing of new money. Paying for these programs out of tax revenues is pure redistribution; it takes money out of one person's pocket and gives it to someone else without creating any new wealth. Besides, tax revenues have fallen drastically as unemployment has risen, yet government spending continues to increase. As for Treasury debt, the Chinese and other foreign investors are more and more reluctant to buy it, denominated as it is in depreciating dollars.

  The only remaining option is to have the Fed create new money out of thin air. This is inflation. Higher prices lead to a devalued dollar and a lower standard of living for Americans. The Fed has already overseen a 95% loss in the dollar's purchasing power since 1913. If we do not stop this profligate spending soon, we risk hyperinflation and seeing a 95% devaluation every year.

  First, you just gotta love this guy. No one in DC cuts through the bulls**t like Ron Paul.

  And you might be wondering what he means by this:

  Anytime the central bank intervenes to pump trillions of dollars into the financial system, a bubble is created that must eventually deflate.

  What bubble? Hey, I don't see no bubble! There's no bubble. Right?

  Oh yes, there is an enormous bubble right before our eyes. It's called this (fake) Recovery.
  

  It's this Bloody Mary hangover cure.

  And it cannot end well. There are two end-game scenarios, and both end badly.

  In the first, you have to imagine that our economy is like a big bathtub. Usually, it's nice, full and soaky-warm, everyone just having a good old time.

  Now sometimes, Mean Old Mr Recession comes along, and starts to drain the tub.

  Well, that's when Supermen from the old Fed come along, and put a spigot right over the tub, and start to fill the tub at --hopefully-- the same rate that water is being drained.

  And that is what Superman Bernanke-Span has been doing for lo these many years.

  Except in the past the spigot was your garden-variety water hose. And our Supermen have been able to shut off the water just in time to keep the warm, happy tub from overflowing... cuz this means something actually worse than sitting cold in an empty tub: It means people start drowning of INFLATION! Oh no!

  But in the past, due to a number of factors, not the least of which was Chinese-fueled deflation, the monster of inflation has been pretty easily avoided.

  But this time is different: the drain that opened up wasn't the usual inch or two in diameter. No, it was like the entire bottom of the tub opened up. Water didn't really "drain" out; it fell out. One second it was there, and the next it was gone.

  THIS is what all the talk was about our economy "collapsing" last Fall. It wasn't getting "uncomfy" in the tub... it looked like the tub itself was going away.

  But our Supermen have rushed to action to do what they always have: Keep the tub full.

  But what's different this time is the size of the spigot. It's not a garden hose. It's an enormous pipe.

  

  Bernanke's Enormous Pipe

  But the problem with trying to keep the tub full with such a giant pipe, is exactly what Ron Paul says it is Runaway inflation.

  Not wimpy, 4-5% inflation. But real-economy-wrecking inflation.

  Cuz all it's going to take is for the drain to close even a little, Bernanke to miss the signs, keep the pipe open just a hair too long, and the tub goes from empty to overflowing all over the place, and people drowning.

  This is actually the worst case scenario. One that Ron Paul thinks is inevitable. I happen to mostly agree, and think it is highly likely.

  The second "Good News" scenario, is that Bernanke Get's It Right.

  He turns off the gigantic spigot just in time when the drain closes up.

  But the problem is that All That Water comes at a price. And the price is that all future tubby-time is a little more empty. More succinctly, we are draining future growth, so that we do not have to suffer today.

  The trillions we are spending today HAVE TO be repaid one way or another. We are "investing" them today in an attempt to have the payoff tomorrow be large enough to make the payments. If the jobs created today create enough of a tax-base tomorrow, we'll be OK.

  But as I said earlier, and as the Bully as much as admitted yesterday, we're wildly over-counting the job creation. The costs per job are far higher than Obama-Jeebus or anyone else will admit.

  Just like everything else in this "recovery". It's fake. The cost per job is far higher than anyone admits, the cost per car sold under Cash-for-Crushers is far higher than anyone is admitting.

  And Yes, the prices being paid for homes in the $8,000 tax credit regime are higher than they should be.

  And we have a good predicting omen for what will happen when all the fakery stops... just look at Cash-for-Crushers: demand 100% evaporated.

  We were sold the idea that somehow C4C would somehow "ignite" a New Age of Automobile buying that would last forever. GM would be fine. Chrysler would be fine. You would be fine. I would be fine.

  No.

  No, all they did was spend a ridiculous amount to get a very few incremental sales TODAY... AND F**K TOMORROW.

  THAT is what happened.

  And it wasn't long before people realized this:

  

  Lithia Motors (LAD), 1 yr

  I, for one, barely dodged a bullet on this one. Since I sold LAD at $16 and change, it has fallen off a cliff, for almost a cut in half.

  THIS, though, is what we should expect post-stimulus: When and if they discontinue the $8,000 tax credit for home buyers, we should expect a post-stim hangover... DUH!

  What if they don't stop it?

  Then it just becomes a permanent built-in part of the price.

  So... what is that called when prices just go up forever?

  Right. Inflation.

  And so that brings a third scenario: STAGFLATION.

  Not only could we have prices that go through the roof, as Ron Paul postulates, we could have little to no growth for a generation.

  WHAT does this sort of scenario look like?

  Zimbabwe.

  OK, to finish off this week, I guess I want to address the idea that I am a big stock-broker type... or other such bulls**t.

  OK, I'm not. I'm just a working dude. I do have a business degree that probably "went to far" for it's own good.

  So I'm intersted in stocks, they always seem to be the Canary In The Coal Mine with respect to the larger economic picture.

  Plus, I do have my pittance of a retirement fund in and out of stocks (and rarely, bonds) as I see fit.

  And as I said over the past year, I went from long-on-the-sidelines, to all-in late last fall.

  And people, I can tell you it was harrowing.

  There was a stretch when I mentally walked away from ALL of my retirement money. It was THAT gone.

  Mercifully, Obama-Jeebus & Bernanke-Span have swooped to the rescue of their Wall St brethren. Thank God. As a side-effect, I was also largely spared.
  

  So I managed to escape this past years investment debacle pretty much unscathed.

  BUT, like most things in my life, the Real Gain was the lessons learned.

  One, I tried to Catch Falling Knives again. I well and truly got stabbed on most of these.

  All the gains of Lithia... well, they went to cover the heinous losses of now-bankrupt Monaco Coach & Fleetwood.

  And I fully understand that Lithia itself was the one instance where I did catch the knife... but just barely.

  Lesson 2: This thing ain't like the others.

  This time IS different. It really is. This is The Black Swan of our lives. This IS The Big One.

  It's going to end badly. Again.

  The ARM resets are coming. The bank failures are coming. The rising tide of unemployment is coming. The government debt crisis is coming. And the foreclosures will keep on coming. The Zimbabwe-esque End is coming.
  

  I don't know if DJIA 3,000 is coming. But DJIA 5,000 is.

  Lesson 3: Stocks may have started off missing it, but I still think they are the Canary in the Coal Mine.

  I see this thing ending, on a mega-wave scale, with stocks bottoming FIRST, then RE.

  Well, if you can call DJIA range trading between 3,500 and 6,000 a "bottom", and residential home prices NOT FALLING 20% a year a "bottom".

  That said, I think that the former will happen first. Then the latter. For decades.

  I talk about stocks a lot because it is Part I in my attempt to avoid the scourge of inflation I see coming. And it's an inflation I don't see housing participating in.

  I will want to hold something that is not Cash In The Bank, when Bernanke's giant pipe-laying experiment goes bad.

  I want "stuff". Gold, copper, timber, oil. Stuff. Specifically, I want companies that produce (or own) this stuff.

  I still think the Play is to hold cash. For now. Until there is proof that the tub has closed up, and our economic cup will begin to runneth over.

  At that point I want to own stuff.

  I'm not sure how long that'll take to "play out". Probably years.

  But my "real aim" is to buy back into RE... finally. Yup, to buy a house.

  NOT as an investment. It won't "go up". But as a dwelling primarily (soley), but also as what I see as a decent post-speculative-busted Bubble asset that may just hold it's value over the remainder of my life.

  But until that time, I wait. Cash is the place to be. Until there are "real" green shoots. Then own the "stuff" sellers. And when things have finally bottomed out, RE will have finally hit it's "L" bottom, and you can buy.

  NOT "buy and make a killing!". No. Never again. But you can buy and not lose your ass.

  hbm, you please Perp-walk me to bedroom?
  

  

  How come no one like Whitey no more?
  

  

  Buster, you type so much, my titties not sore anymore!
  

  
• October 11, 2009
• 6:26

  Lies, fraud and felonies in Bend Real Estate

   » ‎ Bend Bubble 2

  Tags:  fraud and felonies in Bend   [edit]

  OK, I saw just about the worst thing I've ever seen in my life the other day.
  
  Was it:
  
  2 al Quaeda terrorists shooting a baby deer in the head, cutting off the head, and then skull-f**king the head while screaming their crazy-ass Allah whailings?
  
  No. It was worse.
  
  Was it:
  
  Me attending my dear grandmothers funeral, and during the viewing with the grieving grandpa, yanking out the old ladies crusty used tampon, seeping it in some hot water, and telling the old bastard, "Gramps, it tastes like this smelly old twat f**ked 100 guys... no... no, it was worse... 100 BLACK GUYS F**KED HER IN THE ASS, before she died of cum poisoning!"
  
  Nope, it was much worse.
  
  No, what I saw was so atrocious it turned my stomach.
  
  This is what I saw:
  
  A GOOD LOOKING WHITE WOMAN WORKING AS A WAITRESS IN A ALL-YOU-CAN-EAT CHINESE BUFFETT
  
  NNNNNNNNNNNNOOOOOOOOOOOOOOOOOOOOOOO!
  
  MY GAAAAAAAAAAAAAAAAAAAAHHHHHHHHHHHHHDDDDDDDDDD!
  
  PLEEEEEEEEEZZZZZZZZZZZZZZZZZZZZZZZZZZZZZE! MY EYESSSSS!
  
  OK. Sit down, relax, and try to recover. I know, that s**t is harsh for a Sunday morning.
  
  I felt awful for this poor gal. Working as a waitress was bad enough. Cuz you could tell she was used to better. But a waitress in a Chinese Buffett? F**k... this poor thing looked sucidal.
  
  And what's worse, is ahead of me in line, there was YET ANOTHER WHITE GIRL applying for a job. This girl was young, and still hadn't grown used to the finer things in life, but she was standing with something in her hand that almost made me throw up.
  
  It was heinous.
  
  It was...
  
  a RESUME!
  
  AHHHHHHHHHHHHHHHHHHHHHH!!!!!! MY GAHD!!!!!!!!!!!!!! WTF!!!!!!!!!!!F**K MEEEEEEEEEEEEE!!!!!!!!!!SUNNUFFA F**KING BITCH!!!!!!!!!!! WHAT THE F**K IS GOING ON!!!!!!!!!!!!!!!!AHHHHHHHHHHHHHHHHHHHH!
  
  Yes, you read that right. There was what had to be a 18 year old good looking young white virgin applying for a job at a Chinese Buffet with a f**king resume.
  
  Dude, that is why Hitler made Eva Braun kill herself; otherwise she would be forced to make FILTHY JUZE GANG-BANG PORN for the rest of her life.
  
  THAT, my friends, is what this town is CUMMING TO.
  
  Now, let me be clear; I DO NOT blame the husband of that white hotness serving me water while I slopped at a trough of Chinese mixed-meat s**t (yes, she had a ring). No.
  
  I am saying that THIS is what we will have to endure in this place. White women working for motherf**king LING CHOW or some s**t. Dude, Ling Chow, is worse than a Gat Damn Niggra when he gots a White Woman under his thumb. Mother f**k!
  
  THIS is why Bend will fall. Some things can be tolerated: Get ass-f**ked by a donkey and drinking it's cum from your own ass? F**k, ask Bledsoe, that's easy.
  
  But a f**king MILFy hot white woman working for f**king Ling Chow at a Chinese Buffett? No. This cannot stand. I mean, last time one of the MONGREL RACES got their mits on a fine white Piece of A, we ended up with f**king OJ.
  
  No, this is what Bend is coming to. WHITE WOMEN marry WHITE MEN and live in nice WHITE PICKET FENCED homes, with WHITE DOGS.
  
  But that s**t is NOT going to happen here anymore. The NATURAL ORDER of things is getting butt-reamed, and God's Plan For Whitey is getting turned on it's head. And f**ked.
  
  I don't know about you, but I don't even want to live in a World where a hot, white P-of-A has to work at a Chinese Buffett. F**k that. I mean, my God, that s**t is for the Jethro Bodines, the Todd Bridges', and the Tooties of the f**king World. F**king losers.
  
  Bend is becoming a perversion of all that is good in the World. White women working in a Chinese Buffett? F**k that. That's bad enough to clean out at least half this town. That s**t is the saddest s**t I've ever seen.
  
  OK, moving on from that sad, sad s**t...
  
  There was a good piece in the Oregonian yesterday, here's some highlights:
  
  Life after the bubble: From American dream to American nightmare
  
  Kevin and Annette Martin celebrated their 15th anniversary by getting foreclosed out of their Newberg house. Kevin's homebuilding business collapsed in the recession, and they couldn't pay the mortgage.
  
  Their bank, JPMorgan Chase, rejected the Martins' request for a mortgage modification and took legal possession of the house Aug. 19. On their anniversary two days later, the Martins and their two young children moved in with Kevin's aunt in her small condominium in Charbonneau.
  
  They're broke, unemployed and visibly stunned at their rapid plunge from the middle class to the newly poor. A bomb of debt vaporized the Martins' once-comfortable life.
  
  The heavy load of leverage they had assumed in hopes of grabbing their piece of the pie proved their undoing. "I believe in the American dream, the white picket fence and the whole thing," said Kevin, 38.
  
  "But now, we're just in survival mode. For 14 months, it's been survival mode."
  
  [... lot's of stats...]
  
  The Martins now number among the grim statistics of the painful financial realignment. Maximum leverage was the norm in the high-stakes residential construction business when Kevin Martin started his company early this decade.
  
  He and Annette first borrowed $120,000 in 2003 to buy land north of Newberg and build their own 2,600-square-foot house. Kevin went to work remodeling a historic home in Tigard and building spec houses in Yamhill and Washington counties.
  
  But building the business required money. As their house gained in value, they refinanced their home loan multiple times. Kevin's grandmother and father co-signed on loans he took out to build homes in Tigard and McMinnville.
  
  In the most recent home refinancing, the Martins took out a so-called negatively amortizing loan from Washington Mutual, one of those lending industry "innovations" that Lansing wrote of.
  
  The loan was structured so that the amount they owed actually increased each month. By 2008, the Martins owed $512,000 on their house. They also owed $563,000 on a construction loan from Liberty Bank.
  
  OnPoint Community Credit Union repossessed their three cars after the Martins stopped making payments on Kevin's 2008 Dodge truck. They didn't realize until afterward that their car loans were cross-collateralized: If they defaulted on one, the lender could seize all three.
  
  OK, so these poor f**kers OWE over $1 million, own three vehicles, at least one of which is BRAND NEW. What I just love is the simpy-ass VICTIM SOB STORY here.
  
  These f**kers, times several MILLION, are WHY this country is in the fix it's in. They borrowed a f**king million dollars, and LOST. And now the Oregonian is doing a VICTIM story on them. Here's a comment at the bottom of the piece:
  
  Posted by beattlejuice October 10, 2009, 8:47AM

  WOW, SORRY, but very little sympathy here for one half the the interviewees. you borrowed a over a million dollars!? and your homebuilding bisiness went kaput and you bought a 2008 new truck? I could never do that.
  

  It is because I have always lived within my means. I never even bought a kayak 20 years ago because i could not pay for it in full in 3 months or less with credit cards. I am one of those poor smucks who does not owe a dime to anyone and i have never "walked away from a debt or financial responsibility"...so please, please stop this "where is the american dream crap" because the dream is not stupidity.
  

  I cannot relate, however, you have my sympathy or your troubles...trust me. The other interviewees are more sympathetic, but still 2500 to 3500 per month on a mortage, what were you thinking and where were you living and i could never afford that luxury; how could you? oh yes, your different.
  

  I agree with Portowick here, some of you have a sense of entitlement that I never had, maybe it was upbringing, but I never thought i was entitled to anything. I worked. and when i was not working and unemployed i really worked double time searching for any job. I can see that our forefathers principles have eroded over time. Still, i feel your pain, but cannot relate.

  I have to agree with this bastard. Here's another pissed off cunt:
  
  Posted by jory October 10, 2009, 10:53AM

  Message to America: When you borrow money, you're taking on a big risk and you have to pay it back. Why is this concept so hard to sink in?

  Plan for the unexpected. It is not if but when you get sick, when you get laid off, when the economy goes into recession. These are no unforeseen events. They happen all the time and for those caught unprepared it is disastrous to them. Tough luck. Learn from your mistakes and stop asking for handouts.

  This is going to happen... and really already IS HAPPENING... by the MILLIONS.
  
  VICTIM MENTALITY.
  
  It's NOT MY FAULT. I just got caught up in something beyond my control. Couldn't stop it. Not My Fault.
  
  This is probably WHY we have a shrieking pack of liberals in control... RePugs tell you that s**t is YOUR FAULT. The Obaminator tells you Everything Will Be OK, I won the Nobel Peace Prize, so I oughtta know, right?
  
  This whole country is losing it's sense of ACCOUNTABILITY. Do you know what that means? That means CONTRACTS RE-WRITTEN. That means NO TRUST. That means CONSTANT RENEGGING. No hbm, I didn't say "ren****ring" or some such. But being a rePug Nazi, I was probably thinking it....
  
  It means that we are NOT being forced to learn our lessons over this fiasco. All the PAIN will be papered over, and the gubmint will take care of it.
  
  But I can tell you right now, that this s**t will end BADLY. When the people lose accountability, the government loses accountability. And when the government loses accountability you end up with COMPLETE CHAOS.
  
  There is some whacky s**t going on in the World economies. Little irritating upstarts, are starting to bypass economic giants. China is going to make more f**king cars than Japan next year! I mean, WTF?
  
  White women are working for Chinese f**kers...WTF!
  
  NO ACCOUNTABILITY. This is our legacy to our kids. It has consequences on all levels from one-on-one dealings to global economic implications. It means YOU CAN'T TRUST ANYONE.
  
  OK, I'm going to reprint the Atlantic Monthly piece in it's entirety, primarily because bend Media has it's head firmly in the sand and WILL NEVER address or even acknowledge that Bend is thick with thieves in RE, and that this is one of the most corrupt and sinister towns in the World:
  
  Robust Oregon Real Estate Market Poisoned by Fraud
  
  "People have tried to bribe me. I've been threatened, both verbally and with a gun," real estate appraiser Richard Hagar tells me, recounting the heady days of the Pacific Northwest's housing boom, when unscrupulous loan originators in places like Bend, Oregon would aggressively demand his work confirm a dictated appraisal value, often many tens of thousands above the actual market value.
  
  In Hagar's view, "This recession we're in was triggered by loan fraud. That's the end of it." Situated on the northern tip of the Great Basin at the foothills of the Cascades, with lush evergreen forests to the west and high desert grasslands to the east, the small central Oregon city enjoyed a population boom through the last decade. Retirees flocked to Bend for its clean mountain air and slow pace of life, while moneyed adventurers--mostly from California--came for winter skiing and summer outdoor fun.
  
  Ranked the sixth fastest-growing metropolitan area in the country by the US Census Bureau in 2005, Bend's population increased from 50,000 residents in 2000 to nearly 80,000 today.
  
  Now that population is contracting slightly, largely as a result of the rampant wave of foreclosures.
  
  In a community with such rapid growth, the bursting bubble reverberates powerful shock waves.
  
  By this writing, the number of mortgage defaults had more than tripled from their 2007 end-of-year total. Roughly half the properties currently on the market in Bend are either bank-owned or going through the short sell process, in which the owners close deals for less than their mortgage's value.
  
  So much discussion about the real estate boom and bust focuses on irresponsible buyers, who overextended themselves in purchasing homes they couldn't actually afford, often with dreams of re-selling and making fortune off ever-increasing market values. But during a seminar Richard Hagar gave in Bend Tuesday evening, he pointed his expert finger at one insidious culprit: fraud.
  
  Hagar expounded on this theme for me in a two-hour phone interview last night, after which I hung up somewhat disillusioned that most of the crooks who created the housing bubble would likely escape punishment, while their victims will struggle for years to regain footing after foreclosure, bankruptcy, and complete emotional and financial destitution.
  
  Hagar has more than three decades of experience in the real estate industry, starting out as an agent in the mid-1970s, then becoming an appraiser in the 1980s, eventually earning the highly-prestigious SRA designation by the Appraiser's Institute. He holds real estate investments and still works as an appraiser, though much of his time over the past decade has been occupied by advising government officials on legislative efforts to regulate the mortgage industry, assisting law enforcement with fraud investigations, consulting on related legal cases, and conducting lecture tours to educate industry professionals and the public on how to identify and avoid engaging in fraud.
  
  Real estate and mortgage fraud can manifest in various forms, but the particular variety that significantly infected the market in Bend involved mortgage brokers pressuring appraisers to overvalue properties for sale.
  
  According to Hagar, in the early 2000s he first started hearing from his law enforcement contacts about this kind of problem popping up with increasing frequency in Bend. The corruption seemed to grow a little more pervasive with each passing year, until 2004 when it accelerated rapidly.
  
  "The definition of market value is a matter of federal law," he says. "If appraisers had been following that definition throughout this growth, we would not have created the problems we now see."
  
  "It's almost unheard of for an appraisal to 'make value,'" Hagar asserts, but throughout the housing boom in Bend, that seemed to be the norm. For the Bend appraisers, "They'd have an order coming in with a 'minimum value needed,' and if you couldn't make the value, the mortgage broker would just go down the street. He wouldn't hire you again, or wouldn't pay you."
  
  In Hagar's view, "Almost all the bubble is related to them."
  
  "There were people here forcing monstrous" overvalued loans, Hagar says. Once buyers signed paperwork on a loan larger than the value of their new home, they entered into the new purchase already completely stripped of equity, owing more on their mortgage than the house was worth.
  
  Even before the market started to dive, these people couldn't sell their house for the amount they'd paid. At this stage, it's difficult to estimate what percentage of Bend's real estate bubble would be more appropriately described an illusion created by false valuation of properties.
  
  In an environment plagued by an inflation deliberately orchestrated by a loose conspiracy of those profiting from higher prices, the term 'fair market value' becomes almost meaningless.
  
  According to a 2007 report from the financial service companies National City Corp and Global Insight, Bend, Oregon overtook Naples, Florida to earn a dubious distinction as the metro area with the most overvalued real estate in the nation.
  
  The median single-family house price had nearly doubled to $324,000 over the previous four years. Overall, the report estimated Bend real estate listings to run 78.7 percent over the survey's valuation price.
  
  Mortgage brokers originated 70-90 percent of the loans, so Hagar places the largest share of blame on the unscrupulous in their ranks, though also points out many had to be complicit in order for the bubble to reach such extremes.
  
  A modicum of vigilance would have immediately recognized corruption in the process, so the banks allowed it to happen, he says.
  
  Most real estate agents wouldn't have known any better, but if they had figured it out, they wouldn't want to lose the higher commissions they enjoyed from the overvaluation.
  
  At the request of state law enforcement officials, Hagar began making quarterly visits to Bend in 2005, offering his seminar on the basics of mortgage fraud to anyone who would attend. Unsurprisingly, many locals did not like him.
  
  Blog postings and chain emails trying to discredit his work circulated through real estate industry networks. One time in late 2006 or early 2007, a Bend real estate agent reached him on his cellphone, launching into a full-throated tirade as soon as he answered.
  
  "She yelled, 'There's no fraud in Bend. You can't say that. We're not scammers. We wouldn't do that. You'll destroy our real estate market,'"
  
  Hagar recounts, adding his own response: "Hmmm, actually, you're destroying your market." That real estate agent, it later turned out, was representing a major housing developer (now bankrupt), which had begun offering illegal incentives to help close deals with prospective buyers--not an uncommon practice, but also, technically, a form of fraud.
  
  Hagar guesses the woman didn't even realize she was personally engaged in fraudulent practices, ignorance being one of the primary causes for the crime's prevalence.
  
  A legal team pursuing a mortgage brokerage accused of predatory lending in Bend recently requested Hagar review the company's files for evidence of fraud during the discovery phase of proceedings.
  
  Hagar randomly reached into cabinets and started pulling out stacks of files. He'd found his first clear example of fraud within 15 minutes. By the time he worked his way through the files, Hagar had discovered about 80% of the loans involved some form of fraud, a percentage he says is in line with what the FBI discovered in a national audit of closed loans.
  
  Those cases could represent a wide variety of fraud, but Hagar brings it back around to the role of appraisers, estimating, "There would have been 50-70% less fraud if appraisers had done their job."
  
  Off the top of his head, Hagar can think of at least 30 Bend residents who would deserve to be indicted, tried, and convicted for their role in the fraudulent activities that artificially inflated the local community's housing bubble.
  
  However, he says, "The reality is only about 5% will ever be caught."
  
  "Poisoned by fraud"? F**k man, that is a damning piece.
  
  "Hagar had discovered about 80% of the loans involved some form of fraud..."
  
  I think I stand corrected on something I said YEARS ago on this blog: That this bubble, in this town, was the result of financial "incentives" gone awry. That we were merely swept up due to "fortuitous" circumstances. That Bend was swept away due to serendipity as much as anything by the housing bubble.
  
  BULL F**KING S**T.
  
  We're now finding out something that is becoming clearer EVERY F**KING DAY: This town is rife with corruption. There are thieves, scoundrels, and grifters in every corner of private commerce, media and local government that wanted this bubble to happen, and MADE IT HAPPEN through FRAUD, LIES, DECEPTION, and almost certainly FELONIES.
  
  This town is RIFE with criminals; they are RUNNING this place. Look at Patty Smelly Cunt Moss: Besides having a cunt that smells like a hobo's boot, she has driven CACB into the ground with liar loans and fraud loans that have brought that bank to it's knees. She'll be gone in weeks, and the whole crumbling structure will fall into the abyss. And I'll cry crocodile tears for the investors who have lost HUNDREDS OF MILLIONS at the hands of this psycho bitch from hell.
  
  And yet... The Bully still Hero Worships this psycho. Here's a nice ironic excerpt where Moss finds religion on credit quality
  
  Businesses, banks alike caught in credit crunch
  
  “Demand is still fairly strong for small-business loans,” said Patricia Moss, president and CEO of Cascade Bancorp, the Bend-based parent company of Bank of the Cascades. “But no matter what level of demand you have, a business still has to qualify. You can mitigate risk with price, but you can’t move away from the basic range of underwriting criteria because that demonstrates whether a bank can be paid back. A bank shouldn’t take an undue risk of not being paid back.”
  
  I like the title... "CAUGHT in the credit crunch". VICTIM MENTALITY. "CAUGHT". Like it's a f**king coyote trap or some s**t.
  
  The people in the piece can't get a loan TO STAY ALIVE. Moss pipes up and says she can't give out loans, cuz THE S**T HAS HIT THE FAN, the MINSKY MOMENT has arrived, and bulls**t loans can't be issued like they once were, and the WHOLE F**KING PIECE exudes the idea that ALL INVOLVED are VICTIMS, and are blameless for WHAT IS HAPPENING TO THEM.
  
  If you agree with this, then you my friend, do not understand what it means to at least make a weak attempt at being financially prudent and living within your means.
  
  I get the funny feeling that the financially prudent are actually going to get fisted most of all when this is done.
  
  The government is loaning Corporate America TRILLIONS. They are taking the money at 0%, and buying treasuries making 4%. 4% of each TRILLION is $40 BILLION. THAT $40 billion has to be repaid. BY F**KING TAXPAYERS! That's US. You & me, who did not Get Rich on this f**king fiasco, are lining the pockets of those who caused it.
  
  I'm telling you folks, there is a transfer of wealth, the likes of which will never be seen again, going on right now. It's from our kids, and grandkids to todays wealthy. They are being decimated. This country is AGAIN mortgaging it's future for the sake of a chosen few to go from rich to ridiculousy rich.
  
  Started under Bush, and is being staunchly perpetuated by the Obaminator. F**k you if you think different.
  
  That said, I think we're at an inflection point: This "recovery" is being sold like nothing before. To me, it feels like some sort of engineered recovery, so the rich would have one last chance to bail out on an imploding situation. Sounds ridiculous, right? Then I reiterate the f**king TRILLION DOLLAR LOAN SCHEME math again.
  
  Trillions are being transferred to corporations. But this cannot go on forever. This is itself a LAST GASP of liar-loan fraud from the US government to corporate AmeriKKKa, before the whole edifice collapses into a smoldering heap.
  
  So I tell you now: If you got stocks, SELL THEM NOW. If you got a house for sale, MARK IT DOWN AND SELL IT NOW. Got extra cars, PUT THEM ON CRAIGSLIST. SELL YOUR S**T. BATTON DOWN THE HATCHES. Cuz this "recovery" will soon be exposed for what it is: The biggest FRAUD, LIAR LOAN ever perpetrated in the history of mankind.
  hbm, please teach me to be liberal racist motherf**king nerd, like you!
  I glad whitey working to fund these mega-jugs!
  "Ling Chow? You hire the white bitches! KITTY MAU!"
  
• September 27, 2009
• 7:35

  The Incredibly Stupid Hulce

   » ‎ Bend Bubble 2

  Tags:    [edit]

  OK, I'll make this a quickie...
  
  I finally read the "editorial" piece by The Incredible Hulce. It's rolling along in acceptable fashion, cataloging past headlines from years gone by, until the final 2 paragraphs. Then she just completely blows up:
  
  And here we are today, same issues, some different faces. But the economy still sucks and Bill Watkins, executive director of Center for Economic Research and Forecasting at Cal-Lutheran, says he doesn’t believe that sustained growth will occur any time soon. He said we may see small positive growth this quarter and the media will declare the recession over. However, the stimulus plan is not working. Government spending does not improve the productivity of private capital. Banks are still not lending. Houses, especially in Central Oregon, are selling for less than you can build them.
  
  That said, we end this editorial with this: go ahead and declare the recession over. It’s not likely that there’s anything more that we can do to help the economy than to believe that it’s getting better and continue to operate our businesses lean and efficient and hold out for a recovery to eventually happen. If our community can lift itself up from the gloom and find some light even in the smallest of economic improvements, then that’s a very good thing. Let’s get this party started.
  
  So everyone, including her hand-picked schmucks from some obscure-ass loser church-related global forecasting basement says that the s**t is hitting the fan, and will continue to do so for the foreseeable future.
  
  But Hulce, in her infinite wisdom, says "Let's get this party started"? Oh my God.
  
  If our community can lift itself up from the gloom and find some light even in the smallest of economic improvements, then that’s a very good thing.
  
  Really? So if we just click our heels together, we'll get back to Kansas... right?
  
  This is Standard Issue Marketing Bulls**t. That if you bulls**t people enough, they'll start to believe anything.
  
  But the real disturbing part of this, is the "Let's get this party started" bit. I mean, My God. Who talks like that? 85 year old white women trying to be "ghetto"?
  
  And what's really wonderful, is that there is implied in statements like that, that The Bubble CAN, WILL, AND SHOULD get going again.
  
  The PARTY was THE REAL ESTATE BUBBLE. And Hulce thinks the best medicine is to get it going again.
  
  THIS is the reason Bend is doomed. There's a mentality there that isn't right. It's much like that of an alcoholic or chronic drug user: If I can just get the good feelings going again I had during the "high times", I'll be good, everything will be fine.
  
  There are a lot of people in Cent OR who will be jonesing for a fix that never comes. "The party" is NEVER going to start again here. EVER. Well, not in my lifetime.
  
  You've got to understand what is really happening to see why.
  
  This is The Big Unwind.
  
  We have made TRILLIONS in loans that will never be repaid. THAT was "The party". The seemingly unending river of credit which was used for almost everything from buying houses to paying off the old lines of credit so we could borrow anew, was "The party". The borrowing of a bit more to make payments on the old borrowings was when things started getting really dicey.
  
  There was no more "party" at that point. Hulcey-mindset borrowers and others just started borrowing "to feel normal". This is where the drug & alcohol use is only hitting the "flatline" high... just feeling OK. Increased use, as always, is required to get "high" again.
  
  And so you begin a spiralling vicious circle that can do nothing but end badly.
  
  And so it has.
  
  And Hulce wants us to ALL GET HIGH AGAIN... NOT finish rehab. The best way to handle what's happened, according to the Incredible Hulce, is we get a good shot of that what ails us, NOT quit cold turkey.
  
  But what's just precious is THERE IS NO MORE, Hulce. That was it. We're in The Big Unwind. We're through.
  
  So, I guess I will explain what is going to happen over the next several years, primarily for the benefit of dumbf**ks like Hulce, in terms of what has already happened. And I'll try to make it painless & quick.
  
  OK, our banking system is based on the Fractional Reserve System. If you ever had any sort of rudimentary finance classes, it's east to figure out: Let's say you deposit $100 in the local s**thole collapsing bank, CACB. OK, they make money by loaning it out, but not all of it, more like $90. From wikipedia:
  
  Central banks generally mandate reserve requirements that require banks to keep a minimum fraction of their demand deposits as cash reserves. This both limits the amount of money creation that occurs in the commercial banking system, and ensures that banks have enough ready cash to meet normal demand for withdrawals. Problems can arise, however, when a large number of depositors seek withdrawal of their deposits; this can cause a bank run or, when problems are extreme and widespread, a systemic crisis.
  
  To mitigate these problems, central banks (or other government institutions) generally regulate and oversee commercial banks, act as lender of last resort to commercial banks, and also insure the deposits of the commercial banks' customers.
  
  Really, those paragraphs embody a lot of info. There HAS TO BE reserve requirements, or else money creation is theoretically INFINITE (infinite inflation), and BANK RUNS can happen with ease. Imagine you have lent out all of that $100 deposit, if the person even writes a check for $1, you can't deliver.
  
  Now, the "systemic crisis" part is what you should really be focusing on, because that is exactly what has happened.
  
  If you read the wikipedia article in it's entirety (and you should), you'll see there is a very direct correlation between banking reserve requirements, and money creation. There is a very simple example with 20% reserve requirements which leads to a money creation multiplier of almost 5.
  
  So the inverse of the reserve requirement is the money multiplier: 1 / .2 = 5.
  
  You can see the actual reserve requirements for US banks here. It's a tiered system, but on all decent sized banks, it's about 10%. So the multiplier is about 10, but in actuality it is slightly lower due to other factors
  
  Now, this system works great and can be actually used to spur spending by the Fed buying and selling a relatively small amount of bank-held securities, like government debt, some of which is always on the books of banks as "cash".
  
  But there's something "Golden" about that 10% reserve number. It represents the amount beyond which losses become a vicious cycle of contraction vs it's usual virtuous circle of prosperity.
  
  Once you loan losses go beyond 10%, you are pretty much f**ked. Even if your losses approach 10% of your loan portfolio, you are in some deep s**t. Because your depositors CANNOT get their DEMAND DEPOSITS. You are broke and cannot pay them.
  
  You're in some Big S**t at that point.
  
  Now, typically this sort of thing is a localized phenomenon. Big local business goes down, or some regional butter-f**k hits the local economy, like oil in the 80's or S&L commercial lending. And the s**t goes down hard.
  
  But this time it is WILDLY different.
  
  The ENTIRE American housing base is down WAY over 10%. Commercial is down over 10%. THOSE 2 things represent TRILLIONS in loans.
  
  The entire collateralized base of the American banking system is DOWN beyond the reserve point. This is the point where the "systemic crisis" begins.
  
  The banks ARE NOT LOANING, not because they don't want to, but they can't. Even with the TRILLIONS flooding the system, the ENTIRE US BANKING SYSTEM IS STILL INSOLVENT. THAT is the problem. That is why we cannot "Get this party started".
  
  We have gone WELL BEYOND the point of utter collapse. And the government response was really all it could be: FLOOD THE SYSTEM WITH TRILLIONS.
  
  Because, you see, we have an entire banking system whose demand deposits are, say $10 trillion. But the loans and other securities that we have to pay each other off, are only $7 trillion. The gov't hawks were right: If we all tried to Get Our Money, the US banking system would have ceased to exist. Every single bank in the US would have to close.
  
  So the governments only choice was to flood us with trillions.
  
  But now the problem shifts from "I want my money" to "I want this economy to grow", and there my friends we are well & truly f**ked. Because growth relies on money, and money comes and goes with the whim & weft of confidence in the fractional reserve banking system itself.
  
  10% reserve requirements were NOT ENOUGH to avert one of the greatest crises in 100 years. So what do we do?
  
  Lower it, as advocated by Hulce? THAT actually ENSURES it will happen again!
  
  Or raise it? THAT actually ensures a TERRIBLE SLOWDOWN, by collapsing the lifeblood of our economy, money. A 20% reserve requirement would throw us right into a depression.
  
  Even leaving it where it is portends that what we face today will happen again.
  
  F**king rock and a hard place, that is.
  
  And so those are The Real Choices: Lower our reserve requirements to "Get the party started", but have an even more fragile banking system that will succumb to destruction almost instantly. Or raise reserve requirements, and face the prospect of a near-immediate and crushing depression, but a banking system that can in the far-future probably sustain almost any economic slowdown... once it stabilizes.
  
  Or leave it as-is... and face a scenario that is a little of column A, and a little of column B.
  
  Which is what we'll do.
  
  So there will be no real growth in the next decade or so. And government will have to be on-call to forestall collapse for the foreseeable future. We will be in high-wire mode for at least 10 years, with even the slightest disturbance threatening our very existence.
  
  Which is what will happen. We will be in low-or-no growth mode for 10 years, and banks will continue to fail. For years.
  
  Look to Japan to see what happens. Moribund growth that never seems to take off.
  
  When will it take off? When loan losses are so crushed that what actually remains is solid. And loan volume actually begins to exceed deposit growth, and money is created again. The Great Unwind ends when banks stop calling in loans (to pay depositors or "reserve" up), and actually start to lend again, which only happens AFTER we hit rock bottom, and they KNOW that their loans are solid, and repayment is assured. We aren't even close to that. AND THAT, my friends, is WHY banks are not loaning. They have raised their OWN implicit reserve requirements to SURVIVE.
  
  It bears pointing out that I am not one of those psycho, Anarchy-types that believes the best thing is ZERO LOANS, and eating of home-grown beans & tomatoes. Well, I'm closer to that than many people I know, but I do believe there is a place for the modern banking system.
  
  But I also acknowledge that this system can and will cause it's own implosions by it's very nature. And it's near collapse is what we are witnessing now. It makes the peaks and valley's higher & lower. But it does have it's merits.
  
  But when it is systemically participates in a bubble, it literally ensures it's own destruction. There's really nothing else that can happen. And the bigger the bubble, the bigger the collapse IN PROPORTION to the leverage (financial crack-meth) used to create it.
  
  And the leverage used to create our current debacle was almost infinite, because not only were banks going "off balance sheet" to create more money, the amount going into homes as downpayments was LESS THAN ZERO. People would actually get money at closing via all kinds of schemes, namely liar-loan fraud, appraisal fraud, and just about anything else they could get away with... ask Tammy Sawyer.
  
  So our REAL reserve rate was far, FAR less than the OFFICIAL RATE of 10%. It was probably down around 0%, which means 2 things: Incredible fragility and the magnitude of the collapse will be unbelievable.
  
  And THAT is where we are.
  That there is GRILFY hotness, hbm.
  Damn, I need to get laid.
  Ahhhhh, the chubby quasi-pregger MILF. Is there anything better?
  
• September 20, 2009
• 4:59

  What exactly will happen for the next 20 years in the housing market.

   » ‎ Bend Bubble 2

  Tags:  the Cult of Bend   [edit]

  In trying to figure out what will happen in the future, I try to figure out if there is some sort of "model" that applies to the situation.
  
  The housing bubble bursting is sort of hard to nail down, since it is pretty unprecedented. Housing prices as a whole have never really come down in this country. It's also hard to remember, but houses also used to not have such a "speculative" element to their pricing. House flipping was pretty marginal business, pretty much under the purview of sleazy infomercials until the late 90's.
  
  But I think I have the housing market modeled pretty well, in a way that I think reflects the respective payoffs to the parties involved (and maybe I've talked about this before... I'm getting old).
  
  It's our old friend, options.
  
  See, when "we" build a house, we are "long" one house. Now, how it is financed is a secondary concern, but the asset, the house, exists, and we are "long" that house.
  
  How it is financed does cleave the payoffs from this asset in a fairly interesting way.
  
  When you buy a house, if you pay all cash, the payoff is simple: you gain and/or lose dollar for dollar whatever the house gains or loses. Pretty simple, the all-cash example is linear.
  
  But when you buy a house, using one or more non-recourse mortgages (ie they can only take the house on default), you can't really lose monetarily anything once the house goes below the collective principle of the mortgage(s).
  
  The "strike price" of the home is the sum of the mortgage principle. If you "cash out" (ie sell), you get the amount over and above the mortgage sum owed. If the sell price is below that, you simply get nothing.
  
  Of course, it's more complicated than that, since there is also a cost borne of the hit to your credit record, and any sort of "psychic" or other costs, such as mental anguish, and such.
  
  But this does model the purchase of a home using non-recourse debt.
  
  So what is the payoff to the other side?
  
  Well, if you study your options trading strategies, and I have, you know that to simulate a "long" payoff, you need to buy 1 call option (that's us, the home buyer), and sell 1 put option.
  
  As an aside, a call option gives you the right (not the obligation) to buy a share of stock at a given price in a given period of time. A put option gives you the right (not obligation) to "put" a share of stock to someone at a given price within a given period of time.
  
  So the "payoff" diagram of a call option looks like this (strike price = $30):
  
  Call option payoff, $30 strike price.
  So, say instead of $30 strike prices on shares of stock, think $300,000 mortgage on your home. Anything above that, you win, anything below... well, you just walk away.
  
  So, we know we are "long" a house, financing ignored. And the home buyer is really long a call option, with a strike price of the mortgage amount. And for illustration purposes we'll ignore the fact that actually the home buyers "expiration date" and strike price change a bit everyday, since the mortgage is being paid off bit by bit thus lowering the strike price. We'll sort of look at it as a call option with a shorter expiration (like 1 year), with a sort of "blended" strike price of the average owed during the year.
  
  So the other side of this transaction is the bank, and if you know anything about options, you know that they are essentially short a put option.
  
  If they were long a put option, they could "put" the asset (ie house) to someone at a fixed price, something that's nice when prices are falling. But they aren't long, they are short, or the exact opposite. They can have the asset put to them at a fixed price, aka the mortgage principle.
  
  So if the buyer owes $300K, and walks from the house worth $200K, the bank is out $100K. Simple.
  
  So this is our housing market model: Buyers are long call options, banks are short puts the summation of these 2 positions equating to being long 1 house.
  
  You might wonder, "Why in the hell would the banks ever go into a business with severely limited upside, and one hell of a lot of downside?"
  
  Well, that's a good question. And the reason is simple, and was intimated to earlier: Banks receive "premium" (ie your mortgage interest payments) for bearing risk.
  
  Think of an interest-only mortgage: The bank can receive (and invest) this amount every month for 30 years, and at the end they will either receive nothing (ie the house is worth more than the mortgage), or they will have to pay some amount that the house has fallen below the mortgage.
  
  And before now, the idea that a house would be worth less in any decent period in the future was pretty absurd. In fact, this "bet" for banks was, and always has been, a pretty safe one.
  
  But let's get back to our little housing model. To figure out the value of our home buyers "call option" we'd use Black-Scholes. I don't want to go into the mechanics of the formula, primarily because I don't fully understand them, but I do know a few things about option pricing.
  
  When you are buying a call option, the price goes UP when:
  
  

  1. The volatility of returns goes up.
  2. The strike price goes down.
  3. The time to expiration is increased.

  These are all pretty straightforward assumptions.
  
  When the price of a stock is all over the place, the options for that stock, both puts and calls, go up in price.
  
  When the "strike price" goes down, the value of a call goes up, since it's intrinsic value goes up.
  
  When the time to expiration increases, you have more time for the stock to go above your strinke price, and so the value of a call goes up.
  
  So, let's think about the historical aspects of this state of affairs, a bunch of Americo's long call options, and a bunch of banks short puts on the largest store of wealth on Earth, the US housing market.
  
  Well, with respect to Black-Scholes, we can say that the call option buyer probably wants lower volatility, since that lowers the price of their option. The put seller actually can charge more at times of high volatility.
  
  But US housing was never really volatile before 1997. Up a few percent here & there. Maybe once in awhile there would be a regional spike higher or lower, but on the whole home prices moved very steadily, if not slowly, higher. Home volatility has been historically low.
  
  Lowering the "strike price" on a home, basically means increasing the down payment. This pushes up the value of a home owners "call option". It means they have more to lose if the price goes down.
  
  The fundamental thing a large down payment does is it moves the strike price to the left, while the home value remains the same. The home buyer already has built-in "intrinsic value", and a pretty good cushion on which to make money. Similarly, the banks "loss point" moves way down (to the left, to the left), and given fairly stable returns over time, can pretty much count on a long, stable stream of interest payments from a call buyer who has got their financial ass on the line.
  
  OK, so we've had this regime of stable returns, steadily incraesing prices, and fairly hefty down payments until about the past decade.
  
  Then, what happens in any speculative bubble happened to buyers of home call options: They started buying more and more, and banks having lost their senses, also started participating, despite the fact that the increased volatility had actually imperiled the "value" of their vast holding of short puts (home mortgages).
  
  The volatility pushed UP what people were willing to pay for call options, and increased the "premium" received for short puts. And slowly but surely, down payments shrunk, literally to nothing; ie the strike prices on homes equaled their value, and call buyers had almost nothing at risk except the transaction costs, which had actually grown considerably... but were still dwarfed by the potential gains.
  
  And while prices were going up wildly, no really cared. Call prices, bought at little or nothing due to shriveling credit standards, leveraged returns to the sky. Instead of putting 20% down on a home & living in it, people put 3% down on 10 homes (that's 7, plus 3 more on credit cards, so I can retire in the Bahamas!).
  
  And if your house went up 10% when you put 20% down, that was a nice 50% payoff.
  
  But hell, if you put 3% down on 10 homes, and prices went up 10%, that was over 300% on the same money! Even with thick 1%+ transaction costs, it was still worth it.
  
  And so our bubble was created. As usual, with high volatility and increasing strike prices (leverage), and the inherent risk associated with both.
  
  So where are we now? Yes, yes.
  
  Strangely, we have too many homes. That would be that pesky pursuit of 300% returns on 10 homes, not 1, kicking in.
  
  Yeah, should have seen that coming.
  
  Second, the banks hold short put options on assets (those 10 homes no one wants) that have plummeted in value. Yeah, this would be that pesky mortgage crisis I've been hearing about.
  
  Yes, banks ALWAYS have a fairly limited upside on speculative bubbles, but typically (and theoretically) unlimited downside... well, at least to zero, or 100% losses on the assets.
  
  Given that the cumulative sum of US homes was in the low to mid $20 trillion dollar range when this party got started, and prices have fallen off 40%, AND banks had the good sense to spike the party punchbowl with down payments of near 0%, well you've got yourself a recipe for a financial conflagration the likes of which cannot be imagined.
  
  That tells us where we are. And might I add that this blog was around before this monster catastrophe even got started, way back in Dec 2006. And I'll try not to pull a muscle patting myself on the back here, but put all these option analogies together -- the increasing volatility, the shrinking "strike prices" (down payments), and you can see that while the individual call option owners (that's us) had quite a bit to lose (the collective "net worth" of homes in 2006 was many trillions), it was ALWAYS the banks that had the most to lose in a truly colossal meltdown of home prices.
  
  You and me? We can just walk away. The banks just keep losing. And losing.
  
  Or do they?
  
  Our True and Goodly leaders have seen their way clear to taking our money, yes all that medicade and social security cash, and give it back to the fine local put sellers who are losing their shirts (ie Patty Moss et al).
  
  So actually, our model is somewhat off. Because way down in the depths of the left hand side of our option payoff graph, the banks own a long put: They are putting their losses to the American people.
  
  Way, way off to the left... something strange is happening. The banks have received something of almost mond-boggling value: A "free" put option.
  
  Or is it 2 free puts options?
  
  Because, if you look at the payoff diagram of a short put, you see it is the "horizontal" mirroring of a long put. A short put option has a flat payoff as prices increase (simple interest payment collection), but bends lower as prices fall (foreclosure).
  
  Let's say banks on the whole have $15 trillion in mortgages outstanding. That "bend" lower is at $15 trillion and lower. But somehow, banks losses are being capped at an amount equal to what is probably their total capitalization, or about $1-2 trillion, I'd guess.
  
  So somewhere around the $13 trillion mark, the linear negative payoff flattens. More absurdly, it actually seems to turn UP, and head back towards ZERO.
  
  So the banks REAL PAYOFF seems to be a flat line, with a "V" in the middle. It pays banks to be nowhere near the bottom of this V. Be far above, or far below... but not in it's deadly center.
  
  This raises all sorts of issues of fiduciary peril, the likes of which I hope you can clearly see.
  
  But what I find far more interesting is the "offset".
  
  We're STILL only long that one house (or one hundred millions houses... same diff). And Obama Jeebus W Bush has issued the banks somewhere between 1 and 2 FREE put options, meaning their losses are CAPPED below certain loss levels.
  
  So WHO is paying for that put option... or options?
  
  Ah yes... the answer is, of course, us! The American Taxpayer is paying for it.
  
  So, to balance the equation of issuing banks a put option, we are going SHORT a put.
  
  So now the tables are turned. What we thought was our collective "long call"on our homes, with unlimited upside and limited downside, has transformed. Our government has FORCED us to issue a SHORT PUT on the American housing stock, subjecting US to the full brunt of losses below a certain strike price.
  
  But we don't receive interest. And with volatility at it's maximum, the value being lost is worth TRILLIONS.
  
  THIS is the legacy we are leaving to posterity: The payoff of buying a home in this country has been fundamentally altered. Your call option is still in place. You can still win when/if prices go up.
  
  But lurking on the dark side of the mortgage collective is the implicit short put option that will bail out the banks, AND STICK YOU WITH THE FULL BRUNT OF THE LOSSES.
  
  The FLAT left-hand side of the payoff matrix is A LIE. YOU own the losses down there, NOT banks.
  
  Maybe we should have known. How can banks, with their relatively thin capitalization, sustain losses FOREVER? Answer, they can't and they never could. There was always an implicit saving put option owned down there for them in the form of a government bailout.
  
  So you are, as a home buyer, buying a huge call option when you buy a house, and now you KNOW that you are also PAYING for a put option as well. Never really "knew" it before... circumstances had always let it expire worthless, cuz prices inexoribly & continually went up. Not anymore. Prices CAN go down. A lot.
  
  That f**king put option can take EVERYTHING.
  
  Hmmmm...
  
  This whole housing "investment" scheme seems a LOT less attractive. My upside is "unlimited" yes... but my f**king downside is also UNLIMITED. There's a "flat spot" there in the middle... but damn, we sliced through that like butter, and went straight to massive bank bailouts like flies go to s**t.
  
  Yes, yes... I will think twice about ever buying into this payoff matrix. It's not as good as it once was. Before now, it was all caviar and Lamborghini's. Now there's real pain if things don't work out.
  
  No... I don't think I'll be doing that again.
  
  So now... You Will See It Coming. Because THAT is what is going to happen. No more difficult to figure out than simply modeling the situation, and analyzing the payoffs.
  
  It was this easy in 2006. But strangely, Patty Moss and the vast pool of experts the Bully and the rest of Bend media relied on had a curious dearth of insight into the problem.
  
  This is a problem No One Saw Coming.
  
  I did. You probably did.
  
  Know thyself, motherf**ker.
  
  So when, in 5 or 10 years, when housing demand has simply Gone Away, and the Bully is interviewing Experts Who Cannot Explain What Is Going On, you'll know:
  
  The payoffs have changed. "We" CAN LOSE. We are losing. But the debt? It's our kids problem, so who gives a s**t.
  
  Well, you should, cuz it's not really our kids... unless you're damn near dead already. It's us. The debt bomb is ticking, and we owe. Civilizations always die impaled on the pike of debt. Always.
  
  The problem isn't going broke, it's worse than that. We'll lose this country.
  
  To see our "bankers", look East.
  
  Both the borrower & lender have nukes.
  
  And a lender with nukes will always recover the vig.
  Cowboy hats & bikini's... cures anythingDamn... Thumbs up to NUKES!
  
• September 06, 2009
• 5:05

  Goodbye Boys of Summer... that includes Patty Moss.

   » ‎ Bend Bubble 2

  Tags:  Don't Drink the Kool-Aid   [edit]

  I'll make this a short one, since it's the last weekend of Summer...
  
  I saw a pretty amazing home offers over at Forum Meadows. Not "amazing" because they are Good Deals, but amazing because they show how terrible things have gotten in Bend, and amazing in illustrating the after-effects of copious Kool-Aid consumption.
  
  From bend.craigslist.org:
  
  $129990 / 3br - Finished Newer Homes-Ready Now! (Bend) (map)
  Date: 2009-08-08, 8:05AM PDT
  
  Introducing Newer Homes from 1113 - 2100 sqft at Forum Meadows in East Bend Near St Charles Hospital. There are 3 floor plans to choose from and all homes are complete and ready for occupancy.
  
  These are well appointed homes with tile counters, solid wood floor entries, appliances, finished garages, window blinds, fenced yards, accented exteriors, landscaping and underground sprinklers. They are 2 blocks from shopping, restaraunts and movie theater.
  
  These homes are now for steal at $200,000 below 07' listing price.
  
  They are in better shape than any bank owned home and you will receive an answer within 2 days of your offer.
  
  If you're tired of making rejected, competing offers on homes that need repairs, then call Nancy @ 541-480-4599 or Matt @ 541-280-9576 today for information on these clean and ready to move in homes.
  
  These Forum Meadows s**tshacks are down 63% from their original ask prices of $349,500. Remember Pollocks infamous statement about STEALING?
  
  Oregon subdivision a ghost town
  Saturday, December 22, 2007 at 12:00 AM
  
  Buena Vista Custom Homes unloaded 141 homes last weekend in what company says was the biggest residential home auction in state history. But none of the 29 in Bend sold.

  Still, in every place except Bend, the auction achieved what Pollock set out to do — get rid of expensive-to-carry housing inventory. And it gave him some cash to use on his next moves.

  "The sale of the homes from the auction put us in a great position as a buyer," Pollock said in a news release. "There are some great deals to be had out there right now on lots."

  Some of the Bend houses attracted bids, Higgins said, but none of the bids came close enough to meeting the reserve prices to justify finalizing sales on any of the homes, Higgins said.

  "They were trying to steal them," Higgins said.

  The company retained the right to reject any final bids below its unpublished reserve prices, Higgins said. It was obligated to close on any final bids that rose above that level.

  Buena Vista had hoped to see bidding start at $189,000 for its 1,133-square-foot models in Bend and $229,000 on its 2,116-square-foot homes.

  Original asking prices had been $349,500 and $443,950, respectively.

  Tamara Christensen and her family live nearby. She had hoped the auction would work at least well enough to fill the houses with people who would landscape the bare-dirt backyards she sees out of her back windows.

  But another nearby resident said she was OK with the way it is.

  "I kind of like having fewer neighbors," Charlene Gossling said.

  "It's quiet."

  I'm not sure how many times I ranted about Pollock taking the low bids for those cracker-ass s**tshacks, and being happy to get them, but it was quite a few. He's still on the RIP Hall of Shame masthead.
  
  I'm telling you folks... this thing isn't over by a long shot. THIS is where some Realtor would jump in and say something about "nowhere to go but up", or some s**t. They've been saying that for 2 years. Is this UP?
  
  It's stupid ideas like Pollocks STD-fest that'll be taking down this town for decades to come.
  
  Speaking about Taking Down, someone (Ballzee) posted a link to the actual Cease & Desist order sent to Cracker Ass Motherf**king Butt-Fugly Patty Moss, and that s**thole Fraud-U-Net Bank she whores over, Cascade Bank.
  
  Funny, but this is yet another example of The Guy On The Street Saw It Coming YEARS Before The Lying Dumbf**ks Who Are Actually Perpetrating The Fraud. This raises the question whether Moss KNEW she was blowing up CACB, or whether she is a f**king moron. I vote MORON.
  
  So anyway, back to the order. Click the link, and read it, but I'd agree with Ballzee, it is damn "harsh":
  
  the Bank...cease and desist from the following unsafe banking practices...

  1. operating with management whose policies and practices are determinetal to the Bank and jeopardize the safety of its deposits;
  2. operating with inadequate capital in relation to the kind and quality of assets held by the Bank;
  3. operating with a board of directors that which has failed to provide adequate supervision over and direction to the active management of the Bank;
  4. operating with inadequate loan valuation reserve;
  5. operating with a large volume of poor quality loans;
  6. operating in such a manner as to produce operating losses;
  7. operating with inadequate provisions for liquidity;

  
  I mean Holy S**t! If that ain't a stinging rebuke for Moss, I don't know what is. The rest of the order is a bunch of micro-management directives about HIRING PEOPLE WHO KNOW HOW TO RUN A BANK, with the VERY OBVIOUS implication that those who are there now, DO NOT KNOW HOW TO.
  
  One of the directives from Sheila BEAR HUG Bair, is that Mossco get Tier 1 capital up to 10%. It is not even close now:
  
  Cascade Bancorp (Oregon) Announces Filing of Form 10-Q Quarterly Report and Financial Results for the Second Quarter of 2009
  At June 30, 2009, the Company's leverage, tier 1 capital and total risked-based capital ratios were 5.19%, 6.03% and 8.87%, respectively...
  
  FDIC also lays out how Mossy can and cannot raise money, one of which is the hilarious "raise it from the Board of Directors"! WTF! I also believe that "Begging for the money in the local lie-filled rag" is another legit money-raising avenue.
  
  Mossy can also issue new stock... but hmmmm... that is NOT happening. I wonder why? Oh right... Wall Street would rather buy large, puss-ee (pussy?) maggots and eat them. Wall St would no more buy CACB stock than it'd rise & fly. Even CACB's largest shareholder KNOWS that this bank is DEAD & GONE, and will not give a nickel to save it.
  
  OK, so I think Mossy & Pollock have finally earned their badge of shame on our RIP masthead.
  
  OK, just some interesting pieces I read this week. First, I can't help but reprint the BBC piece, since it's hard with the character limits in the comments, and I think it's just a great balance to what you hear from Costa (ie 100% BULLS**T):
  
  Economic crash in Oregon boomtown
  
  By Adam Brookes BBC News, Bend, Oregon
  
  Bend, Oregon was a 21st century American boomtown. It is a beautiful place, in the high desert of central Oregon, amid mountains.
  
  The sunshine is warm, the air crisp and filled with the scent of bitterbrush and pine. Its people are gracious, their gorgeous surroundings imbuing them with a certain American languidness.
  
  All these attributes were - in the minds of the city's ambitious planners and businessmen - what would bring the retirees and tourists flocking to Bend. To accommodate them, a boom in housing began.
  
  Boom and bust
  
  The population of Bend quadrupled in under 20 years - from 20,000 to 80,000. Between 2001 and 2005, the median value of a home in Bend rose by 80%.
  
  By 2005, work was getting underway on 700 new homes each month.
  
  Some of the developments are stunning: houses filled with mountain light clinging to craggy hillsides.
  
  More than 17% of the workforce was employed in construction - far higher than the national average.
  
  In what had once been an isolated lumber and mill town, high-end restaurants and brewhouses opened. Shops selling expensive bric-a-brac bloomed. Massage therapists and hairdressers proliferated.
  
  Downtown Bend looks like a shrine to post-millenial bijou: pricey shoes, scented candles, fancy coffee. There is even a shop specialising in beachwear - despite Bend's location in the high desert.
  
  But when the US slumped, Bend crashed.
  
  The value of a home fell 40% in under two years. And unemployment nearly quadrupled from around 4% two years ago to 15% in the summer of 2009.
  
  "Everything that Bend produced relied on the credit market", says Carolyn Eagan, an economist with the Oregon Department of Employment.
  
  "Construction materials, doors and fittings, recreational vehicles: everything depended on people being able to consume more than they could use."
  
  Now the credit has dried up, and the building of Bend has stopped. The town is dotted with developments that got underway, and then ground to a halt.
  
  They are desolate expanses of weeds, dust and discarded construction materials.
  
  Homeless shelter
  
  In downtown Bend, we met Dan Hardt. Mr Hardt used to employ 20 people hanging drywall in Bend's new homes.
  
  He owned three houses of his own, and a boat.
  
  He used to go on elk-hunting trips. Now it is gone - all of it.
  
  "When the building stopped, the lifestyle went very fast," he told us.
  
  "It's a lifestyle I don't see coming back."
  
  Dan now lives at the Bethlehem Inn, a motel converted to an emergency homeless shelter.
  
  "Those who were living at the at the top of the heap and who have fallen to the bottom, they don't know where to go for help, they don't know how to get that help.
  
  There's anger and frustration and a sense of entitlement," says Corky Senecal, who heads emergency housing services for Neighbor Impact, and has 30 years experience of providing services for the poor.
  
  "The middle class is where it's really been decimated," she says. When you lose your job in America, you will receive financial aid from the government. But it is limited.
  
  Typically, an unemployed worker in Bend will get state benefits for a period of six months to a year. After that, as many in Bend are discovering, you are on your own.
  
  In addition, the loss of a job frequently means the loss of health insurance and payments into retirement funds.
  
  This limited social safety net means unemployment in America can be devastating. "It's not just the job that stops," says Dan Hardt. "Everything else stops with it."
  
  Ms Senecal introduced us to to Randy Worrell and his 11-year-old daughter, Patty. Mr Worrell, a burly 42-year-old former firefighter, was laid off from a variety of jobs.
  
  He has not worked since the end of last year - and his unemployment benefits have run out.
  
  "I don't know what I will do from one day to the next," he says.
  
  Lesson learned Neighbor Impact has put him and Patty in temporary accommodation. He will look for work, he says, for six hours a day.
  
  And he is deeply sceptical of pronouncements emanating from Washington DC that the US economy is showing signs of recovery.
  
  "Lately it's all, 'the economy is turning around'. No, it's not. At least it's not for us," he says. "I don't think we've even hit rock bottom yet. I think we have some way to go."
  
  Bend, Oregon has a great deal going for it, and will, no doubt, experience some sort of recovery. The population of the city has not noticeably shrunk, which is a good sign.
  
  But no-one expects the housing market ever to revert to its previous, ferocious levels of activity. And many will tell you they have no desire for it to do so, that Bend has learned a lesson about bubbles.
  
  But in the US, joblessness can alter a life trajectory for ever. Seven and a half million Americans have lost their job since the start of the recession.
  
  And unemployment's clawmarks will be visible on the face of Bend, and of the US, for a long while to come.
  
  Some of this reporting is a little misguided (gracious?), but it is definitely not a piece you would EVER find in any Bend media outlet. It's basically an onthology and cataloging of greed and it's after-effects. Again, you will NEVER see this sort of thing from the Bully.
  
  Another good piece I saw was from Mish:
  
  Friday, September 04, 2009
  
  How Overpriced Is The S&P 500?
  
  Inquiring minds are wondering How Overpriced Is The S&P?
  
  It's an excellent question given bulls feel the market is headed much higher while the bears feel the opposite after a remarkable 50% rally.
  
  Let's start off with a look at the financial sector where Allowances for Loan and Lease Losses (ALLL) have plunged even though non-performing loans soar.
  
  To understand the importance of ALLL, inquiring minds are reading a description of Allowances for Loan & Lease Losses.
  
  Businesses try to predict, on an ongoing basis, the amount of loss in their accounts. They take periodic charges to earnings to better match losses to periods when they occurred. Banks do this as well.
  
  They use current income, through the provision for loan and lease losses, to create and build a reserve to absorb losses. The ALLL can be increased another way.
  
  When the bank collects on previously charged-off loans, the amount recovered goes into the ALLL. Charged-off loans decrease the ALLL.
  
  If a bank decides it has overestimated its potential loss exposure, it can choose to reduce its ALLL and add the amount to its income. This is known as making “reverse provisions” for loan and lease losses, because the bank decreases the allowance, or reserve amount, rather than increasing the provision.
  
  It is rare for a bank to make a reverse provision, however, because of the imprecise nature of determining an appropriate reserve. One last point to remember with respect to the reserve is that the ALLL is a general reserve.
  
  Therefore, even if a bank analyzes and estimates the loss on each loan, the allowance is there to absorb all losses in the loan portfolio and is not specific to a particular loan. Remember that allowances for loan losses will decrease as charge offs increase. However, the above charts are in relation to non-performing loans.
  
  Because allowances for loan losses are a direct hit to earnings, and because allowances are at ridiculously low levels, bank earnings have been wildly over-stated. Bank Profits Too Good To Be True Flashback April 16, 2009:
  
  Wells Fargo’s Profit Looks Too Good to Be True:
  
  Jonathan Weil What sent Wells shares soaring on April 9 was a three-page press release in which the San Francisco-based bank said it expected to report first-quarter net income of about $3 billion.
  
  Wells disclosed few details of what was in that figure. And by pushing the stock up 32 percent that day to $19.61, investors sent a clear message: They didn’t care.
  
  Dig below the surface of Wells’s numbers, though, and there are reasons to be wary. Here are four gimmicks to look out for when the company releases its first-quarter results on April 22:
  
  Gimmick No. 1: Cookie-jar reserves.
  
  Wells’s earnings may have gotten a boost from an accounting maneuver, since banned, that it used last year as part of its $12.5 billion purchase of Wachovia Corp. Specifically, Wells carried over a $7.5 billion loan-loss allowance from Wachovia’s balance sheet onto its own books -- the effect of which I’ll explain in a moment.
  
  Once it took control of the reserve from Wachovia, Wells was free to start dipping into it to absorb new credit losses on all sorts of loans, including loans Wells had originated itself. (Think of a child raiding a cookie jar.)
  
  The upshot is that Wells could get by with reduced provisions until the $7.5 billion is used up, boosting net income.
  
  Another quirk: The reserve was related to $352.2 billion of Wachovia loans for which Wells was not forecasting any future credit losses, according to Wells’s annual report. Weil goes on with three other highly suspicious (at best) practices by Wells Fargo, including a balance sheet holding of $109 billion of "other assets".
  
  Weil writes: "The footnote says the largest component was a $44.2 billion bucket that Wells labeled as “other.” Yes, that’s right: The biggest portion of “other assets” was “other.” And what did this include? The disclosure didn’t say. Neither would Bernard.
  
  Talk about a black box. That $44.2 billion is more than Wells’s tangible common equity, even using the bank’s dodgy number. And we don’t have a clue what’s in there.
  
  FDIC Problem Bank List Soars To 416
  
  For a nice discussion of some of the problems facing the financial sector, please consider For FDIC, a long tunnel and little light by Rolfe Winkler at Option Armageddon.
  
  FDIC’s problem bank list grew to 416 at the end of last quarter. These banks have $300 billion of assets.
  
  In total, FDIC estimates the banking sector is wrestling with $332 billion worth of loans and leases on which borrowers have stopped making payments. That excludes hundreds of billions worth of underwater loans that may be current now but will ultimately default.
  
  Many banks, including the largest ones, are likely to struggle for some time.
  How Big is the B of A, and Citigroup Problem?
  
  Citigroup and Bank of America have received hundreds of billions of dollars of government support, but, precisely because of that support, they’re not on the FDIC’s list.
  
  Adding them to it would multiply total problem assets 10 times, to $3 trillion. Asset prices aren’t going back to their highs of 2006-2007, so loans held against them will be generating losses for years.
  
  The FDIC may raise enough cash from banks to fund depositor losses in small and medium-sized banks, but it is clear that the biggest banks are far too large for them to handle.
  
  As a result, the government’s emergency rescue measures aren’t going away for a while. And taxpayers should expect to be writing fat bailout checks to the financial system for years to come.
  
  America’s Japanese banks Inquiring minds are reading America’s Japanese banks also by Winkler.
  
  A banking system loaded down with hundreds of billions of dollars worth of unrecognized bad debt — Japan in the 1990s? No, it’s the United States today. And where are American banks hiding their losses?
  
  Among other places, in their loan portfolios. Banks have written down billions in toxic securities, but many toxic loans are still carried at close to full value. According to data published by the Federal Reserve late last year, banks are carrying $3 trillion of residential real estate loans and $1.7 trillion of commercial real estate loans on their books for a total of $4.7 trillion.
  
  Dan Alpert at Westwood Capital thinks as much as a fifth of that total could be uncollectable. Banks argue that loans should not be marked down if they’re still “performing.”
  
  As long as borrowers are meeting their contractual obligations, there’s no reason to take a writedown. The problem is, this gives banks an excuse to extend, amend and pretend. They can make concessions on loan terms or delay foreclosure notices, if only to maintain the fiction that borrowers will make good.
  
  With real estate prices likely to fall, and stay, 40 percent below the peak, borrowers have a big incentive to renege on their side of the bargain. This is how we become Japan.
  
  Emergency bailout facilities allow banks that otherwise would have failed under the weight of bad loans to hold those loans to maturity — pretending the bad ones will be paid off in full over time.
  
  In reality, many loans will default and banks will bleed capital for years. Take commercial real estate. As the Congressional Oversight Panel has reported, few CRE loans that were originated at the peak will qualify for refinancing when they mature.
  
  Banks can pretend they will, carrying the loans at values far above what will ever be paid back.
  
  So what do we do? We can start by eliminating government guarantees that allow banks to avoid dealing with the problem.
  
  As things stand, the biggest banks have no incentive to write down loans because the Federal Reserve, Federal Deposit Insurance Corporation and Treasury Department have, in effect, promised them unlimited financing to hold loans to maturity.
  
  As the Japanese can tell you, this is just a recipe for stagnation. Thanks to a debt bubble that authorities refused to deal with decisively, that country is now entering its third consecutive lost decade.
  
  S&P 500 Earnings Given that loan loss provisions directly affect earnings. Let's take a look a PE chart of the S&P 500 from Chart of the Day.
  PE Ratio, S&P 500
  
  That chart was from earlier in the month. Nearly all companies have now reported and the PE is down to 127.43.
  
  If that sounds preposterous you can check the S&P 500 Excel Spreadsheet right on Standards and Poors. Real vs. Operating Earnings The chart above is based on actual reported earnings.
  
  Unfortunately it's difficult to find anyone stating P/E ratios based on actual earnings. Instead, because the media and investor bias tends towards being 100% invested 100% of the time, nearly all estimates you see are based on "operating earnings".
  
  Barron's had an excellent article on this subject in May of 2008. It is as relevant today as it was then. Please consider What's the Real P/E Ratio? There are two main earnings numbers that Wall Street uses when discussing valuations -- "reported earnings" or "operating earnings."
  
  Typically, the bulls use "operating earnings," and the bears use "reported earnings" because operating earnings are higher and reported earnings are lower.
  
  Also, it makes sense for the bears to use the past 12 months of earnings because they are usually lower, and for the bulls to use forward operating earnings to help make their case.
  
  Using the last 12 months is much more consistent, since it avoids dependence on estimates of earnings. Operating earnings exclude write-offs, while reported earnings include write-offs.
  
  That is the only difference, but it's a difference that is getting much more important.
  
  As recently as the early 1990s, operating and reported earnings were virtually the same. But then we entered the greatest financial mania of all time, and the earnings numbers diverged.
  
  There were so many write-offs by companies making unwise investments and then undoing them that operating earnings grew much faster than reported earnings.
  
  The write-offs that had been sporadic and unusual became common for many companies. Using operating earnings is now like playing in a golf tournament that doesn't count any penalty strokes for hitting the ball into a water hazard or out of bounds.
  
  Over the past 75 years, most market peaks topped at around 20 times reported earnings, and the troughs occurred at around 10 times earnings. The financial mania of the late 1990s pushed P/Es to over 40 times reported earnings, and the following bust never brought P/Es below 18 times reported earnings.
  
  There's more we can do to make sense of earnings: The best way to measure present earnings and future earnings is to smooth them out over long periods.
  
  Earnings can grow at only approximately 6% a year over the long term. The trend is limited by the growth in real GDP plus inflation.
  
  And long term, real GDP cannot grow faster than the increase in the labor force plus the increase in productivity.
  
  If you don't accept this, look at a long-term chart and draw a 6% growth line through the earnings. It is clear that earnings sometimes rise above the line and sometimes fall below it, but earnings always revert to the 6% mean.
  
  Going back to 1950, every instance where actual earnings rose above trend-line earnings was followed by a period where actual earnings went well below trend-line earnings.
  
  Creative Destruction
  
  Please bear in mind that historical long term trends are just that. Intermediate-term, it is imperative to factor in demographics, changing consumer attitudes towards debt, willingness and ability of banks to lend, overall debt levels, etc.
  
  I have discussed consumer attitudes many time, most recently in Creative Destruction. Factors Sealing The Deflationary Fate
  
  The five month, 50% rebound in the S&P 500 was certainly spectacular.
  
  However, the more important question is where to from here? Take a look at Japan's "Two Lost Decades" for clues.
  
  Creative destruction in conjunction with global wage arbitrage, changing demographics, downsizing boomers fearing retirement, changing social attitudes towards debt in every economic age group, and massive debt leverage is an extremely powerful set of forces.
  
  Bear in mind, that set of forces will not play out over days, weeks, or months. A Schumpeterian Depression will take years, perhaps even decades to play out. Thus, deflation is an ongoing process, not a point in time event that can be staved off by massive interventions and Orwellian Proclamations "We Saved The World".
  
  Bernanke and the Fed do not understand these concepts, nor does anyone else chanting that pending hyperinflation or massive inflation is coming right around the corner, nor do those who think new stock market is off to new highs.
  
  In other words, almost everyone is oblivious to the true state of affairs.
  
  How Overpriced Is The S&P?
  
  Take another look at those charts kicking off this article. Factor in the analysis of Winkler and Weil. Factor in demographics, consumer attitudes, etc.
  
  Factor in global wage arbitrage. Factor in loan loss provisions that have only one way to go, up. Factor in consumer debt levels, realizing that consumer spending is 70% of the economy. Do the forward earnings estimates you hear from bulls make any sense to you? They do not make sense to me.
  
  While it's hard to put a price tag on any of those components, we can look at Japan as a model as I have suggested on many occasions and Winkler is suggesting now. If you have not yet done so, please consider Effect of Household Deleveraging on Housing, Consumption and the Stock Market.
  
  Here is a snip pertaining to Japan, but there is much more in the article to see.
  Nikkei, 28 yrs
  
  A look at the Nikkei shows that Japan has already lost two decades since the peak in 1990. It is likely the US follows the same general pattern.
  
  Of course some huge innovation like the internet could come along that would create enormous profits and employ millions of highly paid workers.
  
  However, the odds of that are extremely small. Thus, the risk/reward scenarios of long term investing are awful based on fundamentals alone.
  
  Traders however, will have many opportunities in both directions. All things considered, I suggest the S&P 500 is easily 50% overvalued based on what we know now.
  
  That is not a prediction the S&P will be cut in half, rather it is my belief that it should be cut in half. Given that I have seen estimates as low as 200, I am not "SuperBear".
  
  However, the reality is no one really knows what innovation is (or is not) coming, nor can anyone say for certain what valuations investors are willing to place on earnings. There are also foreign Central Bank issues to fact in.
  
  With that in mind, the S&P could easily meander around this level for a decade while earnings catch up to what are now very poor valuation metrics.
  
  As always, traders need to keep an open mind and not get locked into any scenario. Long-term investors will have to take what they get.
  
  Unfortunately, I suggest those results are not likely to be very pretty.
  
  Mike "Mish" Shedlock
  http://globaleconomicanalysis.blogspot.com
  
  The title of the piece is sort of misleading because it is primarily about banking. What I think is amazing is the B of A and Citigroup chart.
  
  These 2 banks on their own DWARF the size of the S&L problem several fold.
  
  The number of failed institutions going down right now is quite low. But the size is incredible. And this graph doesn't even include AIG. Or Fannie. Or Freddie. Add those in, and you get a real sense that this current problem is something that will not fade away quietly.
  
  Our government is trying to keep these companies off the FAILED board, because the incredible upset caused by just letting Lehman go (a piker in comparison) was not acceptable, and truly would have melted down the Worlds economies.
  
  And it could still happen. I honestly do not think the US Government can recitify the situation. It's my strong belief that the bursting of the housing & credit bubble is the most important event of our lives (economically), and it's effects will be felt for decades.
  
  And finally, I wanted to post this Oregonian piece.
  
  Increase in Portland-area home foreclosures worries analysts
  Posted by mgraves September 03, 2009 18:06PM
  
  Portland-area foreclosure filings have begun ticking up again this summer, reversing a spring trend that showed mortgage defaults had leveled off.
  
  County records show that the number of mortgage defaults -- the first step in a foreclosure -- rose less than 2 percent in Clackamas, Multnomah and Washington counties between the first and second quarters of 2009.
  
  But this summer, new foreclosures are on pace to jump 9 percent in the third quarter to about 3,500 for the tri-county region, or 38 filings every day.
  
  "We're not seeing any relief," said Sande Sivani, a consultant who researches property records and records documents for title companies. "It's going up and up and up."
  
  The uptick comes as lenders, which months ago had put a moratorium on foreclosures, have grown more aggressive with struggling borrowers.
  
  The housing market has seen a mild boost from bargain-hunting investors and first-time buyers chasing a federal tax credit. But the renewed interest isn't coming fast enough or broad enough for some home owners.
  
  Double-digit unemployment and falling home values have pinched home owners between shrinking income and homes that are worth less than the mortgage debt. The position leaves them few options to avoid a default. "It's the high unemployment that's driving foreclosures," said Patrick Newport, U.S. economist with economics firm IHS Global Insight.
  
  Banks, despite political pressure from the White House, remain reluctant to modify troubled mortgages to try to save homeowners from foreclosure. More frequently, borrowers whose mortgage fall into default are not escaping trouble.
  
  Fitch Ratings Ltd., a credit-rating firm, examined mortgages that had been packaged into securities. The firm found that between 2000 and 2006, 45 percent of borrowers who fell behind on prime loans -- those with the best credit -- were able to "cure" their delinquency by catching up on their payments. But that cure rate has plunged to just 7 percent for prime loans.
  
  For Alt-A loans, those with a slightly higher credit risk, the cure rate has fallen from 30 percent to 4 percent. For subprime loans, the riskiest type, the rate went from 19 percent to 5 percent.
  
  In the three-county Portland area, Sivani said she found 800 loan modifications recorded in the first six months of the year. But, she said, her sampling found about only one in 10 were modifications tied to a delinquent mortgage.
  
  Either way, those modifications were dwarfed by the more than 6,300 new mortgage defaults the lenders had recorded in those three counties in the same time period.
  
  Despite Obama's calls for banks to lighten up on troubled borrowers, Newport said: "That isn't going to happen. Usually it's in the banks' interest to take the loan into foreclosure."
  
  A July study by the Federal Reserve Bank of Boston found that lenders expect to make more money on foreclosures than from a modified loan. That's because a large percentage of borrowers historically either "cure" the delinquency on their own or they receive a loan modification, then default on the mortgage again.
  
  By many measures, Oregon continues to fare better than the nation that's been dragged down by Arizona, California, Florida and Nevada. But in some cases, the state's woes are unmatched in its own record books.
  
  The Mortgage Bankers Association reported recently that about 8.5 percent of Oregon mortgage holders were at least 30 days delinquent or in some stage of foreclosure during the second quarter.
  
  For the first time in this downturn, that figure has surpassed the previous high water mark set during the 1980s recession. The second quarter figure was the state's worst since the association started keeping track in 1979.
  
  Those looking for a brighter outlook in the next year may have a difficult time.
  
  Barclays Capital forecasts the number of foreclosed homes for sale will peak in mid-2010 at 1.15 million, up from an estimated 688,000 as of July 1, the Wall Street Journal reported.
  
  IHS Global Insight's this week ranked Portland as the country's sixth most overvalued housing market. The firm says the Pacific Northwest is the final region to watch the froth of the boom years burn off.
  
  Of the 11 markets labeled overvalued, seven fall in Oregon or Washington.
  Dunc, please help me do horny FRASH-DANCE in this metal crib!
  I wish I had a pearl necklace instead...
  Now that the Downtowners gone, where we get an hbm sandwich?
  
• August 30, 2009
• 5:23

  The Latest Bubble? Recovery

   » ‎ Bend Bubble 2

  Tags:    [edit]

  Wow, they are selling this thing hard.
  
  I think the only thing I've seen sold harder than the current "recovery" was the recovery back in Aug 2006. Then the Jan 2007 recovery... and that July's recovery... then the Winter Recovery of 2007... and into Summer 2008's recovery.
  
  Yes, the only "recovery" that hasn't been sold is the FALL of 2008 through Spring of this year. That's because only small-potatoes morons like John Costa were still peddling that s**t.
  
  Now, I'll admit right now (like I did last week), that some, including me, are experiencing something of a "recovery".
  
  I am "asset poor". I don't own a house, and I have 2 would-be Cash-4-Crunchers. I have been saving my pennies, and threw all in late last year... and suffered the worst market losses of my life. Until just recently.
  
  But that sort of "financial profile" I'll bet, is pretty rare. Most people have a big chunk of their assets in their house. For 75-80% of all people this will always be true. This "current history" is the only time in my adult life that hasn't been true for me.
  
  So most people that are represented at all in financial society have their assets tied up in a home. Almost always with the attendant debt. And that asset value has been crushed by trillions of dollars. We are probably only about 55-60% through this thing... for Bend, far less. RE Bubbles NEVER end this fast, and the "recovery" is typically measured in decades... for Japs & Texas oil it's still 2 decades and waiting.
  
  So the primary "net-worth" engine in this country, having gone strong for 100 years, is broken. TRILLIONS are gone, and won't be coming back anytime soon.
  
  So "what" is this recovery we're being sold? Well, it's primarily a Pollyanna, The Sun Will Come Out Tomorrow scenario. And the media is pointing primarily to the stock market as proof.
  
  But I've said over and over that the stock market didn't even see the enormity of the housing bubble, The Greatest Financial Bubble The World Has Ever Seen... and stock market types did not see it. They were too far IN it. They thought what was happening was fine, and would go on forever.
  
  I started this blog in Dec 2006, and it was 11 months later until stocks peaked.
  
  And I can tell you, preaching about The End Is Nigh is pretty damn tough, as the wealth tidal wave grows higher & higher. There seemed to be indications aplenty that things were not going well... but The Canary In The Coal Mine, stocks, were just fine.
  
  So stocks are currently the primary divining rod for recovery prognosticators now. And they have done well. Quite well, having one of the greatest 6 month runs of all time. From about 6,500 to 9,500, or 46%. That's pretty amazing. That's the sort of gain that usually takes years.
  
  So stocks are pointing the way, right. And that "way" is up... right?
  
  Well, look at the curious phenomenon of Freddie, Fannie, and AIG.
  
  AIG's current valuation is $6.76BB. Fannie & Freddie are worth $2.27BB and $1.56BB respectively
  AIG 1 year
  AIG, 1 month
  FNM, 1 month
  FRE, 1 month
  These companies were actually the butt of some pretty sarcastic criticism in the Bully, no less, regarding their recent advance, several hundred percent in all 3 cases.
  
  But folks, again the market has it wrong.
  
  These companies own Unkki Sam HUNDREDS OF BILLIONS. They aren't just worth ZERO, they are in the red TENS OF BILLIONS.
  
  But the market has caught some sort of Dengue Fever, and thinks that it can bring these financial zombies back to life. It has slapped a collective $10BB price tag on these corpses. Rest assured, they are dead. They are worth nothing.
  
  So again, there is a Huge Gulf between what the market expects, and what is seemingly a blatant reality. Could there be the Worlds Largest Debt Forgiveness package coming? Maybe. But even then, the outrage seems like it would dictate a complete wipeout of equity holders.
  
  As I said, this thing is 55-60% done; and that's time elapsed until we hit bottom. For Bend, add on the customary 2-3 years to that. This isn't done. On a opp-cost basis, we will eclipse the March lows.
  
  More proof that the recovery is a sham? There's plenty.
  
  Local unemployment came out last Tuesday at 15.3% (adjusted, 13.9% unadjusted) for Deschutes County. Again, the 13.9% is more salient, cuz you can't buy s**t at Safeway with "adjustments".
  
  To give you sense of this series, the July UE rates for Deschutes from 2006 to date, has been: 4.3%, 4.5%, 6.8%, 13.9%.
  
  Do you see the recovery there? I do not.
  
  No, I see Cessna closing.
  
  I see Epic closing, shafting everyone in sight, and Schramek looting the company coffers and heading to Bermuda.
  
  I see (from today's Bully):
  
  New building permits continue to fall to such low levels that they are close to zero, from a seasonal-adjustment standpoint, Duy said. He credited the drop in permits to the region’s excessive housing inventory, both from overbuilding and from a steady stream of distressed properties entering the market.
  
  Bend is for all intents and purposes, DEAD. We are an ecoinomic ZOMBIE. Accordingly, I take issue with Bubble-Head Duy:
  
  “The good news is (building permits) are so close to zero there’s nowhere to go but up,” Duy said.
  
  No, actually there is a FAR MORE LIKELY direction that ZOMBIE'S take: SIDEWAYS. Says Duy:
  
  “Building permits followed a very nice pattern each year for years — around 175 homes a month — and it was only in the last few years as the bubble accelerated that (the region) had this weird situation where (it was) permitting 300, 400, 500 homes per month.”
  
  Funny how this guy describes the WHITE HOT CENTER of the Worlds Largest Housing Bubble, Bend OR, as a "weird situation".
  
  Bend Oregon is a fairly unique confluence of startlingly rare financial miracles that culminated in one of the greatest concentrations of fleeting wealth this country will ever know.
  
  Yeah, it's "weird". But what will eclipse it in weirdness, has yet to come.
  
  We will find out just how deeply it has been penetrated by the Tami Sawyers, Rick Schrameks, the Summit 1031ers, and all the other grifters that represent probably half this towns economy.
  
  So we are to believe that a UE rate that's gone parabolic is "leveling-out". "Recovery right around the corner", and all that. Hmf.
  
  In Thursay's Bully, Costa again displays a near catatonic penchant for Broken Clock-itis.
  
  Both office & industrial vacancy rates in Bend have exploded higher, from 7% and 3.6% respectively at their nadir, to 19.1% and 17.4%.
  
  Oh yes, thar be recovery there maties!
  
  WTF! This piece had nothing but "RECOVERY IS IMMINENT" statements from start to finish. Have these f**king experts been over on Colorado recently? That f**king place is a ghost town.
  
  Ironically, there is a huge piece just below it, "THE HOUSING INDUSTRY: SIGNS OF LIFE", and a huge pic of Vegas.
  
  No, commercial is NOT where "The Elusive Recovery" is happening. In fact, it is the next shoe to drop. Commercial vacancies will go to 30% in Bend, mark my words.
  
  Where next for this Fabled Recovery Fraud?
  
  Oh, right, right, right, right, right... how could I forget the Biggest Mega Fraud In Town?
  
  Cascade Bancorp.
  
  We already had Priney Bank go down hard, and believe me folks, this s**t comes in 3's. Past will be prescient, and you will see our dearest beloved CACB Fraud-U-Net Financial House of Cards go down.
  
  CACB is headed for the financial dustbin of history, and skank-ass-butt-motherf**king ugly Patty "Beat With An Ugly Club" Moss has told us all as much, with her now weekly PLEADING FOR NICKELS segment in the Bully.
  
  But the bigger issue is little killer bee stings like CACB taking down FDIC, which is all but inevitable at this point.
  
  OK, so Unkki Sam will step in before this happens, but Nigga Pleeze, how the f**k many times can this happen before some major s**t hits the fan?
  
  All this leads to the Point About No Recovery Is Possible Because Our Debts Will 100% Wipe Out The Net Worth Of This Country.
  
  In 10 years, the Obama-Jeebus tells us that we will owe something like $400K PER MAN, WOMAN, and CHILD in government debt. That's just GOVERNMENT DEBT. You will still owe on that f**king $400K mortgage for your $150K STD s**tshack.
  
  THAT is death. THAT is the End. We cannot, as a nation pay that off. No way.
  
  We are riding a short, pleasant, but 100% unsustainable Bloody Mary recovery. At some point, we will all wake up to this 100% INEVITABLE FACT. We have, are, and will continue to BAIL OUT EVERYTHING.... but funny, it's still just us.
  
  The Feds are us. We are AIG. We are all in this together, and pushing the burden from person to person, company to company, and quasi government institution to quasi govt institution does NOT get rid of it. The burden has just been moved, NOT destroyed.
  
  As I've said here several times, what is happening is the greatest transfer of Wealth the World has ever known. The receivers are The Guilty, the perpetrators of the Greatest Fraud Ever Conceived. The Victims, are us, US taxpayers, a flock of sheep getting sheared and ready for the slaughter.
  
  Your current debt load for this thing is near $100K, but it's about to EXPLODE HIGHER. Soon, we will all owe more than we can make in a lifetime.
  
  So I say, take this recovery for what it is: A chance to sell, and cut your losses. I am.
  hbm, can you help me get these pesky shorts off? Dang!
  Good things cum in 3's!
  
• August 23, 2009
• 6:45

  The Poor Get Richer.

   » ‎ Bend Bubble 2

  Tags:  the Cult of Bend   [edit]

  I swore I wouldn't jump into the muck & mud of politics on this thing, mainly because it is like religion, it's an argument that cannot be won. I just see people who engage in endless political debates on any side, as unable to divine the fundamental truth that whatever side they are on and whatever point they choose to argue, they cannot win.
  
  Extended political debates are like watching 3 year olds argue whether green or orange is a better color.
  
  That said, the political face of this country is starting to resemble the hated Cali-Banger. Extreme in all regards. Not just big titties, but only the Biggest Titties On Earth will do. Not just a nice big car, but a f**king SUV that blots out the Sun. Not just a house too big, but a McMansion that is an gaudy abomination to pocketbook & neighbor alike.
  
  Politicos seem to think that they are in a tug-O-war, pulling mightily for the control of The Vast Center. That if they are extreme enough, they will influence the vast hordes of moderates to go their way.
  
  Libs see themselves as enlightened scholars and the vast middle as mentally pliable dullards. The RePugs see the middle as politically nomadic wildebeats to be turned to their will, or eaten. Strangley, religion seems to be the weapon of choice for both.
  
  But again, I simply see a contingent that is wandering away from the middle, which is fine. But there is no rope. Extremist loonies actually make me go the other way.
  
  I don't have cable at home, but the short exposure on cable-TV-enabled vacations I had to the clearly obvious right-wing ravings of CNBC were the most convincing arguments for the left I've seen in a long time. Now, the "I Told You So, Those Right Wing F**kers Are Wrong On Everything!" lib retort is the best way to push me back to my comfy, cozy rePug roots.
  
  And I must say, that one of a few scenarios must be true: Either Bend is FULL of extremists, or I attract Lib's like flies, cuz I don't know anyone who is just a calm moderate centrist. And by that I mean someone who has a thoughtful reason for backing whatever it is their political beliefs are.
  
  For example, not that I am thoughtful, but I am pretty party-line Reaganesque RePug, but I do not think abortion should be outlawed. Abortion is going to happen, one way or another. Period. RePugs who don't understand that are confusing their idealism with the pragmatism of the individual. Plus, I do not believe I should blithely make political decisions regarding a womans body. More accurately, I don't believe abortion should be a political decision. It's an individual decision, not mine or some politico whore.
  
  And ALL my lib friends use THAT example as some sort of rationalizing for ALL lib political viewpoints, and that I should see the light on ALL OF THEM, like I have BABY KILLING. No.
  
  And equally heinous RePugs, like my beloved sister, who was a devout Dem supporter until Monicagate, are aghast, wondering why I am in league with SATAN.
  
  Oy.
  
  I guess my opinion on politics is that the extremists seem to think that they are engaged in a titanic debate with the enormous mass of the middle ready to roll down one side of the mountain or the other, when in reality there is no vast middle being influenced. If anything, many are repelled to the other side.
  
  Many are flying the flag of the Cal-Banger ethos, Extremis delectatio morosa. You can see the pointlessness when these sides clash:
  
  http://www.youtube.com/watch?v=nYlZiWK2Iy8
  
  OK, enough of that s**t, that makes me wanna puke.
  
  I saw a short, interesting piece in The Economist:
  
  The housing wealth effect
  
  ANOTHER housing crisis meme circulating is that much of the recession's pain can be explained by the consumption impact of falling housing wealth. It's a pretty attractive storyline; homeowners feel rich based on their home's paper value and therefore buy more, or they actively use paper housing wealth to fund consumption via home equity loans.
  
  Then, when housing prices fall that wealth disappears and national consumption craters. The problem with this line of thought is that falling housing prices mean falling housing costs for renters, who experience the crash as an increase in their real wages. Rising consumption from richer-feeling renters should partially or entirely offset falling consumption from owners.
  
  New research on the euro area by Ricardo Sousa seems to support this second view of the housing wealth effect:
  
  This paper estimates the wealth effects on consumption in the euro area as a whole.
  
  I show that: (i) financial wealth effects are relatively large and statistically significant; (ii) housing wealth effects are virtually nil and not significant; (iii) consumption growth exhibits strong persistence and responds sluggishly to shocks; and (iv) the immediate response of consumption to wealth is substantially different from the long- run wealth effects.
  
  By disaggregating financial wealth into its major components, the estimates suggest that wealth effects are particularly large for currency and deposits, and shares and mutual funds.
  
  In addition, consumption seems to be very responsive to financial liabilities and mortgage loans.
  
  It isn't the case that falling housing prices can have no effect on the broader economy; they certainly do. It's merely the case that the effect of falling housing wealth on consumption is not the main pathway for an interaction between declining housing values and output.
  
  I find this interesting I guess because it describes me. I don't own a home, and the attending mortgage, plus the recent stock market rebound has done wonders for my net worth.
  
  All this plus the fact that I sort of positioned myself delta-positive for a decline, and I am better off financially than I have been in years. Maybe ever. Hard to say, as I have had homes & businesses acquired with debt, and getting a bead on these illiquid financial assets was only really possible upon their liquidation, which is strangely an event that makes me feel poorer.
  
  So I am spending. A lot. And that's a relative statement, I guess. As I said I don't have cable. Until recently I had a 1950's era TV. But I am buying books. Going out to eat, once in awhile (Sno Cap in Redmond). I do more than single-mindedly walk through the grocery aisles at Costco. Bought my wife a blender a few weeks ago. All this, and I have enough in the bank to survive 18 months with zero income.
  
  I guess THAT is what makes me feel rich: I can live a LONG TIME with what I have, and make all my financial committments. Which are not many. Well... maybe THAT'S what really makes me feel rich: I don't owe much to anyone.
  
  And that was definitely NOT the case in years past when I had a nice big home I owned, or a business that certainly made me feel rich as I cycled through a fairly decent chunk of change each month. I could not have survived those times with my financial resources for more than a few weeks.
  
  So my asset-base is far scaled down now. And maybe in some technical sense, my net-worth is lower now than it may have been in the past. But my debts are almost non-existent, which hasn't been the case since I started college. And THAT is what gives me a very serene state of mind.
  
  And that is why I am "spending". Which basically means I am saving 50% of my income, not 55%.
  
  And it took almost 2 years, but they finally dropped the prices enough for me to buy a game console! Wii-Hoo!
  
  But I still don't have cable. That's a monthly check I still don't want to write.
  
  So I'll end it this week with a great piece from The Economist:
  
  Where it all began
  
  Signs of stabilisation should not obscure the big problems still ahead
  
  HE IS hardly your typical distressed seller. Hugh Hefner recently sold his personal residence in Holmby Hills, California, next door to the Playboy mansion, to a 25-year-old entrepreneur for $18m--some 36% below the asking price.
  
  It will come as little solace to the ageing Lothario that the discount looked about right: house prices have fallen by one-third from their peak nationwide, and by much more than that in the worst-hit states, such as California, Florida and Nevada.
  
  Although global financial sickness first erupted in American residential property, thanks to ludicrously lax subprime lending, policymakers have recently seemed more worried about asset classes to which the infection subsequently spread.
  
  When the Federal Reserve this week extended the life of a facility to support asset-backed securities, for instance, it was more out of concern for commercial property than for housing. Nevertheless, observers agree that America's economy--and all those banks still saddled with underperforming mortgages--will struggle to recover while house prices are still falling.
  
  The Obama administration's economic successes "will be for naught" if the housing free-fall continues much longer, says Mark Zandi of Moody's Economy.com. Hence the excitement over some recent, albeit tentative, signs of stabilisation.
  
  The S&P/Case-Shiller index, which tracks home prices in 20 cities, ticked up slightly in May, its first gain in 34 months. New construction of single-family homes rose in July for the fifth straight month.
  
  Sales of existing homes are expected to show their fourth consecutive month of gains when latest numbers are released on August 21st (see chart 1, right-hand side).
  
  Toll Brothers, a big home-builder, just recorded its first gain in net orders (new orders minus cancellations) for four years. With homes now at their most affordable in living memory, relative to median income, "we've finally found a level where people want to do deals," says Pam Liebman, chief executive of Corcoran, an estate agency.
  
  The revival is largely at the lower end, which helps explain this week's $1.4-billion acquisition of Centex, a home-builder which specialises in cheaper houses, by Pulte Homes. Dig deeper, however, and the recovery's foundations look shaky.
  
  Rising joblessness will continue to weigh on demand for homes. The unemployment rate, currently 9.4%, is expected to peak at more than 10% some time next year.
  
  The economic effect of unemployment is wider: as more and more of those still in work know someone who has lost their job, they will think twice before buying a property. Consumer confidence remains fragile.
  
  For those seeking a mortgage, credit is still hard to come by. The two main federally backed mortgage agencies, Fannie Mae and Freddie Mac, have tightened their standards for new loans (though mortgages handled by their sibling, Ginnie Mae, have fallen in quality).
  
  A Federal Reserve survey of loan officers, released on August 17th, suggested that banks will remain tight-fisted for some time. They are still grappling with growing losses from residential mortgages.
  
  These will not peak until early next year, reckons Betsy Graseck of Morgan Stanley. Moreover, the positive signs in housing are partly driven by short-term factors. One is the tax credit for first-time buyers that was included in Mr Obama's stimulus package: some are rushing to buy now because deals must close by November 30th to qualify.
  
  Annual tax refunds, handed out in recent months, may also have given the market a temporary lift. Attractive mortgage rates helped, too. But these have climbed off their historic lows, despite efforts to keep them down through the Fed's purchases of mortgage-backed securities.
  
  Many expect them to rise further as ballooning government borrowing puts upward pressure on Treasury yields. A glut of supply will also weigh on prices, thanks to a wave of repossessions.
  
  Foreclosures are running at record levels, with one in 355 of the nation's homes receiving a filing in July alone. Seized properties now account for almost one in four sales.
  
  Increasingly, those losing their homes are supposedly safer borrowers with "prime" mortgages. They now account for more foreclosures than subprime borrowers, says the Mortgage Bankers Association (MBA).
  
  With 1.8m homes already in foreclosure, a "similar amount" may be heading that way, reckons Torsten Slok, an economist at Deutsche Bank. Even those states that were the first to feel pain are still seeing a sharp increase in pre-foreclosure notices.
  
  In California one type of notice, for "trustee sales", leapt by 32% from June to July, according to ForeclosureRadar, a website. Even more worryingly, delinquencies, the raw material for foreclosures, are still on the rise across much of the once-golden state.
  
  In Orange County nearly 7% of mortgages are at least three months overdue but not yet foreclosed, up from around 5% at the start of the year. The rise in negative equity--when a borrower's mortgage debt exceeds the value of his home--is also fuelling foreclosures, not least because many would rather walk away than keep making payments on a home that is worth much less than the sum owed on it.
  
  Zillow.com, a property-information service, estimates that 23% of homes with mortgages are underwater. Others put it higher.
  
  A staggering 60% are submerged in Las Vegas. Deutsche Bank's securitisation team expects negative equity to peak at 48% of total homes by 2011.
  
  That may be too pessimistic, but all agree that the number will rise further. This matters because negative equity weighs doubly heavily on home prices, by both weakening demand (it traps potential buyers in their homes) and adding to supply (it often ends in seizure and distressed sales).
  
  Government efforts have done little to stop the rot. Under the main foreclosure-prevention programme, only 235,000 struggling borrowers have had their loans altered to make payments more affordable, out of 4m targeted for help.
  
  Even with a financial incentive to modify, loan servicers remain reluctant. Many borrowers are too deep in negative equity and the redefault rate is too high. "It doesn't help if you're drowning in 20 feet of water instead of 30," says Jay Brinkmann, the MBA's chief economist.
  
  Moreover, the typical troubled mortgage is getting harder to modify because it is more likely to be the result of unemployment than an interest-rate increase.
  
  Bringing the monthly payment down by 20% does not help when the borrower has no job.
  
  Even if the pace of modification quickens, the overhang of unsold homes will remain dauntingly large. The inventory represents 9-10 months of supply, three times the level in a tight market, says Stan Humphries, Zillow's chief economist. Paradoxically, a further wave of supply could crash over the market if it is widely seen to be stabilising. Many homeowners who sat tight while prices fell will try to sell at the first sign of a turnaround, according to surveys.
  
  In one, conducted by Zillow in July, 29% of respondents were at least "somewhat likely" to put their home on the market once the market perked up. The release of this "shadow inventory" could smother the recovery before it gathers speed.
  
  Just as worrying is the possible recurrence of "payment shock" as interest rates on adjustable-rate mortgages reset higher. Resets on subprime loans have mostly taken place, but the worst is yet to come for some other loans, especially the "Alt-A" category between prime and subprime and a nasty type of mortgage called an "option ARM" (see chart 3).
  
  The impact may be muted, but only if the Fed can keep short-term rates very low for the next couple of years--or if the borrowers can refinance as the reset approaches.
  
  Given these downside risks, the recent pop in house prices will probably fizzle. Most economists expect them to fall by a further 5-10 percentage points, to their long-term trend line at roughly 40% below their peak, and not to reach bottom until some time in 2010.
  
  The pessimists predict they will go crashing through the trend-line to as little as half their 2006 high. Analysts at Goldman Sachs, no fools when it comes to housing, hint at several years of stagnation.
  
  They argue that the rate of home ownership, currently just over 67%, will fall back to the 64-65.5% level that prevailed before prices took off in the mid-1990s, cutting deeply into demand for properties.
  
  This view is supported by a recent Fed study, which found that more than half of the boom-era rise in ownership was due to "innovative" mortgage products, many of which are now history.
  
  It could be even worse.
  
  Now that the myth of ever-rising house prices has been shattered, it may be time to embrace another inconvenient truth: that prices can take decades to recover, at least when adjusted for inflation.
  
  A study in June by the Federal Housing Finance Agency, a regulator, pointed out that in parts of Texas house prices still languish some 30% below their 1982 peaks in real terms. Mr Hefner may not have got such a bad deal after all.
  hbm, political knob-wanking makes me wet!
  Buster, I'm thirsty for verbal abuse!
  Dunc watches poolside as women fight for scraps on Free Comic Book Day.
  
• August 09, 2009
• 7:35

  Goodbye Bend Aeronautical Dreams

   » ‎ Bend Bubble 2

  Tags:    [edit]

  A short one today, I promise hbm.
  
  Well, we basically are watching the demise of one of the biggest attempted grifts in Bend history, and that is saying something.
  
  Epic Air finally folded. You may be able to detect my incredulity about this little wingding in my Oct 1, 2007 post:
  How To Make $100 Million A Year In Bend, Oregon
  Which one of these guys apparently invested $200,000,000 in a Bend aircraft maker this week?
  
  1) Peter Tork of "The Monkees"
  2) Rip Taylor
  3) Liberace
  4) Indian Billionaire, Vijay "Jazzy Jeff And The Fresh Prince" Mallya
  
  I know, it's hard to figure cuz each has One Sweet Ass F**kin' Hair Doo! I mean, WTF? Did anyone else see that pic in The Bulletin, and wonder what the hell is up with that dudes hair? I mean, DAMN.
  
  ATTENTION INDIAN DUDE: That sweet-ass tight fro may have landed the ladies in 1973, but that thing is just weird!
  
  Anyway, this is YET ANOTHER STORY THAT DOESN'T PASS THE SMELL TEST.
  
  I wrote in the comments: This whole thing SMELLS BAD.
  
  $200MM (if true), values Epic at $400MM. WHAT! No way. With 140 employees, that is almost $2.9MM/employee.
  
  No freakin' way is that real.
  
  Boeing market cap is $82.52BB
  Employees: 153,000
  Value/Employee: $540,000
  
  Is this Indian Dude INSANE? He's valuing a po-dunk little maker of kit planes out in the desert at more than 5X the per employee value of BOEING?
  
  Man, if this Rick Schrameck guy actually convinced this nut to pay $200MM for 50%, he is One Hell Of A Shyster. Valuing Epic at well over 5X the relative value of Boeing on an employee basis is straight up INSANE.
  
  That Rick Schrameck dude has pulled off the Bend Enterprise Investment Marketing Boondoggle Of A Lifetime. He got rocks.
  
  Bangin' a friend of his for $200MM, for only HALF of Epic, a podunk nut'n out in the desert. That's one thing. But he did it while RIGHT NEXT DOOR, there is a much larger competitor GOING BANKRUPT! Holy S**t! That is just brutal!
  
  Seriously, it is stuff like this that reaffirms my faith in The Impossible.
  
  If this is true, which I seriously doubt, this guy has pulled off a dot-com era boondoggle the likes of which this town will never see again. Good job Rick!
  
  See, this was never possible. This Epic thing was EPIC: Epic-ly Impossible.
  
  Now you might think, "What the f**k happened to the money?". Well, my dear friend, there NEVER WAS ANY MONEY. NEVER.
  
  See if you can detect the misdirection by Costa:
  
  ‘A big shot in the arm for the Bend economy’
  By Anna Sowa / The Bulletin The Bulletin
  
  The $200 million investment by an India-based airline mogul in Bend’s Epic Aircraft could help the local airplane maker break into the commercial jet market by producing larger planes for larger companies, an Epic spokesman said Thursday.
  
  “It’s extremely likely that the Bend facility will grow substantially and contribute more to the job market in Bend,” said Lyn Freeman, the Epic spokesman who revealed how much Vijay Mallya is investing in Epic.
  
  “It will be a big shot in the arm for the Bend economy, but how big a shot it turns out to be ... I don’t know.”
  
  Epic employs 140 people in Bend. Epic President and CEO Rick Schrameck announced Wednesday that Mallya, his friend and fellow aviation buff, was investing in the company, but Schrameck did not disclose the investment’s size.
  
  Mallya representatives could not be reached for comment the past two days, but Freeman said Mallya’s office has confirmed the $200 million investment.
  
  Mallya now owns 50 percent of Epic, Freeman said, adding that Mallya “has insisted” that Schrameck remain as company chief.
  
  You see? There are about 46X where Costa intimates that the investment HAS ALREADY BEEN MADE. Or that it is already in check form, merely being flown to CACB at warp speed. Or that it is ABOUT TO BE MADE. Or that it is pretty much a foregone conclusion. Or that it will probably be made. And about 400 other states of progress on getting the money.
  
  Seriously. This is our local paper's idea of "news".
  
  What really happened here is our local guy got RICK Schmareck ROLL'D by a true global super grifter.
  Vijay Mallya singing his one hit wonder to Rick Schrameck.
  
  What's funny about this is that Costa bought into his own munificience, and thought one of his hillbilly stupid motherf**king drinking buddies could actually roll with the big dogs. Jeebus H Christmas, what a dumbf**k.
  
  This is Bend, COSTA. NOBODY of any substance does ANYTHING in Bend. Small fish, small pond.
  
  That 3 year bubble was a fluke, it wasn't you, or me, or anyone sort of "exceptionalism".
  
  As we are all starting to see, Bend is Mortal. And we have built an enormous false prosperity based on an incredible set of lies: Summit 1031, Tammy Sawyer, Jay Audia, Juniper Ridge, Cessna, Epic.... and on and on.
  
  This whole area is built on the idea that you can start something without any real substance, I don't know... such as... a wheel you drag behind your car that somehow powers the car... or a black box where you burn s**t, and the ashes somehow turn to gold.
  
  The Last Thing You Do In Bend is WORK. Start a business based on some definable need.
  
  No you Do What You Love And The Money Will Follow, and things like that.
  
  Bend is built on dreams, dreams that are bought and sold, despite having no real definable business objective or need, and certainly no revenue stream. We're in a state of suspended animation, always selling our speculative dream to yet a bigger sucker.
  
  And here is where it ended. Epic really was going for the EPIC GRIFT. And you can FEEL THE DESPERATION of just how bad Costa wanted us to reel in and boat that Mallya Bass. He basically said we had already boated that bass, when in reality Mallya hadn't even bit.
  
  And so with the collapse of Epic, and Cessna as well letting go the last of it's zombies, we see the end of the Bend Aeronautical Dream. And you certainly won't be reminded, but this Dream was our Big One. It was going to power Bend's economy for the next 1,000 years.
  
  Epic was going to have 4,000 employees. But that was a piker, as Cessna was going to have tens of thousands. Not to mention the tens of thousands of "support" companies that would crop up by the hundreds at the Bend International Air Complex.
  
  All gone.
  
  No, now the Bend Municipal Airport will go down. It may well go broke. The virtuous circle will Yet Again, become a vicious cycle, as a vortex of death just drags down everything caught in it's rip current.
  
  And history will RHYME yet again in the future.
  
  Communal Frisk Bank (aka Priney Bank) was closed Friday. Eff-Dick swooped in and closed this little bank that could... not.
  
  What should you look for now? Well my thick headed confidante, if you don't know the answer to that, you are well and truly a motherf**king retard.
  
  The answer is that CACB is The Next To Fall. PERIOD.
  
  In a pathetic Beg For Cash piece in the Bully (Cascade Bancorp: Where does it stand?), Patty "Horse Face" Moss answers the question:
  
  CACB Stands In A S**tpile Of It's Own Making.
  
  CACB cannot get money from ANY SOURCE. Not the government, not it's biggest owner, not the mafia, NO ONE.
  
  And the piece is a non-stop BEG-O-THON for someone, ANYONE, to give Moss cash munee. It is quite clear that ALL SOURCES HAVE BEEN EXHAUSTED, and she resorted to a public PLEADING FOR MONEY. ANYONE. PLEEZE GIMME MUNEE!
  
  You should know that most institutions don't even deign this sort of activity as acceptable, and they would rather SHUT THEIR F**KING DOORS than publicly beg for munee.
  
  Not Moss. Because she knows fully well that Eff-Dick is going to pay her a visit VERY SOON. She needs millions or CACB's charter WILL BE PULLED.
  
  Prediction: IT, OF COURSE, WILL BE PULLED. The money is gone.
  
  You see folks, the Grift Always Fails In The End. The Moving Around Of Money is just that. It doesn't DO anything. It doesn't MAKE anything. Lots of sound and fury signifying NOTHING.
  
  But COSTA wanted us all to believe that it signified EVERYTHING.
  
  That Mallya actually WAS Schrameck's FRIEND. No. They were NEVER FRIENDS.
  
  That InEn Tec's Garbage To Gold Black Box was actually a Real Life Rumplestiltskin-esque spinning wheel that would turn s**t into Gold.
  
  That Cessna would plop down in the middle of ASS NOWHERE and start building planes.
  
  That Patty Moss was actually some sort of financial genius, when she is really a horse-faced dumbass who drank her own Kool-Aid.
  
  You have heard, and will no doubt continue to hear that Bend is Xanadu, a mythical place where all your dreams and flights of fancy will come true.
  
  And everyone hears what they want to hear in that situation. You? You want to start a cooking supplies store? No problem, your wish is granted!
  
  How about a furniture store or an art gallery? You can't fail!
  
  Car dealership? A swipe of the magic wand guarantees success.
  
  You see, in Bend, our Game Is The Grift. Has been for decades.
  
  And by a miracle of happenstance, we were in the right country, the right era, and the right instant in time, and it actually seemed like all our dreams and flights of fancy could actually come true.
  
  But of course, that's not true, and was the reason for starting this poor little despised blog. A little Wake Up Call to tell people that you can't Get Something For Nothing Forever. Much to hateful chagrin of those who hoped differently, we are starting to see the unraveling of the Bend Web Of Lies.
  
  Epic Air, Cessna, the thousands of foreclosures, the tumbleweed ridden and abandoned developments, the mass of business closings, the incredible unemployment, the ridiculous movie-themed housing developments/amusement parks, the imploding prices...
  
  All the lies that we've been sold are finally being exposed for what they are. And you need to realize that the Guilty Parties are:
  
  JOHN COSTA & BEND MEDIA
  BEND CITY COUNCIL
  PATTY MOSS & CACB
  EDCO & OTHER TAXPAYER FUNDED BOONDOGGLES
  CROOKED DEVELOPERS & LENDERS (SUMMIT 1031 & RENAISSANCE, et al)
  
  These people will leave this town completely broken and 100% busted. Get your f**king torches & pitchforks and run these motherf**kers out on a rail.
  Costa, my nippies get hard when you get Rick Roll'd!
  I got Epic Juggs!
  In short hbm, I think you're all wet!
• August 02, 2009
• 8:40

  Recovery or Slow Bleed Out From Catching Knives?

   » ‎ Bend Bubble 2

  Tags:    [edit]

  From my front porch, about half the homes I can see in my neighborhood are in trouble, whether foreclosure (recently past, present, or future), short sale, or a state of suspended animation where the tapped-out owner can't get out from under the thing to leave Bend.
  
  So you might think, "Hey, it's half over! We're close to the end!"
  
  Well, no. Remember the Sad Tale of Jay Audia, knife catcher extraordinaire, he was the second to crash and burn on that sad 38ac plot.
  
  Maybe that's the plot of this short post this week: Land & RE crashes are long & drawn-out affairs that claim many victims with the same piece of property claiming sucker after sucker, all of whom think THEY are buying at rock bottom.
  
  Do you think there's any Jap's who have made a dime in the past 18 years? No, and they just keep turning the same property over & over again. And all new owners just lose money.
  
  Again folks, keep your powder dry. And keep it dry until people are literally paying you to take these white elephants off their hands.
  
  You keep hearing about a "recovery". But this is just the after-effects of TRILLIONS of dollars of DEBT being printed & being handed out to AmeriKKKa's most deserving citizens: Those who got us into this mess to begin with.
  
  And I guess they throw Joe Sixpack a bone now & then. "Cash For Klunkers" is a good example of that.
  
  Or is it just YOU borrowing from YOURSELF (or your kids) to buy a car NOW that you don't really need, so you can pay it off later in higher taxes.
  
  Folks, irresponsible lending got us into this, and it hasn't gone away. If anything it has been ramped up to unimaginable heights by the Borrower & Lender Of Last Resort; The US Government.
  
  This entity (which is us, really) has gone catatonic. Borrowing & GIVNG us TRILLIONS of our own money in a economy warping & personal spending warping attempt to jump-start this economy.
  
  But DEBT NEVER SOLVES FUNDAMENTAL PROBLEMS... it just delays them.
  
  Debt can help, if there is a REAL & TANGIBLE plan for paying it off. We don't have that.
  
  WE ARE THE ONES DROWNING IN DEBT, AND WE ARE THE ONES WHO WILL HAVE TO PAY OFF ALL THIS BORROWING.
  
  There is No Plan, neither real nor tangible, for paying this off. We will all see this in a short while.
  
  But, for now, it is having wonderful effects! Have a look at my DJIA update for L/T Fair Value:
  DJIA Long Term Regression
  It's hard to see, but we've had one hell of a rally. The "low" of the recent dip was Mar 9, 2009 at 6,547, or 32% below the long term best fit estimate of 9,627.
  
  As of Friday, we had rallied to 9,172, or only 7% below the L/T regression estimate of 9,865.
  
  Here is a graph of the "difference" between the actual price & the least squares estimate:
  Actual - Least Sq Estimate
  And for you pedantic types, that's actually ln(1 + (Actual - Est)). I use natural logs to do the work here, so you have to exp() things back out to get actual numbers.
  
  Anyway, you can see that recent fall has been one of the most precipitous in history, and the subsequent rally has at least matched it in ferocity.
  
  But you can see that the last time the market passed below it's L/T regression estimate, it took decades for it to get back above & stay there for any length of time.
  
  My own feeling is that given the macro-view of the World, we are in a massive deleveraging the likes of which will never be seen again, that we could hit fair value (DJIA 9,865) or even a little above, before it dawns on market participants that the other shoe has yet to drop.
  
  And we may never hit the recent March low of 6,547 again. Maybe. But we could go several years in the monster 3,500 pt trading range that we've been in for the past few months.
  
  That's at least how I plan on playing it. I still hold all the stocks & mutual funds I bought late last year into the teeth of the decline.
  
  But I am very inclined to start selling these things off between 9,500 & 10K.
  
  Things turned out a lot the way I said they would, but not the way I thought they would. I was convinced that RV's would make a stunning reversal, at least valuation-wise.
  
  Funny thing though: I bought them down 92% from their highs, which ended up to be a waystation on their way to a 99.8% decline after I bought them.
  
  I put a lot in Monoco & Fleetwood. All gone. And I was really convinced those would be my big winners.
  
  No, my big gainer was Lithia Motors, sitting right at $12, up around 700% from it's cycle low of about a buck fifty.
  Lithia Motors, 1 yr
  
  I have NO ILLUSIONS about this one though. Lithia has a business model that has been goosed by 2 things:
  
  1) Cash for Klunkers
  2) The mass wipe-out of competitors
  
  Cash for Klunkers is giving the old girl a shot of Bloody Mary Kool-Aid in the midst of a multi-year hangover.
  
  Lithia was also spared a LOT of the pain of having dealerships summarily closed due to their overall volume. This helped them immensely, probably revaluing all their dealerships up 50-100%. This helped them actually turn a decent profit, as reported Friday.
  
  So at a market value of $252MM with 92 dealerships, the market values this beast at $2.74MM per dealership. But that's only equity & these guys have lots of debt.
  
  But I think that we're in the early phase of a general topping out in equities, and the next leg down could begin at any time. I just see the lower end of the graph above being our range for the foreseeable future.
  
  And the top of that range is around 10K, and the bottom is thousands of points below us now. The risk/reward doesn't look good.
  
  OK, and just to be clear, I still own everything I bought last Summer & Fall... but I am looking at hard rallies from here to start to sell it off. And that looks to be between here & 1,000 pts above where we are.
  
  OK, moving on...
  
  I guess you have to be a real Bendite to see the Kool-Aid wishes and caviar dreams embedded in today's Bully piece, "Building up Bend’s business landscape".
  
  It's just ridiculous, the amount of puff pieces we must endure from this pathetic rag. Tagline:
  
  Are things finally looking up in Bend? Olive Garden, Dick’s and now Kohl’s are all coming to town. What does that say about the region? That it still has what retailers and others seek, some say.
  
  Thy never stop running this sort of thing. When Gottschalks came to town, it was because Bend Is Special. As it is now.
  
  Bend remains an attractive market, say people familiar with the area’s economy, as evidenced by news that two prominent national retailers — Dick’s Sporting Goods and Kohl’s department store — have plans to open here this fall and in spring 2010, respectively. Additionally, a prominent restaurant chain, Olive Garden, has launched construction in Bend and will open this winter.
  
  My God, this is pathetic.
  
  First, there is the TYPICAL UNSOURCED CLAIM that "Bend is an attractive market". Absolutely NO SOURCE for this QUOTE. Yes, "People Familiar With The Area's Economy". That means COSTA. That is COSTA editorializing PLAIN & SIMPLE.
  
  Then we have the LEGITIMIZING that our Frog-town is actually a prince, where COSTA says that we have PROMINENT NEW ARRIVALS. PROMINENT.
  
  Type "define:prominent" in the GoogleZzzz.
  

  • outstanding: having a quality that thrusts itself into attention
  • big: conspicuous in position or importance; "a big figure in the movement"; "big man on campus"; "he's very large in financial circles"; "a prominent citizen"

  Sad little Costa. The ugly girl with braces always goes to prom with Judd Hirsch in that f**kers mind.
  
  Then he just rolls out His Bitches for the obligatory statements on the "Bend Lifestyle":
  
  “Just because we’re going through the bottoming of the cycle here and everywhere doesn’t mean the reason why people want to move here has changed.” Nyberg said
  
  Bend will continue to be a desirable place to live and, as a result, businesses will want to capitalize on the region’s growth.
  
  The downturn creates opportunities for those companies that can expand.
  
  ...companies didn’t close their Bend stores because Bend was a bad market but because the companies filed for bankruptcy due to national economic conditions, Powderly said.
  
  That speaks to the area’s underlying economic attractiveness, Powderly said, adding that commercial real estate is picking up, especially for small businesses.
  
  ...the addition of Kohl’s speaks well to the region’s economic validity in that it is a store for residents, not tourists.
  
  I think the assumption is long-term growth in Central Oregon will be above average compared with other cities across the nation because of the lifestyle here,” Powderly said.
  
  God, this is pathetic. Passing this editorializing off as "news". Read the Bully critically, and you will see that it is AWASH in unsourced & unfounded statements.
  
  It's always "Sources familiar with......". Never a name. That's because the name is COSTA. And if there is a source, it is one of Costa's Pro-RE bitches.
  
  And if that's not bad enough, it is the UNENDING puffery. Stores that come to Bend are "Prominent"!!! They aren't just retailers... they are PROMINENT RETAILERS.
  
  The fact is, they are not prominent. Costa WANTS anyone stupid enough to come here to FEEL IMPORTANT. Why? Because if you actually look at the economics of the region, you would be scared S**TLESS... something GOTTSCHALKS found out the hard way.
  
  Costa GETS THEM HERE... and then doesn't give a f**k if they live or die. Notice they COME HERE because Bend is SPECIAL. But By God when they leave it has NOTHING TO DO WITH THE POOR FUNDAMENTAL ECONOMICS:
  
  ...the companies didn’t close their Bend stores because Bend was a bad market but because the companies filed for bankruptcy due to national economic conditions, Powderly said.
  
  Costa say, "I'm a Good Boy, Mommy! I'm Good!"
  
  The fact is that Bend has one of the highest unemployment rates for any MSA in the country. It has the fastest rising UE rate anywhere.
  
  The boom turned the frog into a prince. For awhile. But the frog is back. Bend is a terrible, TERRIBLE place to do business.
  
  It's horribly over-restauranted and over-retailed. It is a Me-Too business landscape where every successful business plan is subject to almost instant oversaturation.
  
  Which brings me back to the main thrust of this blog now in the post-boom meltdown: Keep your powder dry. This thing isn't over, not by a long shot. Catch enough knives and you'll bleed to death, ask Jay Audia. The current "recovery" is nothing but a short term bump.
  Costa, I need some good puffery...
  hbm, please give my nipples a LIBERAL TWEAKING! Please!
  Hey Dunc, we heard there was a Superman in this store... care if we look under his cape?
  
• July 19, 2009
• 6:24

  Bankrupt in Deschutes County? Impossible!

   » ‎ Bend Bubble 2

  Tags:    [edit]

  I'm going to do a short one this week....
  
  But I'll preserve for the ages a fairly good piece by the Bully on going BK... in Sisters, no less.
  
  The human side of bankruptcy
  Financial disruption is personal for the millions who file for it
  
  By Lily Raff / The Bulletin
  Published: July 19. 2009 4:00AM PST
  
  

  At 64, Jack Gulick is starting over.

  He buys groceries with cash instead of credit. He no longer buys lattes from Starbucks. He and his wife, Laura, share one car instead of two. He is grateful for things he once took for granted, like having health insurance. He follows the financial news more closely.

  For the Sisters resident, this is life, post-bankruptcy.

  When a bankruptcy makes the news, it usually involves a large corporation — think General Motors or Lehman Brothers. But the vast majority of bankruptcies are not filed by companies at all. Of the 1.17 million bankruptcy cases filed in federal court last year, 1.07 million, or 92 percent, were filed by families or individuals.

  Bankruptcy is a legal process that helps people and businesses eliminate debts or repay portions of their debts under protection of the court.

  Non-corporate bankruptcies are usually mentioned as statistics or trends. But for the individuals who file, bankruptcy is personal. Really personal.

  The Gulicks had been living near San Francisco when they bought a half-acre lot in Sisters in 1997.

  “I was born and raised in Portland and my wife in California, so this was kind of a compromise, I guess,” Jack Gulick said. “We both loved it. We’d been coming here for years.”

  In 2001, they sold their house in California and hired a Central Oregon builder to construct a 2,100-square-foot custom home on their lot. In June 2002, they moved in.

  “It was our dream home … and our plan was to retire in it,” Gulick said.

  The couple saw no reason not to. Gulick had a steady job as regional sales manager for a large electronics company, with 30 years of industry experience under his belt. He traveled, two or three weeks a month, throughout the 13 Western states. He earned a six-figure annual income including commissions.

  Then a lingering health problem flared up. For about 10 years, one of the discs in Gulick’s neck had been slowly deteriorating. In late 2003, doctors recommended a disc fusion.

  “They told me I had about a 50-50 chance that it might work (to stop the pain),” he said. “So I got the wrong side of the coin, so to speak.”

  By 2007, Gulick was unable to lift more than 10 pounds. He couldn’t comfortably walk more than 100 yards at a time. He could no longer handle the grueling travel schedule his job required.

  In December 2007, Gulick was laid off. His long-term disability insurance now provides him with 60 percent of his base salary. But Gulick’s base pay rate does not include sales commissions, which made up half of Gulick’s income.

  “I’m actually getting 30 percent of my ordinary pay,” he said. “So … all of a sudden my income gets cut by 70 percent and it’s like, ‘Wow, there’s no way we can pay for this. We can’t pay for the house.’”

  Unable to pay their mortgage, the couple moved out of their dream home and into a nearby rental. The home was foreclosed and will be sold at auction next month.

  Even with their housing costs cut by more than half, the Gulicks’ finances buckled under growing debt. They sold one of their two cars at a loss, just to get rid of one monthly bill. Meanwhile their credit card balances, which included many of Gulick’s medical costs, ballooned.

  “We took all the cost-cutting measures we could, but we still had a lot of credit card debt,” he said. “That’s really what sunk us. You miss one payment and your low-interest credit card goes from 6 or 7 percent up to 19 or even 24 percent.”

  Gulick called a counseling service and was told that even with more drastic cuts in spending, he would need to earn about $900 more per month to qualify for any sort of debt consolidation program.

  “Their advice,” Gulick said, “was to get a hold of a bankruptcy attorney.”

  Credit fever

  Last month, 94,085 Americans called a consumer credit counseling service. That’s a 36 percent increase over June 2008, when 69,431 Americans phoned for help.

  Kate Williams is vice president of financial literacy for Money Management International, a private nonprofit that oversees 24 nonprofit consumer credit counseling agencies. Before a person may file for bankruptcy, he or she is legally required to seek a one-hour credit counseling session and receive a certificate of completion. These sessions make up about 45 percent of consumer credit counseling calls, according to Williams.

  She went on to estimate that about 90 percent of callers’ most troublesome debts are carried on credit cards.

  “Credit cards become, in some cases, a third source of income. Mom works, dad works and then we’ve got Mr. Visa at our house,” she said.

  Psychological studies have shown that consumers don’t feel as responsible buying an item with a credit card as they do buying an item with cash, Williams said.

  She offered two pieces of advice to people who want to avoid bankruptcy: Save for retirement and save for unforeseen expenses.

  “Every worker today should be (saving for retirement) because we know we want to retire. Even though the market is just brutal to everyone right now, make it a habit,” she advised. “And … even if you can only set aside $25 a paycheck right now (into a savings account), it’s not going to grow fast, but the $600 or $700 that you save in 2009 may be the set of tires that you don’t have to put on a credit card in 2010.”

  Try to cut expenses in little ways, she urged, by packing a lunch instead of going out, for example.

  “Most families can cut out $85 to $100 a month. It’s not going to be easy, and it’s not going to be one particular thing, but it’s a lot of $2 and $3 and $5 and $8 things that add up,” she said.

  Williams recommends that consumers keep track of their income and expenses on one sheet of paper. Most people, when asked how much debt they think they owe, underestimate it by 20 to 33 percent.

  Gulick said it was shocking to see a comprehensive list of his debts.

  “My wife had been admonishing me for years about going on a cash basis and getting rid of credit cards,” he said. “I just, I didn’t listen to the advice that I got.”

  Deciding to file

  Brian Hemphill is a lawyer in Bend who did not work for the Gulicks but who specializes in bankruptcy cases. He keeps a box of tissues on his desk because clients are often in tears. Many clients, he said, feel overwhelmed and ashamed.

  “I tell them, it’s not a magic wand and it can’t cure everything,” he said. “It does have a lot of negatives to it, and people have to decide, do the positives of bankruptcy outweigh the negatives? But fundamentally, bankruptcy is there to help.”

  Hemphill said the social stigma attached to bankruptcy has faded in recent years as it has become more common.

  Donald Trump told the New York Daily News in 2004 — during his casino company’s second voyage through bankruptcy — that there’s no shame in it.

  “It doesn’t matter,” he was quoted as saying. “It’s a modern day thing, a legal mechanism.”

  Many others disagree. Dozens of Central Oregonians who filed bankruptcy in the last year declined to speak about their experiences for this article.

  When Hemphill’s clients decide to file, he helps them determine which avenues of bankruptcy they qualify for. Most individuals consider Chapter 7 or Chapter 13 bankruptcy, both named for the section of federal code in which they are described. In Chapter 7, some of the debtor’s belongings may be sold. Debts are then forgiven or discharged.

  In Chapter 13, a debtor works out a payment plan and agrees to dedicate future earnings toward paying off some or all of the debts.

  Not everyone qualifies for both types of bankruptcy, but some people get to choose. In both types of bankruptcy, the person files in federal court and is assigned a trustee, who acts as a referee between the debtor and the creditors.

  In Chapter 7 cases, the trustee helps decide which assets to sell. In Chapter 13 cases, the trustee helps create a fair, feasible repayment plan. In both, the trustee helps determine how much money each creditor gets.

  In all cases, a bankruptcy judge has final say. Filers must appear in bankruptcy court at least once, but few Central Oregonians must trek to federal court in Portland. Instead, bankruptcy judges or trustees come to Bend several times a month, to hold hearings in classrooms at the National Guard Armory.

  Just before Gulick filed for Chapter 7 bankruptcy, he paid for an appraisal of his furniture and belongings to see what they could fetch at an auction. If certain pieces had been particularly valuable, Gulick may have been required to sell them. But there are legal exemptions to protect people from having to sell basic necessities.

  “They can’t sell off every single thing you own,” Hemphill said, “otherwise you’d be naked, living under a bridge.”

  Chapter 13 cases usually go on for three to five years as the consumer pays back his or her debts. The trustee oversees the case throughout that time, collecting money from the consumer and adjusting the agreement if he or she loses a job.

  When people emerge from bankruptcy, they often feel relieved that the debt is behind them. A discharge from bankruptcy court is a document confirming that the debts are closed.

  Life after bankruptcy

  Bankruptcy is not just for low-income consumers.

  “Most people who file for bankruptcy never, ever could have imagined that they’d be in this situation,” said Paul Stednitz, a senior vice president and regional manager for Central Oregon at Liberty Bank.

  Williams, of the credit counseling group, said the process is, in some ways, more difficult for consumers with high incomes.

  “Some of them are paying for private schools, for example, so their kids end up having to change schools,” she said. “It just upends their lives.”

  Many people who go bankrupt lose their homes, although foreclosures — when banks reclaim homes whose owners fail to pay their mortgages — are often separate legal processes.

  A bankruptcy remains on a credit report for seven to 10 years. But that doesn’t mean that a consumer is unable to obtain new loans.

  “We have, at times, lent to people that have had bankruptcies,” said Stednitz of Liberty Bank.

  Banks are usually notified when an account holder files for bankruptcy.

  “People could have overdraft lines (of credit), for example. Almost everybody has some sort of line of credit attached to their bank account,” he explained. “And any sort of lending mechanism like that would trigger a bankruptcy filing to come to our bank.”

  When a person with a past bankruptcy applies for credit, the loan officer looks closely at the details of the bankruptcy before making a decision, Stednitz said.

  “In that person’s credit report, we can see all of the credit that was included in the bankruptcy,” he said. “And if we can’t see that, then we ask for a copy of the bankruptcy documents so that we can see it. Because some people will exclude items from a bankruptcy, so they might file for bankruptcy but stay (current) on some of their loans.”

  Generally speaking, he said, a Chapter 13 bankruptcy looks more favorable than a Chapter 7 bankruptcy because it shows that the person or couple took some responsibility in repaying parts of loans.

  “But there are times when people don’t have a choice. They have to file a Chapter 7,” Stednitz added. “They may have had a medical situation or an illness.”

  Post-bankruptcy consumers can rebuild their credit with a secured credit card.

  “It’s essentially a Visa card that’s issued with a savings account that is collateralizing the card,” Stednitz explained. “So if you have a $1,000 limit (on your card), you would have to have $1,200 in the savings account. It appears on the credit report as a regular credit card, so it’s a great way to rebuild credit. In fact, it’s hard to rebuild credit any other way.”

  Experts agree that it is critical for a person who goes through bankruptcy to learn a lesson in the process.

  Gulick said that for him, lessons were unavoidable.

  “It’s really tough to go on a cash (only) basis; it takes more discipline than I ever thought,” he said. “But going through bankruptcy, you lose all your credit cards, and I’m not going to take any new ones out. So we live on cash only, and it’s a whole different experience. If you don’t have the money in the bank to do it with, you don’t do it. That goes from grocery shopping to taking a weekend away or anything that you want to do.”

  Gulick has shared these lessons with his grown children to help them avoid his same fate.

  “It’s been an education, and it’s been … very traumatic,” he said. “I wouldn’t say that I feel lucky in having gone through the experience but I will say this … it has been a great teacher. Unfortunately, I got taught pretty late in life.”

  I linked to the print-version, since there's some good info there, including a graph for NW states of BK's per quarter since 2006.
  
  The Bully also gets another notch to The Good for printing this. A nice reprieve from their candy-apple bulls**t.
  
  A warning though: The douche-lawyer they quote in there is a big asshole. And a total dumbf**k. Believe me, I know.
  
  OK, I'll print the other piece in the Bully, since it's pretty rare for them to have ANY decent pieces:
  
  Few loans to rely on
  Scarcity of money making it especially tough for startups, so many turn to private financing
  
  By Andrew Moore / The Bulletin
  
  

  Before Terri Cumbie opened Dudley’s Bookshop Cafe in downtown Bend in December, she applied for business loans, only to be turned down. She self-financed her store instead.

  Terry Rhode is a Madras farmer who has started marketing safflower oil, a cooking oil derived from crushed safflower seeds he’s begun harvesting. He also recently applied for loans to build a pressing plant, but said he was turned down. He’s financing it himself, but the meager amount he can invest is making it harder to launch the business.

  Sky Pinnick, owner of the new downtown Bend bar Velvet that opened last month, said he and two business partners put up all the funds to open the business, not once considering a bank loan.

  “Why go through all the hassle if they are just going to turn it down?” he said.

  The credit crunch that ushered in the recession still seems to have a stranglehold on people who want to start new businesses.

  While banks are making small-business loans, they’re fewer than in the past. Throw in the lack of capital once available from credit cards or home equity, and many would-be entrepreneurs are left with either dashed dreams or a scramble to secure capital from family, friends or their own savings accounts.

  Under more scrutiny

  Dennis Lloyd, director of lender relations for the federal Small Business Administration in the Portland district, said the number of loans guaranteed by the SBA this year in the district — which includes Deschutes County — is down “considerably.”

  The value of the loans, however, is roughly the same.

  From Jan. 1 through July 15, the SBA had guaranteed 21 loans in Deschutes County for $6.8 million, according to the SBA. For the same period last year, it guaranteed 34 loans for $6.7 million, and in the same period in 2007, it guaranteed 56 loans for $10.2 million.

  Asked whether the decline in loans was due to fewer applications or more denials, SBA spokeswoman Sylvia Gercke said it was the latter.

  “Because of the economic situation, making loans to small businesses is risky, so (banks) are preferring to monitor their existing portfolios rather than add new loans,” Gercke said. “I guess they are just being cautious.”

  Paul Stednitz, a senior vice president for LibertyBank and the regional manager for Central Oregon, said banks are lending, but it has always been difficult for new businesses to secure startup financing — in the current recession, even more so.

  Stednitz said there are some industries, such as restaurants, that banks rarely give new-business loans to because of high failure rates. But for other startups, the decision about whether to extend a business loan depends on the experience of the entrepreneur, the business plan and the viability of the idea.

  “The economy hasn’t changed how we look at startups,” Stednitz said. “I think now we have to scrutinize collateral closer, cash flow, projected cash flow, what you’re selling — is it going to be able to sustain in this economy, because people aren’t buying things. You could have the greatest idea, but if no one’s buying … here we are as bankers trying to make these determinations and it’s not easy.”

  A waiting game?

  Money is tight, and that’s affecting the way new businesses are being launched, said Bill Saling, a volunteer with the Central Oregon chapter of SCORE, formerly known as the Service Corps of Retired Executives. Saling and local SCORE staff offer free advice to small-business owners.

  “We’re already telling people early in the conversation that if they are saying they have to get lending from banks, not right now, I don’t care how good you are,” Saling said.

  Saling said he is advising people interested in launching a new business to wait for the credit crunch to subside. He said prospective small-business owners should instead tie up all their loose ends and ensure they have a solid business plan so they can move quickly once credit normalizes.

  Saling said it can be tempting to self-finance a business, but many would-be business owners miscalculate how much more money they will need.

  “Not everybody is going to pay their bills on time, some people will stiff them, contractors change their terms, so all of those things without a cash reserve make it very difficult to survive,” Saling said.

  Falling back on private funding

  Stednitz said the loss of jobs is compounding the problem, as more people are forced to come up with creative business ideas to generate income. But with home equity no longer an option for most and retirement accounts battered by the stock market’s decline, those wanting to launch a business could find themselves in a pinch.

  “The next fallback, unfortunately, it’s the credit card — and we would not recommend using a credit card to start a business,” Stednitz said.

  What’s left is private money, he said.

  Cumbie, at Dudley’s, tapped family, credit cards and a home equity line to open her store, she said. She also was frugal about the endeavor, furnishing her store with secondhand items and stocking inventory she collected for four years prior.

  While initially disappointed she didn’t get a small-business loan, Cumbie wasn’t surprised, given the economy. In the end, she’s glad she didn’t get the loan.

  “I think if I got a really big loan from a bank, the economy got worse after I opened, and it would have been really, really hard to make those loan payments,” Cumbie said. “I would have had to borrow more just to make the payments in addition to what I needed.”

  These two pieces basically illustrate 2 sides of the same coin: Save Your Money.
  
  People who are liquid in the future will run the show. Being "INVESTED" (as I have been admonished for not doing so in this forum... often) is NOT what you want to be doing now.
  
  Putting your money "At Risk" has worked just peachy for 3 decades, it's all many people have ever known in their adult life. Buy a house, buy stocks... if you did these 2 things to the fullest extent of your ability, you've done as well as could be expected.
  
  This formula needs to be turned on it's head for the next 10-20 years. This is not going to be a short-term phenom.
  
  In the first piece you read the guy had to sell his STUFF at a LOSS. The second woman could not get a nickel, and went to CC's & HELOC... and family, who almost certainly did the same. So basically she doesn't "own" the place, others do.
  
  Folks, Cash Is King. True today, true in 2019. This will not be over soon.
  
  It's especially true here. We are STILL 24% overvalued! STILL! The pain is not remotely over here, in some ways it hasn't even gotten going.
  
  We won't fall 24%, and that'll be it. We'll cut RIGHT THROUGH THAT, and keep going down. Then we'll just sit there, at dead-ass bottom.
  
  THAT is when you break the piggy bank, and begin a slow, methodical process of accumulating stuff CHEAP.
  
  What'd you pay for Pegasus, Dunc? $5K? That there is what I'm talkin' 'bout.
  
  Things won't just be cheap, they will be ridiculous. All the current-day knife-catchers will have bloody, perforated hands, and will just want out. Soooooooo many people think they are catching the bottom now. Folks, that s**t will not happen until the first digit in your age advance 1 or 2 digits... the second digit will stay the same.
  
  This blog will be LONG GONE when it's time to buy in Bend. There ain't a chance in hell I can write this f**king thing for 2 decades. Neither will you have The Bully available to Ring The Bell... it'll be long gone.
  
  Folks, they'll be GIVING s**t away. I know this seems impossible, because things NOW are STILL so f**king (relatively) expensive. That's because we are still in the BEGINNING STAGES of working off a speculative bubble the like of which will nevere be seen again... EVER.
  
  So assets are still ridiculously expensive. Compared to what they will be. At the end, cars, homes and small businesses will be given away practically. Big Assets, previously the domain of credit providers, will have to go for Cash Prices. And cash will be Damn Scarce. Scarcer than it is now. Lots.
  
  OK, I'll end with some Great News!!! We are finally Number One!
  
  Oregon homeless figure tops nation
  Jobless rate still high; shelter worries about coming winter
  By Amy Easley, KTVZ.COM
  
  Oregon has the highest proportion of homeless people in the nation, according to a new report issued by the U.S. Department of Housing and Urban Development.
  
  The study reveals more than one-half of 1 percent of Oregonians were homeless last year.
  
  Chris Clouart, executive director at Bend's Bethlehem Inn, blames the troubled economy for high numbers. "We've seen a definite increase in need for beds," Clouart said Monday.
  
  "We've seen a need in single individuals and families, and it all has to do with the fact that the economy is in such bad shape."
  
  While all of Central Oregon's roughly 2,200 homeless may not be living on the streets due to financial hardships, the recession certainly hasn't helped.
  
  Oregon's unemployment rate hovered at 12.2 percent in June - essentially unchanged from the previous month but more than double the jobless rate at this time a year ago, the state reported Monday.
  
  The seasonally adjusted unemployment rate remained well above the U.S. rate of 9.5 percent, as Oregon's recession-bound economy shed another 7,200 jobs last month.
  
  In all, there were 241,000 Oregonians on the unemployment rolls in June, compared with 114,000 jobless a year ago. Bill Seidel, says with all the competition, begging is the only job he can get.
  
  "I wish something would happen with this economy so I could get into a place and wouldn't have to do this," he told me.
  
  Others, like 17-year-old Haze O'Riley, chose to live on the streets, saying it's the only life they know, but admit it has its hardships.
  
  "What I've seen in Portland, I saw about 400 or 500 kids my age and younger living on the streets," the teen said. " It's not a pretty sight, with drugs, fighting and hunger." Homeless shelters say during the summer months, the number of homeless is manageable, as more people opt to camp outside.
  
  Staff at the Bethlehem Inn say the trouble will come this fall. "What we're hoping doesn't happen, but what will probably happen, is that when the weather starts turning cold this fall, we're going to see ourselves inundated,"
  
  Clouart said. It's a problem with no easy solution. Because in this recession, no area is out of the woods yet.
  
  Jam yesterday, and jam tomorrow, BUT NEVER jam today. ie, Don't worry about the homeless today, cuz their frozen corpses don't line China Hat Rd.
  
  The homeless kid in Portland had what I thought was the most unsettling quote:
  
  "What I've seen in Portland, I saw about 400 or 500 kids my age and younger living on the streets," the teen said. " It's not a pretty sight, with drugs, fighting and hunger."
  
  WTF is going to come of this? 'Course the Bully won't print that essentially Bend has this same problem, because to do so would admit that we're facing some sort of Lord of the Flies-Escape From New York scenario.
  
  Finally, I was walking downtown yesterday and I guess it was the first time I've seen that Tetherow's Sales Office in Franklin Crossing is closed. When did this happen? I tried searching the Bully, but didn't find it.
  
  Life on the 'Berg: 90% of what happens is never seen.
  hbm, will you ever let me grab your huge stick shift?Dunc, please tell me about Pegasus backorders... it makes me so HOT!Woof. This chick is HOT.
  
• July 12, 2009
• 7:12

  Deadbeat Government

   » ‎ Bend Bubble 2

  Tags:    [edit]

  Funny, funny things are starting to happen in this country. The latest is that The Government and Banks are beginning to give (& take) IOU's from each other.
  
  Citi, Bank of the West to keep taking IOUs
  
  Citibank and Bank of the West will continue accepting California IOUs, State Treasurer Bill Lockyer’s office said late Friday. Citi (NYSE: C) agreed to accept the notes for another week -- to July 17.
  
  Bank of the West, which initially told the Treasurer’s office that it would no longer accept the notes, changed its mind and will now do so “indefinitely,” according to the Treasurer’s office, which had urged all the state’s major banks to continue taking the IOUs.
  
  More than 60 credit unions will accept the IOUs, according to the California League of Credit Unions. Some community banks said they’ll also accept the notes from existing customers.
  
  Major banks which rejected Lockyer’s request include Bank of America, (NYSE: BAC) Wells Fargo, (NYSE: WFC) J.P. Morgan Chase, (NYSE: JPM) and Union Bank. Lockyer’s office said U.S. Bank (NYSE: USB) did not provide a “definite answer” on whether it will continue accepting the IOUs.
  
  Most major banks in California had originally said they would accept California IOUs only through July 10. “Citi made a difficult but responsible decision, both from a customer and taxpayer perspective,” Lockyer said. “As for the other banks, their refusal to continue accepting IOUs is disappointing. I understand their position, but I don’t agree with it. “I continue to believe they would better serve their customers and the taxpayers of California if they continued to accept the IOUs,” Lockyer said.
  
  “Hopefully, they will have a change of heart.”
  
  I don't exactly know what to make of a situation where Government & Banks begin to exchange IOU's.
  
  And these aren't traditional government "IOU's" (ie bonds), with a legally binding agreement to pay back the amounts, collateralized by some thing. No, these are just straight unsecured IOU's, like you'd get from your deadbeat brother.
  
  I assumed that Government would only accept IOU's, NOT issue them. Strange Day's, folks, strange f**king day's.
  
  I just wonder what's next? Because issuing IOU's starts to blur the line of just what "debt" is, and how trustworthy our governments promises are. The whole edifice is starting to blur... who is dependable, who needs money, who will go out of business?
  
  Seems Cali would have issued bonds or something before this happened. That they didn't seems to indicate they couldn't.
  
  And you can tell from the article that accepting them is a dicey business. Banks are in a precarious position themselves. They are supposed to owe Real Money to the US Government.
  
  This gels with my thesis of Keep Your Money, and segue's into the local hilarity surrounding the failed establishment of Crown Point Bank.
  
  Folks, Keep Your Money! When a snake oil salesman comes and tells you that they have the latest & greatest perpetual motion machine, for the love of God, don't buy it!
  
  Here is Gerlicher & Costa's initial attempt to fleece the masses:
  
  A new player in local finance?
  Investors plan to start nationally chartered bank in Bend
  
  Pending regulatory approval, Bend could soon be home to a new nationally chartered bank.
  
  A group of investors led by Sisters resident Elijah Aldinger has proposed creating a full-service commercial bank that would be headquartered in downtown Bend with a branch in Portland.
  
  The proposed bank, which would be called Crown Point National Bank, would specialize in servicing the banking needs of small businesses, said the bank’s president and CEO, Andrew Gerlicher.
  
  “This is a great place to open a bank,” Gerlicher said. “People are discovering Bend, have been and continue to, and the opportunities are real and, we think, dependable.”
  
  Gerlicher said the bank has 43 founders who have pooled more than $4 million to fund the bank’s organization, and that additional capital would likely come from a public stock offering sometime after the bank gains regulatory approval.
  
  Gerlicher estimates the bank will open by the first quarter of 2009. Despite the current economic climate, Gerlicher said, it’s a great time to open a bank.
  
  While many banks have slashed their lending in the wake of the housing and credit fallout, falling real estate prices have created demand for loans, which presents opportunities for banks with clean balance sheets, he said.
  
  Gerlicher said the bank is not being created to take advantage of the current situation but because it believes in the long-term potential of the Bend and Portland markets. “The things we’re hearing in the news are temporary things ... cycles tend to work their way through issues, so you really want to look beyond that and not hang the whole prospectus of the enterprise on a point of time,” Gerlicher said.
  
  “It’s the overall demographic changes, the continued growth and the people moving in, and, really, in Oregon in general. The same trends can be seen in the Portland market, so this is a long-term business that has a long-term view.”
  
  The bank has applied for a national charter with the federal Office of the Comptroller of the Currency, which requires the applicant to include the word “national” in its name or the abbreviated suffix “N.A.,” which stands for “national association.”
  
  Banks without a federal charter are chartered by states. Gerlicher, an attorney with 25 years of experience working for Umpqua Bank, West Coast Trust Co. and First Interstate Bank, said the bank chose a national charter partly due to his and other Crown Point executives’ experience in dealing with federal regulatory agencies.
  
  Gerlicher said the differences between federally chartered and state-chartered banks are small. The bank’s headquarters will be in the former Washington Mutual Home Loan Center in downtown Bend, at 956 N.W. Bond St. Washington Mutual closed its home loan centers across the country in March, according to Darcy Donahoe-Wilmot, vice president of national public relations, Northwest bureau, for Washington Mutual.
  
  Renovations on the bank’s future home, at the corner of Bond Street and Oregon Avenue, are under way.
  
  Gerlicher said dedication to customer service and a community bank mentality will attract customers in a crowded field of banks downtown.
  
  “Local businesses, I’ve found, prefer to work with people who they can get in touch with in person and who can give them the immediate, intelligent response to their requests,” Gerlicher said.
  
  “We’re going to hire experienced and seasoned bankers, and help these businesses get that level of personal service, to be able to talk to someone on the other end of the line.”
  
  Though it plans to specialize in small-business banking, Crown Point also will offer home and personal loans, and checking and savings accounts, and its deposits will be secured by the Federal Deposit Insurance Corp., Gerlicher said.
  
  The bank expects to finalize a Portland location in coming months. Should it be approved, Crown Point will join the Bank of the Cascades, founded in 1977, and High Desert Bank, founded in 2007, as the only banks with headquarters in Bend.
  
  Linda Navarro, president and CEO of the Oregon Bankers Association, isn’t surprised a new bank is opening in Bend. The region’s demographics make the area attractive, and speak to the fact that there’s a strong future for community banking in Bend and elsewhere, she said.
  
  “Banks continue to provide viable services to their communities ... and even with consolidation in the banking industry, new banks continue to organize because there is a place for community banks, especially in local communities where management and employees are centralized in the community,” Navarro said.
  
  “They truly embody the definition of serving and growing a community.”
  
  Sorry, but the parrellels to earlier hucksters is just amazing.
  
  “Local businesses, I’ve found, prefer to work with people who they can get in touch with in person and who can give them the immediate, intelligent response to their requests,” Gerlicher said. “We’re going to hire experienced and seasoned bankers, and help these businesses get that level of personal service, to be able to talk to someone on the other end of the line.”
  
  OK boys and girls, it's time for NAME THAT HUCKSTER!
  
  What huckster said this?
  
  "They want to live in a custom home," _________ said. "And they don't want to sacrifice quality. They want to be close to walking trails and the mountains. They're really mobile and they have a lot of money," _______ said.
  
  If you guessed BECKY BREEZE, You Win!!!! Who could forget the salad days when articles with titles like Condo-mania appeared in the Bulletin with such regularity, that we didn't even think how preposterous they really were.
  
  And if you just rolled in off the turnip truck, you should know that the "custom home" Breeze is speaking of was her very own Plaza condominiums, a disaster that went down to foreclosure.
  
  OK, on to our next Huckster!!!! Who said the following?
  
  In Franklin Crossing at the corner of Franklin and Bond — the downtown’s first new five-story mixed-use building — buyers lined up to snap up reservations on the buildings eight top-floor condominium units last spring, despite prices that ranged over $1 million, ___________ said.
  
  If you guessed NORMA DUBOIS, you win!!! Ding, ding, ding, ding, ding, ding!!!!
  
  Turnip truckster will be happy to know that Franklin Crossing NEVER "Sold Out" and still has cobwebbed units galore available to this day.
  
  OK, our next Huckster is up! It's a toughie, so I'll try to give you more material...
  
  "They told me, start conservatively," he recalled. "I just really didn't want to go there. I wanted to break down the barriers and go with the philosophy of if I build it right, they will come."
  
  "The day we opened the doors, it had the buzz we were looking for," _______ said. "It could have been in Portland or San Francisco."
  
  "Everything is going according to plan," _________ said, "and it feels good."
  
  If you guess JODY DENTON, you WIN!!!!! Ding, ding, ding, ding, ding, ding... well, OK, you get it.
  
  Turnipers, it should be obvious that Bend is all about PR & MARKETING PONZI SCHEME'S TO YOU, dumbf**ks who just fell off the meat wagon.
  
  That's ALL that happens here.
  
  It's why this blog is periodically "written off" in the comments. The grifting crowd really, REALLY hates this motherf**ker.
  
  MOST of the failures of Bend are not even acknolwedged. Only the really zingers that are too big to coverup, such as Cessna's Complete Failure with Columbia Air, and others. Most of the small stuff simply closes, and goes out with a whimper.
  
  Who are the Failures of Tomorrow?
  
  Well, it is typically people who start a modest enterprise, in the same spot as something similar that has recently failed. Usually easy to spot because of lines in the Bully like this:
  
  Bend and Redmond to get new restaurants
  
  Longtime Central Oregon restaurateur Axel Hoch and business partner Mark Perry are planning to open a new steakhouse in Bend’s Mill Quarter district. The restaurant, to be called the River Mill Grill, will be in Fireside red’s old location, at 803 S.W. Industrial Way, Suite 202, in Bend. Fireside red closed in May.
  
  So why do these people think they will succeed where others have failed miserably?
  Why it's The Doctrine of Bend Exceptionalism, of course. That feeling that makes you want to piss away your life's work because your a Narcissistic Fop who thinks they will always succeed where other mere mortals have crashed & burned.
  
  BUT, you have to appeal to THE NORMALS, and not come off like an asshole, so the Ace In The Hole always comes out:
  
  Hoch, who previously opened Le Bistro, the Old Bend Blacksmith Shop and Barney Prine’s Steakhouse & Saloon, said the location — with its expansive deck and view of the river, The Old Mill District and Les Schwab Amphitheater — was too good to pass up.
  
  Ahhh yes. The Olde Location That Is Too Good To Pass Up. Who has recently succumbed to this load Of S**t?
  
  Let's play Guess That Dupe!!!!
  “It is exactly the same food, same menu and the same staff — it’s just a new location,” said ____________, co-owner of __________. “We are excited to be a part of downtown.”
  
  If you guess "Cheri Helt" and "Zydeco", then you win!
  
  But then again, it could be 900 Wall, or a host of other Bend businesses that have frisked the owners CLEAN of all their Worldly possessions. No one says it better than Hot Young Margie:
  
  Marge said...
  
  The Shire s**t, was a good one. Bottom? Not for 3-5 years. Their holding time. More Cali-suckers. I say, fleece em and eat em.
  
  All these NOOBS jumping in, just because prices have fallen UNHEARD OF amounts. And their newest, best-est idea is some sort of VALUE-PRICED MENU.
  
  Cessna? Value Priced Menu.
  Zydeco? Value Priced Menu.
  Crown Point Bank? Value Priced Menu.
  The Shire? Value Priced Menu.
  Tuscany BUTTPLUGS? Value Priced Menu.
  River Mill Grill? Well, let's see:
  
  “It’s a great location, great parking and good timing,” said Hoch, adding that the menu will be “value-oriented.”
  
  Yup, same s**t, different day. Everyone buys the infinite river of bulls**t sluiced down their gullet by The Eternally Optimistic Bend Media Machine.
  
  Not a single NEW IDEA in sight. Always the same BULLS**T recycled in exactly the same spot, with exactly the same reason for WILD & ETERNAL SUCCESS: Value Priced Menu.
  
  Same s**t, just a little cheaper.
  
  This is exactly the sort of thinking that will keep Bend in an eternal malaise.
  
  Bend has exactly 3 BUSINESS PLANS:
  

  1. Subdiv (or Bank or Restaurant or...) with New Value Priced Menu
  2. Ski Hill
  3. Perpetual Motion Machine (aka Garbage-Fueled Buttplugs)

  These are the only things that have even been tried here for 100 years.
  
  Bend's recent success is more indicative of a country that is DYING than anything. What do you do when you don't have a lot of time left?
  
  Well, you gather up what you DO have, and go off and spend it in an orgy of hookers & blow, and basically come out the other side ready to die.
  
  Bend is a community that revolves around HOOKERS & BLOW. Ski hills to find the hookers, homes to snort the blow, and buttplugs when your f**king mind is gone.
  
  Bend is a side-effect of a country in decline. The last gasp of hedonists who implant pump-up cocks & fake titties, and squirt their love juice over anything that moves. Ask Bledsoe: he built the Magnificent Pleasure Palace Xanadu where he swallers donkey cum by the bucket & you can always stuff a 14" inflatable cock-balloon in your best friends wifes ass.
  
  This is Bend.
  "Where's the blow, Big Boy?"
  hbm, do you have a dog that'll Fill me Up?
  OK, this chick is just hot.
  
• June 28, 2009
• 5:54

  Bend's Newest Business Plan: Flip & Strip.

   » ‎ Bend Bubble 2

  Tags:    [edit]

  OK, just when I think Costa has woke up & smelled the homeless, he puts out something like this:
  
  Where all the jobs have gone
  
  By Jeff McDonald / The Bulletin
  Published: June 28. 2009 4:00AM PST
  
  

  The meteoric rise and fall of Deschutes County’s unemployment rate has garnered national headlines as a prototypical boom and bust story, but what lies behind the county’s unemployment rate increase of 12 percentage points from May 2007 to May 2009?

  Where have all the jobs gone? And how will the region look when it recovers?

  Many companies reported difficulties finding employees in May 2007, when Deschutes County’s seasonally adjusted unemployment rate was 4.7 percent.

  Now, with an unemployment rate of 16.7 percent reported last week in the county and rates of 16.4 percent in Jefferson County and 20.9 percent in Crook County, employers report an abundance of labor with companies slashing wages and jobs, unemployment rates at all-time highs and job-seekers going to great lengths to find work.

  Experts who study the region’s labor trends agree that the region’s housing market and construction activity became overheated during the boom years between 2004 and 2006.

  “I don’t know what we’re shifting to, but when you look at that loss in (mining, logging and construction) jobs in just the last two years, it is safe to say the development-based economy has slowed,” said Carolyn Eagan, the region’s economist for the Oregon Employment Department.

  “The county and city of Bend (have) had to cut staff, engineering firms are operating on bare-bones staff and many Realtors are not renewing their licenses,” Eagan said. “I don’t know what we’re shifting to. I don’t think we’ll know until it’s happened.”

  The collapse of the housing industry has resulted in a net loss of 3,050 jobs in the county’s mining, logging and construction sector from May 2007 to May 2009, a 36.2 percent drop, according to the Oregon Employment Department. Most of that sector is construction, according to the department.

  The county has 4,860 fewer jobs overall than it did in May 2007, the department said.

  Other sectors where job losses were reported included manufacturing; professional and business services; and trade, transportation and utilities. They lost 910 jobs, 530 jobs and 710 jobs over the two-year period, respectively.

  Individual industries such as high-tech and biosciences, which are smaller in size, are grouped under larger sectors such as manufacturing or professional services, depending on whether they produce a product or conduct research or provide services, for example, according to the Employment Department.

  Professional and business services jobs range from those in law offices and architectural firms to employment and janitorial services. The trade, transportation and utilities sector includes retail and wholesale businesses, as well as private utility companies and private transportation companies.

  Educational and health services jobs were up by 400, and leisure and hospitality jobs by 240, from May 2007 to May 2009, according to the data.

  Those sectors demonstrated growth, but at a milder pace than during the boom years, the department said.

  Over the same two-year period, there were 360 government jobs added in Deschutes County.

  In May 2007, there were 67,120 jobs, 8.7 percent more than May 2009, according to a report last week from the Employment Department. The county peaked in total employment with 73,510 jobs in June 2007.

  Job losses alone do not explain the state and county’s record-high unemployment totals, Eagan said.

  The civilian labor force — which includes anyone 16 and older who either has a job or is looking for work — has been growing in the county and statewide despite fewer jobs available, according to the Employment Department.

  More people are postponing retirement and staying in the work force, and second-wage income earners such as spouses who previously didn’t work and retirees are re-entering the work force. Additionally, more people are continuing their job search longer than they would normally without finding work, Eagan said.

  Unemployment trends

  Oregon’s 12.4 percent unemployment rate is the second-highest in the nation, behind only Michigan, which had a 14.1 percent seasonally adjusted unemployment rate in May, according to a U.S. Department of Labor report issued June 19.

  The Midwestern state, which has been decimated by the loss of auto industry-related jobs, has seen its civilian labor force shrink from 4.97 million in April 2007 to 4.78 million in April 2008, according to the state’s labor Web site.

  Meanwhile, Oregon’s civilian labor force grew from 1.91 million to nearly 2 million over the same time period, according to the state’s employment Web site.

  The collapse of the housing market — one part of the asset bubble that also included stocks, retirement savings and other investments — also contributed to the rise in the civilian labor force in Oregon and other Western states, said Timothy Duy, adjunct professor of economics at the University of Oregon.

  People who were living off their assets, particularly in a resort community like Central Oregon, were forced to go back to work when they saw their houses and other investments lose value last year, said Duy, who follows the region closely and authors the quarterly Central Oregon Business Index.

  “As assets became increasingly impaired and foreclosures started rising, the labor force started (increasing) quickly,” Duy said. “That started a process where the unemployment rate started spiking.”

  Mounting job losses also contributed to the rising unemployment rate, which spiked nearly 10 percentage points over the past 12 months — from 7 percent to 16.7 percent, Duy said. Both trends, an increasing number of people who had lost equity in their homes and money in investments, and an increasing number of people who lost their jobs, increased the rate of unemployment, he said.

  The county is on track this year — with 1,661 notices of default through Wednesday — to easily surpass the record 1,928 notices of default filed in 2008, but notices appear to have peaked in April. A notice of default is the first step in the foreclosure process but doesn’t always result in bank repossession.

  While the unemployment rate could still go higher in coming months, the high unemployment numbers are more of a lagging indicator for the region, a fallout from the overheated housing economy, said Roger Lee, executive director of Economic Development for Central Oregon, which promotes development in the region.

  “It cannot be overstated that while it is definitely a painful process, there is a purpose to the business cycle,” he said. “We’d like to have it a lot less deep and prolonged, but we’re seeing people get lean and mean.”

  Hardest hit

  Construction and manufacturing have been hard hit throughout the region, accounting for roughly half the region’s unemployed workers, but several industries, while battered, are still holding their own, Lee said.

  Lane Lehrke, 42, who moved to Bend in 2003 with his wife and two children, bought a home and worked for a local builder as a production manager until October, when he was laid off due to lack of work. He had owned his own company in Oregon City before he joined the Bend builder.

  But Lehrke has not been able to find work in the construction field, despite sending out résumés to five different Western states and online sites, he said.

  “I have put in résumés in lots of places,” Lehrke said. “I have gotten a lot of nonresponses. Very rarely do I get a response.”

  Lehrke, while collecting unemployment, still makes $400 monthly payments to pay for the cost of his builder’s license, insurance and bonding, he said.

  “I’ve got some opportunities in the fall,” he said, referring to potential jobs in Portland. “A lot of it has to do with stimulus funding.”

  What comes out of the current trough in the business cycle will depend upon how much the county diversifies its employment base, said Lee.

  Construction was 11.7 percent of the total work force in May 2007, and is 8 percent today, according to the Employment Department. Manufacturing, meanwhile, was 7.7 percent of the work force in May 2007, and is 6.9 percent today.

  “This place is not tanking,” Lee said. “There are indicators of economic activity still going on here.”

  The economy needs more diversity, but is not on a tipping point like it was in the 1980s, Lee said.

  That was when the region’s mills were crippled by changing forest policies and the area began to rebuild its economy, he said.

  “There are a lot of examples in the West where the change in forest policy decimated those areas,” he said. “Central Oregon has done a decent job, but we still need to do better in targeting industries that have promise.”

  The region needs to target companies in knowledge-based industries such as renewable energy, software and medical device manufacturing, he said. Global competition is fierce in recruiting “green” companies, which provide top wages and heavy capital investment, Lee said.

  Central Oregon has been competitive in its recruiting efforts for those types of companies, Lee said, citing more affordable land in the region, a ready work force and quality of life. Lee expects to find companies that are the right size for the region, possibly landing suppliers for Portland’s growing green manufacturing base.

  Companies such as Bend-based dog apparel manufacturer Ruff Wear and Warm Springs Composite Products, which both ship products overseas, are faring well. Others that have been hit hard by the national recession, such as Madras-based manufacturer Bright Wood and Contact Industries in Prineville, are retooling and will eventually provide jobs in Jefferson and Crook counties, Lee said.

  “With very few exceptions, these are very sophisticated wood products manufacturing companies,” Lee said. “They will be back with those kinds of jobs. Our challenge is to diversify with other types of jobs.”

  OK, without looking, was the title:
  
  

  WHERE HAVE ALL THE JOBS GONE

  or

  WHERE ALL THE JOBS HAVE GONE

  Right. The first one implies jobs that are gone. The second implies that the jobs are "still there", they are just hanging out somewhere smoking cigg's or something.

  Very sleezy writing, and something I guarantee Costa jumped in to change. Sooooo... the first is a more appropriate title, but of course it is the second that was actually used. You can tell, because the writer uses the obviously "correct" title in his second paragraph:

  You find, of course, there is no answer to either.

  WHERE ALL THE JOBS HAVE GONE.

  So it is a STATEMENT, not a question. And it appears that the answer is NOWHERE. They're just gone. They aren't hiding somewhere, waiting to be found.

  You gotta love these softball pieces, where the reader is treated like they are 5 yrs old.

  Where have all the jobs gone? And how will the region look when it recovers?

  Here's the real answer: Most of that employment near the peak was FAUX JOBS & FAKE BUSINESSES, 100% fake and unneeded and unsustainable jobs, businesses that never had a chance.

  Building houses no one wanted. Mortgage brokers hired, apprasiers for falsified appraisals. And all the "multiplier" jobs: All the jobs & businesses that were spawned from a credit-fabricated bubble, to feed demand that had no basis in reality.

  Those jobs are gone. And the "multiplier" jobs; the coffee shack purchases, the Jamba Juices, the oil changes and all the other stuff that "fuels" those faux jobs will soon be gone too.

  Remember the local business index that the Bully used to print? Well, one of the most out-of-control pieces of that index was the Help Wanted ad count.

  Over the course of just a few years, it went from 1-2,000 to something like 12,000!

  THAT was the bubble. Well, at least it showed the jobs bubble that happened here. We should have known FULL WELL something was wrong when we saw that stat.

  But we didn't despite have sharp as nails local experts making the following observations:

  Experts who study the region’s labor trends agree that the region’s housing market and construction activity became overheated during the boom years between 2004 and 2006.

  Wow.

  Do you think so, Costa?

  Funny. In this sentence, it starts out regarding experts studying the "region's labor trends", and ends up with a conclusion about our "overheated" construction market.

  Standard bamboozling bulls**t.

  And what's great is although we are promised some sort of insight into what the area will morph into, the piece never delivers:

  “I don’t know what we’re shifting to, but when you look at that loss in (mining, logging and construction) jobs in just the last two years, it is safe to say the development-based economy has slowed,” said Carolyn Eagan, the region’s economist for the Oregon Employment Department.

  “I don’t know what we’re shifting to. I don’t think we’ll know until it’s happened.”

  Is this one of the "EXPERTS", Costa? Seriously.

  She is really going out on a ledge here, with such forward-looking statements as:

  ...it is safe to say the development-based economy has slowed

  Dang. I guess maye she looked over at the sidebar and saw the following stat:

  Mining, logging and construction 8,420 to 5,370 (jobs) — Down 36.2%

  Nice touch. The strangely globbed together industries of mining, logging and construction has LOST ONE THIRD of it's job base, and THE EXPERT has made the observation that THE DEVELOPMENT BASED PORTION OF OUR ECONOMY HAS SLOWED.

  Never "shrunk". Not "lost". No, no. Slowed.

  Q: "Dude, are you feeling better after that motorcycle accident where you lost your f**king arms and legs?"

  A: "F**k dude, I didn't LOSE anything! They were just slowed!"

  Q: "Dude, did you also become retarded?"
  

  So, needless to say there is a ton of Costa-fueled double-talk in this piece. But there are also outright contradictions of earlier "assertions":

  The collapse of the housing market — one part of the asset bubble that also included stocks, retirement savings and other investments — also contributed to the rise in the civilian labor force in Oregon and other Western states, said Timothy Duy, adjunct professor of economics at the University of Oregon.

  People who were living off their assets, particularly in a resort community like Central Oregon, were forced to go back to work when they saw their houses and other investments lose value last year, said Duy, who follows the region closely and authors the quarterly Central Oregon Business Index.

  Remember, way back when, we were told repeatedly that BECAUSE Cent OR had such a huge Asset-Rich retirement base, that we were essentially IMMUNE to unemployment anymore?

  Uh huh. All those IDLE MILLIONAIRES just stuffing westside houses, didn't need to work, or do anything but cycle all day, and get their cocks sucked all night by their best friends wife, while Bledsoe swallowed donkey cum buckets.

  Welp, all of a sudden those motha f**kas need money, and are starting to take jobs at McDonalds.

  These are the WAKE UP AND SMELL REALITY Cali-banger dumbf**ks who thought they'd come here and never work another f**king second in their lives... dead ass broke.

  THAT is who is UNEMPLOYED, that is what's come outta the f**king woodwork. Costa told us we'd all ride a magic carpet of affluence FOREVER cuz these motherf**kers would never stop CUMMING here, and showering us with BILLIONS.

  Yeah, these f**kers are BROKE.

  Finally, we get Roger Lee's take, who basically says it was over months ago, and it's great that it happened:

  While the unemployment rate could still go higher in coming months, the high unemployment numbers are more of a lagging indicator for the region, a fallout from the overheated housing economy, said Roger Lee, executive director of Economic Development for Central Oregon, which promotes development in the region.

  “It cannot be overstated that while it is definitely a painful process, there is a purpose to the business cycle,” he said. “We’d like to have it a lot less deep and prolonged, but we’re seeing people get lean and mean.”

  It's all good with Lee. His mother could get her head cut off in a f**king car wreck, and Lee would spin that s**t as something she really needed to happen anyway. Yeah, she gettin' "lean and mean", right Roger?

  OK, enough about the Bully's non-stop bulls**t machine. Not much to say about this next nugg, but man it hurts:
  

  

  Graph of US Housing Equity

  Woof, that is a hideous hit to US net worth, down from $12.5 trillion or so, to below $7.5T and still falling. Keep in mind that is a 57 year chart.

  If you extrapolate out some sort of bottoming process, it could easily go on for 15-20 years.

  And that's just "stabilizing": We'll NEVER hit the peak values of 2006 in our LIFETIMES.

  Couple this with NAR, who continues to try to make the salad days appear by reinstating practices that caused this mess to begin with:

  Real Estate Associations Want Appraisers To Inflate Home Prices

  The housing is still struggling because appraisers are being too tough assessing the value of homes.

  That's the self-serving argument being made by realtors who are complaining that lower appraisal values of homes are delaying deals, ruining sales and prolonging the housing crisis.
  

  Appraisal fraud was an enormous contributor to the unsustainable run up in prices during the boom period. Many (but not all) mortgage brokers and realtors referred buyers to appraisers that ALWAYS hit the number of the home purchase price

  Now, NAR and other real estate lobbying groups, who are trying to maintain stay in business despite the total destruction of their market, are mobilizing a major effort to reach out to Congress and housing officials.

  As NAR economist Lawrence Yun said earlier this week, "Lenders are using appraisers who may not be familiar with a neighborhood, or who compare traditional homes with distressed and discounted sales." Instead, Yun and his bunch want appraisers who won't be too tough. As Yun puts it, "There is danger of a delayed housing market recovery and a further rise in foreclosures if the appraisal problems are not quickly corrected."

  And what about the RIDICULOUSLY LUCRATIVE easy-life of local moving companies? Well, they are finally getting their comeuppance!
  

  Housing, unemployment woes leave movers shaken

  Sinking home prices and a weak job market have forced normally restless Americans to stay put in an uncharacteristic shift that has, among other things, clobbered the moving industry.

  Yeah, basically the moving trade is imploding. But still we need local Government bureaucrats to save us from these sleezy f**kers, who are barely holding on by their fingernails:
  

  'Sting' targets unlicensed movers, so you're not stung

  You can read the piece direct, but the comments tell of the outrage over such bulls**t:

  Native Oregonian says:
  2 days ago, 04:19:51 PM
  "When I was a kid my brothers and I made money by doing yardwork for neighbors, babysitting, having kool-aide stands, washing cars. and doing housework for neighbors. I suppose most of the above would now require bonding, licensing, permitting, liability insurance, etc. Thankfully, we were never sued and all our "clients" seemed happy with the work we did and even tipped us sometimes.
  

  Yes, all these monstrous state agencies are supposed to "protect" the consumer but they just create more out-of-control spending government with perks and pers. A claim against a contractor needs to go through a long process and even when the contractor is licensed and bonded, if he (she) files bankruptcy, your claim could be released in the process regardless of their bonding.
  

  Oregon Construction Contractors Board allows the licensed contractor 6 months to pay a judgement or settlement agreement before a bonding company is involved if they fail to pay. Oregon licensed contractors can appeal the decision and again this takes months. Who pays for any necessary immediate repairs?
  

  So, do you think this highly over-regulated state will pay your claim? Nada. Many bonds are for $10K and if you as a homeowner get a judgement over the bonded amount, all you are left with is a piece of paper that you likely will not collect on, over the bonded amount of money.
  

  I tried to find someone to do some weeding for me this summer. Every licensed landscaper, or yard worker wanted from $40-$67 HOURLY. They explained that was because of the high cost of the state requirements for licensing. I did not use them.
  

  Did all the people working at Cessna that are unemployed or soon to be unemployed make that much money? I personally would hire an unlicensed mover, yard worker or babysitter any time I could and use my own resources to determine if I feel they are qualified and honest to complete the job properly.
  

  As for my weeding, I found a very dependable, responsible, hard-working and honest person that quickly completed the work I needed done. I paid him $25 an hour and he was not licensed. I am very pleased with his work and more pleased that he is not licensed.
  

  Guest says:
  2 days ago, 04:50:15 PM
  "Let this be a very important lesson to all you kids out there running those lemonade stands in front of your house,,, If someone say`s "we`re here to help you" RUN !!!!

  Guest says:
  Yesterday, 04:16:23 PM
  "wow that is lame. hurting the little man trying to make a buck! everyone involved in this should be ashamed and apply for work out of the country, karma is a bitch!
  

  There were 18 vehicles caught in this "sting". How many got tickets?

  In Thursday's sting, there were 18 vehicle-related violations issued and one was placed out of service for safety violations.

  F**king ODOT scumbags, and they used cops as their THUGS.

  This is a bunch of rag-tag, broke ass broke down and out workaday bastards who are just trying to do something to put food on the table, and ODOT hands out tickets to each & every one.

  They raise the SPECTRE of unlicensed BANDITS stealing your s**t on a meth-fueled, gun toting bender, when that is 100% UNADULTERATED BULLS**T. These poor f**kers can barely afford to pay attention.

  And that's where this thing is going: Vultures stripping the meat off damn near dead carcasses. Cops & ODOT stripping the poor, NAR wants to steal from new homebuyers by inflating the bubble anew.

  Everybody in strip-N-flip mode.

  

  hbm, will you please flip and strip me?

  

  Dunc, do you have paper or plastic for my comics?
  

  
• June 21, 2009
• 5:54

  The Bedrock Of The Oregon Economy? Wishful Thinking.

   » ‎ Bend Bubble 2

  Tags:    [edit]

  Well, Summer is here & it's a truly glorious time to be in Bend!
  
  Seriously! I don't know about you guys, but I am all about soaking up local fun stuff with the fam over the Summer. It's almost always some sort of "no-pay" non-Cali-banger chillax activity, costing at most $5 to park in some forest parking lot somewhere.
  
  And it's sure as hell hard to write this blog. I'm being pulled to go for a walk in the cool morning air right now. Plus, things seem to go well in Bend over the Summer.
  
  I think that'll change this Summer though.
  
  Unemployment is coming out for Bend this week, and if it's anything like the State figures, it should be just awful.
  
  Go to the OL-reliable OLMIS spreadsheet for State unemployment, and you'll see the 12.4% ADJUSTED rate for May was the highest on record, squeezing out the previous all-time high set in Jan 1983 of 12.0%.
  
  The more-important unadjusted rate of 13.4% set in that same month, still stands as the record.
  
  But we're getting there. We're still #2 in the nation, trailing only Michigan.
  
  Which is pretty unbelievable. When you think of Michigan, you think of ---?
  
  Right. Michigan has a single dominating industry that is kicking it's ass. Everyone knows what it is, and KNOWS that it is the one thing dragging down the WHOLE STATE.
  
  But Oregon? What single industry "drag" do we have?
  
  Is it tech? Well, sorta. RE? Yeah, sorta. The last gasping breaths of timber? Hmmm... maybe.
  
  No, it just seems like Oregon AS A WHOLE, is just falling apart. This whole state is just reverting to it's mean.
  
  And this may not be the WHOLE REASON, but it seems to me to spring primarily from one cause: Deluded narcissistic exceptionalism.
  
  People here think their s**t don't stink.
  
  Everyone knows Mountain Comfort is going down the toilet. But still, the owner DeeDee Keith insists on sticking $1,000 SALE tags on plain-jane crap furniture.
  
  She's going down, but she is still running insipid ads non-stop on KTVZ.
  
  She's going down, but would rather PR-Market her way into oblivion, rather than cut prices.
  
  She thinks her S**T don't stink. And that if she pushes hard enough, she can convince you to buy her s**t.
  
  She went cracker-ass broke on Apr 14, but just a few months back, dished up a self-serving turd in the Bully, who was only to glad to oblige:
  
  Divine downtown
  

  DeeDee Keith jokes that she always promised Karma, her dog, that some day she would get them a better place to live.

  And boy did she deliver, going from living out of a trailer at a KOA campground to becoming a successful Bend businesswomen.

  ... after a few years, Keith outgrew her leased spaces, so it made sense to her that when a large, prime piece of property on Wall Street became available, she would buy it.

  And she did, explaining it this way: “I was young and dumb, but I had a good business plan.”

  Keith was anything but dumb. She not only expanded her business, she also oversaw the construction and design of the new Mountain Comfort building from the ground up.

  And speaking of up, this is where Keith made good on her promise to her dog.

  She built up, as in a three-bedroom, two-bathroom luxury rooftop condominium above her store.

  Taking the store elevator to the third floor, the elevator doors slide open and the Mediterranean-style design of the floor begins to emerge. The first doorway you pass is Keith’s manager’s condo, and between this condo and her condo door is a complete workout facility with an elliptical machine, treadmill and several weight machines. Keith explains this is where she alleviates some of her workday stress. Across from the workout area is a window door that leads to the outside deck facing Pilot Butte. This is Karma’s domain, where the builder constructed a 50-yard dog run and barking station. At the end of the run is a large, custom-built doghouse for the faithful dog.

  The whole piece is just endless self-serving tripe. Standard Cali-Banger bulls**t. Someone who just thinks they are God's Gift.

  And about 6 months later, it was all gone. The TAINT of the Bend Bully PR AIDS strikes again.

  Here's another S**t Don't Stink piece from the Oregonian:

  Portland-area retailers try to retool leases
  

  In fall 2008 when Storables' Fischer realized how the recession was hitting his newest store in Mesa, Ariz. -- where sinking home values and consumer confidence had tanked early on -- he tried to set up talks with his landlord, a mall operator he said already was struggling to pay for an expansion.

  By January, when Fischer started trying to meet with landlords, he already was late to the game. Many of the larger tenants already had begun talks. Adding to the logjam, he said, larger chains such as Williams-Sonoma, Chico's and Anthropologie often start with more favorable leases tied to sales or whether certain neighbors stick around.

  "It's the big national tenants, not the regional or small local, that can really work that," said Fischer, adding that one of his landlords told him that having an empty space was better financially than offering lower rates.

  A drop-off in rents, Fischer said he was told, could leave a lender wondering about the value of the landlord's building. Such a scenario could trigger a review that could mean the landlord has to make up the difference to the bank.

  WTF? So these landlords & lenders are in this game of chicken regarding pie-in-the-sky lease rates. They would actually rather have their space EMPTY, than a paying tenant.

  The grass is greener thinking. Always jam tomorrow, NEVER TODAY.

  This is just psychotic, yet widespread thinking. Hold out for $2.50 a foot, even though vacancies are 90%.

  The thinking is, "I KNOW I could have gotten $2.50 a foot a few years ago, and the value of this building imputed at that rate is $X million, but if I were to actually take $1 foot, it would be $X/3 million, and since I owe $2X million, I can't take $1/ft or the bank will come after me".

  So everyone in this weird f**king state is in state of suspended animation, always believing in some Pollyanna, dumbs**t dream that TOMORROW WILL BE A BETTER DAY.

  Always. Seriously, look at this headline from TODAYS Bully:

  Summer is finally here — will the tourists come now?
  Prospects for Central Oregon could be worse - July especially should see more visitors - but don’t expect a record-breaker

  On the heels of an abysmal winter season, Central Oregon’s tourism industry is hoping for a boost in business during its ever-important summer season.

  That could come from a range of events planned for July, as well as from perceptions of a rebounding economy, but tourism officials still don’t expect a full recovery or at least stabilization until at least 2010.

  Earlier projections of a 25 percent drop in tourism this summer have softened somewhat, but most lodging operators still expect to be down from last summer, Audette said.

  She expects the region’s resort properties to do well this summer because they offer the feel of a vacation getaway while still being a short drive from the Seattle and Portland markets.

  Look at just how much HOPE & DREAMING there is in there. The whole piece is just hopeful bulls**t. Bend is NOTHING but smoke, mirrors, and illusion. You can NEVER count on anything to be real. Here's a dreamscape excerpt, included in almost every Bully article EVER WRITTEN:
  

  Room-tax collections are the most reliable indicators of the health of the tourism industry, which is estimated to have a $571 million annual impact on Central Oregon’s economy.

  100% BULLS**T. That $571 mill is 100% MADE UP. But it is printed damn near every day in the Bully. Why? Cuz this place is Kool-Aid crackerland.

  DeeDee Keith PR-Marketing her store into oblivion, rather than just cutting price.

  Portland commercial landlords & banks playing cat & mouse so that some effemeral and 100% FAKE building valuation can be hit with lease rates that aren't even being collected.

  Bob Thomas filing appeals to keep open a dealership because he thinks he's entitled.

  Roger Lee & Alana Audette lying day-in and day-out about how important they are to Central Oregon, and the City of Bend (you & me) are actually FUNDING THEIR BULLS**T.

  There's a fundamental thread here: Oregon cultivates DREAMERS.

  Now this is great when things are going OK. Even dreamers have their place on the upswing.

  But man, on the downswing, they do All The Wrong S**t. The HOLD OUT, when they should BAIL OUT. They don't know when to say WHEN. They don't know when to STOP THE BULLS**T.

  Audette STILL claims $571 mill in tourism, DESPITE THE FACT that even SHE ADMITS tourism is DOWN DOUBLE DIGITS.

  "Yes, room rates are DOWN 25% YoY, but that $571 mill figure I 100% MADE UP last year STILL STANDS, YOU DUMBF**KS!"

  Roger Lee, same deal. EDCO has "helped" land blah-hundred jobs, bringing in blah-many-millions to the Cent OR economy. 100% UNADULTERATED BULLS**T.

  This f**king place is run by RETARDS. Pie-in-the-f**king-sky idiots. The whole f**king state is that way, it's just especially severe in Central Oregon.

  And we're seeing the upshot. #2 in unemployment.

  Can't really narrow down the cause... until you realize it is just general self-delusion.

  OK, I can't let it go this week without a total reprint of the NYTimes piece on the CRACKAGE OF BEND. It's the only way I can circumvent the comment posting limits.

  This is such a great piece, because it addresses something KNOWN to Cent OR locals for many moons: Cali-Bangers are the root cause of ALL EVIL.

  What sweet f**king redemption to have a NYTimes piece that essentially blames these equity locust motherf**kers for ALL OUR ILLS.
  

  Slump Dashes Oregon Dreams of Californians
  

  By WILLIAM YARDLEY

  BEND, Ore. — Susan and Mike Telford had a plan back in the boom years in California. They would sell their house outside Fresno at a solid profit and take their equity to this sunny mountain city to build a better life, a fresh-air future in Oregon.

  “We wanted to lose the commute, to lose the smog,” Mrs. Telford said. “We wanted to lose California.”

  They moved here in 2006, when Bend was one of the fastest-growing places in the West and money and migration from California fueled that growth. Now the Bend area’s unemployment rate, at almost 16 percent, is one of the highest of any metropolitan area in the nation. “For sale” signs dot desert-toned, unfinished subdivisions. Luxury furniture stores downtown are going out of business. San Francisco chefs have fled.

  The freefall has made Bend a succinct symbol for the economic perils of “lifestyle destinations” in the so-called New West, recreation-heavy communities where jobs have been heavily tilted toward construction and services and where many of the new residents were self-made exiles from California cashing in on their overpriced real estate. Bend, a former timber town that now has 80,000 residents, was particularly popular among those drawn to the often rainy Northwest because it is located on the sunny side of the Cascade Range.

  Now the Californians who contributed to Oregon’s growth are in some cases adding to its economic struggle. As of May, Oregon had the second-highest unemployment rate in the nation, at 12.4 percent, behind Michigan. California, which has not released its May figures, ranked fifth in April.

  While some other states with high unemployment, including Michigan, have seen their labor forces shrink, Oregon’s labor force has grown. Economists say some of the growth appears to be driven by people who moved here with money they made in California, whether from real estate or stock market investments, and expected to get by but now must look for work.

  “It’s just so depressing to hear them because they thought they had life handled and they don’t,” said Bobbie Faust, an employment counselor who works for the state in Bend.

  The Telfords are among those facing trouble. They had presumed they would be able to sell their house in Fresno for more than $300,000 to help pay the mortgage on the new house they bought near the Deschutes River in Bend for $475,000. But the Fresno house has yet to sell, and Mrs. Telford, an accountant, has lost a series of jobs at small firms here that she said had downsized. The couple’s only income now comes from her unemployment checks and her husband’s salary as a high school teacher.

  “The cash flow is negative,” Mrs. Telford said. “This will be the first time we’ve had to go into savings.”

  Not all of the newcomers are from California, of course. Lost equity, lost jobs and the possibility of foreclosure also threaten people who moved here from just across the Cascade Range, on the wetter western side of Oregon, as well as some from Seattle or the East. Measuring California’s economic impact on Oregon and its struggles is difficult, and economists say that Oregon, which has less than a tenth of the population of California, has not always been directly affected by its neighbor’s fortunes.

  Still, just as other places in the West have blamed California transplants for treading heavily into town, the words “California equity” roll off many tongues here in Deschutes County with particular resentment these days.

  “California immigrants can never win in Oregon,” said Philip J. Romero, an economist who has advised governors in both states. “In a boom, ‘They are crowding the roads and bidding up house prices.’ In a bust, it’s: ‘They alone caused the price of my house to drop by hundreds of thousands of dollars. They came up here without a job, and now we can’t absorb them and they’re competing for my job.’ ”

  Carolyn Eagan, a regional economist for the Oregon Employment Department, pointed to federal data showing that the overall percentage of personal income from dividends, investments and rental income in Deschutes County was almost 26 percent in 2007, the latest year for which data were available. Compared with an overall state rate of slightly less than 21 percent, the figures suggest that people here, more than elsewhere, have relied on income from sources other than a steady job.

  “Shhh,” Biff Ingels, a transplant of four years, standing outside the main job counseling center here, said when asked where he had lived before. “California,” he said in a whisper.

  A cultural shift appears to be under way. One of Bend’s leading restaurants had been Merenda, whose chef, Jody Denton, came from San Francisco in 2002. Under mounting debt, Mr. Denton closed the restaurant in January and left for a job in Australia. Several people involved with the restaurant before it closed have reopened it under a new name, 900 Wall, its street address. The menu has been recast from mostly French and Italian cuisine so that it now incorporates more ingredients from the Northwest and has slightly more approachable pricing.

  “We’re trying to present ourselves as a local restaurant,” said Cliff Eslinger, the executive chef. “We’d relied far too heavily on outside forces.”

  Another casualty was Bend Living, a glossy regional magazine driven by advertisements for high-end homes and luxury furniture. Kevin Max, the magazine’s former editor, is planning the first issue of a new magazine about Oregon culture and history, based in Bend and set to make its debut this summer. It is called “1859,” a reference to the year Oregon entered the union.

  “Bend Living was about Bend’s emergence into 24-7, go-go-go, irresponsible construction and people living beyond their means,” Mr. Max said. “1859 is kind of National Geographic meets Condé Nast Traveler. It’s about Oregon, so it’s all about sustainability.”

  Locally, sustainability is a challenge. Bend’s job market has not proved diverse enough or deep enough to provide jobs for the newcomers who suddenly need them. “Poverty with a view” is how many people describe Bend before the boom. Economists say the city’s sudden abundance of investment income and housing equity from newcomers made Bend seem more secure than it was. While experienced people like Mrs. Telford, the accountant from Fresno, struggle to find work, there are longer term questions over how the area will support its newest residents.

  Zachary Lauritzen, a student teacher at Summit High School, on Bend’s west side — the side some residents call “Little California” — said he was teaching a lesson in government when the topic prompted him to ask how many students had lived in California.

  “Half of them raised their hands,” Mr. Lauritzen said.

  

  Buster, please uncurl from fetal position, leave LaPine, and come back!
  

  

  hbm, I been saving special titty-f**k for you so long!
  

  

  tim, please thwack my nipples for bad apostrophe usage!
  

  
• June 14, 2009
• 5:15

  "Bend is in a depression..." -- Bob Thomas

   » ‎ Bend Bubble 2

  Tags:  the Cult of Bend   [edit]

  Well, there you have it, folks.
  
  Reputable business man telling a house subcommittee, and then printed in our local rag:
  
  BEND IS IN A DEPRESSION
  
  Wow. THAT makes it official. Although, we've been saying that for over a year.
  
  I thought that was pretty stunning, to hear someone say that, much less have the Bully print it.
  
  And not to belabor the point, and in case you've been in a cave for 2 years, the CAUSE of our current DEPRESSION is the REAL ESTATE INDUSTRY. Pure and simple, endlessly promoted and pumped and dumped on us, it was the real estate bubble, and it's inevitable collapse that is THE CAUSE of our current problems.
  
  I feel like I have to say this sort of thing, because it's starting to spread & manifest itself in all sorts of collateral effects. Like Bob Thomas losing his dealership.
  
  Almost any industry fueled by credit is getting it's ass waxed.
  
  So you might think we're suffering a "credit bust", which we are, but it's primary vehicle for expansion was RE. We're not in a Depression because of zero down car deals.
  
  The rest of the article about Thomas is standard self-serving tripe, standard issue when the Bully does it's usual BS. Even Greg Walden hops on the bandwagon, questioning the "wisdom" of closing ANY dealerships.
  
  I just have 2 observations about this:
  
  1) I still DO NOT understand why Gary Gruner in Madras is still alive.
  
  I would have guessed they'd be The First GM dealership closed in Cent OR, GM bankruptcy or not. Gary Gruner? WTF?
  
  2) Driving around auto row, and Bob Thomas' lots, there are NO CARS for sale in Cent OR.
  
  Well, not "NO CARS", but a hell of a lot less than there were just a year ago. You could go to auto row on the East side, and see a ridiculous number of cars over there. THOUSANDS and THOUSANDS.
  
  That was one of those businesses that was so irrational, I simply could not understand how any of those dealers survived. There are STILL too many.
  
  And that doesn't count the innumerable used car dealers, whose numbers are now being swelled by new car dealers losing their franchises & joining their ranks.
  
  I think you'll see a winnowing in the numbers of dealers, especially on auto row. There is just a ridiculous number of them. And the number of cars sold has already plunged, probably far worse than most people think. Ask Bob Thomas.
  
  Proably the most amazing piece I've read since this whole RE Implosion began, is a piece posted in the comments by PopGoesBend. Excerpts:
  
  Median home prices drop below 1989 levels in some parts of Southland
  
  Properties in several areas are selling for less than they did 20 years ago, and that's not even counting the effects of inflation.
  
  John A. Beatrice, 55, bought his spacious two-story Spanish-style house there brand-new for $120,000 in 1989. But he never imagined his neighborhood would drop off the charts. In April, a slightly larger home two doors away sold for $66,500.
  
  That's just over half the $130,000 it went for new in 1992. In 2005, that house sold for $330,000. ...in 14 Southland ZIP Codes, mainly desert communities in the Antelope Valley and Inland Empire, median prices have fallen below levels recorded in April 1989, according to MDA DataQuick, a San Diego real estate information service.
  
  That means thousands of homes in those neighborhoods -- even houses barely 20 years old and in decent shape -- have lost every dime of their appreciation, giving back not just the gains of the recent bubble but steady increases logged over a generation.
  
  The April median price in Beatrice's Lancaster ZIP Code of 93535, for example, was $87,000. That's down 74% from a $334,500 peak price in 2007.
  
  Even worse was the 92410 ZIP Code in the city of San Bernardino, which covers several older neighborhoods. Its $61,000 April median represents an 84% drop from the peak of $370,000 in 2007.
  
  Prices also tumbled below 1989 levels in neighborhoods in Palmdale, Hemet, Barstow, Desert Hot Springs, Victorville, Highland, Santa Ana and Oxnard, according to DataQuick.
  
  Several other inland communities, including parts of Moreno Valley, Banning and Rialto, had median prices that were only slightly above 1989 levels and below the April 1990 median.
  
  I always thought that Cali-Bangers would take it the hardest. The California Miracle was just that; a mirage, a figment, a dream.
  
  I honestly had no idea where Palmdale was, and come to find it is in the barely commutable quasi-desert outskirts of LA's Northern suburbs, if you can call living 2-3hrs from LA in gridlocked traffic a "suburb".
  
  Sound familiar? Out in the f**king desert? 2-3 hours from any real metro area?
  
  Although I was sort of surprised about Oxnard having fallen below 1989 levels. What the f**k is next? Santa Barbara?
  
  I wouldn't give a handful of my own s**t for a house in cracker-ass Victorville. But Oxnard? I've been there, and it was OK. Ocean's just right there. Oxnard falling below 1989 levels is pretty strange.
  
  And it's happening elsewhere, including the central valley:
  
  Back to the future home prices
  
  

  Real estate bargain hunters in Stockton can buy property for less than the sticker price of a Cadillac Escalade in today's market.

  San Joaquin County real estate listings contain at least two dozen homes priced less than $50,000 and at least one as low as $15,900. These are prices not seen in California since the 1970s, a decade in which home prices climbed from $23,000 to $84,000.
  

  The 1,300-square-foot house is priced at $15,900, a 92 percent discount from what property records show as a $180,000 selling price in August 2005.
  
  My main takeaway on this piece is NOTHING IS SACRED. "Rationality" least of all. Prices staying above some price point that "makes sense" is 100% Grade AAA Bulls**t.
  
  Prices can AND WILL go to INSANE price levels. Prices will slice right through the "Rental Arbitrage Point" like a hot knife through butter. People will start questioning EVERYTHING when all sorts of "logical" arguments start to fall.
  
  You'll soon be able to BUY A HOUSE IN BEND FOR LESS THAN THE RENT. Why?
  
  Because "prices" are always based on CREDIT. Credit is valuing a STREAM OF MONEY, NOT A PILE OF IT. Credit is "If I give you this PILE OF MONEY, you will give me 360 payments of $X EVERY MONTH".
  
  THAT is what's going away. Not for everyone, but for a hell of a lot of people. THAT is the "rational assumption" that will fail. No CREDIT means people will go back to paying for stuff with PILES OF MONEY, not streams. And there ain't much money left.
  
  For now.
  
  I think, FOR NOW, the primary economic theme is DEFLATION.
  
  But our government is altering the natural course of things by throwing TRILLIONS OF DOLLARS at an essentially stagnant economy.
  
  Not today, but soon, there will come a day of STAGFLATION. And it will boggle the mind. Money in this country will be worth nothing.
  
  Houses probably WILL go up at that point. Well, at least compared to holding cash. Better to have your cash in some shack losing 5%/yr, than in the bank losing 15%. A 5% LOSS will actually feel like a good deal. People will treat cash like Ebola.
  
  But not now. But folks, watch the dollar, and watch long government bonds.
  
  The dollar index, after a long plummet from 120 in 2002, fell to as low as 70 last year. It had a dead-cat rally to 90, but has now fallen back to the high 70's. The World is getting nervous about the Obama Jeebus Printing Press.
  
  Similarly, 30 year government bonds, declared DEAD a few years back when the US Gov't was never going to borrow money again (man, that never gets old), has fallen from it recent EUPHORIA DEFLATION FUELED all-time highs over 140 (My God!), clear back to pre-panic prices, around 115.
  
  I would watch this. The dollar has long been signaling an incredible devaluation in our currency. But luckily, the Chinese & others have seen these losses counter-balanced by recent huge gains in treasury prices.
  
  At least till recently. Now the double whammy of declining dollar and treasury pricing could cause a Worldwide credit panic, as the US has to print its way out of bankruptcy.
  
  And that means STAGFLATION.
  
  Portland is finally starting to really hurt in the current RE Depression. There were some good pieces recently.
  
  Stalled Portland luxury development shows depths of recession
  
  (Tom) Moyer's four decades of empire building smacked into a wreck of a recession April 10, when he halted construction on his $170 million Park Avenue West tower.
  
  That morning, Moyer paid 100 workers in the pit spiked with rebar. On Wednesday, the final three workers climbed out of the hole for the last time.
  
  Commercial lending has gone net negative.
  
  I thought that graph was interesting. Lenders have gone net negative on commercial RE, taking more out in payments than they are lending. Again, the whole concept of STREAMS OF MONEY, is dying.
  
  In another piece, we see that residential in Portland is also moribund:
  
  Portland housing market still gloomy
  

  Portland-area home owners continued to weather a gloomy market in May, another sign that talk of a economic recovery is premature for the region's housing market.

  The Regional Multiple Listing Service reported today that the median price for homes sold in May was $250,000. That's down 13 percent from May 2008 and 17 percent from the August 2007 peak.
  

  But the number of closed sales in May lagged last year by 23 percent. Pending sales, seen as a predictor of future closed sales, was down 7 percent from a year ago.

  The inventory of unsold homes -- the time it would take to sell all homes on the market at the current sales paces -- dipped, but remains high at 10 months.

  Portland is actually holding up pretty well since it does have... stuff. Unlike Bend, which only has RE, and nothing else.
  
  Folks, don't believe the calls of a "RE-bound", and "we've GOT TO have hit bottom, it can't go any lower!", and such. We've heard both ad nauseum from RE "experts" (Bratton, DuBois, et al) quoted in the Bully going on 2 years.
  
  It CAN go lower, and it WILL go lower.
  
  Look at the price reductions in the cracker-ass middle of the desert in Cali: DOWN 90%+!
  
  I don't think we'll see that, but 75-80% DOWN from the top is VERY POSSIBLE.
  
  I mean, Holy S**t, we had $396,000 MEDIANS for the love of Christ! We're in the middle of ASS NOWHERE!
  
  We'll hit $125K medians. If you DO CARE about capital preservation, and can tolerate renting, DO SO. Do it for 5-10 years. You will be able to make good money in 5-10 years from now.
  
  Work, pile up your money, and shoot your wad in a few years. You'll have to pay cash, or nearly all cash, but there will be good money to be made.
  
  NOT in cap-app. NO. RE isn't going to "go up" in any appreciable manner for 2 decades. BUT you can get a cash-flow positive s**t-shack, that pays you a few hundred every month, and that will KILL what you could get elsewhere.
  
  Finally...Any hbm sightings recently? Is he actually gone? Was the coincidental exodus of he & Brucey part of a Mormon love triangle?
  hbm, come back! With you gone, there is no one to twist our nipples! Look! In the sky! It's a bird! It's a plane! It's hbm! hbm, please come back! My leather bras have shrunk to just B-cup! I need you!
  
• June 07, 2009
• 6:08

  This Blog Better Have 800 Comments This Week, Or I'm Shutting It Down!

   » ‎ Bend Bubble 2

  Tags:    [edit]

  Oh geez.
  
  The pre-occupation with comment counts is rearing it's ugly head... again. People are starting to make comparison parrellels with Bend RE and such. Funny.
  
  I wouldn't look for those days to happen again. The high water mark was 1,076 on Sept 6, 2008, a time just after being mentioned on patrick.net, when traffic spiked massively. Also I think there was much traffic from googlers searching for "Britney Spears Naked", or something right around that time. Then the Google's shutoff.
  
  Oh well.
  
  I'm not running this rock for comments numbers: It's primarily to have a no-holds barred, 100% unmoderated discussion about Bend RE & Business, although there isn't much off-limits, and in a similar vein, it's to expose ridiculously biased Bend media reporting.
  
  If I accomplish those 2 things to some extent, I'm good. Plus, I like it. It's my sort of "thing". If "My Thing" was to manifest itself in truck form, it'd look like this:
  The Official BB2 Milk Truck.
  
  I don't know this dude, but a guy who builds a drag strip, then puts an 825hp noise-maker under the hood of a POS milk truck, and then just sits and burns slicks all day, is f**king All Right With Me.
  
  That s**t is Awesome! Kenny Clouse, 65, is out in Alfalfa tearing the s**t outta a racetrack he built himself. That is just kick ass. I salute you Kenny, you're the kind of people Cent OR NEEDS.
  
  Some interesting stuff in the Oregonian this week. FIrst, the whole Biomass Fuel Dream is Dead. Not "dying", it's dead.
  
  The Biomass Ponzi Scheme is something that was a variant on the Perpetual Motion Machine. Only in Bend does Perpetual Motion Still Fly, with Bully pieces like:
  
  

  • Entrepreneur thinks air is the new gas, but experts say the idea has some leaks
  • Electric-car evangelist sees a battery-powered future
  • Powered by innovation
  • Garbage never smelled so sweet

  These sorts of things happen every so often, when Arab Shieks think their s**t don't stink. In Bend they are just moronic as hell. That "Powered by Innovation" piece was a deceptively titled piece (funny how that happens) about the REDMOND ALBERT EINSTEIN who dragged a car tie behind his car to generate electricity.
  
  Ironically, the Oregonian is running a piece on the collapse of the Biomass Energy Bubble, a mere 18 months or so after it started, while The Bully, as usual, is running a sketchy piece that defies about 42 laws of Thermodynamics:
  
  Garbage never smelled so sweet
  InEnTec of Bend has partnered with Waste Management Inc. to build its trash-to-gas machines at landfills across the country. The result could be a renewable energy dream — and InEnTec is promising big returns for Central Oregon, in the form of gree...
  
  By Andrew Moore / The Bulletin
  
  Two weeks ago, Bend-based InEnTec LLC announced a joint venture with Houston-based Waste Management Inc., a Fortune 500 company with more than $13 billion in revenues.
  
  While a big step for privately held InEnTec, a small waste-to-energy company that relocated to Bend last year from Richland, Wash., it also promises big returns for Central Oregon.
  
  The new joint venture, called S4 Energy Solutions LLC, will be based in Houston but is opening an office in The Old Mill District, adjacent to InEnTec’s office.
  
  S4 will eventually employ more than 20 chemical and other engineers, generally earning more than $100,000 a year, according to Jeff Surma, a founder of InEnTec and S4’s first CEO.
  
  They are the sort of high-paying green jobs that politicians love to promise, working with technology that turns everyday garbage into fuel and other products without any harmful emissions.
  
  But InEnTec hasn’t been visited by presidential candidates promoting renewable energy, or sitting senators touting the green spending in the stimulus bill. “You’d think it would be the perfect opportunity,” joked Surma, who stepped down as InEnTec’s CEO two weeks ago to take the same position with S4, though he will stay in Bend.
  
  Perhaps converting garbage into energy isn’t as sexy or as simple as harnessing the sun and wind. Rather, Surma chalks up the company’s “under the radar” existence to emerging technology — using super-hot plasma to convert trash into synthetic gas that can be refined into hydrogen or ethanol — that is only now ready for commercialization on a scale that could make it as well known as the solar panel or the wind turbine....
  
  Oh my goodness. The old SUPER-HOT TRASH COMPACTOR that turns s**t into gold.
  
  What's funny is that InEn Tec was not bought out or some other super-sexed transaction that EMBIGGENS the company, or some such... it barely gets a word, but the CEO QUIT.
  
  In case you're wondering How This Ends, it was covered in today's Oregonian:
  
  Northwest's biofuel boom goes bust
  

  In two short years, the Northwest has gone from biofuels boom to biofuels bust.

  The boom began in August 2007, when Imperium Renewables opened a 100 million-gallon-a-year biodiesel plant near Grays Harbor, Wash. A month later, Pacific Ethanol opened a 40 million-gallon corn ethanol plant in Boardman. In June 2008, Cascade Grain opened a 113 million-gallon corn ethanol plant in Clatskanie.

  Encouraged by tax breaks and Oregon and Washington standards designed to require biofuels' use, the companies promised environmental benefits on an industrial scale, a quantum leap from smaller-scale producers making fuel from cooking grease and Northwest crops. Nearly 30 more projects were under discussion.

  Then came this year.

  In January, Cascade Grain filed for bankruptcy six months after it opened, idling its plant and putting a $20 million loan from the state of Oregon in jeopardy. Imperium, whose grand opening was attended by both Washington senators, idled its Grays Harbor plant indefinitely, laying off 24 workers in March.

  And Pacific Ethanol, which received $14.6 million in Oregon tax credits for its plant, filed for bankruptcy for five of its subsidiaries last month, including the subsidiary that owns its Boardman plant. It warned that it has enough money to continue operations only through June.

  Same s**t, literally just a different day. Car towing wheel, plasma-buring trash compactor, biomass bulls**t. All are the same. All are Classic Oregon Ponzi Scheme Ripoffs, disguised by physics-defying bulls**t super-big-hair technology.
  
  THIS is why Oregon is doomed, this is why Bend is doomed. The physics of all this is 100% Grade AAA Bulls**t.
  
  Note, I DID NOT include PV Powered. It could be argued that PV Powered is Yet Another Gobmint Funded Boondoggle that will collapse when credits are yanked, something that apparently won't happen for awhile, as candidate Obama unwittingly committed to this during a PR-fueled junket way back when, when he shook hands with PV's CEO.
  
  The diff between InEn Tec & PV Powered? One BURNS s**t, the other absorbs & converts energy from an autonomous source.
  
  I'm not saying PV is on it's way to UNENDING RICHES. It just has a fundamental plan that is actually supported by PHYSICS. It's NOT a Perpetual Motion Machine. Wind power is similar. It's really already there, whether we harness it or not.
  
  Again, I feel the ROI on such stuff is negative, for quite awhile. The fundamental nature of people is to maximize The Now: Burn the CHEAPEST FUEL now, and f**k the future, even if it means cooking our kids in an Easy Bake Oven. The RE Bubble is Yet Another Illustration of our inherent F**k The Future outlook.
  
  THAT is why Bend attracts this sort of grifter. Grifters THRIVE on those who say F**k The Future, and live for The Now, even if the NOW is an illusion, and The Payoff is a fundamental VIOLATION OF BASIC PHYSICS.
  
  The Biggest Payoff out there is just that: A physics-violating super big-hair technology perpetual motion machine. Look around, we're drawing these brand of grifters like flies.
  
  You wondered What Is The Next Big Bubble After RE? Well, it was supposed to be Alternate Energy (right Brucey Buttplugs?), and it's already collapsed. But as usual, the Bully continues to run stories that It's Better Than Ever In Bend!
  
  Speaking of Compressed Collapse Cycles, Luxe, successor to Norwalk, went down. Dunc had a nice post about the 'Comings and Goings' of such business, and is well worth a read.
  
  If there is a retail sector more bloated and ridiculously outsized for a town the size of Bend, it is auto's. I NEVER understood how all the auto row s**t, and the 3rd St sellers, and vast underbelly of used auto sellers survived in this town.
  
  They just built and opened new dealership after new dealership, and I was baffled. Who the f**k is buying all these cars? Not me. My NEWEST auto is 8 YEARS OLD. And I have no intention of buying another, unless I am made an offer I cannot refuse.
  
  Which may happen. We're in that strange saddle point when dealers are literally contractually forced to gorge themsleves of stock, and there ain't no one buying despite some damn good prices.
  
  Huge amounts of wealth is just drying up and blowing away, like so much STD landscaping, as Matt Thomas grouses about the loss of his Chrysler franchise:
  
  “The big loss is losing the (Chrysler) franchise,” he said. “I could have sold the franchise for $7 million to $8 million two years ago.”
  
  I can imagine the Bob Thomas franchise has lost at least that much. WTF is GM thinking leaving the only GM dealership in MADRAS? That's the stupidest thing I've ever heard of!
  
  I can understand almost everything else in this auto dealer collapse, except that. Pulling Thomas' GM franchise is moronic in about 12 ways. Having to drive to MADRAS to buy a GM vehicle essentially means NO ONE WILL BUY GM IN CENT OR. My God.
  
  Aside from that, nothing should really surprise anyone about how s**tty it is going to get for Bend dealers. There are simply WAYYYYYYY too many of them. Still.
  
  Start at Costco, and check the Subaru dealership... they're just starting to close. Tons of that s**t will close. I put NO STOCK in the idea that the Porsche or Mercedes dealers on 3rd will survive in their current form. Many, many millions are going to be lost on these franchises getting boarded up.
  
  We bitch about Luxe, Rising Star and all that going down... f**k, all the furniture stores in Bend weren't worth what a single half-assed auto dealership is worth. And they are closing them down in droves.
  
  Bend is STILL ridiculously overvalued.
  
  Is your home still overvalued?
  Report says half of the most overvalued markets are in the Northwest
  Wenatchee and Longview were third and fourth on the overvalued list, with Bend, Ore., Bellingham and the Portland area (including Vancouver) seventh, eighth and ninth.
  
  We've been nearly cut in half, and we're still in the top 10. Here's a link to the actual PDF report by IHS Global. You have to fill out a short info form to get it, something I am too paranoid to do.
  
  I guess I find it amazing that despite the collapse that has and still is going on in Bend RE, that we reached such a RIDICULOUS overvaluation, that we have been CUT IN HALF, and we're still in the Top 10 most overvalued MSA's in the country.
  
  We're right around $200K medians folks, and all the talk here of $125K is not bulls**t.
  
  There is all sorts of macro (oil is back near $70/bbl) and micro reasons (wholesale collapse of Bend's auto, furniture, {{your favorite industry here}}) that medians can go down to $125K. All I can really bet on is it will be a slow, arduous, and wealth destroying process.
  
  Take a look at this graph by OFHEO (Thanks to PopGoesBend). Drag the "time-line" back to 1985. That gives a GREAT perspective on just how whacky things in Bend got since 2005... but really it shows that Bend has been on a multi-decade tear.
  
  I don't see that 300 HPI level being breached in my lifetime. If we're back to 2007 price levels in the next 15 years, I would be amazed. We're f**ked.
  
  OK, here's what you're waiting for...
  Bend RE fallen so much, it HURTS MY NIPPLES!
  Buster, pleeze cum back to white girls. We love you long time too!
  
  I promise to take off this shirt, if I get 800 BB2 comments this week...
  
• May 31, 2009
• 5:12

  On A Clear Day, You Can See GM Going Broke...

   » ‎ Bend Bubble 2

  Tags:    [edit]

  Steve Larsen died, and that's a damn shame. It really is. Probably a good guy, had kids & a wife. The sort of Model Citizen Bend Needs.
  
  Really. He's actually exactly what Bend needs and Wants.
  
  We talk about the relentless selfishness of Bend PR & Marketing, drawing people in and selling them gobs of Bend bulls**t, most of which they don't need.
  
  And the whole "Work Hard, Play Hard" motif is a thread that runs throughout. Search "Olympic Athletes" on the Bully. "Olympic Athletes are everywhere you turn...", and so forth.
  
  Then they get to the sticky business of a Bend Super-Athlete Posterchild Success... dying. And not just dying... Dying While Exercising. That's... not good... for business.
  
  Hmmmm.... now what?
  
  Is it possible all this Mad Pursuit of Exercise Excess is... gulp... Bad For You?
  
  No. No, no, no, no, no. No. It's fine. It's STILL good for you. And as May West can attest, Too Much Of A Good Thing Is.... Wonderful.
  
  And That is what Bend really stands for. Excess. Too Much.
  
  But let's say you are John Costa, and you can't let the lemmings start to question The Message... what do you do? You obfuscate, of course.
  
  
  39 years old, a pro athlete collapses and dies. How can this happen?
  

  Larsen was declared dead at 7:05 p.m. Tuesday. He died from sudden cardiac arrest, but what caused the cardiac condition remains unknown.

  “There’s a lot of things that can happen,” said Deschutes County Medical Examiner Steve Cross. “And the problem here is this very vigorous, healthy, relatively young 39-year-old who is a world-class athlete dies while exercising.

  “It’s not supposed to happen. It’s not supposed to happen, and it did.”

  “Did exercise cause it to happen? No. He has something that has yet to be explained,” Cross said.

  Cross said an autopsy showed no obvious signs of coronary heart disease. Larsen’s heart has been sent to a laboratory in the Midwest where it will be analyzed.

  ...

  “When you’re young and you’re healthy and you have potential underlying conditions, it’s challenging to find them,” he said.

  Both Widmer and McLellan said heart conditions can lead to symptoms like shortness of breath, or even to sudden death.

  “For some, the first symptom is sudden death,” McLellan said.

  ...
  

  “Our vision of Steve is the healthiest, fittest guy you would ever know. He was an absolute specimen,” said Teague Hatfield, owner of FootZone, a local athletic store. “He’s always the guy who is faster and stronger than everyone else, and just a good guy.”

  Michael Larsen, also an athlete, said he believes a grandfather died of a heart attack, and his father is in poor health. But he said he’s not aware of any family history of heart problems. He believes his brother did go to the family’s general practitioner once he had trouble breathing, but he wasn’t positive.

  OK. Read that. He died from cardiac arrest, but What Caused His Cardiac Arrest remains "UNKNOWN"? What? Really?
  
  It was his f**king HEART, you dumbf**ks!
  
  They're sending this guys HEART TO A LAB. THAT is how serious this s**t is to Costa.
  
  If I drop dead on a jog, will they send MY heart to a lab? F**k no, they'll throw my fat ass in the nearest dumpster and call it good.
  
  "He died from sudden cardiac arrest, but what caused the cardiac condition remains unknown."
  
  WTF? That's like saying, "He died of a GUNSHOT wound, but the source of the gunshot is STILL UNKNOWN."
  
  IT WAS A F**KING GUN!
  
  Holy s**t, talk about Collateral Damage Control:
  
  It’s not supposed to happen, and it did.
  
  Did exercise cause it to happen? No.
  
  This is the f**king CORONER! He hasn't even looked at the body, and the f**ker ALREADY has a NEGATIVE DIAGNOSIS.
  
  Q: "Did he die from exercise, Doc?"
  
  A: "F**K NO!"
  
  Q: "Was he exercising when he died?"
  
  A: "Bitch, I'm going to get my gun if you mention that again!"
  
  Q: "Was it his heart, then?"
  
  A: "WTF? How the f**k should I know, Bitch! I haven't even seen the body!"
  
  Q: "But there's a quote in the paper where you say it wasn't exercise, it was 'something yet to be explained'. So do you know the cause or not?"
  
  A: "F**K YOU! I'm calling Costa, Hollern, and the f**king cops!"
  
  If you EVER wonder just what the f**k is going on in this town, RE-READ the piece covering Larsen's DEATH WHILE EXERCISING. Read how many times they tell you how he died... then they tell you THEY HAVE NO IDEA HOW HE DIED. THEN they tell you confidently how he DID NOT DIE.
  
  World-class athlete. Good guy. I feel very bad for his family, wife & kids. It's a loss.
  
  But to MAGGOTS like Costa, it's an incursion into THE KOOL-AID MESSAGE. A chink in the f**king armor. Larsen's death was an EXTREME INCONVENIENCE to people like Costa.
  
  People like Larsen are Marketing Piece #1 to the Wall-To-Wall Olympic Athlete image that has been crammed down our throats. And one of them DYING while doing Their Thing, is Bad, BAD news for Costa.
  
  Re-read that piece. It ain't about Larsen. It's about preserving Bend PR & Marketing at all Cost - ahs.
  
  
  So we got unemployment figures for Bend this week, and yawwwwwwwwwwwn they were absolutely awful.
  
  Just another in a long line of nails in the Bend Miracle Coffin.
  
  I don't know about you, but I saw U-Hauls this weekend as far as the eye could see. They are everywhere.
  
  And this is it. The Big Weekend! Kids outta school in under 2 wks! Mommy & Daddy are outta work!
  
  Time to LEAVE BEND! Yeah!!!!
  
  This is it, folks. You won't hear it anywhere, except maybe on the Wandering Eye. The Great Gutting of Bend has begun.
  
  I would bet that 5-10% of this great City will pack up & go in the next 90 days. That's between 4-8,000 people who are going to Abandon The Bend Dream.
  
  No? Drive along Purcell, between Costco & the hospital. Drive to the base of Pilot Butte. That there is Rental Central, and that motherf**ker has alone provided a Big Boost to the FOR RENT sign business. EVERYTHING is for rent up in there.
  
  Drive around, look on craigslist. Bend is going to STD Rental Hell.
  
  And there'll be no one to rent to. 4-8K are leaving in the next 90 days. And it ain't gonna be picked up in survey's of UNITED VAN LINES.
  
  OK, that's for f**kers WITH MONEY. No one in this s**thole, bled-dry town has a f**king cent.
  
  No... people are leaving in U-Hauls and their f**king CARS. They are selling or abandoing their s**t, and just driving away.
  
  You watch: We'll see population signs on the outskirts of Bend that DO NOT read "80,995" in 8-10 years. It'll be back in the 60's.... or 50's...
  
  So we're in the early stages of a recovery, right? We've got our Green Shoots, recovering DJIA, Spring is in the air, and such...
  
  Market look fantastic! All my stuff is recovering nicely, thank you very much (except the stuff that went Chap 11, but let us not talk of trifles...). The market, the most dependable indicator we've got, is pointing to a nice bounce in The Real Economy... by the looks of it, probably later this year.
  
  Right?
  
  Wrong.
  
  Sorry, but the market had this implosion Dead F**king Wrong from The Word Go. Housing started crapping out starting in JULY 2006... and the DJIA didn't top out till OCTOBER 2007!
  
  The market has done an abysmal job at discounting the effects of the complete destruction of about 1/3rd of this countries wealth. And the rest of the World did no better. Of course, NOWHERE is the prediction business WORSE than right here in Bend Oregon.
  
  The Bully STILL maintains that the Sun Will Come Out Tomorrow... despite the fact that the sun has never really gone down. It's all in our heads. Have some Kool-Aid.
  
  No, markets & media have done a disatrous job calling this Great Recession.
  
  But BY GOD they feel 100% CONFIDENT calling it's end. And it's END IS NIGH MOTHERF**KER!
  
  Yeah, the exact same bitches who could not see this f**ker coming a mile away, are confidently calling it OVER in Q3. Q4 at the latest. The Bully, in classic dumbf**k fashion, says that it all ended a year ago April 25, before it even started.
  
  It's ain't over. Not by a mile.
  
  What could possibly go wrong?
  
  First, commercial RE. Commercial RE isn't even close to hitting bottom. Hell, it ain't even to the point of Maximum Decline.
  Commercial RE default rates, based on "seasoning".
  
  X-axis is months of seasoning, Y-axis is default rates. That real steep brown line is commercial RE deals done right at the Bubble's top, while the flat dark blue one is deals done years earlier.
  
  Doesn't take a rocket scientist to see that commercial RE, a wealth storehouse rivaled only by residential housing (maybe), has yet to see the other shoe drop.
  
  We're in a vicious deleveraging cycle, and this sort of thing doesn't just "stop". It grinds on and on and on... Look at the Japs: 20 years later and the f**kers are still mired in the World's longest Modern Day Depression. That's what's coming our way.
  
  What's next? The future is plastics...
  Credit card default rates ain't the problem, it's the amounts... Graph from LAST YEAR!
  You're going to hear It Ain't So Bad Now, Cuz It Was Worse In 1991! Right.
  
  See, in 1991, we only had about $800 bills in CC debt. And we defaulted on 5.3%, or about $42 bill.
  
  Today, we have over $2.6 TRILLION, and we're just getting started on the Default Train.
  
  Look for banks to start folding again on commercial and unsecured (Credit card) debts AGAIN, Green Shoots BE DAMNED.
  
  Finally, we'll see in HIGH RELIEF more of a symbolic failure than anything, this week. Our friend GM itself will die of CARDIAC ARREST.
  
  Same s**t, different day: There will be no end to stories of it's RESURRECTION, bigger & BETTER than ever. Nah... AmeriKKKa is still the World's Premier Manufacturing Location!
  
  AMERIKKKHAN WORKER BEST IN WORLD!
  "My husband is UAW Proud!"
  
  AmeriKKKHAN workers, namely Union Tubs of F**king S**t, are the most MINDLESS DUMBF**KS THE WORLD HAS EVER KNOWN. Read it again, hbm.
  
  Instead of actually realizing they were ass-f**king what used to be the Worlds Largest Company so f**king hard, that it DIED, these butt-wipes will now be equity partners, and own 17.5% of a BANKRUPT BEHEMOTH.
  
  OK, the math: 17.5% of nothing is... NOTHING!
  
  Right, right... New GM, Bigger, Stronger, Faster, we can rebuild him, yada, yada bulls**t.
  
  The fact of the matter is GM, Chrysler, Ford, and a s**tload of other PROTON-based manufacturers are less relevant than ever. We've got our panties in a wad over the idea that Indians, Japs, Chinese, and Queersbekistanians could own our auto business, putting us on par with Greenland auto production, or some s**t.
  
  F**k that. GM, if brought back to life, will NEVER EVER again be anything but a bit player. Did you hear the "UNITS REQUIRED FOR MINIMUM SAFE DISTANCE" quoted by the auto industry? It was 11 million units! We're doing 9 mill now!
  
  These f**kers need 11 million units to even EAT, and that figure might as well be 10 billion, cuz we'll never hit it.
  
  Ohhhh, GM is going to declare Chap 11. AT LEAST TWICE. This motherf**ker is going to be like a Weekend At Bernies. The whole US manufacturing base is slowly going to erode away.
  
  So RE isn't even close to being over. There has yet to be the aftershock of CC defaults. And US manufacturing is just going to die.
  
  What's the "New Normal?".... it's a whole lot skinnier than it was.
  I know you love my huge titties, AMERIKKKA!
  
• May 24, 2009
• 8:36

  All Signs Point To Deteriorating Bend Economy

   » ‎ Bend Bubble 2

  Tags:    [edit]

  I suppose the Big News of the week is that Oregon Unemployment seemed to "stablize" at 12.0% (adjusted). The unadjusted figure fell to 12.1% from 12.7%, but remember: the "adjusted" figure is the new Quoted Standard.
  
  In 2008, Bend unemployment went from 7.8% in March to 6.6% in April (down 1.2%), while the adjusted stayed at 6.7% for both months.
  
  So we can look forward to a rising "adjusted" unemployment rate even if our "real" rate falls as much as 1.1%.
  
  Only 1 thing is for certain: Local Bend media, while not even acknowledging "unadjusted" unemployment will start touting the FALLING UNEMPLOYMENT rates contain therein, if they do indeed happen.
  
  Watch for it this week: The Last Leading Indicator was MONTHS OF INVENTORY, and it did a pretty damn good job.
  
  Months Inventory stands at 11.7 months for Bend residential.
  
  Bend w/ Acreage stands at just over 5 years inventory.
  
  Who is the LEADER (by LEADER, I mean LOSER)?
  
  Sisters, my favorite PARIAH, has 101 residential homes for sale, and just a single sale in April, for a (fairly transient) pretty terrible 8.4 year supply of homes.
  
  If you think that single sale is a Big Anomaly, Sisters also had a single sale in March as well.
  
  Sisters w/ Acreage has had either zero or 1 sale in each of the first 4 months of this year. Months (Years?) Inventory has ranged from 6 years or so on the low side, to infinity on the high end.
  
  Redmond has a 14.5 month supply of homes, and over 2 1/2 years of acreage properties.
  
  LaPine has 10 months of homes, and just over 32 months of acreage properties.
  
  Crook County has just under 2 years of home supply, and a fairly brutal 14 year supply of acreage property... that's a single sale out of 168 available properties.
  
  Madras has about a year and a half of homes, and 2 years of farms for sale.
  
  So the Leading Indicator of Economic Health for the region is still Very Poor. Damn Poor.
  
  That tells me that the Best Concurrent Indicator, Unemployment, is not going to jump up soon.
  
  At least I don't think.
  
  Because I have a sneaking suspicion that all the Job Seekers are starting to see the Wizard behind The Curtain isn't all he's cracked up to be (Hollern, Smith, Costa). And a lot of people make their forward-looking plans at this time of the year (Brucey).
  
  Many will say "No".
  
  I am seeing a HUGE number of For rent signs sprouting up. I've been here 8 years, and haven't seen this many. Usually they go up, and are down in a week... not so this year.
  
  People are leaving Bend in DROVES and I don't give a s**t what anyone else is saying.
  
  I'm SEEING IT.
  
  So here's the Low Down: We may have reached the seasonal low in real unemployment for the season (I thought this last month & was proved wrong), but Inventory is still HUGE. Dark matter is suddenly seeing the light of day. Gray matter is coming out of the woodwork.
  
  But there is no money here to buy it. There's no money because there are no jobs. There are no jobs because we squandered the largest lottery payout this place has ever seen, by distributing the money back to developers via reduced and now eliminated SDC charges, and other perks such as free land distributions (Putnam Pointe).
  
  We might start to reach the Self Healing Point: People leaving having had their Bend Dream Crushed via 401K 100% losses on amenity business black hole, and so the unemployment rate starts to ease because there are fewer job seekers.
  
  Maybe?
  
  I hate to keep saying I Told You So (that's a lie), but...
  
  San Fran leads the pack with the largest absolute dollar losses in housing prices, with a crushing loss of $444,800.
  
  It's also 3rd on the depreciation list of Big Cities (over 1 mill population), with a nut-crushing loss of 52.5%
  
  And that's the loss on the MEDIAN home, not the average. The average is probably a lot higher.
  
  I think SanFran is much like Bend, and still has yet to deal with the real repercussions of losing that much net worth.
  
  By my calculations, Bend has lost $13 billion in net worth, from a peak of $24 billion. And the population has actually gone up over this time. So we've individually gotten a lot poorer.
  
  But SanFran has lost several HUNDRED BILLION in net worth.
  
  SanFran won't change as much as Cent OR (we will have it MUCH WORSE), but it will suffer immensely, and the fundamental character of the place will transform over the next 10-20 years.
  
  All these Cut In Half markets, like Bend, SanFran, San Bernnie, Phoenix, Vagas, LA... will all take 15-20 years to recoup the bubble losses.
  
  I don't know about you, but in 20 years I will be an old motherf**ker.
  
  My kids will be grown & married. And probably have kids.
  
  Folks, 20 years is a Long Ass Time.
  
  These places won't recover in any relevant time period.
  
  Well, I actually have to get to work, so I'll leave it at that...
  hbm, you wanna float the river, big boy?
  BendBubble2 makes me wanna take off my shirt!
  
• May 13, 2009
• 7:05

  BB2's a pretty toxic place. I don't go there.

   » ‎ Bend Bubble 2

  Tags:    [edit]

  Funny thing happened on the way to April 2009... we became Fairly Valued.
  
  Remember, back last August, when Brucey was still riding atop his Perpetual Filing Machine (Perpetual Flying Machine?), hbm had sworn off BB2 for the 122nd time, which we celebrated as it coincided with his age... and National City had stated that Bend was still tops in overvaluation.
  
  We had $285K medians, which Nat City said was 46% too high.
  
  So... that brings us to $195K medians... which... is... where.... we... are. Back to 2003 levels.
  
  Yup folks, we are no longer exceptional. We are average. Well, sorta.
  
  We are actually far above average in unemployment & the rate of housing price depreciation.
  
  That's the unfortunate part. We're in a Bad Way. 17% unemployment doesn't just vanish. In fact, with Cessna & the Multiplier Effect, we're probably going to lose several thousand jobs from that source alone.
  
  Bend is in Collapse Mode. The Virtuous Circle is now a Vicious Cycle. All will be undone, and then some.
  
  People will soon start making arguments that prices in Bend have reached IRRATIONAL LEVELS. And they will be right, in one regard.
  
  You will be able to buy cheaper than owning.
  
  It really won't make ANY SENSE to rent. But prices will go below that parity. They will because there is no money here. There is unemployment, there is no money, and there are no jobs. And when that happens, price doesn't matter.
  
  Bums can't buy houses.
  
  I think there are some touting that now is an INCREDIBLE time to buy a home in Bend. This is just indicative of someone who has no idea about the repercussions of a Black Swan.
  
  Black Swans don't make sense. Medians are headed towards the low $100's. Buying will be cheaper than renting soon. Believe it.
  
  
  Speaking of crazy old cooters, hbm found a good piece in Business Week about the implosion of Bend.
  

  “It boggles my mind how we’re going to get out of this,” Erik Kancler, executive director of Central Oregon LandWatch, told The Bulletin.

  Maybe the only way to get out of it is to follow the example of other Bendites, load up the U-Haul and get the hell out of Dodge.

  Funny that hbm & I have what appears to be similar "agendas". Or at least similar conclusions about what people should do if they are down & out in Bend, OR.

  We don't see eye-to-wandering-eye on much, but we certainly share the belief that Bend is a crumbling edifice of Greed & Corruption & Crushed Dreams.

  And all we hear, is that our beloved City Leaders SAW IT COMING, all along.

  Bull s**t. None of these dumbf**ks saw anything coming.

  Go read the Bully archives. Not a single City or Business Leader was predicting ANYTHING except a BRIEF SLOWDOWN, and then off to the races, harder, faster, and HIGHER than ever before.

  Everyone "running" Bend wanted you to buy, buy, BUY.

  And they believed it. Sawyer & hundreds like her (and him) bought after the top, when we were down just 10%... not the near 50% we are down now.

  And still they tell you to buy. Why? It's actually starting to be a "Good Deal".

  OK, I'll go along with that. IF, you can pull of positive cash flow from Day 1, and IF you have absolutely NO PLANS of ever selling. THEN, it can work.

  But why? It'll work FAR BETTER in 1 year. And FAR, FAR better in 2.

  In a couple of years, when all have lost hope, Bend will be a nice little spot for making money. NOT the CAP APP days of yore. But just positive cash flow each month. Regular place, with an OK RE market.

  It's getting there, but it's not there yet. We have $195K medians, the rest of the country is $165K, or so. We are STILL too high, and will ultimately go 20-30% below national medians.

  This crazy f**king blog, attracts your standard garden variety lunatic. And that repels quite a few. Can't stand the heat, I suppose. Saw this over at BendBB:

  by popgoesbend on Thu Apr 09, 2009 9:10 am
  

  Marge sometimes posts that info over at BB2...

  by Jack_Elliott on Thu Apr 09, 2009 1:35 pm
  

  BB2's a pretty toxic place. I don't go there.

  The guy wants info on RE, someone suggests coming here... but WE'RE TOO TOXIC. AHHH! Stay away! You'll catch BB2 Swine Flu AIDS!

  Oh geez. I don't think Jack Elliott has heard about the New, Kinder, Gentler BB2, with 1/100th the F**K YOU IN YOUR SMELLY CUNT factor, now that Buster has curled up in LaPine, and is giving hand-jobs to goats.

  Sorry, but I read this sort of thing and realize that this Jack Elliott guy is like Oran Teater in hbm's piece: They will f**king deluded themselves into things at all costs that serve their own purposes.

  This place is "toxic"? Really? WTF does that mean? And it's actually true for many on BendBB, they just won't come here. Too rough-N-tumble, too Wild West.

  I just think that's sorta funny. If I want info, I will go anywhere on the web to get it. I don't think anywhere is "TOXIC". That's just weird. "TOXIC" is harvesting IP's, and that is done on BendBB, not here. "TOXIC" is moderating & deleting comments... again, not done here. "TOXIC" is having some sort of Trusted Registration process, when no such thing is possible, which is done... well, you get the point.
  

  Finally, I figure I will throw hbm, Dunc, and other lib's a bone. I had a chance to watch CNBC over the past week... I do not have cable here at my house.

  Ummmmm... when did they become an almost Zombie Force For Repugs?

  I last saw that station 10 years ago, and they were relatively neutral. What happened?

  They had the odd position of blaming the economic problems on Barack, but somehow saying the huge stock market rally was happening despite all the awful things he was doing.

  When did this happen? I see OPB leaning towards the dreadlocks & granola crowd, but this is ridiculous. It was so BLATANT.

  I did not watch Fox News, so hold all cat calls of YOU SHOULD WATCH FOX NEWS!

  Anyway, I guess I am back to the obvious slanted view of KTVZ, but man.... they don't hold a candle to CNBC. that was just ridiculous.

  Finally, just a note on Social Costs.

  Social Costs are borne by all people, when a small number choose to (usually unilaterally) impose them on everyone else.

  I usually illustrate this with littering. I HATE littering. It's SO EASY to avoid, and is just a direct transfer of costs onto everyone. I HATE IT.

  But that seems what this country is becoming. SOCIALISM. The costs of a few are imposed on the masses. Very few benefit, but the costs they impose are HUGE.

  That's what we are. It is everywhere. We are a nation of Narcissitic Paris Hiltons. Every little thing MUST BE indulged NOW. If we can make $1 while costing society $20, so be it.

  I know everyone is reviling the Socialist Movement of Barack, but to me it is less about the $1 being given to the Free Wheelers. It is about the $20 that I, my kids, and my kids kids will have to bear.

  Capitalism may not be perfect, but Socialism is a disaster. It's nothing but the masses trying to impose costs on everyone else. In a social context, it's rampant littering with no garbage pickup.

  That is where we are headed.

  

  
• May 03, 2009
• 8:21

  Siyonara Brucey (and Cessna), We Hardly Knew Ye

   » ‎ Bend Bubble 2

  Tags:    [edit]

  Well, I have Good News and Bad News:
  
  The Good News is, if you can survive in Bend, you can survive anywhere.
  
  The Bad News is, You Can't Survive In Bend.
  
  Yes, yes. Brucey, like Cessna, most homebuilders, graphic artists, PR freelancers, RE brokers & mortgage bankers and a raft of other amenity business owners cannot survive in Bend.
  
  And, I guess I could say I share tim's sentiment with respect to the passing of Olde Brucey:
  
  tim said...
  
  Bruce, If you were tempted here by the PR, that is indeed a good reason to be mad. I didn't even know Bend was supposed to be special when I moved here.
  
  Of course, I didn't know the paper was lousy, the Realtors were in control, or the local gov't was silly. But my expectations were clearly lower than yours. Good luck to you.
  
  I do like to see people make fun of you, but only because your reactions are so priceless.
  
  Having said that, I like you a lot.
  
  I agree Bruce, you and thousands of others were sold a Bill of Goods. A load of S**t. You were suckered in by the Bend Grifting Machine. And Bend takes no prisoners.
  
  But rest assured Bruce, you're doing the Right Thing. This place is all smoke & mirrors. On a Good Day. On a Bad Day, it's suicides, mob hits, and losing your house & job.
  
  You're catching flak Brucey, cuz I think you walked in like a lot of people declaring, "I'm going to run this s**thole in 90 days!"
  
  And then you slowly found out that living in Bend is like living on the Moon. The middle of nowhere, and precious little time left to Get Out after your blood starts to boil...
  
  So I have to give the bad with the good:
  
  tim said...
  
  >>Some of you have to man up.
  
  I hope you're joking when you say that. You, after all, are the poster boy for how much energy can be expended while effecting so little change.
  
  I guess this is more of a life lesson than anything.
  
  1) You talk about Anonymouses, and I understand what you're saying. But this is Bend, dude. Look what all the publicly ID'd commenters got: Bile & Loathing. Even Dunc, who is fairly highly regarded, got his share of ass beatings.
  
  2) Combine #1 with the aforementioned "megolamania" about changing the World, and you're going to get roundly assailed. Anywhere. But on this blog, it will be relentless.
  
  My own philosophy is to NEVER say I'm going to do something publicly, UNLESS it is for precisely the reason of motivating myself to do it knowing I will be lambasted if I do not succeed.
  
  That's what happened here.
  
  But, Dear Brucey, take solace in the fact that you are leaving for a better place. A lot of the cat calls are veiled shrieks of envy. Really. A lot of people are angry that you, someone they have beat on mercilessly, actually has the good sense to leave this imploding s**thole.
  
  All these cries of "Good Riddance", are tainted with envy. You can't survive in Bend. And neither can they, and they know it.
  
  It's gotten so bad, Buster has regressed into a fetal ball in La Pine, fantasizing over Malay sex slaves.
  
  No Brucey, you are leaving to a better place. Bend will implode into a firey ball of s**t, taking most of us with it.
  
  Bend IS exceptional: Highest 1% unemployment in the land. But we are actually The Top for how fast we got there. Bend has the single largest INCREASE in unemployment in the USA over the past year. Blew away Flint MI, that's for damn sure.
  
  I salute you, Brucey. And wish you well. You WILL have the last laugh. Check in occasionally, while you watch Rome Burn from afar. And believe me, it will burn. Your own example of futilely trying to effect change from outside the Good Old Boy Beltway ensures that. You can't change Bend, and that will be it's downfall.
  
  Really, do check in. Especially when unemployment hits 20%+. And laugh your ass off. This place is tearing itself to pieces, and will catastrophically explode.
  
  Lot of people staying based on the idea that you can rise a souflette twice. Can't. Bend is 100% doomed.
  
  And your example will lead the way Brucey. There is going to be a mass exodus the likes of which has never been seen. This Summer. 1 in 6 unemployed, and getting worse. That can't stand. People yank their kids and move ASAP in places like that.
  
  Come back Brucey, when this place has hit rock-ass bottom, and medians are under $100K, and you can buy you a nice little s**t-shack downtown for 100% cash, and live off your royalties. You'll be the last one laughing.
  
  Everyone who decides to stay will be destitute.
  
  You are doing the right thing Brucey, if only a little late. You drank the Kool-Aid, and then saw the Emperor wears no clothes. This place is a 100% grift scam. Nothing is real. How could it be 200 miles from anywhere? Again, it's a moonbase.
  
  Good luck to you Brucey.
  
  
  
  Cessna Closes
  
  OK, it's hard not to gloat a little on this one. I called this before Cessna even bought the remains of Columbia Air. It seemed clear that Bend Oregon as an assembly point was catatonicly stupid. Moon F**KING Base. Gat Damn.
  
  We got the obligatory "We knew it was coming" bulls**t from every corner, including the founder. Seems EVERYONE KNEW it was coming. No biggie. Uh huh.
  
  That's how EVERY SURPRISE CLOSING is unveiled.
  
  "Yeah, we knew it was coming."
  
  What is left out, as usual, is the Reverse Synergy Angle.
  
  Right? Yeah, the Bully, and every single interviewee (typically Roger Lee), categorically states that when these businesses are on the upswing (like CESSNA WAS IN 2007), that the synergies will spread out throughout the land.
  
  For every hire done by Cessna, there will be 10 new hires by other companies.
  
  600 hires at Cessna? 6,000 teritiary hires elsewhere, and $6 billion in new growth throughout Central Oregon.
  
  Standard Op Procedure. Alana Audette does this daily. $600 bazillion in "tourist" economy dollars spent yearly here.
  
  Audette & Lee are the masters of taking something ridiculously small and multiplying it by 7,000,000,000,000 to make themselves look important.
  
  Funny though, that the same MULTIPLICATION is never unwound on the way down.
  
  Now that Cessna is gone, there will not be an UNWINDING of 6,000 jobs, nor an UNWINDING of the $6 bazilion dollars they brought to our doorstep.
  
  This is Bend. Everything is PR'd to 100X it's size on the way up, but never downsized when it explodes.
  
  Rest assured Central Oregon, those 6,000 teritiary jobs Cessna brought here will NEVER GO AWAY.
  
  This is the web that caught our Young Brucey, and THOUSANDS of other just like him.
  
  Lies, and More Gat Damn Lies. Audette & Lee. All funded by our dear City Council & local government.
  
  You are here to be bilked of EVERYTHING. Everything you've ever worked for.
  
  Folks, if you arrived here in the past 5 years, it's time RIGHT NOW, to take a hard look at the facts. Many, MANY of you reading this blog are either UNEMPLOYED, horrifically UNDER-EMPLOYED, or about to be UNEMPLOYED. And if you bought a house, you have lost an average of $1,000/week. And that is not going to stop.
  
  And Summer is coming. And the kids are getting out of school. THIS IS IT. THIS IS GO TIME.
  
  Take a serious hard-nosed look at things.
  
  CAN YOU afford to stay in a place that has NO HOPE of getting a Real Economy? This is a MOON BASE, light years form anything REAL.
  
  CAN YOU afford to lose $1,000/week for the next year? Or even $500/week? This is more than many people make here.
  
  CAN YOU afford to bet it all on your employer surviving a complete collapse of this place?
  
  CAN YOU afford NOT to leave this Summer, and find a place that isn't completely falling apart at the seams?
  
  This place is DOOMED. It is deteriorating at a rate FASTER THAN ANYWHERE IN THE USA. Housing WILL NOT GET BETTER. The JOB MARKET WILL NOT GET BETTER.
  
  Don't believe me? Go talk to ANYONE who used to work for Cessna. Go to the Redmond School District, where they are talking about 4 day school weeks. THAT is on it's way here.
  
  Redmond is just like Brucey; They have simply woke up & smelled the coffee before Bend, and are doing something about the problem.
  
  This place will start hemorhagging people and jobs starting in ONE MONTH. Well, the jobs has already got a good start, people will now follow. Before we had RUMORS of exodus. Folks, at 17% unemployment, not even the mightiest PR efforts this place has to offer will be able to put down THE FACTS. People will leave Bend in DROVES.
  
  There will be huge swaths of empty, decaying STD's ALL OVER. My God, Hollern has marked down Yarrow 80%! And still he won't sell anything...
  
  It's time to MAN UP, and follow Brucey's example. LEAVE. Seriously. If you do not have a job, could get fired at anytime, are barely scrapping by, or own a house and aren't making $3K/week to make up for your losses, LEAVE THIS PLACE. You will not survive.
  
  
• April 28, 2009
• 7:16

  Bend Oregon: 300 Days of Bulls**t Every Year

   » ‎ Bend Bubble 2

  Tags:    [edit]

  OK, I'll do a little knick-knack post placeholder to break up the monotony.
  
  1) As I live & f**king breath, it is snowing outside this morning.
  
  April 28, and it's snowing.
  
  OK, I don't want to hear this 300 Days Of Bulls**t anymore. Central Oregon has some of the weirdest f**king weather in the World.
  
  When I first got here, I remember getting snowed on near the end of May, on a sunny (but pretty cold) day.
  
  300 days of sunshine a year, is 100% Grade AAA Bulls**t.
  
  2) 17% Unemployment.
  
  OK, this motherf**ker is taking on a Kevin Bacon ONE degree of separation. Everyone KNOWS someone who is unemployed.
  
  UNEMPLOYED and In The S**t. I know people. I know almost as many who are "employed" but making NOTHING. Not nearly enough to meet their daily expenses.
  
  We have 17% unemployment. And probably 25-30% EXTREME UNDER-EMPLOYMENT.
  
  You can read about how unemployment is hitting home values at the Portland Housing Blog.
  
  3) Yarrow down 75%.
  
  In today's Bully you can see there is a piece titled, "Yarrow now offers ‘twice the land, half the price’".
  
  Follow the link, and you'll see that Yarrow is essentially succumbing to the desert. And since they are MORE THAN cutting price in half, and doubling lots sizes, this approaches something like 80% OFF.
  
  But you will see, this will only move a little property. To Madras locals. And a couple of prison guards new to the area.
  
  No one moves to a place with 20% unemployment, no matter how cheap the housing. It's called "The Burns Manifesto".
  
  4) Case Schiller is out today.
  
  The big 10 & 20 city composites are off about 19% YoY.
  
  I'm starting to think that my Dead Ass Hit Rock Bottom Date estimate of July 2010 might be early. This thing might go to 2011... or 2012.
  
  Which means Bend will stretch out to 2014 till we crater at the nadir.
  
  At sub $100K medians? It is looking more and more possible.
  
  5) High End Homes Crashing in Bend.
  
  My favorite "If I Had a Million Dollars" Bend neighborhoods is Deschutes River Ranch. Very nice, big fancy, schmancy homes overlooking a hay operation. Provincial and snooty as hell.
  
  But click the above link, and go to bendeconomy.informe.com (ANON PROXY ONLY!), and you'll see that DRR has utterly imploded.
  
  The above home haas crashed from $2.4MM to $1.15MM, or just over $200/sf.
  
  DRR was holding the line at around $500/sf all through the implosion, and seemed pretty much immune. I saw Tetherow collapse, and still DRR held.
  
  No more.
  
  6) RE "Economist" gets ass kicked by Oregonian.
  
  In this town of Kool-Aid Fueled "news" reporting, once in awhile it's nice to see a paper call out BULLS**T on some dumbf**k Pie-In-The-iSky RE tout, who has YET AGAIN, called for the RE bottom:
  
  Real estate life spotty for many in Oregon
  by Colin Miner, Special to the Oregonian Friday April 24, 2009, 6:03 AM
  
  At the association's December conference on the market outlook for 2009, Jerry Johnson, a real estate market and regional economic development consultant, predicted that "we have found the bottom" and that the "fundamentals are not likely to get worse."
  
  The next month, things did get worse. According to the Regional Multiple Listing Service, January 2009 saw a 32.5 percent drop in closed sales from the year before. Pending sales dropped 26.1 percent, and the average sale price fell 13.3 percent.
  
  Good one Oregonian. Take a page, Bully.
  
  
  
  OK, I gotta go to work. I'll try to MAN UP and do an actual post this Sunday.
  "I'm so lonely for a Real Newpaper to tell me about Bend RE!"
  
• April 19, 2009
• 7:27

  Bend: The Mass Exodus Has Begun.

   » ‎ Bend Bubble 2

  Tags:  the Cult of Bend   [edit]

  Downtown seems to have a grip on Bendites. Everyone thinks that if you have a spot downtown, you can't fail. Despite all evidence to the contrary, despite a sea of failures.
  
  See who's moving in
  
  “It is exactly the same food, same menu and the same staff — it’s just a new location,” said Cheri Helt, co-owner of Zydeco. “We are excited to be a part of downtown.”
  
  “Visitors are absolutely going to come,” La Placa said. “The new downtown restaurants are very promising and positive news for our tourism industry and locals.”
  
  The new restaurants could re-energize downtown, said Carin Cameron, owner of Cork, a fine-dining restaurant on Oregon Avenue that opened in 2001.
  
  Always someone who believes They Are Special. "I'll make it, because I am better than the rest."
  
  Sheeps to slaughter. Thanks Costa. Mission accomplished.
  
  I have to mention again, one of the Bubbleliscious Busts of the week: Mountain Comfort.
  
  Any idiot should have seen this coming. But as I am often told, I am not any idiot.
  
  Mountain Comfort was one of those things that just had no exposure to any other time, except the Best of Times. They were never exposed to anything except a parabolic economy.
  
  Things didn't just go well, while Mountain Comfort was alive, they were meteoric.
  
  And there are so many places like that in Bend. All the lost restaurants, Merenda, deep, Bluefish, et al. But it goes far beyond that.
  
  All the Cook-It-Yourself franchises. 75% of the area homebuilders. Most of the RE industry infrastructure. The Big Box retailers. Auto row.
  
  It was really most of Bend. I know there are some long timers. Like the Porsche dealer.
  
  They were here forever before the Boom. Then the Boom. Then they remade themselves in the image of the Boom. Same with the Mercedes dealer.
  
  Same with almost everyone. Except maybe Dunc.
  
  Everybody bought it.
  
  You don't have to buy the boom to own it. You just have to "refi".
  
  You just have to alter your plans for bigger & better things. Like Mountain Comfort.
  
  They threw millions into their facility during the parabola. They didn't build, they just refi'd up.
  
  Everyone looks at who built, but the refier's built as well.
  
  There was huge capacity added by entrants, but there were a huge percentage that just traded up, or they feared they'd be left behind.
  
  Look around. This whole town traded up. It's FULL of Mountain Comforts.
  
  
  
  I found the Job Loss on Slate chart Dunc mentioned.
  
  Very cool, and illustrates the heinous & sudden change in this countries economy. Millions of jobs have been lost.
  
  And we found out that Oregon has taken it's rightful place on the economic extremes.
  
  Odd dynamic propels Oregon jobless rate to No. 2
  
  Layoffs alone don't account for Oregon's dubious distinction as the state with the nation's second highest jobless rate behind Michigan.

  Instead of giving up or leaving, as they're doing in every other high-unemployment state, more people in Oregon are seeking work. Retirees, nonworking spouses and others are job-hunting alongside laid-off workers, together driving the state's unemployment rate in March to a 12.1 percent historic high.
  

  Oregon business news has become a daily drumbeat of layoffs and bankruptcies, yet it's difficult even for experts to fathom how joblessness here could approach levels of Michigan, a state devastated by the auto industry's meltdown. Michigan, with 12.6 percent unemployment in March, sees its labor force shrink as job seekers give up and as laid-off workers move away.

  Economists can't entirely explain why Oregon bucks the same trend of worker-exodus in Nevada, California, Indiana and the Carolinas.

  "I'm left scratching my head about why is that labor-force growth going up," says Tom Potiowsky, Oregon government's chief economist. "Are we going to see that level off? That's my expectation."

  Potiowsky also expects Oregon's seasonally adjusted unemployment rate to keep climbing, perhaps even overtaking Michigan to become worst in the nation. Oregon's rate rose in March by 1.4 percentage points, the nation's largest increase that month, the U.S. Bureau of Labor Statistics reported Friday.

  Fifty-eight thousand more Oregonians entered the labor force during the year ending in March. The state lost 77,000 jobs during the same period. The 3 percent labor-force increase combined with a 4.2 percent employment decrease to produce the jobless rate equaled only once before, in November 1982.

  In-migration accounted for less than 1.2 percent growth in Oregon's labor force, meaning most of the new entrants to the labor force were current residents. Michigan, by contrast, is suffering a brain drain as skilled, unemployed workers bail out.

  "In some cases they've decided to move where they like to vacation," says Patrick Anderson, of Anderson Economic Group in East Lansing, Mich. "Oregon might be one of the beneficiaries."

  Some Michigan citizens have lost hope, Anderson says, due to the auto industry's decline, the state's fiscal troubles and statements by former President George W. Bush and President Barack Obama that, he feels, have devastated consumer confidence in U.S.-made vehicles. Anderson predicts Michigan's jobless rate will rise higher.

  "The president has essentially put Chrysler on a 30-day deathwatch that's going to cause a string of bankruptcies across the entire country, including Oregon," says Anderson, who expects many U.S. car dealerships to fold.

  The recession is hitting the West especially hard, pushing regional unemployment to 9.8 percent in March, compared with 9 percent in the Midwest. The national jobless rate was 8.5 percent.

  Oregon has lost major employers recently such as Monaco Coach and Joe's Sports, Outdoors & More. Managers of SpectraWatt, an Intel spinoff founded in Oregon to make solar cells, found superior government incentives in New York. Other big Oregon employers are cutting pay and laying off workers.

  Instead of getting discouraged, however, many Oregonians are writing resumes. More Oregon college graduates are staying in state to job hunt.

  "Generally when you get these economic downturns, you would expect people to exit the labor force, not enter it," says Tim Duy, a University of Oregon economist. He suspects out-of-state retirees who moved to Bend and elsewhere in recent years could be partly responsible.

  "Maybe it's because we attracted so many equity refugees," Duy says, "people that sold their homes in California for some ridiculous amount of money and moved to Oregon expecting to never have to work again."

  One solution, says Duy, who admits it's harsh: a free one-way bus ticket out of state, for anyone who wants one.

  This is just classic. What created prosperity on the way up, is now strangling us on the way down: Cali-Bangers.
  
  People who flocked here with equity, traded up paying half down, a HUGE cushion, never going to work another day in their lives.
  
  Until houses got cut in half.
  
  Now they all need to work again.
  
  Duy says give them free bus tickets OUT OF TOWN. COVA is paying millions to get them to come.
  
  A House Divided.
  
  Oregon will break your heart. Bend will give you the f**king AIDS.
  
  
  We've had a nice little reprieve from the downward onslaught of late. In fact, we've had the best 6 week run in the markets since 1938.
  
  But don't get comfy. The tax refunds will soon be spent, the stimulus dollars will be revealed as just another AIG boondoggle, and Oh Yes... the foreclosure moratorium is coming to a halt:
  
  US Foreclosure Filings Jump as Moratoriums End
  REAL ESTATE, MORTGAGES, ECONOMY, FORECLOSURES
  Reuters
  16 Apr 2009 | 05:09 AM ET
  
  U.S. foreclosure activity leaped 46 percent in March from a year earlier, hitting a record high as programs stunting the torrid pace of failing mortgages expired, RealtyTrac reported on Thursday.
  
  A temporary freeze on foreclosures by major banks and government-controlled home finance companies Fannie Mae and Freddie Mac ended before President Barack Obama's massive housing stimulus, unveiled on March 6, could take root.
  
  Filings, which include notice of default, auction sale or bank repossession, jumped 17 percent in March from February. Filings for the quarter also marked a record high, jumping 24 percent from the same period a year ago.
  
  The March and first-quarter totals were the highest since RealtyTrac began tracking them in January 2005, even as bank repossessions declined. One in every 159 U.S. households with mortgages got a foreclosure filing in the first three months of this year, RealtyTrac said.
  
  Filings were reported on more than 803,000 properties in the quarter. California, Florida, Arizona, Nevada and Illinois accounted for nearly 60 percent of U.S. foreclosure activity in the first quarter, with a combined 479,516 properties receiving filings.
  
  In the transition from industry freeze to new government rescues, the foreclosure filing floodgates reopened. After the moratoriums ceased, "we saw an onslaught of notices of default, which is the first stage of foreclosure," Rick Sharga, senior vice president at RealtyTrac, said in an interview.
  
  The rise in filings suggests a backlog had built up due to the moratoriums. The success of the Obama mortgage bailout may not be seen until the autumn, Sharga added. Activity should peak near year-end. "
  
  But unfortunately, these well-intentioned delays in the processing might have the unintended consequence of extending the housing downturn," and further dragging down home prices, he said. "We still anticipate that we'll see upward of 3 million households receive a foreclosure notice this year, up from 2.4 million last year," Sharga said.
  
  For all of 2005, the last year before the foreclosure spike started in earnest, RealtyTrac reported about 800,000 filings. Loan servicers are overwhelmed with the volume of failing home loans and many are understaffed to handle modifications.
  
  One national servicer that foreclosed on 2,000 properties in 2006 handled about 21,000 the next year with similar staffing levels, Sharga said. The servicer expects a 50 percent spike in 2008, without approval to increase staff.
  
  Unemployment May Trump Bargain Hunting
  
  Nevada, Arizona and California had the highest foreclosure rates in the first quarter. Homes prices and sales soared in these states during the boom years earlier this decade, and now suffer the biggest losses on overbuilding and abandoned investment units.
  
  Nevada led the ranks in the quarter, with one of every 27 households with loans getting a filing, more than five times the national average.
  
  Everyday I hear people who are deciding to Walk Away and Not Pay. U-Haul is the only growth industry I see.
  
  And you watch, the Mass Exodus of Bend is about to go into high gear. School's over, and I'll wager we are going to see the first innings of an outmigration the likes of which this place has never seen.
  
  You can have 16%+ unemployment and not hemorrhage population. Crook & Jeff counties will be even worse.
  
  They'll start talking about a rebound soon, but nature hates a vacuum, and homes will rush in to fill the void. The plummet in Bend prices will continue unabated.
  
  But even so, now is basically the only time you can sell. And you have to want to sell.
  
  Realtors are finally waking up to the New Reality, and that reality doesn't involve overpriced listings that sap their valuable resources.
  
  You need to wake up & realize that if you bought in the past 5 years, you will lose.
  
  If you bought in the 5 years preceding that, you might do little better than break even.
  
  If you bought before that, simply realize that your gains will be muted, not astronomic like you thought they'd be 3 years ago.
  
  That's the New Bend. A place where dreams are crushed.
  
  
  Finally I want to go out with a little excerpt from The Economist.
  
  One of heresy-ridden ideas I put out about 18 months ago was that home-ownership (The American Dream) would become the AmeriKKKan Nightmare.
  
  People would actually look down on home ownership. Home owners would be seen as The Inferior Race. Not Renters.
  
  Renters are just losing their monthly payment. Owners are losing everything.
  
  Shelter, or burden?
  Apr 16th 2009
  
  The social benefits of home ownership look more modest than they did and the economic costs much higher
  
  IN A scene from the film “It’s a Wonderful Life”, a happy couple is about to enter their new home. Jimmy Stewart, whose firm has sold them the mortgage, reflects that there is “a fundamental urge…for a man to have his own roof, walls and fireplace.” He offers them bread, salt and wine so “joy and prosperity may reign for ever”. That embodies the Anglo-Saxon world’s attitude to home ownership. Owning your own roof, walls and fireplace, it is thought, is good for householders because it helps them accumulate wealth. It is good for the economy because it encourages people to save.
  
  And it is good for society because homeowners invest more in their neighbourhoods, engage more in civic activities and encourage their children to do better at school than do renters. Home ownership, in short, benefits everyone—not just the homeowner—and the more there is of it, the better.
  
  Which is why it is usually encouraged by the government. In America, Ireland and Spain, homeowners can deduct mortgage-interest payments from taxable income. Yet the worldwide crash was bound up in this supposed miracle of social policy.
  
  The disaster began with defaults on American subprime mortgages, a financial instrument designed to spread home ownership among the poor.
  
  It gathered pace after the failures of Fannie Mae and Freddie Mac, two government-sponsored enterprises that provide cheap home loans. As a result, the home-ownership rate in America has fallen for four years, the first time that has happened in a quarter of a century.
  
  In 2008, 2.3m families lost their homes or faced foreclosure—double the average before the crisis—reducing the home-ownership rate from 69% in 2004 to 67.5% at the end of 2008. The number of owner-occupied dwellings also slipped in Britain in 2007-08 for the first time since the 1950s.
  
  Subsidised castles
  
  So attempts to expand home ownership have contributed to the wider economic crisis without succeeding in their own terms. How does that affect the arguments for supporting home ownership? Should it still be deemed a public good?
  
  No, say several economists and commentators. “Given the way US policy favours owning over renting,” writes Paul Krugman, 2008’s Nobel laureate in economics, “you can make a good case that America already has too many homeowners.” Edward Glaeser, an economist at Harvard University, talks about “the madness of encouraging Americans to bet everything on housing”.
  
  So far, policymakers are unmoved. In mid-February Barack Obama proposed a $275 billion plan to support America’s housing market. Outside the Anglo-Saxon world Nicolas Sarkozy, who campaigned for the presidency to turn France into a property-owning democracy, has expanded zero-interest housing loans for the poor.
  
  The main economic argument for home ownership is that, in the words of Thomas Shapiro of Brandeis University, “it is by far the single most important way families accumulate wealth”. This argument now looks as weak as house prices. In Britain prices have fallen 21% since their peak in October 2007. Prices in America have fallen more slowly but further, down 30% since their peak in mid-2006 (see chart 1).
  
  This has reduced the total value of the country’s housing stock from over $22 trillion in 2007 to $19 trillion at the end of 2008. In the past few weeks, housing markets on both sides of the Atlantic have seen signs of life, but there is every chance that prices have further to fall before they finally reach their low.
  
  The collapse in house prices matters most directly to two overlapping groups: those who bought property at the peak of the market and now face “negative equity”; and those (in America) who took out subprime mortgages.
  
  Roughly 10m Americans are in negative equity—ie, the cost of their mortgage exceeds the value of their home. In Britain about 3% of households are in negative equity. For homeowners, negative equity makes houses more like a trap than a piggy bank.
  
  Those who cannot meet their payments lose their house, their savings and (in America, usually) their credit rating for seven years. The other area of concentrated distress is subprime mortgages, which increased their share of the American mortgage market from 7% in 2001 to over 20% in 2006.
  
  According to the Mortgage Bankers Association, the delinquency rate was 22% in the fourth quarter of 2008, compared with only 5% for prime loans. Many people have concluded that, in Mr Krugman’s words, “home ownership isn’t for everyone.” However, a study by the Centre for Community Capital, part of the University of North Carolina, Chapel Hill, casts some doubt on that conclusion.
  
  It compared a group of people who took out subprime loans with a group of borrowers from the Community Advantage Programme (CAP), a government-backed scheme that lends to the sort of people who might have had a subprime mortgage. The default rate for CAP borrowers was only a quarter what it was for subprime mortgage holders, even though the incomes and backgrounds of borrowers were similar.
  
  Since the real problem lay partly in the mortgages, rather than the borrowers, this suggests the subprime crisis was a financial-market mess, as well as a housing one. Does that also imply that home ownership has the economic benefits that its proponents claim? Two pieces of evidence seem to support such a view.
  
  The first is that housing has fared better in the crisis than other assets. Share prices are around 50% below their peaks in many countries, so compared with shareowners, homeowners have not done badly. However, home ownership in a downturn has one big disadvantage: most people buy shares outright but homes on margin (ie, they put down a small stake, if anything).
  
  If share prices fall by 10%, you lose 10%; if house prices fall by 10%, you may lose your entire savings. The value of American homeowners’ equity in their own houses has slumped from a peak of $12.5 trillion in 2005 to just $8.5 trillion at the end of 2008. This undermines one claim that homeowning is economically beneficial. The other piece of evidence for home ownership’s benefits is that the house-price fall has so far spared most existing homeowners from absolute losses.
  
  In America, for example, house prices have fallen back only to where they were in 2004. There were roughly 29m house sales in the United States between 2004 and 2007, compared with 115m households, and anyone who bought before then is probably sitting on a nominal profit.
  
  However, as Harvard University’s Martin Feldstein points out, if house prices rise, people feel richer and borrow and spend more. If they feel poorer, they may cut back even if the price of their house has not fallen below what they paid for it. Subsidies to home ownership have thus increased economic volatility.
  
  They boosted consumption, as homeowners used their houses as collateral to finance consumption or investment. In America mortgage-equity withdrawals reached $9 trillion between 1997 and 2006—equal to more than 90% of disposable income in 2006. This gave homeowners more to spend in the good times but less in bad ones. In Britain home-equity withdrawals added the equivalent of 3% of post-tax income to households in the fourth quarter of 2007 but subtracted 3% a year later.
  
  So changes to house prices aggravate the economic cycle. Recent research by the IMF finds that a quarter of the 100-odd recessions since 1960 have been associated with house-price busts and that these contractions “are deeper and last longer than other recessions do”. Subsidies to home ownership have also weakened financial services.
  
  They encouraged more people to buy houses (which was the point), but, logically enough, also encouraged lenders to take greater risks with housing. This was fine while house prices were rising, but the fall exposed how vulnerable banks’ balance sheets had become. Moreover, if public policy aims to create wealth, there are other ways of doing it.
  
  People could invest their savings in the stockmarket and rent their homes, for example. Had they done so in the past two years, they would have done worse than homeowners. But for three decades before that, equity prices easily outstripped property prices (see chart 2), so in the long run equities have been a better bet than houses. (Admittedly, this strips out the effects of share dividends and imputed rents, which favour property.)
  
  Housing suffers from two further weaknesses as an investment. It sucks up disproportionately large amounts of money, falling foul of the idea that investors should diversify: in America the equity tied up in houses accounts for 45% of the net worth of the average householder.
  
  And it is illiquid. If you need to raise money, you cannot sell a room or two, whereas you can always sell a few shares. It is hard to argue houses are the best asset for building wealth. “Perhaps the most compelling argument for housing as a means of wealth accumulation”, argues Richard Green of the University of Southern California, “is that it gives households a default mechanism for savings.”
  
  Because people have to pay off a mortgage, they increase their home equity and save more than they otherwise would. This is indeed a strong argument: social-science research finds that people save more if they do so automatically rather than having to choose to set something aside every month.
  
  Yet there are other ways to create “default savings”, such as companies offering automatic deductions to retirement plans. In any case, some of the financial snake oil peddled at the height of the housing bubble was bad for saving.
  
  Subprime, interest-only and other kinds of mortgage instruments allowed people to buy their homes without a down-payment and without building up equity. “Negative amortisation” (neg-am) mortgages even let people pay only part of their interest each month and to add the rest to the principal, increasing their debt, not their savings. Home-equity loans had the same effect.
  
  Where the heart is
  
  The main arguments for home ownership, though, are not primarily economic, but social. Home ownership, argue those who want to expand it, benefits society because it encourages stable, more law-abiding communities; it makes people more likely to vote in local elections and join clubs; and it benefits future generations because, it turns out, the children of homeowners do better at school and have fewer behavioural problems than children of renters.
  
  On the face of it, the evidence for these claims is strong. In America homeowners are less likely to move than renters, so areas with a lot of homeowners are more stable. According to the 2007 American Housing Survey, homeowners stay where they are for about nine years whereas renters move every two.
  
  More stable neighbourhoods are more law-abiding. According to a study of New York City, the home-ownership rate was second only to income as an explanation for different crime rates.
  
  The link between ownership and political participation is stronger still. In America in the early 1990s, 69% of homeowners voted, compared with only 44% of renters. Homeowners are more likely to know who their representatives are; more likely to support local causes or parent-teacher associations and (this being America) more likely to go to church.
  
  Perhaps the most surprising link is between ownership and children. One study in America found that, in 2000, the mathematics scores of the children of homeowners were 9% higher than those of renters’ children; reading levels were 7% higher.
  
  This had nothing to do with income: the research controlled for that. In another study homeowners’ children were 25% more likely to graduate from high school and more than twice as likely to go to university. Their teenage daughters were also less likely to become pregnant.
  
  These studies, though, are not the last word. They find a link between children’s education and homeowning. But is this because, as some suggest, home ownership requires parents to possess managerial or financial skills that they pass on to their children? Or is it because the people with those skills help their children at school and also buy houses? No one knows.
  
  Nor is it certain that owners always take better care of their neighbourhoods than renters do. Some studies claim that the effect in fact depends on a few public-spirited people willing to set an example. Renters can be public-spirited too. In America areas with lots of renters tend to be transient because the typical rental period is short.
  
  In Germany, though, people rent for years. Stable neighbourhoods and widespread home ownership can go together but do not need to. As Bill Rohe of the University of North Carolina, Chapel Hill puts it, “evidence regarding the societal benefits of home ownership is highly conjectural.” Still, on balance, home ownership gives people a stake in the state of their surroundings.
  
  Thriving streets increase the value of properties, giving owners incentives to improve them further. Renters get no such benefit; they may even have to pay more if the neighbourhood improves. Whether stability is such a good thing in a downturn, though, is a different matter.
  
  A decade ago Andrew Oswald of Warwick University argued that owning your own home makes you more reluctant to move, so labour markets tend to become more rigid as home ownership increases. He claimed that increases in the level of home ownership (though not necessarily the level itself) are associated with rises in unemployment. Ireland, Greece and Spain all saw large increases in home ownership in the 1980s and 1990s, and had relatively high unemployment.
  
  America and Switzerland had stable ownership rates, and escaped the long-term rise in joblessness. His argument remains controversial. Critics point out that many things other than home ownership might prevent people from moving (children’s schools, friends and so on).
  
  Anyway, liquid housing markets should make it possible for people to move, if they want to. It is also possible that, even if people were trapped in distressed areas, jobs should move there to take advantage of the willingness of homeowners to accept lower wages. All that said, Mr Oswald’s arguments seem especially powerful at the moment.
  
  The recession in America is bearing down most heavily on two groups of states: Florida, California and Nevada, which had the largest house-building booms in the 1990s; and Michigan, New Hampshire, Delaware, West Virginia and Mississippi, which have the highest home-ownership rates.
  
  People are not, in fact, moving as frequently as they used to: the share of those moving house in 2007-08—11.9% of the population—was the lowest since records began. So labour markets look less flexible than they were.
  
  Negative equity exacerbates immobility because people are reluctant to move if it means selling at a loss. Researchers at the Wharton School reckon that people in negative equity are only half as likely to move as those who are not.
  
  In all these ways, high home ownership may prolong and deepen a recession. The problem remains of how to weigh the economic costs against the social benefits of home ownership.
  
  There can be no easy judgment about this but the recent rise and fall of house prices suggests both that the costs are greater and the benefits smaller than once thought. If owning were such a boon, you would expect neighbourhoods with lots of owners to have done better than those with lots of renters during the boom years.
  
  That does not seem to have happened. What has happened, though, is that above a certain level, foreclosures have done a lot of damage during the bad years. Recent studies of New York and Cleveland find that, if lenders foreclose on 3-4% of properties in an area, local prices fall even faster and further than average. Rows of For Sale signs almost certainly have the same effect in Britain.
  
  In other words, ownership can sometimes be worse for a neighbourhood than renting. A shelter—for your money Lastly, and perversely, the decade of obsession with expanding home ownership may actually have reduced neighbourhood stability.
  
  Nicolas Retsinas, the director of the Joint Centre for Housing Studies at Harvard University, suggests that, until the crash in 2008, Americans were coming to see their homes as financial investments rather than as places to live.
  
  That is true in other countries. Neg-am mortgages in America and buy-to-rent arrangements in Britain were based on the assumption that houses were primarily investments. As a result, people seem to have started to buy and sell homes more frequently.
  
  Between the mid-1990s and mid-2000s, the number of new houses sold almost doubled in America, from just over 600,000 to over 1.2m in 2006. Perhaps that made labour markets more mobile, but it was certainly not what policymakers were aiming for when they set out to increase home ownership.
  
  Their efforts in the past few years seem to have weakened, though not destroyed, the best arguments for treating home ownership as something to be encouraged: that it increases people’s savings and creates better neighbourhoods for everyone. But perhaps you should not be surprised by that.
  
  As Adam Smith wrote in “The Wealth of Nations” two centuries ago, “a dwelling-house, as such, contributes nothing to the revenue of its inhabitants.”
  
  You watch. Bend, and the USA in general, is becoming a serfdom. A smaller & smaller number of owners.
  
  Great for those miniscule numbers on top, and a nightmare for the rest. No middle class. Just serf's working to pay debts, forever.
  
  The bounce is temporary. We'll find out, just like GM, that the debts are coming due. Again. And put as many debt reprieves in the pipe as you want, they will simply come due again, and again.
  
  This town is 100% doomed. If you trade up to downtown, you will fail. The Financial Black Plague is here.
  
  Save, don't spend. List your house today for 30% less than you think it's worth. Or better, what your hungry Realtor thinks it's worth. I said this 1 year ago, and no one believed it.
  
  Well, here we are. Again. It'll be even worse next year. 16%+ unemployment ensures that there will soon be NO ONE left to buy homes here at the end of this Summer. NO ONE.
  "It's tough out there... time to tighten my belt!"
  Momma Be MILFin!
  Made & Installed In Bend Oregon!
  
• April 12, 2009
• 12:38

  Dear Fellow Wage Slaves

   » ‎ Bend Bubble 2

  Tags:    [edit]

  Good Day Fellow RE Nutjobs,
  
  I have managed to keep alive my 100% unblemished sterling record of wanting to pay my taxes on Feb 1, but not actually doing so until April 15.
  
  So here I am, again, with a bowl of chocolate pudding in my financial underpants.
  
  OK, so I am going to pay my F#$%*(&%$ing taxes today, and probably plotz out a empty-husk of a post when I'm done. It might be Wed before I get there.
  
  Otherwise dear friends, please feel free to ridicule me and revile my lack of planning. Again.
  
  Sincerely,
  
  I Hate To Baste Your Butterball.
  Is my W-2 down there?
  
• April 05, 2009
• 5:13

  A House Divided

   » ‎ Bend Bubble 2

  Tags:  a house Divided   [edit]

  On June 16, 1858, more than 1,000 Republican delegates met in the Springfield, Illinois, statehouse for the Republican State Convention.
  
  At 5 p.m. they chose Abraham Lincoln as their candidate for the U.S. Senate, running against Democrat Stephen A. Douglas.
  
  At 8 p.m. Lincoln delivered this address to his Republican colleagues in the Hall of Representatives. The title comes from a sentence in the speech's introduction, "A house divided against itself cannot stand," which paraphrases a statement by Jesus in the New Testament.
  
  Even Lincoln's friends believed the speech was too radical for the occasion.
  
  His law partner, William H. Herndon, thought that Lincoln was morally courageous but politically incorrect.
  
  Herndon said Lincoln told him he was looking for a universally known figure of speech that would rouse people to the peril of the times.
  
  Another lawyer, Leonard Swett, said the speech defeated Lincoln in the Senate campaign. In 1866 he wrote to Herndon complaining, "Nothing could have been more unfortunate or inappropriate; it was saying first the wrong thing, yet he saw it was an abstract truth, but standing by the speech would ultimately find him in the right place."
  
  Mr. President and Gentlemen of the Convention.
  
  If we could first know where we are, and whither we are tending, we could then better judge what to do, and how to do it.
  
  We are now far into the fifth year, since a policy was initiated, with the avowed object, and confident promise, of putting an end to slavery agitation.
  
  Under the operation of that policy, that agitation has not only, not ceased, but has constantly augmented.
  
  In my opinion, it will not cease, until a crisis shall have been reached, and passed. "A house divided against itself cannot stand."
  
  I believe this government cannot endure, permanently half slave and half free.
  
  I do not expect the Union to be dissolved -- I do not expect the house to fall -- but I do expect it will cease to be divided.
  
  It will become all one thing or all the other.
  
  Good Old Abe Lincoln. Smart bastard.
  
  And, as usual, what is old is new again.
  
  So what is this "house divided" crap? Well, it's us.
  
  It's the U.S. Government & private industry, becoming intermingled at a startling rate.
  
  So what's the big deal? The auto industry is imploding on itself. Everyone, government & auto makers alike want it to survive. Right?
  
  Well, not really. Government doesn't want to lose the jobs. Specifically, the Dem's don't want to lose the Union votes. You lose the jobs, you lose the votes.
  
  So they are shoveling money to the auto makers as fast as possible.
  
  But strangely, the auto makers just aren't doing their part fast enough.
  
  The entities being bailed out are still failing. Only vacuous idiots thought there would truly be another outcome.
  
  GM & Chrysler face bankruptcy. Soon. Sooner than that.
  
  Why? They are getting BILLIONS thrown at them. The leadership (auto & Union, alike) has to want to keep their perk-laden jobs, G5's & bimbo junket's, right?
  
  Do you see why this is a House Divided?
  
  The government wants survival.
  
  Survival requires sacrifice.
  
  Sacrifice is exactly what both sides do not want.
  
  Sacrifice means plant closures, cuts & lost jobs. And neither the government, not the auto maker top brass, nor the union rank & file or leaders want that.
  
  No one can possibly get what they want out of the auto bailout. The cure is exactly the poison that is killing the beast.
  
  Bailout Nation U.S.A. can do nothing but fail. It is a House Divided. It will fall.
  
  OK, on to truly terrible news....
  
  Jobless rate bolts to 8.5 percent, 663,000 jobs lost
  
  WASHINGTON -- The nation's unemployment rate jumped to 8.5 percent in March, the highest since late 1983, as a wide swath of employers eliminated 663,000 jobs.
  
  It's fresh evidence of the toll the recession has inflicted on America's workers, and economists say there's no relief in sight.
  If part-time and discouraged workers are factored in, the unemployment rate would have been 15.6 percent in March, the highest on records dating to 1994, according to Labor Department data released Friday.
  
  The average work week in March dropped to 33.2 hours, a new record low. Since the recession began in December 2007, the economy has lost a net total of 5.1 million jobs, with almost two-thirds of the losses occurring in the last five months.
  
  "It's an ugly report and April is going to be equally as bad," predicted Mark Zandi, chief economist at Moody's Economy.com.
  
  First, it bears mentioning again, that all jobless rates are wildly understated. There are all sorts of exclusions that reduce the number of "unemployed" persons in this country.
  
  You can see it here, stated quite literally: The real unemployment figures are easily double what we are told.
  
  We already know that Bend's stated 12.6% is actually 16.1%. And that 16.1% is already massaged as well, so the real rate is closer to 25%.
  
  It's safe to say that the real unemployment rate in Bend is just about double what The Bully reports. Possibly more.
  
  Even that 8.5% rate for the US is bogus. It was 8.9% in Feb. It is impossible to really know, because this is Kool-Aid bailout Nation, and it seems Job 1 is assuaging the population with lies, money & big boobs.
  
  But despite all this lying, within the paradigm of the lies, you can see things are getting grim.
  
  Worst Jobs Recession since the Great Depression
  
  This is a chart from Last Month!
  
  Things are still going from Bad to Worse. The markets are discounting the idea that this "recession" will be worse than others recently, but that things will soon turn.
  
  Wrong.
  
  There has been a fundamental shift in almost everything in our government & our "free" economy.
  
  They are slowly evolving into some sort of unified blob, taking the worst of both, and making a monster.
  
  Remember when Daimler Benz (the beautiful fairy princess) joined with Chrysler (the frog)?
  
  Right. You got a monster.
  
  I'm not telling people this to scare them, or anything else. It's just a warning, the same warning I've been giving almost every single day for 2 1/2 years:
  
  We face financial Armageddon, as a country. Prepare.
  
  This isn't going to be like the Last Time (2001), or the time before that (1991, etc). This is The Big One.
  
  You should need look no farther than last weeks chart of Bend's unemployment, or the chart above of lost jobs. Things are still getting worse, not better.
  
  OK, moving on....
  
  OK, here's a shocking revelation:
  
  Most of the "help" (financial assistance) that banks are supposed to give struggling homeowners (with OUR MONEY), is just hollow gestures.
  
  What a surprise.
  
  Loan modifications rise; many don't pare payments
  by The Associated Press
  Friday April 03, 2009, 8:55 AM
  
  WASHINGTON -- Though lenders are boosting their attempts to curb record-high home foreclosures, fewer than half of loan modifications made at the end of last year actually reduced borrowers' payments by more than 10 percent, data released today show.
  
  The report, based on an analysis of nearly 35 million loans worth more than $6 trillion, was published by the federal Office of the Comptroller of the Currency and the Office of Thrift Supervision.
  
  It provides the most detailed and broad analysis to date of efforts to stem the foreclosure crisis, which President Barack Obama is trying to combat with a $75 billion plan to promote loan modifications.
  
  The report helps explain why many loans are falling back into default after being modified. Many borrowers and consumer groups contend that the modifications offered by the lending industry aren't very generous, despite more than a year of public prodding from regulators.
  
  For instance, nearly one in four loan modifications in the fourth quarter actually resulted in increased monthly payments.
  
  That situation can happen when lenders add fees or past-due interest to a loan and spread those payments out over the 30- or 40-year period.
  
  Perhaps unsurprisingly, the report found that loans were far less likely to fall back into default if a borrower's monthly payment is reduced by a healthy amount.
  
  Nine months after modification, about 26 percent of loans in which payments had dropped by 10 percent or more had fallen back into default. That compares with about half of loans in which the payment was unchanged or increased.
  
  Loan mod's are simply an attempt to perpetuate past over-consumption mistakes.
  
  You consumed too much house, you can't afford it, but our new US Government-Banking behemoth wants you to pay and pay and pay, until you are beyond tapped out.
  
  This is serfdom. You are a slave to property. You will spend a lifetime servicing your debt.
  
  There is an incredible re-distribution of wealth happening. And it is not to the Top 50% (Whitey), or even the Top 5% (Buster), or even the Top 1%.
  
  It's the Top 0.0001%. It's not people who have a million bucks. It's people who make a million bucks. Per month.
  
  These people are having the full faith & credit of the US (that's us, our kids, and grandkids, et al), printed up & deposited in their bank accounts.
  
  They caused this. Now they are reaping the biggest financial bonanza the World has ever known.
  
  We'll be a country of vast serfdom with an almost impossibly small number of financial Masters ruling the place.
  
  Loan mod's are nothing but an attempt to enslave you.
  
  OK, next....
  
  And just more proof that nearly all the goodness of this blog is in the comments...
  
  Trends Signal Slowing Population Growth In Bend
  
  For years, Bend has been the fastest growing city in the state -- and one of the fastest-growing in the country.
  
  But in the recession, that development and growth has turned into a high number of foreclosures and job losses.
  
  Now, a series of statistics have begun to trickle out that signal many people are leaving the region to find a better life elsewhere.
  
  I'm not sure how many people read this blog (not really important, I guess), but it's little nugg's like this that I just love.
  
  Because it is something Bend's local media would never run.
  
  

  At Bend High School, the hallways remain crowded. But, a little less so than in the past few years.

  The front office says the school has about 100 fewer students than this time last year.

  The trend holds true at the district level as well.

  There are about 250 fewer students in the system today, than one year ago, a drop of more than 1%.

  Ron Wilkinson is the superintendent of the Bend-La Pine School District.

  Ron Wilkinson: “Without any question, Bend is in a situation of flattened growth. And when you’ve been on this pattern of almost straight-up growth on the charts, it feels like a significant decline.”

  Ron Wilkinson: “For us, it’s a matter that a lot of that construction industry is unemployed or has moved elsewhere. It’s certainly impacted the economy and the entire community.”
  

  Ah yes. The old Flattened Growth. A classic Bendism. It now joins other classic Bend-oxymorons, "larger half", "rolling stop", and "only choice".

  Flattened growth. This is Bend.

  Finally, another priceless nugg from the comments (Sub req'd).

  Cascade Bancorp asks shareholder to invest $25M
  By Andrew Moore / The Bulletin
  
  Published: April 04. 2009 4:00AM PST
  
  Cascade Bancorp, the publicly traded parent company of the Bank of the Cascades, is seeking a $25 million investment from David Bolger, its largest single shareholder, that could potentially give Bolger ownership of more than 50 percent of the company, according to a filing Thursday with the Securities and Exchange Commission.
  

  Bolger, of New Jersey, currently owns 21.33 percent of the company’s common stock, according to the company.
  

  Bolger was the lone shareholder of Boise, Idaho-based Farmers & Merchants State Bank, which Cascade Bancorp bought in 2006.

  Patty Moss has been reduced to begging!

  She wants this Bolger guy, who has probably lost untold tens (hundreds?) of millions, to throw good money after bad.
  

  I'm not sure how this will work out, but my guess is that we'll see an Obombifying of Moss similar to GM's ex-CEO Wagoner: Moss will be caput, with some ridiculous Golden Shower Parachute to keep her ugly lesbian ass happy at night.
  
  Bolger will go for it, if MossCo is ejected. Could happen.
  
  My own opinion is that he should just mentally walk away, not throw good money after bad, and try to get Moss blown out anyway.
  
  Finally, just random nugg's to boggle the mind:
  
  Financial Rescue Nears GDP as Pledges Top $12.8 Trillion
  

  By Mark Pittman and Bob Ivry

  March 31 (Bloomberg) -- The U.S. government and the Federal Reserve have spent, lent or committed $12.8 trillion, an amount that approaches the value of everything produced in the country last year, to stem the longest recession since the 1930s.

  "Hey kids, here's why I can't send you to college! And you won't send your kids either! Bailout nation 2009!"
  
  Yet another House Divided piece:
  
  Finding the upside of the homes market
  
  Government trying to make mortgages easily available while preventing foreclosures
  
  Oy. This is what got us into this mess. Increasing mortgage availability simply increases defaults. We KNOW that now. Increase mortgage availability beyond a certain point, and you simply invite foreclosures. That's what is happening now.
  
  Home Prices: Low, But Still No Bargain
  Forget low mortgage rates and the buyer's market. Real-estate prices still have a long way to fall.
  
  Homeowners are watching anxiously for any signs of housing market stabilization. So, too, are all those who believe the market may hold the key to the economy.
  
  And yet the most recent data makes for more gloomy reading.
  
  The closely watched Case-Shiller index, which tracks prices across twenty major cities, shows that through January the crash was getting worse, not better.
  
  And yet, even after these declines, homes overall still may not be that cheap relative to wages. More on that later.
  
  The headline numbers are grim enough. January's Case-Shiller index showed a 19% slump from a year earlier.
  
  The usual suspects fared very badly: Phoenix was down a remarkable 35%. Las Vegas fell 32% and Miami 29%.
  
  I encourage you to go read the original story on WSJ Online, if only for the cool Flash graph, showing Home Price with respect to earnings.
  
  That index, which was at 91 in March 1997, zoomed to 200 in May 2006. It now stands at 128 (Dec 2008).
  
  We're starting to re-enter the range of normalcy, but we are still historically high. Without the recent bubble to muddy the waters, our current reading of 128 would troublingly high. More excerpts:
  

  But for the market overall the picture isn't as hopeful as you'd like.

  Even today, prices overall have only reverted to levels seen in late 2003. Yet by that stage the bubble was already well inflated. You would expect a crash of this scale to retrace its steps much further. To find pre-bubble prices you have to go back to about 2000 – when values overall were about a third lower than they are today.

  It's true that mortgage rates, now at 4.5% to 5%, are currently very low. But relying just on that is far too simplistic. Rates were also low from 2003 through 2005 – as many pointed out, disastrously, at the time.

  Is there a bullish scenario for house prices? Sure. If all the government spending to turn around the economy reignites inflation in a year or two—as some predict—house prices could begin climbing again. But if the current price deflation continues, look for house prices to keep dropping.

  Over the long term, average home prices have tended to track average earnings. And by this measure the market may have much further to fall.

  I looked at Case-Shiller's index back to 1987 and compared it to federal data on average earnings. The result, rebased to 100 in January 1987, can be seen here. And it's alarming. By this (admittedly very simple) measure, today's home prices are actually more expensive, in relation to average earnings, than at the peak of the 1989 property bubble.

  Equally noteworthy is that when the last property bubble burst, it took about eight years before the market showed really strong signs of revival. This bubble was far, far bigger.

  I'm telling you, folks, this thing is still in the early innings. And if you've got any sense at all, you know Bend is far, Far, FAR behind the curve. We're in the 2nd inning, at most.
  
  We've fallen almost 50% from our peak values. And we are still one of the most overvalued RE markets anywhere.
  
  We'll hit $125K medians in Bend, and it will not recover peak values in any adults lifetime who lives here. EVER.
  "A bra divided, I will not stand!"
  
• March 29, 2009
• 5:55

  Bend -- Uncertainty Capital of the U.S.A.

   » ‎ Bend Bubble 2

  Tags:    [edit]

  Wow, what I thought would be The Big News Of The Year, seemed to get the collective yawns of everyone in Bend.
  
  16.1% Unemployment in Bend
  
  No one seemed to really care about that. Well, here it is in graph form:
  Bend Unemployment, unadjusted -- Jan 1990 to Feb 2009
  Folks, something is seriously wrong with that.
  
  This isn't some run-of-the-mill downturn, you can see one of those culminating around 2001, where unemployment locally almost hit 10%.
  
  This doesn't look or feel like a little cyclical downturn, and I suppose it'd be odd if I said it did, considering the reason I started this blog... cataloging the worst financial catastrophe of our generation.
  
  No, you can see that Bend's Small Wave days are over. The nominal yearly tops & bottoms that change with the seasons around here used to be bounded by peaks & bottoms that were between 2-4% apart.
  
  You can easily see this on the graph. The sharpest turnaround to date was the plummet in unemployment from 11.1% in Feb 1994 to a mere 5.5% the following September.
  
  You can see what is happening now is unheard of in modern Bend history.
  
  The absolute low in unemployment in modern Bend history was reached October 2006, 3.8%.
  
  There was the usual seasonal jump to 5.7% in Feb 2007.
  
  Then something very strange happened: The usual yearly cycle of peaking unemployment in Feb & bottoming in September began to break.
  
  The subsequent low in unemployment for 2007 didn't happen in September, as it usually does. It happened in May at 4.3%.
  
  In Feb 2008, unemployment reached 8.1%, which proved to a high water mark that was actually breached later in the year. You can see it on the above graph.
  
  After a short jaunt down to 6.4% in May again, unemployment figures in Bend did something they have rarely done in recorded history: They breached the standard seasonal highs that are virtually always set in February.
  
  The high water mark for unemployment for 2008 was actually set in December at 11.9%.
  
  Look at the graph, look at where the peaks are: They are just right after the vertical bars, which I think are December.
  
  Unemployment peaks in February in Bend like it has eyes. It's such a reliable cycle, you can set your watch to it.
  
  But look at 2008-2009: The cycle breaks horribly.
  
  Here's a look at this graph, with a YoY comparison thrown in:
  Bend Unemployment, with YoY comparison.
  
  That red line is just the current months unemployment divided by the unemployment rate 12 months prior. Then I subtract 1, to get a percentage, then I multiply by 5 so that it doesn't end up being a tiny squiggly line right around zero.
  
  So when the red line is at zero, it just says that this years unemployment is the same as last year. When it's above zero, it means this years unemployment is higher than last year, possibly indicating a downturn in the economy. And the converse when the line is below zero.
  
  You can see there have been 3 fairly typical downturns since this series began, 1991, 1995, and 2001. The upturns were in 1994, 1997, and 1999.
  
  The Long Boom, starting in 2003, and ending in 2007 was itself a curious anomaly. Most of Bends cyclical turns were fairly benign & short-lived. But these Bubble Years certainly made it feel like This Time It's Different.
  
  It wasn't that the peak was so sharp, it's that it was so durable. Things seemed to get better every single day. For years. Unemployment never seemed to get worse than it did during the previous year. Only better. For 4 solid years.
  
  And you can now see the price we will pay: An explosion in unemployment to rival anything this area has seen in modern, and probably not-so-modern history.
  
  You wonder why I dismiss talk about How Bad This One Is Versus The Last Bust: This One Is Nowhere Near Over. This one may very well still be getting worse.
  
  We can talk about that when the red line hits zero again. Well, actually when it is well below zero, we can talk about recovery. Because even if unemployment goes back to a yearly average of 12%, that's going to look like a recovery compared to a 15% year.
  
  But that won't be much of a recovery. Which is what I've been trying to convey for a long time now. That blue line isn't coming down anytime soon. And it'll probably NEVER come back to where it was only 2 years ago.
  
  It's going to stay up in it's new rarefied plateau, well above 10% for years. And years. The best of the future's seasonal upturns, will actually be WORSE than the worst downturns we've seen in the past 20 years.
  
  We'll start becoming THRILLED with yearly low unemployment figures at 10-11%!
  
  This graph says it all: The past 20 years of comforting cycles, up & down like gentle waves on a beach, have been replaced by a tsunami.
  
  And possibly worse than the outright level of unemployment itself, is the yearly amplitude will increase markedly. There will be wild swings each & every year.
  
  This is manifested in UNCERTAINTY. People will never know, from year to year, is this My Time? Will I lose my job?
  
  This cyclicality will drive people out over the long haul, probably as much or more than the outright level of the seasonal bottoms. People HATE uncertainty. And folks, Bend is the Uncertainty Capital Of The U.S.A. for the coming 20 years.
  
  People will leave when their job has been gone for a year. But the real outmigration will be because of the never-ending uncertainty. That's what is not going away.
  BB2 Be The Best Pimp Ever!
  
• March 22, 2009
• 5:39

  Ripoff Outrage Boils Over

   » ‎ Bend Bubble 2

  Tags:    [edit]

  Doesn't it seem like we're entering a sort of malaise period with this economic collapse? The biggest worry of the week, was the 1/10% of 1% of AIG's bailout is going to bonuses, so the DC scapegoating/grandstanding machine went into overdrive.
  
  Funny that just about a year ago when I said they'd be perp-walking people out of their offices, I thought it'd be almost all real estate-based types, like Summit 1031... not Madoff. It's like this thing has turned into a roiling spectacle, like The Jerry Springer Show, everyday claiming some new victim.
  
  I have some weeks where I don't really know what to write about because things seem to be going so irrevocably wrong. This is one of those weeks, so maybe I'll keep this short.
  
  We are in a near-manic effort to get "credit flowing" again. Everybody says that the lack of credit is the problem, and in this de-leveraging nightmare, we have to get it going again.
  
  And funny, but the purported solution is to borrow FROM OURSELVES (our future selves) via the government, in attempt to make us take the money, now.
  
  It's like the governement is saying, "We will take everything you ever make, to force you to take it & spend it right now"!
  
  Very strange. Strange because the reason it is not working is so obvious, that I can't help but think the current strategy is purposefully flawed. That this is being done on purpose to achieve some ulterior motive down the road.
  
  The AmeriKKKan people are either, A) Credit Score depleted via default, and cannot borrow, or B) So tapped out & carrying such a heavy debt load now, that they are unable to borrrow anything else.
  
  There's nothing left in the AmeriKKKan consumer pack mule, yet the government is piling on more with every monetary tool in its arsenal.
  
  It's ridiculous. The government is flooding banks with money, and they are incredulous that it isn't being loaned. Of course not. The people who are showing up to borrow are the worst credit risks in The World. But the government wants them to be lent money.
  
  Uhhhh, that is exactly how this debacle got started.
  
  This is so blindingly obvious that I can only assume they are attempting to achieve other ends via this "stimulus". It seems a simple reallocation of wealth from future generations to the wealthy of today.
  
  That's where most of the money is going. Most of the "stimulus" that went to AIG went to extraordinarily wealthy counterparties. Many in foreign countries.
  
  We're making the rest of the World solvent, while bankrupting ourselves. And our kids. And their kids.
  
  Most of the people who walk in to buy homes simply do not qualify. What did some one write in the comments? 9 out of 10?
  
  Banks are simply returning to prudent lending standards. All else would kill them. Yet the government is trying to insist that they return the Gold Rush Days that have brought on this debacle.
  
  We're a country at odds with itself.
  
  I'm not sure how this will play out, but the fact that we are A) Borrowing from ourselves & our kids at a terrible rate, and B) Distributing it to the most wealthy all over the World, does not make me feel anything but sick to my stomach over this countries long term future.
  
  Another statement I made well over a year ago was that the USA would lose it's predominant economic might on this planet, seems now a foregone conclusion.
  
  As a segue to that, I read a little piece about how the US Debt Passed $11 trillion this week. What took GeeDub 3-4 years back in the early part of the decade, has been done in a couple of days now. We blasted through a TRILLION DOLLARS.
  
  And it looks to get much worse before it gets better.
  
  The dollar got crushed as a result.
  
  Here's a good summary of what is going on with our government's attempt to rescue us (from the $11 trillion piece):
  
  Monetary Policy Under the Bernanke Fed our monetary policy is to print massive amounts of currency in order to head off asset price deflation. Falling asset prices, combined with way too much leverage, are the chief reasons the financial system is in such deep trouble.
  
  Over-leveraged banks have very little tangible common equity to absorb losses in the value of their assets. If asset values were allowed to fall to market clearing prices (say another 25% decline in home prices), this would mean banks’ remaining assets aren’t sufficient to pay off their liabilities. Assets = Liabilities + Equity.
  
  As the left side of the equation falls, so must the right. Liabilities are ostensibly fixed, so a decline in assets must be matched by a decline in equity. Again, financials are ridiculously over-leveraged, which means they have very little equity cushion to absorb losses on assets.
  
  In other words, allowing asset prices to fall will bankrupt the financial sector, leading to systemic meltdown and worldwide bank runs. To fight the fall in asset prices, Bernanke has made clear the Fed will print money at a very rapid clip in order to buy assets like Treasurys, mortgage-backed securities, asset-backed securities, etc.
  
  The best way to track how much money is being printed by the Fed is to watch the expansion of assets on its balance sheet. (second chart above, click to enlarge) The balance sheet equation (A = L + E) applies to the Fed just like it applies to banks.
  
  The difference is the Fed has this magical machine called a printing press which means it can manufacture its own debt in order to finance purchases of assets. The debt it manufactures are simply electronic dollars that it puts in the accounts of those from whom it buys assets.
  
  This is not hard to grasp actually. The Fed said yesterday that it wants to buy $300 billion worth of long-term Treasurys (in addition to another $750 billion of MBS). As an example, pretend you owned some Treasury bonds that you want to sell.
  
  Since the Fed wants to buy them, it will conjure dollars out of thin air and put them in your bank account in exchange for the Treasury securites you’re selling. As the Fed prints money to buy assets, look for total assets on its balance sheet to expand dramatically.
  
  An Economist article published today (see links) included an estimate from Capital Economics claiming the Fed’s assets are likely to expand to $4.5 trillion. That’s an awful lot of new dollars!
  
  As I’ve argued before, this strategy is badly flawed. The Fed thinks the economy’s problem is falling asset prices. That is wrong; the economy’s problem is too much debt, which over-inflated asset prices to being with.
  
  The only “solution” is to let asset prices fall. Unfortunately, this will be very painful. Pumping more borrowed money into the economy via fiscal and monetary policy won’t actually stop that from happening, it will just delay the day of reckoning and make it far more painful when it arrives…
  
  We're attempting to stop the implosion of one bubble by replacing it with another.
  
  This just makes it feel like there will be nowhere left to hide when we finally Man Up & just let the s**t hit the fan.
  
  I'm not sure what the ultimate outcome will be, but again, my old outrageous claims of olde seem to be apropos. Remember Zimbabwe?
  
  I think I'm also a little "down" because I'm starting to know more & more people who are being sucked into this RE debacle.
  
  They are decent people who did not go in over their head, kept their nose to the grindstone, and didn't go on spending binges.
  
  But the one unfortunate thing they did was buy a house in Bend in the past 3-4 years.
  
  And again, they are not having problems paying the mortgage. But they are becoming poor at an untold rate.
  
  These are people who have slowly but surely just worked the the American Dream as methodically as possible, working 2 jobs, kids, etc.
  
  But they bought a $350K house that is now worth under $200K.
  
  That slowly but surely ascending line of net worth that took 20 years to get where it was, has plummeted to Less Than Zero in 18 months.
  
  A lifetime of work, wiped out.
  
  And these people are understandably upset. They are 100% broke, and they went broke engaging in the most Apple-Pie & baseball American Dream transaction that there is: buying a house.
  
  That's what you're supposed to do when you've worked all your life in this country... you buy a house.
  
  And so they did it, and the American Dream has turned into a nightmare.
  
  And after going through the various stages of loss, I'm seeing a lot of these people simply resign themselves to 10 years of Bad Luck, and they are simply going to Walk Away, and Not Pay.
  
  They have the money, mind you. But they are not going to throw 2-3X what it costs to rent each month for the priviledge of losing $2,000 per week. They're just walking away from their White Elephant.
  
  Walk Away, Don't Pay.
  
  Yet another prediction that seems to be coming true in spades today, that seemed ridiculous just 12 months ago.
  
  And here's the reason:
  
  Marge said...
  
  The RE optomists quoted last month are from Mars:
  
  March 09 sales to date
  13 Sold @ $221k med
  
  March 08 to date
  47 Sold @284k med
  
  I see that the steam building up in the market is just hot air.
  Kinda like Dorn making a deal a day.

  March 17, 2009 9:06 AM

  This is just brutal. Not even 1 house per day is selling. We're starting to get to numbers that are so low volume-wise, that we're going to have to combine 2 or 3 months to get medians that even are meaningful.
  
  My response to marge:
  
  Wow, 70% REO & shorts.
  
  So, the traditional 6% on those sales is $172,380, for about 17 days or $10,140 per day for brokers.
  
  For 1,500 brokers (?), that's $6.76 per day.
  
  Gross profit. Net might be a few bucks less.
  
  HELLO iSKY!
  
  The Realtor profession is going away in Bend. There is going to be a skeleton crew left when this is over. Gardner, DuBois, and a few others.
  
  And even these people will be starving. RE will never return to it's Glory Hole Years.
  
  But luckily we have the Doctrine of Bend Exceptionalism that will keep these people feeding this beast until it collapses of it's own weight.
  
  Ahhhh yes. There is just no Good News in me this week folks. No bloodlust for the devouring of The Stupid, no outrage over bonuses, no disgust over our governments incompetence.
  
  Just a general hazy malaise & despair that we are doing everything wrong. Just the unfortunate idea that as a country, as a state, as a town, and as people living in our neighborhoods with friends who are being steamrolled by this thing, that our futures are, at this very moment, being destroyed. And the same goes for our kids.
  
  I'll end with a piece from The Bully:
  
  The Great Depression
  How they lived, what they learned — and what they say about today’s tough times
  
  By Erin Golden / The Bulletin
  Published: March 22. 2009 4:00AM PST
  
  Vadabell Brumblay has always been careful with her money.
  
  At 88, the Bend woman lives comfortably in the same home she’s had for decades, but she doesn’t take anything for granted.
  
  She makes her grocery lists only after scouring the week’s advertisements and circling the best deals with a felt-tipped pen.
  
  In a notebook, she carefully records each purchase she makes and charts all the bills she’ll need to pay during the month.
  
  They’re the kind of habits that come from growing up in the midst of the Great Depression, a time when Brumblay watched her parents lose everything they had in a bank collapse and then rebuild their lives with the help of a small dairy business — a venture they eventually had to quit because so many people in Bend fell on hard times and couldn’t afford to pay for milk.
  
  “You didn’t have much, but neither did anybody else,” she said. These days, with the economy in a slump and people around the country grappling with unemployment, plunging stock prices and higher living expenses, the Depression has made its way back into the news and dinner table conversations with some people wondering how it compares with today’s economy.
  
  For the most part, Brumblay — and other Central Oregonians who lived through the period — say we’re not in a crisis like the one that swept through the country in the 1930s. But as government officials and families make tough decisions about doing more with less, they say the lessons they learned from surviving those times have become more relevant than ever.
  
  A tough time In Central Oregon, as in other parts of the country, the Depression began in late 1929 and continued at least in part until the U.S. became financially involved in World War II more than a decade later, said Daniel Pope, a history professor at the University of Oregon who teaches a class on the subject.
  
  At the time, many people in Bend and other cities in the region were involved in agriculture or the timber industry, including Rosanna Duberow, 86, of Bend, who lived with her parents and four brothers and sisters in a Shevlin-Hixon logging camp about 13 miles south of Bend.
  
  For much of the Depression, Duberow’s father was able to keep steady work, but she remembers a few months when the company stopped cutting timber. Because he had a large family, Duberow’s father was given some money for taking care of company livestock, but it wasn’t always enough.
  
  In town at Erickson’s grocery store, they let people charge groceries, and Mother had a huge grocery bill by the time (the loggers) were working again,” she said. “I know each month, she’d take so much extra to go pay that bill, and Mr. Erickson said when she finally did pay the last bit, ‘You wouldn’t believe, you’re one of the very few to even try to pay that bill.’”
  
  Brumblay, who also lived in Bend for much of the Depression, remembers similar stories about people who were unable to afford food for their families and had to depend on credit from the grocery store owner.
  
  “He eventually would take their homes,” she said. “They’d owe him so much, he’d have them sign their homes over. And the talk was that he owned half of Bend.” Brumblay’s family avoided falling into serious financial trouble, but it wasn’t always easy.
  
  In the late 1920s, the family was living on a ranch near Tumalo when Brumblay’s parents decided to sell nearly everything they owned and move into a house in Bend, where Brumblay’s father worked at a mill. Shortly after they sold it all — the house, the cattle, even a player piano — the bank where they’d put all their money collapsed.
  
  “My mother had a dollar and a little bit of change in her purse, and that was it,” Brumblay said. “They still had all their bills, and they had just sold all their assets.”
  
  Brumblay’s parents got back on their feet with the help of a friend who was living with the family and had invested his money in a different bank. Her father kept working at the mill, but he had to compete with many other men who were also looking for jobs.
  
  “I remember he would go down to the mill in the morning and take his lunch, and if there was work, he’d stay, and if there wasn’t, he’d come home again,” she said. “Then he’d go back at noon, because maybe there would be a half-day’s work.”
  
  To supplement his income, Brumblay’s father purchased some cows and started a dairy business. Several days a week, her mother would pull down the seats in the family car and load it up with bottles of milk, which Brumblay would carry up to people’s doorsteps.
  
  But as the Depression wore on, the business slowed down. Brumblay said she remembers going to houses where she knew the families had fallen on hard times and couldn’t afford to pay. For a while, her parents tried to help, but eventually it got to be too big of a burden.
  
  “The problem was, Dad had to buy hay and grain, and some of the people weren’t able to pay for their milk, and we couldn’t afford to give it to them, so (my parents) eventually quit that,” she said. “And how can you refuse to take milk to families that have kids?”
  
  Without savings or job prospects, some people in the area resorted to begging for food or work.
  
  Cora Houston, 100, of Prineville, spent some of the Depression working as a teacher at the Bear Creek School, near Paulina.
  
  In the most rural parts of Crook County, she said, many families were able to get by because they’d raise and grow their own food.
  
  But when she’d travel back to Prineville to visit her mother — who lived in the same house Houston now calls home — she saw many people in need. “People came to the door asking for food, several times, right here,” she said.
  
  Lessons learned Though many people have been hit hard by the current downturn, Pope, the history professor, said it’s not quite on the same magnitude of what happened in the 1930s.
  
  “I think people are talking about it as a potential depression, but I don’t think we’re there yet, and I don’t think most people would claim we’re there yet,” he said. Some of the locals who lived through the earlier downturn agreed, saying the pain doesn’t seem to be quite as deep — or widespread — as it was when they were young people.
  
  Art Welch, 90, of Prineville, said he volunteers at a local food bank and has seen an uptick in the number of people looking for help, but he doesn’t think the economic situation has reached a crisis point.
  
  “As far as it being a depression? Not yet,” he said. Welch, who was born and raised in New York City, came to Prineville at 17 as a member of the Civilian Conservation Corps, a work program for young men that was organized by the federal government.
  
  He and dozens of other men stayed in barracks-style lodging and worked on a variety of projects, from cutting down trees to building houses for U.S. Forest Service staff. In his time with the CCC, Welch made between $30 and $45 per month, though most of it was sent back to his family in New York.
  
  With housing and meals taken care of, Welch said, the program provided a big boost to young men like himself who might have otherwise found themselves out of work and on the bread lines, waiting for a free meal from a charity group.. Welch said he thinks a similar program could be the answer to some of the current unemployment problems. “
  
  They put the people back to work, and that’s just about what’s going to have to be done here this time,” he said. Others who remember the Depression said they worry that people today might not have the tools to stay on track if the economy gets worse.
  
  Georgia Gallagher, 87, of Sisters, lived on a ranch two miles outside of Sisters during the Depression. She said her family got by in part because her mother was skilled at sewing, cooking and other tasks — and knew how to make a little go a long way.
  
  “People are quite a bit different now, been used to not doing any of those things. ... I think people would have a harder time now because they don’t know how to can, they don’t know how to sew, they don’t know how to economize,” Gallagher said.
  
  “So many of them are losing their homes, and there’s no place to live that is really inexpensive now, so it’s real hard on those people.” But some of the local Depression survivors said they think people dealing with the current downturn should follow some of the habits of people who grew up in the 1930s.
  
  Gallagher said she canned food every year up until very recently, and Duberow said she and her husband still maintain a large garden, growing all of their own vegetables and some fruit.
  
  Houston said she believes many people fall into trouble because they spend far more than they actually have in the bank.
  
  Houston said she’s had just one credit card in her life, and she used it for a single purchase — $60 for a hotel room on a vacation to the Oregon Coast. Saving, rather than spending, she said, is the way to stay secure, even when the economy takes a turn.
  
  “I would say definitely to build up a savings account if possible; even if you only had $5 a year to put in, try to have a savings account,” she said. Brumblay said she remembers a popular Depression-era saying that’s still as relevant as ever: “Make it over, wear it out, make it do, or do without.”
  
  Though she said it’s hard to tell when the economy will make a recovery, Brumblay said the simple choices we make can go a long way in tough times. “First there’s wants and then there’s needs, and you have to learn to separate the two,” she said.
  
  I love spending on the essentials in life! That's why I live in Bend, Oregon!
  Me so horny for AmeriKKKan Debt!
  
• March 15, 2009
• 6:59

  Welcome to Mumbai, Oregon!

   » ‎ Bend Bubble 2

  Tags:  Bristol Palin's Huge Boobs   [edit]

  Can't do a full-scale rant today, so I'll just post some interesting snippets, so we can all get right to the comment-goodness.
  
  A Long Time Ago, In a Town Not So Far Away, I bought a really old Sci-Fi book at a place called The Bookmark. It was like a lot of buys that happen at places like this: It was a little treasure, a little gateway back to my youth, a book I read in my teens, a little reminder of the naive me-of-olde, and it was only $1.50.
  
  It was a quasi non-fictional thesis called "A Step Farther Out" by Jerry Pournelle, an old 1970's era Sci-Fi writer who, when paired with Larry Niven, put out some good stuff. It was a survey of pop-tech and other sci-fi grandiose schemes that Pournelle thought would solve our problems.
  
  Anyway, I guess what was sort of funny about re-discovering this book (it's been boxed up for 6-7 years now), is that Pournelle is addressing his audience as if there is this chronic & terminal disasterous condition with the World. It was written just after the Oil Shock, so I guess that's understandable.
  
  But he writes also with the implied assumption that the Earth is going to become imminently unlivable due to pollution. He posits that population growth is completely out of control, and it'll lead to Standing Room Only within decades. He talks as if food-shortages in Africa are all but inevitable for the rest of the World.
  
  He takes this stance that he is rebuffing The Pessimism Of The World. He's taking a stand, fighting back, and he's going to put out some Damn Pragmatic Solutions. Things such as mining asteroids, converting the Worlds oceans into farms, and quite a bit of other flying-car-in-every-garage-nuclear-power-plant-in-every-house stuff that never happened.
  
  I guess what was really strange about this was the dissonance with what actually happened after Pournelle wrote this.
  
  The malaise ended.
  
  There was a huge explosion in growth, but it was not at all like Pournelle envisioned it. All the pessimism just sort of melted away.
  
  But what's also funny is that some of the problems that he outlined as intracable, never went away. The Earths population has kept growing. Africa is still starving to death. We pollute more than we ever have.
  
  The Oil Shock ended, but other problems of equal or greater importance remained. They're still here today.
  
  But what fundamentally changed was The Attitude about our problems. They just changed. The pessimism just sort of went away. I guess other Feel Good topics like Growth just usurped the importance of Live Aid, and other stuff like that.
  
  I'm not entirely sure what I'm trying to say about this, other than this planet has seen times when it looked like The End of Days before. It was just so long ago, no one except real Geezers remember it.
  
  And I'm Not saying The Bad Times Manifested Themselves In 2 Years Just Like Now, So We Can Rest Easy because It's All Over. No. The malaise of the 1970's took a decade plus to work itself out. It took a long time. We're in the 2nd or 3rd inning.
  
  I don't know, I guess it was sort of comforting to know that what is happening today is not totally unprecedented. We've been down before. We've been almost pathologically pessimistic about it, too.
  
  But, it did end. After a long time, it did end.
  
  Next --
  
  We found out what we pretty much knew all along: Patty Moss & Co are frauds.
  
  Cascade Bancorp posts wider adjusted fiscal 2008 loss
  
  Friday, Cascade Bancorp Inc. (CACB), the holding company for Bank of the Cascades, said it made adjustments to its preliminary financial results to include goodwill and asset impairment charges, additional provision for loan losses, resulting in a wider net loss for the year.
  
  Including the non-cash goodwill charge and other adjustments, net loss for fiscal 2008 was $134.6 million or $4.82 per share, compared to a net loss of $21.2 million or $0.76 per share reported in the preliminary unaudited earnings release dated January 29, 2009.
  
  Right. All of a sudden, not in normal earnings season, MossCo woke up & found out that their Idaho acquisition of Farmers & Merchants bank was a 100% LOSER. They wrote off 100% of the F&M goodwill.
  
  This is becoming Standard Op Procedure for MossCo. Last quarter it was "Hey, wow, whoa! You know we just found out due to SOFTWARE ERROR, we actually LOST A S**TLOAD MORE MONEY than we originally told you. Sorry."
  
  Now it's a HUGE LOSS, that will result in the near-nuking of CACB's net worth:
  
  Cascade Bancorp (Oregon) Announces Filing of Form 10-K Annual Report and Audited Financial Statements; Adjusts Preliminary 2008 Results Due to Goodwill Impairment and Additional Provision for Loan Loss
  
  2008 return on book equity and tangible equity decreased to (47.90%) and (80.51%) respectively, from the previously reported (7.02%) and (11.79%). At December 31, 2008, the Company's reserve for credit losses was $48.2 million or 2.46% of total loans and NPA's are reduced by $22.9 million to $159.4 million or 7.0% of total assets.
  
  SO they went from a small ding to earnings to a near WIPE OUT of tangible equity. When you lose 80.51% OF TANGIBLE EQUITY, YOU ARE F**KED. One good point to this is the tax benefits, but you have to BE ALIVE to recognize such benefits, and CACB's stock price telegraphs a different story.
  
  So you'd think the CEO would have a pretty sobering & concrete response? Hell No! This is Bend!
  
  Patricia L. Moss, CEO said, "We are in serious times and actions will influence outcomes. The challenges we face reflect the stress the economic downturn has caused to our customers, businesses, friends and neighbors, and community at large. We are resolved to play our part in helping the community address the challenges we share, and to progress toward an improving economic future together." Moss continued, "Local deposits from our communities are essential to the economic health in the markets we share.
  
  We are encouraging the community to keep their money local to the benefit of our shared economy. Community banks effectively redeploy their deposits back into our communities." To this end, Cascade has provided additional assurance to customers by participating in the Temporary Liquidity Guarantee Program which provides unlimited FDIC insurance for all transaction account deposits through 12/31/09.
  
  Commenting on loan quality, Moss said, "We continue to fund our reserve for loan losses to ensure we have provided resources under the current adverse economic conditions. In addition, we have written down a substantial portion of the residential development loan portfolio that has proven to be most negatively affected by the downturn.
  
  Residential development now represents just 10% of our credit portfolio while the majority of the Company's loans continue to perform well. I am gratified that we have taken these actions on the credit side and exceed benchmarks for a well-capitalized bank."
  
  OK, there are several statements of concern, but this is the most startling:
  
  "We are in serious times and actions will influence outcomes."
  
  What the f**k! This is where you know you are dealing with a truly deranged lunatic. Moss has just LOST 80% of the net worth of the biggest bank in Central Oregon, and all she has is some sort of whacky identity logic?
  
  "We're in the s**t, and if A= B, and B = C, then A = C. Thank You."
  
  My God, what a f**king idiot. Everytime Moss opens her mouth, I realize that the banking system of Central Oregon as we know it, is 100% DOOMED. This vacuous dumbs**t is at the helm of a sinking ship. Know that CACB at $1.22, is INFINITELY OVERVALUED. It is worth NOTHING.
  
  I formally retract all my previous statements that it is "almost worthless". It is 100% WORTHLESS.
  
  Next --
  
  There's some scapegoating going on with some pretty unlikely characters lately.
  
  Someone posted the Jon Stewart crucifixion of James Cramer in the comments. I saw it, and it was pretty good. Jon Stewart is a relatively clear thinking guy, and he tears Cramer a new corn chute. He backs Cramer down pretty well, something Cramer richly deserves.
  
  Then Dunc posted the tut-tut-tut titled Jesse, Jesse, Jesse..., about Jesse Felders point of view on his blog, My Back Pages:
  
  You've been talking this way for months now, and the market continued to decline that whole time. (Don't forget to leave out that little fact.) You started talking about 'bottoms' and then it would drop some more, and then you'd talk about 'bottoms' again, and it would drop some more.
  
  Now you've even gone so far as to post an article in the Bulletin. Are you so sure it won't drop some more? Especially housing prices? Look at the Bend Economy Bulletin Board, and you'll see prices are still 99.9% down arrows.
  
  Is it really your advice to ignore that and buy now? Really?
  
  Jesse's been calling a bottom since I've started wiping my own bottom: About 6 months ago. And let's face it, he's been dead wrong.
  
  And finally, the vultures have descended on Buffett himself, with articles like "Warren Buffett has lost his touch", "Is Warren Buffett Crazy?", "Bill Gates' foundation dumps shares in Warren Buffett's Berkshire", and it goes on and on.
  
  And to add insult to injury, Buffett's Bershire (along with GE), has lost it's Golden Boy AAA status. There were only a handful of companies on Earth that had been bestowed that honor, and Buffett used it every chance he got to peddle more insurance.
  
  So we're all supposed to jump on the Cramer-Madoff-Felder-Buffett scapegoat bashing bandwagon?
  
  No. Well, Madoff, Yes. But Cramer is a dumbf**king stock tout, he doesn't know what else to do. The fact that the dumbs**t f**ks chickens on his show to get ratings is more a reflection of American tastes than anything.
  
  He's an entertainer more than anything. If you don't get that, and you actually take his advice, You Are A Dumbass.
  
  Felder. Again, here's a guy just posting his opinion. And for the time being, he's wrong. F**k, I threw my retirement in 100% a few months ago. 100% WRONG. So far. Sure as hell did not and will not buy at the bottom.
  
  So Felders wrong too. Big f**king whoop. Again, if you take someone's advice to heart, it's not their fault, it's yours. Man the F**k UP, and admit that you are responsible for your life.
  
  I lost my retirement money, not Felder. Conversely, when (if) things turn around, I will not be sending Felder a commission.
  
  This same thing goes for Buffett. He touted GE right before it took a huge dump, he even bought a s**tload of it. So Buffett ate his own cooking, and he's now paying. Big F-ing Deal.
  
  Everyone Loses In A Black Swan.
  
  But we're starting to go after people indiscriminately.
  
  OK, Madoff deserves to die. I mean he just deserves to be stoned to death, nude, over the course of weeks. With his dick in a meat grinder. And maggots eating out his eyes.
  
  But Buffett, Felder, and Cramer are just fallible. S**t, that goes for all of us. These guys are just wrong, that's all. Is Felder digging his own grave deeper by the day? Hell yes. Nobody's perfect. Remember the Opening Of The Second Comic Book Store On 3rd? Hey, but for the grace of God....
  
  That's the one thing ALL THESE PEOPLE have in common: NONE saw THIS coming. Look at Cramer's video: He calls this episode "one in a million". It's not that, but it's still pretty damn rare.
  
  And by "THIS", I mean the utter meltdown of the World's financial system. Which brings us to...
  
  Next --
  
  I saw on NBC's nightly news that the total Worldwide toll of the financial meltdown has been approximated at $50 TRILLION.
  
  $50,000,000,000,000 is a lot of money. That's like $8,000 for every single person on this planet.
  
  I know, you're thinking, "I got way more than that!". OK, good. But the vast majority of the planets population doesn't even have a fraction of that. If you started at the bottom, and just systematically wiped out the net worth of the Earth's poorest, moving towards the wealthiest, with a $50 trillion dollar vacuum, you would probably wipe out well over 95% of all individual net worth on this planet.
  
  95% of the World would be flat-ass broke. Probably more like 98-99%. 95% is extremely conservative. Extremely.
  
  Just an illustration of The True Total Cost of What The USA Housing Bubble Really Is. It's set us back 2-3 decades. It's set others back 2,000 years.
  
  ECONOMIC REPORT
  Household net worth plunges 18% in 2008
  
  Consumers pay down debt for first time on record in fourth quarter
  By Rex Nutting, MarketWatch
  Last update: 2:35 p.m. EDT March 12, 2009
  WASHINGTON (MarketWatch) -- Hit by a double whammy of declining home prices and a falling stock market, U.S. households saw their net worth fall by $11.2 trillion, or 18%, to $51.5 trillion at the end of 2008, wiping out four years of gains, the Federal Reserve reported Thursday.
  
  In the fourth quarter alone, household net worth fell by $5.1 trillion, a record 31% annualized decline. Consumers lost $937 billion on the value of their real estate. Their direct holdings of corporate equity dropped by $1.68 trillion, while holdings in pension and life insurance reserve dropped by $1.46 trillion. Mutual-fund holdings fell by $730 billion.
  
  Net worth has fallen for six straight quarters since peaking at $64.4 trillion in the second quarter of 2007. Net worth -- defined as assets minus liabilities -- is down 20% from the peak. The decline in wealth was accompanied by a sharp pullback in consumer spending at the end of the year.
  
  According to Commerce Department data, real consumer spending fell at a 4.1% annual rate in the final six months of 2008, the sharpest decline since 1980.
  
  Economists figure consumers will spend about 5 cents out of each additional dollar of wealth, or cut spending by about 5 cents for every dollar lost. "Consumers have turned a lot more cautious and are saving more," said Richard Berner, chief economist for Morgan Stanley.
  
  In the longer term, Berner sees a "sea change in consumer behavior" that will bring the personal savings rate to 7% or 8% within the next few years as consumers begin to understand that quick and easy increases in wealth aren't likely. "Households are being forced to rely less on rising asset prices and more on their paycheck to fund everyday living expenses," wrote Drew Matus, an economist for Bank of America/Merrill Lynch. "In other words, frugality is coming back into fashion."
  
  The decline in net worth raises the risks of deflation, Matus said. He said money supply growth turned negative in the fourth quarter, based on more complete information about the shadow banking system.
  
  Lost decade
  
  At the end of the year, households owned $9.9 trillion in equity shares outside of pension plans, less than the $11.3 trillion they owned in 1998. At the end of 2008, assets fell by $11.3 trillion to $65.7 trillion. Liabilities fell $87 billion to $14.2 trillion. Home owners' equity in their houses fell to a record low 43%.
  
  "It's an old lesson: Asset values can fall quickly, but debt lingers!" wrote Bill McBride on his blog, Calculated Risk.
  
  At the same time their assets were falling, households were taking on less debt, deleveraging their balance sheets after five years of double-digit growth in debt.
  
  In the fourth quarter, households paid off more debt than they took on for the first time since at least 1952, when the Fed began reporting the information in its quarterly Flow of Funds report.
  
  Household debts fell at a 2% annual rate in the quarter, including a 1.6% decline in mortgage debt and a 3.2% decline in consumer credit, including credit cards and auto loans. For all of 2008, household debt rose just 0.4%.
  
  Since the early 1950s, debt had never risen less than 5% in a year.
  
  Businesses also took on less debt.
  
  Total debt grew 4.8% in the corporate sector after a 13.4% gain in 2007.
  
  In the fourth quarter, corporate debt increased at a 2.2% annualized rate, the slowest since early 2004. The federal government made up for the deleveraging by families and businesses, however.
  
  Federal debt increased 24% in 2008 and rose at 37% annual rate in the fourth quarter. Total nonfinancial debt -- individuals, businesses and government -- rose 5.8% in 2008 and increased at a 6.3% pace in the fourth quarter. It was the slowest annual increase in debt since 2000.
  
  I know hbm likes to think of the poor in America as being crushed by unfeeling corporate behemoth monsters. And that's fine. But in the grand scheme of things, WE are the richest 1%. America is ridiculously wealthy by global standards.
  
  If you actually suctioned up the $50 trillion in losses, the losses suffered by this country as a whole have been miniscule. Worldwide wealth decimation by the poor has been catastrophic. And I mean people with only a few hundred bucks to their name after a lifetime of toil.
  
  The poorest American's are 1,000X better off than them. At least we have something to lose.
  
  Next --
  
  Just a little note about the min wage dogs**t jobs that iSky is bringing BACK to Central Oregon.
  
  I mean, I don't want to look a gifthorse, and apparently neither do a lot of other hungry folks, from the 200 applicants TRG got on Day 1.
  
  But let's face it: NO ONE CAN SURVIVE ON THESE S**T WAGE JOBS. NOT HERE.
  
  Central Oregon always has been and always will be about the EXPLOITATION of locals. You are dogs**t to the machine. You're the f**king pigs anus, cat entrails, hobo arm, and leather boot that goes into Central Oregon's LOW WAGE SAUSAGE FACTORY.
  
  This place takes YOUR LIFE & turns it into SAUSAGE. You are dog s**t. If you went to iSky, you are on the road to DOG S**T.
  
  Please, even a single person tell me otherwise. PLEASE! iSky doesn't have a single Family Wage job available. Nada. They have SAUSAGE JOBS. They turn lives into DEAD DICKS.
  
  That is REAL BEND. I don't really want to pick on iSky, when this same fundamental truth applies to about 107% of Central Oregon Employers. They are a meat grinder, and you are a horses asshole.
  
  It's a commentary on the nature of this place. It's where we are going. The Bend of Olde. If you don't like the sound of working for peanuts, losing your house, and living on China Hat Road turning tricks with donkey's, then you need to get the f**k out.
  
  Finally --
  
  In what may have been the event that Turned Things Around, we all found out that Bristol Palin broke up with her longtime boyfriend, and father of her illegitimate child.
  
  This could not be better news for borderline-perverts like me (borderline?) who love Gigantosaurous Boobs. I mean, Mom was doing pretty damn good in the jugular department, but daughter looks like Bend's balloon guy stuffed something under her dress.
  
  Those are the biggest gat-damned teeny-bopper, single mom, mega-jugs I've ever seen. I'm drawn to that s**t like hillbillies are drawn to all-you-can-eat buffet's, tractor pulls, f**king yer sister and alcoholism.
  
  So in tribute to all the Mother-Daughter mega-hottie gang-bang 2 on 1 clusterf**ks that I hope to have in Heaven, I present Bristol's now-single huge mega titties, swelled by many months of suckling for your viewing pleasure.
  
  Bristol Palin's titties being crushed into all sort of unnatural shapes due to Milk Bustout. "My hobbies include Mother-Daughter gang-bangs, 2 on 1's, and f**king liberals and eating them."
  Hey hbm, when are we gonna f**k? I'm hungry!
  
• March 08, 2009
• 6:59

  Bend: Doomed To Tear Itself To Pieces... Again.

   » ‎ Bend Bubble 2

  Tags:  Home Price Declines   [edit]

  Ahhhhhhhhhhhh, Bend.
  
  I guess I've figured it out: Bend is a town doomed to tear itself apart.
  
  Look at Buster; Here's a Bend Lifer who wants nothing more than The Good Olde Days to return in force. Guns, depression, liquor, downtown vacancies, flatbacking renters. Cowboy Capitalism at its finest.
  
  Just about the polar opposite of today.
  
  Now hbm; Surely there couldn't be someone more Buster's Polar Opposite, right? No.
  
  HBM said:
  "What I want to know is why is Bend considered the land of paradise?"
  
  Bend isn't "paradise" and never was. When my family and I moved here in the mid-1980s it was a nice, pretty small town. Now, thanks to 20 years of uncontrolled, poorly planned (or unplanned) growth, it's just a sprawling ugly mess with a s**tty climate.
  
  IMHO.
  Bend was fine for me at a certain stage in my and my family's life. It isn't anymore. I've changed, my family circumstances have changed (daughter has grown up and moved away), and Bend has changed -- a lot, and mostly not for the better IMO. Why not move on?
  
  How about Dunc? Surely as a downtown business man, he wants things to somehow right themselves and continue his 3 decade upturn?
  
  Laying out the odds
  
  Scenario Three.
  
  Things really crash, dropping 50% or even 60%. Storefronts empty and aren't refilled. People leave town. I start playing cribbage on the sidewalk with my neighbors, waiting for customers. Ironically, after the worst has hit, probably no more vulnerable than the above scenario, because concessions would be forthcoming, one would think. And I would just cut to the bone.
  
  Tuesday, May 29, 2007
  
  A series of restaurants went into the space the Toomies is now in. Nothing like the haunted look in waiter's eyes, as they stood, tuxedo ed in the window waiting for customers. My neighbor, Jerry from the Sole Shop, and I used to sit out on the sidewalk and play cribbage for hours.
  
  See the common thread? It's that way with everybody.
  
  No one is happy with Bend, because it is never quite what they want. Hell, I got here in '01, and Bend has already become a horrible perversion of what it was then.
  
  Full of Cali-Bangers. Hot & Cold running Hummers. Sprawling STD's going everywhere. Locals gone wild with greed (Breeze, DuBois, Bauhumper, Kuratek, et al). Prices just out of control. Mindless idiotic developments. Rude f**ks. Liberal elitist dicks. Fake titties.
  
  And I'm a fairly conservative, Olde School rePug. But even hard-core flaming liberals, like hbm, are fed up with the place. Why?
  
  Full of Cali-Bangers. Hot & Cold running Hummers. Sprawling STD's going everywhere. Locals gone wild with greed (Breeze, DuBois, Bauhumper, Kuratek, et al). Prices just out of control. Mindless idiotic developments. Rude f**ks. Liberal elitist dicks. Fake titties. Well, maybe not the liberal elitist dicks.
  
  And Bend's anti-Christ, Buster... what's his f**king beef?
  
  Full of Cali-Bangers. Hot & Cold running Hummers. Sprawling STD's going everywhere. Locals gone wild with greed (Breeze, DuBois, Bauhumper, Kuratek, et al). Prices just out of control. Mindless idiotic developments. Rude f**ks. Liberal elitist dicks. Fake titties.
  
  Right? Right.
  
  That's what I see as Bend's main problem: No one will ever be happy with the place.
  
  Papa Bear Buster: TOO HOT (liberal)
  
  Mama Bear hbm: Too cold (conservative) (and too many Busters)
  
  Brother Bear Dunc: Barely supports one store, and yet it always attracts locusts anyway.
  
  No one ever seems to be happy in Bend. When it's growing, it's growing wayyyyyy too fast, at a pace that cannot last, and is doomed to implode at the end
  
  When it implodes, it drives out everyone, and the whole place is economically gutted.
  
  Dunc is a perfect encapsulization of Bend:
  

  • Buys first store at True Rock Bottom Price.
  • Does surprisingly well. Thinks it is personal genius, not cresting wave of fad.
  • Expands in short order. 4-5 stores
    
  • Fad implodes.
  • Stores implode.
  • Hanging by fingernails. For 20 years.

  This is the nature of capitalism in the USA. And the nature of Oregon is the nature of the USA squared. And the nature of Bend is the nature of Oregon squared.
  
  When the USA catches cold, Oregon gets the flu, and Bend gets the f**king AIDS.
  
  And I can tell you EXACTLY WHY THIS HAPPENS. This is it. Are you ready, because this IS IT:
  
  We never diversify.
  
  Think of the US economy as a portfolio of business, because that is essentially what it is. All are, to some extent, interdependent. With some, the correlation is low, like aircraft & BBQ sauce. With some, the correlation is high, like furniture and housing.
  
  OK, here's a graph of the fundamental nature of bonds vs stocks:
  Risk/Return space for stocks, bonds, and riskless T-bills.
  You want low risk & high reward, right? That's the upper left of this graph, and the maximum return per unit of risk lies on that brown line. It assumes there is some "optimal" mix of stocks, bonds, gold, and everything else, that lies right where that brown line touches it. What's that brown line? It's where the Ultimate Uncorrelated Asset (T-bills) intersects the Y-axis.
  
  Strangely, you'll note that if T-bill rates go UP, that modern portfolio theory indicates you should buy more stocks. Imagine grabbing that brown line by it's left side & pushing it up... it "rolls up" that curve towards 100% stocks. Conversely, pulling T-bill yields down indicates more bonds should be bought. This is where we are now, extraordinarily low short yields.
  
  I have to say, I spent a fortune on higher education, and this was about all I got out of it.
  
  But maybe it was enough. Because while this graph illustrates that you can ALWAYS do better by buying a mix of stocks & bonds for maximizing your risk-adjusted return, it illustrates this fundamental truth for many assets classes in a huge variety of situations.
  
  It's why there are Swim & Ski shops in town. Hiking shoes & snowboards.
  
  When one is up, the other might be down, and vice versa.
  
  But, by and large, there is a general ebb & flow to the economy as a whole, and everything either is doing OK, or everything is sort of doing crappy.
  
  But the good thing about diversification, is that IF YOU PROPERLY REBALANCE, you can weather almost any storm.
  
  Cuz think about it: What if you buy, say 70% stocks and 30% bonds. In 1933. Well, by about 1966, your stock portion is wildly overweighted. And on that graph above, you'll be off the optimal investment weighting, which is always that straight line that is resting on the risk/reward curve.
  
  You can see on that curve, that the optimal mix is somewhere around 30% stocks, and 70% bonds. And it gets better when you can mix it with T-bills. The ability to buy T-bills, as well as sell them (buy optimal stock/bond mix on margin) is what constitutes this brown line. The brown line is ALWAYS the best investment. ALWAYS.
  
  Same goes with a Swim/Ski store. What if your "Ski" section starts to overwhelm your "Swim" section? What if there is a Big Upswell in skiing for some reason?
  
  Or closer to home: What if your Breakout Comic Section seems to justify opening a new comic store? And another. And another. And another.
  
  What happens when you're "All Comics" (ie stocks, timber or ski's), and no "Games" (ie bonds, tech, or swimsuits)?
  
  Your portfolio becomes unbalanced.
  
  You become too tied to the whim & weft of One Thing. Too many comics, so when comics crash, you crash harder. Especially if you "averaged in". ie: You "bought" 4 stores at the top, borrowing to do so.
  
  Solely Buying Buffett, while sensical from almost any rational backward looking perspective, NEVER makes sense from this perspective.
  
  Diversify OR DIE.
  
  Now, this doesn't mean Start An Aircraft Parts & BBQ Sauce store.
  
  It means start with comics. Add games. Add used books. Add new books. Add things that "add value" to the other things.
  
  So diversify intelligently. But also realize your Inherent Lack of Diversification. Realize you are in Bend. Realize you are selling a very targeted set of goods. Realize your customer base may have a high correlation to some sector of the economy (ie construction).
  
  How to fix? Internet? I don't know. That space is already saturated. Start an "Awe Shucks" blog, and see where it goes? Maybe.
  
  I guess that's my point: Success BREEDS it's own failure. Comics, Dunc's bread & butter, almost begat his collapse. Timber, once Bend's economic mainstay, very nearly put this place in a 20 year depression.
  
  Then we made the jump to Real Estate. Ahhhhhhhh, yes. Surely Real Estate will be our savior. It never Goes Down!
  
  And so it came to pass that RE, via a series of well-designed, planned & executed strategies using local government & media as puppets, has come to completely dominate this little towns economics.
  
  Once again, Bend is a completely unbalanced business portfolio, ripe for a fall. We have almost nothing else to rely on to soften the blow.
  
  This is why, and maybe you'll remember, I've said ad nauseum, that we should have taken our RE lottery winnings and Put Them Somewhere Else. NOT RE.
  
  We should have charges $60K SDC's, and slowly but surely diversified into a number of POORLY CORRELATED investments: A 4 year college, tech, aerospace, medical, I-97 4 lanes, whatever.
  
  Get us the f**k out of RETAIL, RESTAURANTS & REAL ESTATE. OK, we have MORE THAN ENOUGH OF ALL 3.
  
  We have more than enough "life style" bulls**t to last us a lifetime.
  
  But no. We doubled down on REd. Just like a lot of my friends doubled down on tech around March 2000. Borrowed to buy, borrowed as much as they possibly could.
  
  Should have taken their early winnings, and bought something Very Poorly Correlated.
  
  "You mean IHTBYB, they should have bought Losers? Cuz they were winning up to that point, and boring stuff like BRK was going down the drain! Why diversify into a Loser?"
  
  Cuz, as Dunc illustrates, as Bend timber illustrates, as Japan RE illustrates, as dot-com-2000 illustrates: It is the nature of things to undo themselves. It is the nature of booms to bust.
  
  Success begets more investment. More investment begets concentration. Concentration begets lack of balance. Lack of balance always fails.
  
  Far worse than a bad investment, is ALL IN as an investment ethos.
  
  When comics perform well, buy more games (or books, or pogs, or...)
  
  When stocks perform too well... buy bonds, NOT MORE STOCKS.
  
  When RE explodes, get tech, a 4 year college, medical, a 4 lane highway... NOT MORE RE.
  
  But that is, in fact, what we've done. From all timber to all RE.
  
  And it's NOT that RE is itself inherently bad, it's the timing. We went ALL IN so late in the game, we're DOOMED.
  
  "ALL IN" as an investment theme has a 100% FAILURE RATE.
  
  Dunc went ALL IN on comics late in the game. But really, that's the nature of the game. ALL IN AT THE END is almost ubiquitous, whereas ALL IN AT THE START is essentially unheard of.
  
  How many failed comic stores did you say there were Dunc? Something like 80-90% have failed in the past 20 years?
  
  It's not so much a bad Industry, as it was Bad Portfolio Management. ALL IN AT THE END. Again, ALL IN has a 100% FAILURE RATE.
  
  So Dunc went ALL IN AT THE END 20 years ago in comics, just as Bend went ALL IN AT THE END 2 years ago in RE. Expect similar results.
  
  Where are we now? Funny, but we are exactly where all my friends were about 90 days after the NASDAQ bubble topped. They'd mindlessly bought some Swedish telecom something for $220/sh, watched it literally go to $280/sh overnight, but then mysteriously fall to a harrowing $125/sh.
  
  They were shaken, but Very Hopeful. Very HOPEFUL. VERY, VERY HOPEFUL.
  
  "It's going to bounce back. I know it. It'll be back at $300/sh before you know it."
  
  And this keeps up, as it seesaws its way to $2/sh, where it flatlines for a decade.
  
  That's where we are. Very hopefully sitting on something at $125/sh that we averaged in at $220/sh. It'll NEVER get there again, but we don't know that. We're HOPEFUL.
  
  So it is too late to change things. RE runs the show via City Council & COBA, COAR, and God knows what other acronyms. It's not like we can call a stock broker & bailout. It took us years (decades) to get here, it'll take decades to get out.
  
  So what should we do, once this thing has played out, and The Hope Is Gone (15-20 years) sufficiently that people in unison shriek "NEVER AGAIN!"?
  
  Easy, diversify. Start building a Real Economy With Real People And Real Businesses. Does it mean BEM's "5 Things Bendites Should Do Now"?
  
  Yes, that's a start. But it should be diversification within some rational bounds.
  
  Realize that untrammeled growth into natural areas is shooting the Golden Goose. I don't see eye to eye with hbm on a variety of topics, but even I understand that mindless growth into places like the Metolius is pathological.
  
  Realize that people come here to LEAVE THE URBANE. They are trying to ESCAPE. Making this place more like your favorite Frisco hood is just idiotic.
  
  I guess there should be some rational guidelines, and hope that minds greater than mine can figure out what that means, and implement it. I can only say it IS NOT BEING DONE NOW.
  
  But the primary objective should be to DIVERSIFY our economy to the extent that is achievable. Not only is this NOT BEING DONE NOW, all measure of force, time, money and effort is going into EXACTLY THE OPPOSITE.
  
  Our local government is 100% made up of RE stool pigeons. Bought & paid for for 5 cents on the dollar. Doing all in their power to keep the gears of RE grinding along. Wiping out SDC's, building "affordable housing" and God knows what else.
  
  This is why I said there is "nothing to be done" to save Bend. It is owned. And it'll be owned until the local RE interests are 100% wiped out. And that'll take decades.
  
  Then, AND ONLY THEN, will Bend be ready for a rebirth. people will have had it with RE, even RE, and they will start to rebuild. When they do, unlike after the timber bust, they should NOT let one industry come to completely dominate this town. If they do, it'll simply happen again.
  
  Diversify. It's the only free ride out there. And it is the key to Bend's future.
  
  Geez! 9:00AM! Geez, this time change stuff is death. Time to look for the boobies....
  I diversified into both jugs!
  
• March 01, 2009
• 5:34

  Bend Bulletin Stops Publishing, Cessna Closes

   » ‎ Bend Bubble 2

  Tags:    [edit]

  With the release of January's unemployment figures, I think it's pretty safe to say we've reached the End of Days here in Bend.
  
  It hasn't happened but a lot of things we're all accustomed to are going to go away. And Buster is pretty infamous for saying we're reverting to Olde Bend. But I think it's going to be worse than that.
  
  Bubbles have a funny way of bursting. And the bursting doesn't seem to go according to anyone's plan.
  
  I don't think we're going to have a local paper much longer. The economics aren't there.
  
  So much of this place, the Bulletin included, survived, and thrived, due to RE. They were conjoined twins in an ever-escalating swell of leverage-fueled prosperity.
  
  Now though, we're in The Great Unwind. The Big Deleveraging. The Big One.
  
  We're in the most vicious down-spiral ever witnessed in our lifetimes, and still most people in Bend don't get it. There's still this enduring idea that We Are Near The Bottom, and things are going to turn around momentarily, thank you very much Dana Bratton.
  
  But, of course, this is not true.
  
  The RE/Bend media conjoined twin is on life support.
  CACB, 3yrs
  
  We only really have CACB to go from as a barometer of local financial health (OK, we have Prineville Bancorp PNVL, but it ain't exactly busting out either). And the patient is near death.
  
  CACB officially went to penny stock status this week. 90 cents. Look at that chart, it's almost zero. Down 97% from it's peak.
  
  Now the question isn't If it'll be shutdown, but When.
  
  And if The Bully was a pubicly traded company, you would see something similar. A company on the verge of collapse.
  
  Same with construction.
  
  Same with local manufacturing. Manufacturing actually lost more jobs this past month in OR than construction.
  
  The seemingly invulnerable combination of Bend media & the local RE juggernaut aren't just going to get slimmed down, they are dying. They will be dead in a year or so.
  
  The whole infrastructure of this place -- the constant influx of people, the building, the new businesses... the whole freshness & zest & zeal, for lack of better terms -- is stopping.
  
  We had 1 in 9 people unemployed in December. It's about to go to 1 in 8 for Jan. And in the month just gone, it promises to get even worse. And there's no end in sight.
  
  Even the perma-optimist Obama, said that 2009 is going to get much worse before it gets better.
  
  And I think it just hit me -- I think it was Tuesday -- that Bend is turning into Burns.
  
  People do not go to Burns.
  
  But Wait, you say. Homes will become cheap enough that people will want to stay here. Look at sales, they do seem to be bottoming out, as local RE-types have said. Right?
  
  Homes are cheap in Burns.
  
  The problem in Burns is Not cheap housing. It's no jobs. What jobs that are there, are low-wage, go-nowhere jobs. You cannot Build A Life in Burns.
  
  There's something far more important than rock-bottom low prices to living somewhere: It's Building A Life.
  
  It's doing something this year that makes you more than you were last year. It's making yourself a better person. It's seeing that you are piling up a skill set that is actually valuable out in The World. It's about some sort of legacy, a Life That Matters.
  
  You can't build a life that matters in Burns.
  
  And like a desert sandstorm can reclaim and consume an entire region, the desert is about to reclaim Bend.
  
  Bend had been pushing out -- extending its prosperity oasis towards Burns, towards La Pine & Christmas Valley, towards Madras. The shoots of growth that started 30 years ago actually seemed like they had conquered the unconquerable. They had multiplied a thousand fold.
  
  No more. The desert is pushing back and is going to reclaim this place.
  
  I think a lot of people think (I was one of them): "Great! After prices fall far enough, I'm going to snatch up my own sweet-ass, rock-bottom foreclosure and just lord it over all my stupid friends who bought at bubble tops. Awesome!"
  
  No. You might want to think about that. You might want to make a visit to Burns first.
  
  Because I think I have a fairly prescient idea of what's going to happen here, in broad strokes.
  
  The City will go broke.
  
  Local paper will go broke.
  
  Local banks will go broke.
  
  Local restaurants will go broke.
  
  Unemployment will reach Depression era levels.
  
  This place will become a ghost town of The Walking Dead.
  
  Like Burns. No life, no future, no human legacy, no nothing.
  
  That just sort of hit me this past week. I'm starting to see quite a bit of empty parking, where it was once so full so constantly, it was really annoying sometimes.
  
  They say downtown is filling up almost as fast as it is emptying out -- whatever that means -- but it is a losing battle. Downtown is emptying out nonetheless. Same thing all over town.
  
  You can see The Walking Dead all around. It's 1 in 7 people here.
  
  But at least Burns is functional; Burns has a grip on reality. Burns isn't pretending to be something it's not.
  
  Burns has crappy s**t-jobs, and crappy s**t-houses. Both are at the ass-bottom of the money scale, whether paying or pricing.
  
  Look at Bubble Bend: The whole West side is populated with vacant 3,500 sf McMansions. They were $850K. Now they're $550K. And of course, no one is buying.
  
  No one gets it here. We have an Aspenesque housing market, that has just been plopped into a Burnsesque economy. Bend is so self-conflicted, so paradoxical, inconsistent and incongruous, it's mere existence is almost impossible.
  
  What happens to a place that is Wall-To-Wall with mansions, where The Money seems to have taken on a will of it's own and fled, leaving confused and penniless humans behind?
  
  Yes. It hit me this week.
  
  Bank of the Cascades is going to be extinguished. And the dominoes will start falling in rapid succession after that.
  
  The Bulletin will close. Cessna will close. Even the mighty St Charles may fall. The Old Mill will implode. Most of the restaurants, boutiques, art galleries, festivals, fairs, parades, schools, police stations, and local governments will simply fold.
  
  That doesnt just mean "Cheap". That means Burns. That means No Life. That means Get Out As Soon As Possible.
  
  See, people don't care about cheap, when their lifes work is in peril. Again, drive to Burns to witness the phenomenon for yourself.
  
  I can buy a house today Cash in Burns. No going to though. My life is more important than getting a cheap house. If that's all I cared about, I'd be in Detroit right now.
  
  A lot of people around here have been drinking the RE Kool Aid for so long that they can't imagine a life that doesn't revolve around RE, it's their lifeblood. It's pricing, the sales volume, the transacting, the ebb & flow of it, it's every movement, no matter how inconsequntial, is of riveting importance. Been like that for 30 years.
  
  But in the end, this mindset will prove to be a phantom, fleeting.
  Maslow's Hierarchy of Needs
  
  Bend went from Safety to Self-actualization so forcefully & quickly, that it seemed like it was preordained. We are God's people, this is our fate to live life at it's pinnacle.
  
  But actually this place is about existing at the Physiological level. It's at The Burns Level. It's in the red.
  
  This is why I say Burns is Honest. Burns knows it sucks. Bend also sucks, but we think that we'll be OK, because we have surrounded ourselves with the edifices of Self Actualization, of that Shining Golden City on The Hill.
  
  What happens in a place surrounded by the edifices of opulence after a monetary neutron bomb has gone off? What happens when you realize a place cannot ever sustain a Life Worth Living? What happens when you realize that Bend has essentially turned into Burns?
  
  You leave. The desert reclaims it's own.
  
  
• February 22, 2009
• 6:31

  Bend Godfather: "Doctrine of Bend Exceptionalism, Dead"

   » ‎ Bend Bubble 2

  Tags:    [edit]

  I think Bend reached a seminal point in it's collapse last week.
  
  One of the Boss Hogg's of Bend, if not The Boss Hogg, declared Bend non-Exceptional.
  
  Through the Looking Glass With John and Bill
  
  In his Sunday column, Bulletin Editor John Costa talks to three of Bend’s biggest movers and shakers to find out why the Bend real estate market went belly-up and how to keep it from happening again. They offer a number of ideas. Some of them make sense; one is just crazy.
  
  Developer Mike Hollern blames the Doctrine of Bend Exceptionalism – the peculiar notion that Bend is so special that it’s immune to outside economic forces. “We were overwhelmed by the amount of money pouring in,” Hollern told Costa. “We thought that we were different from the rest of the country. It turned out that we are not so much [different].”
  
  This really is astounding. It's more or less a declaration that all we have done, all that we have thrown our energy, time, and vast, Vast quantities of money at all these years, is actually Harming Us.
  
  The PR & Marketing Industrial Complex of Bend is Dead.
  
  Now I don't want to say that I originated the idea that holding ourselves above all others was a bad Idea, but I'll admit that I mentioned it once or twice:
  
  A Prayer for Bend
  
  And speaking of bulls**t pieces, thank you Baby Jeebus for the Bulletin piece basically printing that this place is a deluded bunch of drug-addicts, by printing this quote from Sandy Henderson, new head of the perennial money-losing BendFilm: 'You know what, there’s got to be Prozac or something in the water, because everybody is happy.’
  
  It's called KOOL-AID Sandy, and it will soon render your mind whithered & useless...
  
  Take off the Beer Goggles, and Start ta Chewin'
  
  The Bulletin is a prime conspirator in Boss Hogg's little pump-n-dump scheme, but sadly it is too late for that, as the idiotic RiverWild "auction" proved.
  
  NO ONE is buying the Kool-Aid anymore.
  
  The ass-ugly imploding nature of Bend's RE market is clearly visible in high-relief for all to see, and no amount of bulls**t shoveled into the locals gullets will change that.
  
  They've done it a million times before to good effect, and the Bulletin still believes that we can "market our way out of anything", but obviously we cannot.
  
  IT IS OVER.
  
  Bends Mayor Arrested and Jailed For Embezzlement
  
  "The softness in our real estate markets has worsened in the past quarter, putting increased pressure on cash flows of developers and builders of new homes and subdivisions," said Patricia L. Moss, CEO.
  
  "While we are disappointed in reporting this action, we feel strongly that it is prudent to be assertive in recognizing the heightened risk in this segment of our loan portfolio."
  
  She added, "Despite the immediate cost of these steps, Cascade remains a solidly profitable and well-capitalized institution serving some of the best growth markets in the nation.
  
  I am confident that the long-term strength of our markets and our experienced management team will enable us to effectively navigate this downturn in the real estate cycle."
  
  You see Moss, despite being slapped upside the head with Reality, is still is bobbing for apples in the Kool-Aid vat.
  
  Extinct Species Found In Bend Oregon
  
  Local banks, that only months ago declared themselves fit as a fiddle financially & almost completely IMMUNE from the collapse... LIED. They were firmly planted in some Kool-Aid fueled hallucination where they were exempt from reality.
  
  The Cult of Bend
  
  You hold an auction, that gets press coverage FAR & WIDE, you actually get a hard-core contingent of buyers to show up, they actually BID on these s**thole, shoddy tubs of s**t you call "homes", and you say they are trying to STEAL THEM?
  
  This comes back to a point I've written about several times on here, despite it's unpopularity, the idea that Bend is a town that has been indoctrinated & brainwashed into thinking that WE ARE GOD'S CHOSEN PEOPLE.
  
  Not the "Jew Thing", but that as a town we are better than "The Rest". We deserve better. Hell, we deserve THE BEST, and by God, we'll wait until our dying day to get it.
  
  This is a mindset cultivated DAILY by ALL BEND MEDIA.
  
  EVERYTHING IS BETTER IN BEND. ESPECIALLY THE PEOPLE. AND IF WE ARE GREAT, SO ARE OUR HOMES, AND THUSLY THEY CANNOT & WILL NOT GO DOWN IN PRICE. PERIOD.
  
  Q1 2007 Numbers
  There's also the acknowledgment that Bend is 75% overvalued... BUT, there's also floated the idea that What Applies To The Rest Of The Country Does Not Apply To Bend.
  
  This is my Gods Chosen People thesis, an attitude reflected in Jonestown before they all killed themselves by pounding down a little Kool-Aid with an arsenic chaser.
  
  So, yes, I think I may have mentioned it once or twice, that the worst thing that could happen to this place was this carefully cultivated & continuously reinforced idea that Bend Is Better. I, and others on this blog, have repeatedly said that Bend Is Not Better.
  
  Bend is Not A Flint, MI. It's Not Cleveland. But neither is it Aspen.
  
  Bend is a regular place. With regular people. Regular, if not low-paying, jobs. Regular.
  
  But we were fed the Kool-Aid, and were made to think we were God's Chosen People, and what applied elsewhere, did not apply here.
  
  And the Boss Hogg's, like Hollern & Smith, as well as all of Bend media did all in their power to perpetuate this myth, that we are better, that we deserve The Best.
  
  And they accomplished this to fantastic effect. The Kool-Aid was drunk far & wide, and almost no one is immune.
  
  So why is Hollern turning on his own?
  
  He's turning on the very PR/Marketing Industrial Complex that he & other God Fathers of Bend helped establish. Why is he turning on COVA, Costa, the Bend Visitors Bureau, EDCO, Roger Lee, Alana Audette, and the vast hordes of minions that run this factory, all to the assumed benefit of him & others like him? Why?
  
  Because, as I suggested 2 years ago, it is Killing Bend. It's killing this town. It's killing Hollern. It's killing his business. It's killing everything.
  
  The Doctrine of Bend Exceptionalism is the worst man-made disaster that will ever afflict this town.
  
  And Hollern is 100% responsible.
  
  Well, that's not true. Costa is also responsible. The Incredible Hulce is responsible.
  
  No. That's not true. The Incredible Hulce is actually retarded, and cannot be held accountable for her actions.
  
  No, the blame lies with the vast hordes of Realtors, Hometown Newspaper Editors, RE developers, contractors, builder associations, and everyone else who lied to line their own pockets. And in this place, 2-3 years ago, that was almost everyone.
  
  But Hollern has seen the light. Maybe he's seen this blog, who knows. But Yarrow & Ironhorse have to be some pretty unmistakable thorns in his side, that Exceptionalism does Not Sell Houses. Not in a downturn. Exceptionalism actually grinds the gears of industry to a halt.
  
  Look at all the listings in Bend: Most are still Wildly Overpriced. Nothing is moving when credit goes away, and you then have to rely on local incomes to actually move product. And Bend has lousy incomes.
  Bend IS Exceptional!
  
  Look at these 2 graphs of national housing stats, and you see that Bend is exceptional: We are still Wildly Overvalued.
  
  Nationally, prices have fallen back to 120 months of rent. I know that most Eastside Bend STD's are still well above 200X rent!
  
  Nationally, prices have fallen to 3.2X median incomes. Even after the incredible 40+% plunge in local medians, homes in Bend are still almost 4X median family incomes, a level that was just barely hit nationally at the absolute top of the housing bubble.
  
  In Bend, we'll probably fall back to 80-100X rent for homes. That means medians on the Eastside may go below $100K.
  
  If we go back to 2.4X median family income, and incomes remain constant (a fairly dubious assumption), then Bend medians will fall to around $140K.
  
  The End of an Era. The End of Exceptionalism.
  
  To that end, here are the hard numbers:
  
  National recession takes its toll locally
  
  Some parts of the regional economy are stabilizing; others are not
  
  By Jeff McDonald / The Bulletin
  Published: February 22. 2009 4:00AM PST
  
  Central Oregon’s economy took a severe hit from the national economic collapse in the fourth quarter of 2008, and as it moves forward there is no single remedy for recovery, according to a University of Oregon economist who authors a quarterly business index for The Bulletin.
  
  The national recession hit Central Oregon in the form of skyrocketing unemployment claims, continued weakness in housing and depressed visitor activity, said Timothy Duy, adjunct professor of economics who authors the Central Oregon Business Index.
  
  The index provides a seasonally adjusted look at the region’s economy based on nine economic variables, including Deschutes County building permits and Central Oregon housing units sold, Bend lodging tax revenue and unemployment claims.
  
  The index dropped to 145, down 1.8 percent from the previous quarter and 7.2 percent from the same quarter in 2007, according to the report. It is the fifth consecutive quarter the index has declined.
  
  The trajectory of the index, rather than its numeric value, is more important for understanding the health of the economy, Duy said.
  
  Already, the last five quarters are showing a steeper decline than the recession at the beginning of the decade, he said.
  
  The index weighs data from Central Oregon’s economy dating back to 1997. “Some things are stabilizing because they couldn’t get any worse,” Duy said.
  
  “But I don’t think the employment outlook is stabilizing. I don’t think the forces of the national picture are stabilizing. I don’t think foreclosures are stabilizing.”
  
  Tourism and the region’s employment were especially hard hit in the fourth quarter, bringing home to Central Oregon a national economic crisis that froze credit and tightened consumer spending.
  
  Lodging revenues, adjusted for inflation, contracted to levels last seen in 2004, Duy said. Home sales appear to have stabilized at around the 200-homes-sold-per-month mark with 183 homes sold in Deschutes County on a monthly, seasonally adjusted basis during the quarter.
  
  By comparison, there were roughly 250 monthly sales in the preboom era and a bubble high of 560 monthly sales in second and third quarter 2005, according to the report. Building permits remained depressed.
  
  A monthly average of 56 permits were issued during the quarter, according to the data. “If you are an economy that is geared to build 600 homes per month and you are only building 50, you are essentially at zero,” Duy said.
  
  On a brighter note, median days on the market declined significantly, likely a result of falling housing prices, he said.
  
  “There is some evidence that home sales have stabilized at relatively low levels,” he said. “This suggests the possibility that some bottoming is occurring.
  
  However, the reason that home sales are stabilizing is that prices are coming down to realistic levels.”
  
  Also clouding Central Oregon’s economy was an increasingly bleak jobs picture.
  
  Deschutes, Crook and Jefferson counties posted monthly unemployment rates that were among the state’s highest in the fourth quarter.
  
  Deschutes, Jefferson and Crook counties reported 11.3 percent, 13.3 percent and 14 percent unemployment, respectively, in December, according to the Oregon Employment Department.
  
  Unemployment claims for Deschutes County shot up to a seasonally adjusted average of 4,133 per month in the fourth quarter from 3,032 in the third quarter, according to Duy’s data.
  
  Nonfarm payrolls, meanwhile, remained steady, which is unlikely to continue in the first quarter of 2009 due to the high number of jobless claims, Duy said.
  
  Duy’s report was completed before revised data was released earlier this month by the Oregon Employment Department that showed a much gloomier picture of job growth in the region.
  
  In previous reports, Deschutes County’s employment picture remained soft, with 0.9 percent job growth in 2008. But the revised data posted Feb. 12 on the agency’s Web site, www.qualityinfo.org, showed a 3.9 percent job loss in the county and monthly job losses dating back to December 2007, said Stephen Williams, the region’s economist and a Salem-based usability analyst for the Employment Department.
  
  December 2007 marked the official start of the recession, according to the National Bureau of Economic Research.
  
  Almost every industry in the county lost jobs in 2008, Williams said. “It shows the picture that people are feeling,” Williams said.
  
  “This finally reflects the sense of what’s going on in the community.”
  
  Construction was hardest hit in the county, losing 2,000 jobs in 2008.
  
  The job losses brought the county’s construction employment down 25 percent, or down to 6,070 jobs, about equal with its 2004 numbers, Williams said.
  
  Manufacturing lost 240, or 9.6 percent of its jobs, in 2008, while professional and business services lost 300 jobs, or 3.9 percent.
  
  The only sectors to gain jobs were education and health services, leisure and hospitality, and government, Williams said.
  
  The new data was “astonishing,” said Roger Lee, executive director of Economic Development for Central Oregon, which promotes business recruitment and retention.
  
  He was skeptical about the state’s employment data, which changed from only one month of job declines in 2008 to every month showing job declines back to December 2007.
  
  “When you go from modestly positive numbers to fairly severe ones, that’s a shock,” said Lee, who called the fourth-quarter economic collapse “historic” in its scope.
  
  “It came down to the collapse of the credit markets, which trickled down locally to the aircraft industry,” he said, referring to layoffs locally at Cessna Aircraft Co. , which started to take effect in January.
  
  “We had been projecting growth for 2009. But all of a sudden the credit crunch came along and Wall Street had its issues.
  
  People did not feel nearly as wealthy as they once did.
  
  Overall, the wealth of the nation has taken a … dive.”
  
  Lee predicted a slow recovery, contingent upon a revival of the credit markets. “2009 is going to be largely a contractionary year,” he said. “But I think the region will start to emerge in 2010.”
  
  Duy was not surprised by the revised data, saying job losses would be reflected in declining payrolls in the next index.
  
  The region’s economy will stabilize with small increases of activity across multiple industries, he said. “There is no magic bullet for the region’s recovery.”
  
  December was an “absolutely brutal month” for Central Oregon tourism, said Alana Audette, president and CEO of Central Oregon Visitors Association, which promotes tourism for the region.
  
  Room-tax collections for the city of Bend and Deschutes County dropped 28.6 percent and 18.6 percent, respectively.
  
  It was a wake-up call for the industry, which expected bad but got much worse, Audette said.
  
  “We were doing OK and it’s not that we didn’t see it coming,” she said. “But December was the month where we learned that weather plays a tremendous role in our success as a visitor destination. The state was seeing a lot of layoffs, and combine that with brutal weather conditions … that made accessing our destination very difficult.”
  
  Realtors are hopeful the region hit bottom in the fourth quarter.
  
  2008 was a painful year for the region’s Realtors, builders and mortgage professionals and has resulted in a thinning of the ranks of real estate brokers, said Wendy Adkisson, principal broker with The Garner Group Realtors and Development LLC, in Bend.
  
  Adkisson is on the Central Oregon Association of Realtors board.
  
  The number of licensed Realtors in Central Oregon dropped from about 2,129 in January 2008 to 1,477 on Feb. 19, a 30.6 percent decline, according to Central Oregon Association of Realtors.
  
  Those brokers who are still active are seeing sales pick up as prices decline.
  
  The first quarter of 2009 is on pace to match the first quarter of 2008 in sales, Adkisson said. “We’re just excited to be even.”
  
  Median sales prices, which were $396,000 in Bend in May 2007, have fallen to $227,500 in the first 1½ months of 2009, according to data from the Central Oregon Association of Realtors. That’s a decline of 42.5 percent.
  
  “The truth is we have taken a huge hit from our highest price point,” she said. “I wouldn’t want to swear that we are at the bottom, but I think we’re at a trough.”
  
  At least half the 2009 sales have either been short sales, in which a home is sold for less than the amount owed on it, or sales of bank-owned property, Adkisson said.
  
  “We’re down inventory-wise because for the most part we’ve got sellers who are realistic about where they need to be if they want to sell,” she said.
  
  “You can buy a nice house for $150,000. That may be a blessing for all of us.”
  
  After the downturn, Central Oregon — and the rest of the country — will emerge looking very different, Duy said.
  
  “There is a tendency for people to think that their boom was somehow unique, but the growth that occurred the last five to six years was fueled by credit intertwined with an asset bubble,” Duy said.
  
  “We’re moving to the other side of that. You have to think what the world’s going to look like in the absence of that credit growth. Even when you get to the other side of this, you won’t have the factors that were responsible for this surge in consumer spending.”
  
  Jeff McDonald can be reached at 541-383-0323 or at jmcdonald@bendbulletin.com.
  
  The End of an Era
  
  Pretty bleak.
  
  But what's funny, is you can still smell a whiff of hope there. A whiff of, "We'll be back to bubble times again, if we just believe!"
  
  Of course that's ludicrous. And Duy, for once, hit's the nail on the head in his final sentence: We're in uncharted waters here. Bend has Never, in modern history, faced an economic climate like it does now.
  
  You can see why Hollern sees Bend Exceptionalism as the New Enemy. Exceptionalism doesn't sell houses. Exceptionalism doesn't sell anything. We're looking at the complete destruction & meltdown of this place, and The Doctrine of Bend Exceptionalism (ie Drinking The Kool Aid, We Are God's Chosen People) is the root primary cause.
  
  RIP: The Doctrine of Bend Exceptionalism.
  
  OK, some final ideas. I find myself over at Jesse Felders My Back Pages blog fairly often, and I think it's fair to say that he is Up on the stock market.
  
  And maybe for good reason. For the First Time In Modern History, the DJIA is DOWN over 50% from it's peak. We came close in the 70's. But I don't think we made it to -50%.
  
  Even some unquestioned dogma is starting to look shaky:
  
  A Bigger Bargain Than Buffett Bought
  
  One of the complaints people made about Warren Buffett's investments in financial companies last year was that regular investors weren't able to secure similar terms for their own portfolios.
  
  In 2008, Buffett invested in companies like Goldman Sachs and General Electric receiving preferred stock that pays a dividend of 10% and warrants to purchase common stock at a set price. Well those people should take a second look. Right now, regular investors can secure terms even better than the Oracle of Omaha.
  
  GE common stock currently trades at a 50% discount to the strike price on Buffett's warrants AND currently pays a dividend yield significantly greater than 10% (this may be reduced in the near future, however, to help maintain GE's AAA credit rating).
  
  People are starting to question Buffett and whether he's lost his touch.
  
  People are starting to question "Buy & Hold" as a philosophy.
  
  This only happens after severe losses. And it has ALWAYS been a Great Harbinger of a Time To Buy.
  
  And I largely agree with Jesse on a lot of points, and I actually do think that stocks can & will represent value someday.
  
  But I'm starting to wonder just how long that will be. I think I'm a lot like Felder, in that I and much of the Vast Contrarian Stock Buying Contingent in this country, people that think they're smarter than the herd, just may have it wrong. Terribly Wrong.
  
  I know I have. My IRA is a shriveling prune of investment crap at this point. And I bought well off the highs.
  
  I think we're looking at our Black Swan moment. The time when we say It's Different, and unlike the past 20X when the herd all said this, this time it actually IS DIFFERENT.
  
  Look at Japan. After topping out near 40K, the Nikkei today sits near 7,400, or down 81%.
  
  Sometimes IT IS DIFFERENT. Sometimes Buy On The Dip is a TERRIBLE IDEA. Even when it's a historic dip. Even when it's a down 50% dip. Buying the Nikkei at 20K, 50% off the top, would have been buying a historic dip... and a TERRIBLE IDEA.
  
  I'm wondering if my own predilection to buy in the DJIA 5,000's will be usher in yet another round of punishment. Because I agree with Felder: When compared to historical markers of value, the US Stock Market is plumbing historic lows.
  
  But that's exactly the nature of Black Swan events: They blow away historic expectation. They're something you've never seen before.
  
  And I've said it before: This will end worse than anyone thought possible, even me.
  
  OK, I'll leave it on an Up Note, as always!
  I believe in Exceptionalism!
  
• February 15, 2009
• 6:46

  Barack "100 cents on the Dollar" Obama Will Save Us All

   » ‎ Bend Bubble 2

  Tags:  the Cult of Bend   [edit]

  Sometimes it's good to remember how something Bad Got Started, so you can figure out how to stop it.
  
  At some point, back in the 70's (80's?, 60's?), we started getting little applications in the mail. It was actually the norm to have only one credit card way back when, like it was the norm to have 1 TV or 1 car or 1 house.
  
  Then people started applying for another. And things still seemed OK. You could get more stuff, and paying 3% on 2 cards with $1,000/ea was not the end of the World. It was actually nice, you didn't have such a rigid connection between earning & spending. People could bridge the gap on the odd occasion when they actually lost their job.
  
  But saving became a little less important. And there was this strange creeping feeling that we weren't spending real money. I got my first credit card when I was fairly young, and I certainly remember that feeling.
  
  Pretty soon though, the urge to save pretty much went away. The urge to spend increased with each new application filled out, and new plastic arriving in the mail became something of an expected ritual. In fact, those applications started to feel like income.
  
  And things NEVER got worse because of this. People seemed happier. In fact a whole generation of people base their happiness on consumption. They don't even know it. I'll show an illustration in a bit.
  
  So things seemed to get eternally better. More jobs. More income. More stuff. Every indulgence indulged, every craving sated.
  
  Then, round about 5-10 years ago this credit-fueled industrial complex began engaging in some practices that seemed great, but they ultimately sowed the seeds of economic destruction:
  
  

  • We started putting unqualified borrowers in homes.
  • We started accepting nothing down on a home.
  • We started lying to put them in a home.

  
  See, we did this with those credit card app's, right? Sure! Who hasn't hit hard times, got a CC app, and lied to get one, and bridge the gap? Or, maybe you just wanted another card, because you could get money at near 0%, and if you inflated your income, you'll be eligible for a buttload of extra cards, right? And the credit card companies NEVER CHECKED!
  
  It was become standard issue to LIE on credit applications. So when they began Securitizing Mortgage Loans, it became OK TO LIE. Why not? They were going to sell the loan to someone, who was going to sell it again, ad nauseum. And this scheme was working out great! Everyone got a little slice of the action, and foreclosures, price declines, joblessness, and other such nasties had Never Been A Problem Before.
  
  So we had historical evidence on our side. We had a booming economy on our side. We had rock-bottom defaults validating these practices. Everything was peachy.
  
  So what did we have, circa 2005-2006? We had an incredible over-abundance of homes. An overabundance of cars. Overabundance of clothing, computers, food, carpet, factories, businesses. An over-abundance of JOBS. Yes. Most of the jobs created in the 5-10 years prior to The Boom, are artificial. They really are not meant to be.
  
  The credit was not meant to be. The consuming was not meant to be. So the jobs & businesses behind them are not meant to be. We've had quite artificially low unemployment for a good decade. Go to Wal-Mart: Look at the troglodytes working & shopping there; those people should be kept in trailer parks, away from the rest of humanity.
  
  And Yes,I went there yesterday. And on a Sat afternoon, I have never seen the parking lot so empty. EVER.
  
  So lots of the stuff lying around you right now, is probably from a place whose existence is predicated on demand about 30% higher than it is right now.
  
  So the upshot is that demand & spending need to crash for equilibrium to be reached. Unemployment goes way up. Lots of factories shut down. Demand just goes away, and simple economics of supply & demand reassert themselves, and prices fall.
  
  As I said Long Long Ago: The only way to pay off debts is to sell stuff or make more money.
  
  The "make more money" option is being lost at a clip of about 50,000 jobs/day. That leaves Selling Stuff.
  
  Selling houses. Selling toys. Selling cars. Selling computers. Selling everything. And not just re-selling house, or re-selling computers: Builders have crushing debts & need to build & sell more homes. Dell has factory capacity that costs them when idle. Airlines. Flea markets. Garage sales. GM. Banks. Home sellers. All have product that must go.
  
  We have a FLOOD of stuff from ALL CORNERS... and no one can buy it.
  
  So along comes The Stimulus Package. That'll set it right... right?
  
  Well, the first slug of the bank bailout billions is out there, and guess what? The Banks Are Not Loaning. Gee, I wonder Why?
  
  Oh....right, right, right, right, right. Cuz they have TRILLIONS in bad loans on their books. Now they can do one of a few things.
  
  They can go into the Free Market and SELL THESE LOANS, and realize essentially that they are insolvent. The banking system in the USA is technically INSOLVENT RIGHT NOW. If they realized the losses, the CEO-pay gravy train is over & Disgraced Idiot Era begins. Is it any wonder they are not doing this?
  
  And really, why do this, when Obama, Our Lord & Savior, Has Promised that he'll Make It Right.
  Father Barack "100 Cents on the Dollar" Obama
  This brings up Option 2: Wait to be bailed out. Wait for TARP money that you can stick in the vault. Don't even have to worry about bad loans, or realizing the losses, cuz Barack gonna make it all all right.
  
  "We gonna get that TARP money!"
  
  So the bailout, and it's promise of making us all whole again, has actually exacerbated & prolonged the problem. Every bank in the country is waiting to accept & BANK their piece of the trillions. Ain't gonna lend it, that's for damn sure. Fool me once...
  
  So we are caught in a deflationary spiral. Lots of people are looking out the Side Window, and telling us, "NO! We're Not In A Depression! Now Deflation seems to precede, cause & exacerbate a Depression, but we ain't in a Depression. Look. Out the side window. We're just in a rapidly deteriorating Deflation. There's really No Way To Know what lies ahead. Sure, about 99.9999999% of the time, deflation leads to Implosion, but we can't be sure! So all we can really do is Hope For The Best. And plan for the best. And start that new handbag store, despite the complete failure of the last one".
  
  Stock slaughter
  
  For equities, a sustained period of deflation is widely seen as a disaster By Alistair Barr, MarketWatch
  
  SAN FRANCISCO (MarketWatch) -- As 2009 began, U.S. dairy farmers slaughtered more than 70,000 cows in one week to fight slumping prices.
  
  Herds are being culled at the fastest rate in almost two decades as the recession withers away consumers' demand for everything from frothy cappuccinos at Starbucks.
  
  In January alone, milk and cheese prices plunged by at least one-third. Similarly painful adjustments are playing out around the world as companies try to slash production and cut jobs in the face of falling demand and waning pricing power.
  
  The problem is that, as more companies hunker down, demand may weaken further, spurring another wave of downward pressure on prices that would usher in a prolonged period of deflation.
  
  "The combination of credit-crunch deflation and recession is forcing companies to conserve cash by firing workers and slashing capital spending," said investment strategist Ed Yardeni. "That should work for one company, but when they all do it, it just exacerbates the situation by cutting demand all over again."
  
  Many investors believe that a lengthy bout of deflation is unlikely.
  
  But if consumer prices do indeed fall for a long time, the result is likely to be a disaster for much of the stock market, investment professionals say.
  
  Investors could minimize their losses in stocks -- and maybe even capitalize a little on the situation -- by paring their portfolios of the most vulnerable assets while steering toward sectors that are more resilient to a deflation wave.
  
  Companies that may suffer less include those with costs that fall more than the price of their products, such as Dean Foods, and firms that help consumers save money, like Wal-Mart Stores and McDonald's Corp. But many sectors including banks, metals companies, retailers and manufacturers would likely be crushed by sustained deflation. "Sometimes an entire asset class is not a good idea," said Kevin Harrington, chief economist at San Francisco-based Clarium Capital.
  
  Clarium, which runs a $2.24 billion global macro hedge fund, is avoiding stocks, while betting on gains in the U.S. dollar, which Harrington describes as "implicitly a deflationary trade."
  
  No global macro hedge funds were bullish on U.S. equities, according to a survey in early February by consulting firm Greenwich Associates.
  
  That was down from 46% in January and 62% in December. The lowest level of interest in U.S. stocks before that was 8% in October 2007, just before the Standard & Poor's 500 index began a 45% slump.
  
  "It's not a question of if. Deflation is upon us," said John Brynjolfsson, chief investment officer at Armored Wolf LLC, a global macro hedge fund in Aliso Viejo, Calif. "It's a question of how bad it will get."
  
  Steven Bell, a former Deutsche Bank economist who runs a global macro hedge fund at London-based GLC Ltd., has been betting against, European and Japanese stocks, while buying two-year German government bonds.
  
  "Deflation is a serious threat," he said. "You have to say that all companies would lose in such an environment, but some would lose less than others."
  
  In contrast to equities, deflation typically boosts long-term government bonds because their fixed payments become more valuable as the price of goods and services fall. See feature on deflation and the bond market.
  
  Japan
  
  When Japan suffered its most severe bout of deflation, from October 2000 through January 2003, only one sector of the nation's stock market -- electric power and gas shares -- posted gains, according to Morgan Stanley.
  
  Shares of non-ferrous metals producers, communications, banks and services companies dropped more than 60% during the period. And there's a worrying difference between Japan's experience and the current predicament of the U.S.: The Japanese had lots of savings when the country descended into its deflationary recession, but U.S. consumers are now mired in debt.
  
  "The societal effects were not nearly as dramatic as we're experiencing now in the U.S.," said Brian McAuley, chief investment officer at Sitka Pacific Capital Management LLC. "People had much more to fall back on in Japan, while our consumption is falling dramatically."
  
  McAuley is investing in gold and gold mining companies, while keeping his clients' equity exposure at zero.
  
  He's expecting more stock market losses, with the Standard & Poor's 500 index possibly falling to 650 points, more than 20% below current levels.
  
  Deflation scare trades
  
  Morgan Stanley strategist Ronan Carr recently advised investors to keep most of their money in cash and gold. Gold is usually considered a good hedge against inflation, rather than deflation.
  
  However, Carr said the precious metal would likely provide protection in either scenario. Banks should be avoided, partly because deflation increases borrowers' debt in real terms, making it harder for them to repay loans, Carr explained.
  
  Bank stocks in Japan slumped 91% during its long fight with deflation and slumping real estate, according to Goldman Sachs. The KBW Bank Index, which tracks the largest U.S. banks, has dropped roughly 77% since the housing bust began two years ago.
  
  That suggests, in a worst-case scenario, U.S bank shares have another 60% to fall, Goldman analysts warned this week.
  
  Mining companies carrying lots of debt, such as Xstrata , may also be losers because the real value of their interest payments would rise while the prices they can charge for the metals they produce falls, Carr said.
  
  Other so-called cyclical stocks, such as carmakers, should also be avoided, he added. Relative winners include companies that generate strong cash flow and have little debt.
  
  Industries that have pricing power and are protected from new competition could also survive better. Tobacco companies, drug makers and property and casualty insurers fit those criteria, Carr says.
  
  Already declining
  
  While debate swirls over whether deflation or inflation will emerge over the long term, prices are already falling in the U.S.
  
  The consumer price index fell 1% in October, the most since the Bureau of Labor Statistics began publishing seasonally adjusted prices in 1947. The CPI slumped 1.7% in November, another record, and 0.7% in December.
  
  Morgan Stanley estimates that by July, U.S. consumer prices will have fallen 3% from a year earlier.
  
  Merrill Lynch sees the CPI down by the same amount by the third quarter. Once falling prices form a trend, it's difficult to reverse, partly because consumers are encouraged to save rather than buy.
  
  That dents demand and sales, potentially inflating companies' inventories and triggering more discounts. "
  
  Potential buyers realize that they can negotiate even lower prices simply by waiting," Brynjolfsson said.
  
  Fixed debt payments get larger in real terms, which means any credit problems impacting the financial system only get worse, he added.
  
  The auto industry has already been buffeted by deflationary winds. Most new car purchases are at least partly paid for with loans.
  
  The transaction results in two costs for consumers -- the extra money for the loan and the impact of an asset that begins to lose value the moment it's driven off the lot.
  
  But in a period of deflation, the cost of the loan increases because the debt payments rise in real terms.
  
  The result has been a plunge in new car sales which has pushed U.S. automakers General Motors, Chrysler and maybe even Ford to the brink of bankruptcy.
  
  One carmaker, South Korea's Hyundai, is trying to tackle the problem by letting buyers return vehicles, at no cost in most cases and with no dent on their credit rating, if they lose their job or income within a year.
  
  "That's a direct response to the deflationary psyche of buyers," Brynjolfsson said. Cutting capacity Airlines performed relatively well last year when their costs fell as oil prices slumped. However, demand for flights started dropping too, pushing ticket prices down 11% from their August high, according to Yardeni Research. "
  
  Airlines benefit when oil prices decline, but they lose if conditions are such that no investment bankers are flying to see their clients," GLC's Bell said. "Space in first class and business class has been dramatically reduced."
  
  Bell was speaking from Kuwait, an oil-rich country which only a year ago was dogged by inflation concerns. "January is usually very busy, but the Middle East is much quieter this year," he said.
  
  "The hotels are empty and flights are not full." The parent companies of American Airlines and United Airlines said in January that they would cut capacity further this year to try to halt the decline in airfares.
  
  The retail sector has been particularly hard hit as slumping demand forced many companies to slash prices to whittle down ballooning inventories.
  
  Costco Wholesale Corp., one of the world's largest retailers, sent a shudder through the industry in early February when it issued a big profit warning.
  
  The company said it cut prices aggressively to drive sales, but that took a chunk out of margins. Eggs and butter prices were chopped 10% to 20% and milk prices were slashed more than 20%, Chief Financial Officer Richard Galanti said. "
  
  Arguably, a good chunk of that is short-term, as long as we don't live in a recession forever and as long as we don't see huge deflation," he added, during a conference call with analysts. Even luxury retailers have slashed prices.
  
  Saks Inc. cut designer-clothes prices by 70% before the holiday shopping season. Still, the department store operator reported a 24% slump in January sales, partly because shoppers continued to buy sale items, rather than regular-priced merchandise.
  
  "What the sector will have a tough time doing is returning to full-priced business," said Brian Sozzi, an analyst at Wall Street Strategies.
  
  "Consumers are now trained to expect discounts." Nuts and chips Other companies traditionally considered resilient in recessions have also been hit by deflationary troubles recently.
  
  Kraft Foods, the world's No. 2 food maker, reported a 72% drop in fourth-quarter profit as it struggled to deal with declining food prices.
  
  In January, Kraft was forced to cut prices on its Planters nut snacks after it lost market share. When Kraft raised prices last fall, its rivals didn't.
  
  Technology companies are used to falling prices, but the recent drop in chip prices has been so severe that several companies have suffered.
  
  The price of DRAM, a memory chip commonly used in personal computers, slumped 77% from May to December last year. NAND flash chips, used in cell phones and digital cameras, have fallen 62% in price during the same period, according to iSuppli.
  
  Shares of Micron Technologies, a leading DRAM supplier, dropped 64% last year, while SanDisk, one of the largest NAND flash makers, slumped 71%. Qimonda AG, a big German DRAM maker, went bust in January.
  
  Possible winners
  
  Some companies may benefit from deflation if their costs fall faster than the price of the products they sell. Take Dean Foods.
  
  The company buys milk from dairy farmers then processes it, distributes it in refrigerated diesel trucks and sells it to grocery stores and other food retailers. The recent drop in milk prices and a slump in diesel in the past year have cut Dean's costs dramatically.
  
  That's made up for declines in the price of the dairy products it sells, improving profit. As recently as Wednesday, Dean Foods said that fourth-quarter profit more than doubled and issued a bright forecast for 2009.
  
  Other companies that offer consumers ways to save money may also avoid some of the damaging effects of deflation. Sitka's McAuley said Wal-Mart may benefit as shoppers become thriftier.
  
  Meanwhile, fast-food giant McDonald's has remained resilient in recent months. "Companies that provide consumers with the opportunity to save some money and still get fairly good service and products may do OK," Yardeni said.
  
  Even so, Yardeni and McAuley warn, if deflation lingers for a long time, there would be few such examples for investors to consider.
  
  So deflation, and it's attendant terrible side-effects, is here. Prices, demand, and jobs simply go into a self-reinforcing cycle of decline. Easily illustrated by Japan's economic conditions for almost the last 2 decades. Generation Lost.
  
  Japan's reaction was to hope against hope. Still is. Banks STILL hold trillions in NPA over there. They are entering their 3rd decade of Asset Denial. They won't sell or re-price, or otherwise realize these loan losses, as the corporation would cease to exist. The Overhang Continues.
  
  So what are we doing? Surely we aren't following Japan's Bad Example, right?
  
  Ohhhhh, we surely are. Everything possible is being done to avoid realizing losses. Everything possible is being done make it to Barack's Promised Land, where TARP, and other bailout funds flow like water. Everything possible being done to Ride It Out, wait for the bailout some we can bank the money, wait for The Bad Bank to take All Our Bad Loans. Every bank in America made whole again.
  
  Maybe. It's possible. We can certainly print the money.
  
  But The Losses Will Be Recognized. At some Point. By Someone. And that someone is taxpayers. Which seems OK, since it's just us chickens. We made the mess, we'll fix it, we'll be fine.
  
  Actually, this is true in some respects. But what is Really Happening, is that the wealth of this country is being reallocated.
  
  All the banks with bad loans are having their negative net worth made whole.
  
  All the people with foreclosures, are being made whole.
  
  Trillions are being expended to do so. And we are all going to pay. Even those who had NOTHING WHATEVER TO DO WITH CREATING THE PROBLEM.
  
  The Responsible are bailing out the irresponsible. The Good bail out the Bad. The winners are being made to lose.
  
  Did you buy 6 houses by LYING on your mortgage applications at the top of the Bubble mega-froth? Lucky me, I am going to bail you out, because I chose to rent, and not lie, and live within my means.
  
  Citigroup and J.P. Morgan suspend foreclosures
  
  Obama to provide more details about foreclosure prevention plan in Arizona
  
  WASHINGTON (MarketWatch) -- Citigroup Inc. and J.P. Morgan Chase & Co. on Friday announced that they would temporarily suspend foreclosures, as Washington's debate continued about how to save the U.S. economy and moribund housing market.
  
  In a letter to House Financial Services Committee Chairman Barney Frank, D-Mass, J.P. Morgan Chief Executive Jamie Dimon said that he would set up a three-week moratorium on foreclosures.
  
  Citigroup, in its own statement, said that it would suspend foreclosures until the Treasury plan is finalized. The announcements by Citigroup and J.P. Morgan come as President Obama prepares to announce more details about his plan to stem home foreclosures in an address on Wednesday in Phoenix, Arizona, according to White House press secretary Robert Gibbs.
  
  The Arizona housing industry has been pounded by the slow economy and the state is now seeing some of the highest foreclosures rates in the country.
  
  The Treasury plans to use $50 billion of the remaining $350 billion in bank-bailout funds for some form of foreclosure-mitigation program, but it has yet to produce details on the subject.
  
  The goal of the program, which is part of a $1.5 trillion financial rescue program, is to help troubled homeowners avoid defaulting on their loans.
  
  The Obama administration is working on a program that would subsidize mortgage payments for troubled homeowners subject to an affordability test, according to reports.
  
  This approach would be different from other assistance programs, because borrowers would go through a standard eligibility test and could be approved before their mortgage becomes delinquent.
  
  Citigroup and J.P. Morgan are responding to a request from Frank, who pressed bankers on Wednesday to voluntarily set up a moratorium on foreclosures until the Treasury Department has put in place a plan to alter mortgages.
  
  In addition to Frank, the Office of Thrift Supervision asked the federal and many state-chartered thrift institutions it regulates to stop foreclosures on owner-occupied homes until the new plan is finalized in the next few weeks.
  
  Frank, in a meeting with reporters on Wednesday, said he expects that more than 90% of banks will halt foreclosures until the program is up and running.
  
  He declined to provide details of what kind of plan he would like to see take place, but he said some principal write-down for troubled borrowers would be a key part of it.
  
  A Treasury staffer said Tuesday that the program could resemble a proposal introduced by Federal Deposit Insurance Chairwoman Sheila Bair that would use funds from the bailout package in a program to help avoid foreclosures.
  
  It is a loss-sharing program between mortgage servicers or investors and the FDIC and deals with loans that fail six months or longer after being modified.
  
  See? Everyone waiting. Everyone going to get bailed out.
  
  In the end, it's so tragic, you just have to laugh. I am, at some point, going to pay higher taxes for the STD's built on the Eastside. I will pay so that mortgage app liars will be bailed out of the lies. I will pay to artificially somehow keep housing prices high, so that I cannot afford one. I will pay for being honest and living within my means.
  
  I made a bad choice.
  
  I'll learn next time. I want my bailout money. I want money re-allocated TO ME, not AWAY FROM ME. I will be irresponsible. I'll lie. I will f**k you over to get mine.
  
  This is a great country.
  
  OK, I said earlier I would end with an illustration of almost ridiculous self-indulgence. It comes from the owners of Pomegranate, the failed downtown crap-O-torium. This woman is still blogging, and still just oblivious as s**t to the World around her. Check this out:
  
  End of a dream (or two or three)
  
  I miss Merenda. We would have gone there a few weeks ago after closing the doors on our own downtown shop for the last time. Instead, we went home and made a nice little dinner, sat in our pjs, and drank some champagne... to soothe our souls.
  
  Truth is, we hardly ever (never) go out to dinner anymore, which makes us part of the problem for restaurants. It's endemic, this economic situation. Call it trickle down (too lite), ripple effect (better) or smashing tidal wave (apt), but it has affected everyone in one way or another.
  
  When I lived in San Francisco some time ago (and please, no one needs to send an anonymous comment about Califungos [sic: Cali-Bangers]) I used to frequent the wonderful Farmer's Market at Ferry Plaza, just like I frequent our wonderful Farmer's Market at Mirror Pond here in Bend.
  
  Back then, the Ferry building wasn't yet refurbished into the foodie heaven it is now, but once a month or so, local restaurants would set up tented booths and cook up a storm for shoppers. At that time, Jody Denton owned Lulu's (south of Market area), one of the restaurants represented at the market. I didn't know him then, but clearly remember standing in line for a soft shell crab sandwich, and going crazy over the amazing taste and texture of it. A bunch of people around me announced (to no one in particular) that it was so good they were getting back in line to get another one.
  
  Sometimes a meal is memorable like that, even if it's eaten standing up in a converted parking lot with seagulls and pigeons swooping around, hoping for a bite. We were happy when Merenda opened. It was hugely ambitious, and all the buzz about how it could sustain itself seemed to dissipate when year after year, it just kept succeeding.
  
  Until the financial crash. I really liked going there, and maybe this post is more about post-mortem support than anything else, but some of the blog posts I've read bothered me in their analysis of why they went down.
  
  Truth is, everyone has a different experience at different restaurants, and some of it depends on the day, time of day, mood of the servers, who's cooking, and who's sitting next to you. There are lots of good restaurants here, and you'll get a different critique of them from everyone you talk to. And no observer will really know the details of why a restaurant – or any business – falls apart.
  
  All I know is the restaurant business has to be a crazy scary venture: more intense and problematic and potentially disastrous than anything you can do in retail. I'm glad another group is giving it a go: the space is fabulous and, I think, the anchor of downtown. It's good that some of the Merenda employees are going to get their jobs back.
  
  And I'm glad that Jody has another job lined up in Sydney. But I'm very sad that they had to go bankrupt in the process. No one wants to see that for a young family. Or anybody. We were there on their last night, and I shed a few tears as we left (oh yeah, lots of raw emotion these last few months).
  
  Jody and Michelle are sure to land on their feet again, and the restaurant will reincarnate itself (empty spaces downtown will get filled: it will just be different).
  
  It just hit me as the end of a dream, a vision. Not just theirs, but ours as well (knowing we'd be soon closing our downtown location), and soon, others. This is what I crave right now: that lemon rotisserie chicken. Maybe with an indulgent side of tempura green beans, followed up with an order of insanely delicious beignets. Call the medics.
  
  I mean, this gal sounds like she's very nice. But, if you read this post closely, and in the context of someone who has just Closed Down A Failed Luxury Handbag Shop, you just have to wonder What The F**k Is She Thinking?
  
  She even has the barest self-awareness to know that Cali-Bangers are the most LOATHED species on Earth. But even so, she almost defines Happiness by the Quality of Her Consumption. I almost feel bad for this person. How many authentic moments has she had in her life? I mean she describes herself as a "Shopping Monkey" on her blog.
  
  It's actually just sad. And still, she is probably almost broke, and all she can do is reminisce about consuming. And you see this as a common thread in almost everything listed on BendBlogs.com. 95% of all posts are of an almost completely selfish nature: "Why I like/eat/do/dislike/buy/avoid/think about 'X'".
  
  Well, I better wrap this up, so hbm can take a nappy pie.
  I love deflation! My back is killing me!
  
• February 08, 2009
• 5:34

  Outrage Exhaustion

   » ‎ Bend Bubble 2

  Tags:    [edit]

  I think Dunc used the phrase "Outrage Exhaustion" a few weeks back in the comments to describe the nature of the comments. He just had an entry on Pegasus that there were only 200+ comments over here. I guess I think that's a little funny; I don't know of any local blogs that get that many, but c'est la vie.
  
  But that's probably how this thing will end, especially locally. With a whimper, not a scream.
  
  People will just slowly mentally succumb to this thing. All the Merenda replacing will have failed. The hottest spot in the hottest town in the West will just be laughable. That Subway will probably hold on by it's fingernails, maybe. But the hoity-toity stuff will all go down hard, and finally no one will step up to replace it.
  
  I even think the Old Mill will suffer a long-term erosion. Some big anchors will close. The Money Losing Trophy Property (MoLo TroPro) concept will die a certain death, and that's much of what's there. I can't see REI staying. Greg's Grill gone. Yumm Cafe, Alisons Kitchen, Community Flatbread... all gone.
  
  And there are no jobs here. The nationwide unemployment rate came out this week at 7.6%. As recently as September, we were at 6.0% nationwide, and it appeared things were stabilizing.
  
  No more. This is a statistic that hardly moves one way or another more than .2% in any given month. It's gone up an average of .5% for the last 3 months. Doesn't sound like much, but I haven't seen any similar period in modern history where unemployment has moved so much, up or down.
  
  And here's a graph of recent unemployment figures for the USA, Oregon, and Bend. You don't have to be Kreskin to see where Bend is going.
  Unemployment for USA, Oregon, and Bend; Jul 2008 to present.
  
  I mean, look at that; you tell me where you think it's going. The top of that graph is 14%, and if Oregon stays in it's ways of outpacing the nation by almost double, and Bend outpaces Oregon by 50%, it seems like a slam Dunc that we'll hit 15% for this month. 13% for January seems also within reason.
  
  Towns with 15-20% unemployment are just not vital hubs of commerce. Towns like that are usually in long term decline. Those are your little towns out 30-40 miles SW of Missoula or somewhere (ie Burns), that are just in a secular decline. Outdoor mecca? Beautiful? Nice to visit? Oh yeah, all that. But in long term decline nonetheless.
  
  I saw many towns like this on my last vacation. Beautiful spots. Outdoor activities out the ying yang. I had a great time there too. But get on the outskirts, and it was all decay, rot, malaise, and abandoned malls. You could see it on people's faces, they were in existence mode, just surviving day to day.
  
  Not dying, mind you. There was just this perceptible resignation to a fate that had no chance of any "upside". No excitement, no challenges. People had stopped that, because the remnants of failure were all around them.
  
  I think Dunc had it right: The "excitement" of the decline will be replaced by a real sort of despair that things aren't EVER going to bounce right back. We will become like so many other places in the West: Beautiful, activity-rich, but caught in a molasses-like, moribund economic spiral downward.
  
  And I'm not trying to "drag people down" to my way of thinking, or some such bulls**t. I'm trying to talk people out of economic suicide. On the slopes of Everest, when Common Sense Caution is not heeded, people die. It's not so dramatic here. Well, except for the people who have died. My point is, the signs are all around us: STOP THE CLIMB.
  
  Many are still not heeding the advice of the environment around them. Everything points to white-out, 100 below, killer conditions; but still people start to climb.
  
  Why is Merenda II even being considered? Why? Because what killed the last guy, won't kill me. I'm better than him. I'll make it. This. Is. Bend.
  
  It's really incredible. Pahlisch Homes has watched as their subdiv's have imploded (from BendBB):
  Just noticed today that all Pahlisch signage has been removed from the Fieldstone Crossing development in Redmond. Looks like their model has been shut down completely. Their is no reference to Fieldstone Crossing on the Pahlisch website.
  
  And yet Pahlish announced they have started building The Bridges At Shadow Glen this week.
  
  Ahhh... the power of LLC's. Failure is not an option.
  
  Even our public servants have jumped on the Bubble Bandwagon.
  
  Bend police captain on leave amid FBI probe
  
  Bend Police Capt. Kevin Sawyer has been placed on administrative leave as the FBI investigates one or more businesses Sawyer and wife Tami have been operating, the police chief confirmed Friday. "I am aware of an investigation going on by the FBI into the finances of a business or businesses that Captain Sawyer is associated with,"said Police Chief Sandi Baxter.
  
  And so it goes. Everyday, we seem to find someone with their twig & berries exposed as the tide rushes out. First Summit, now this guy, and there are, like an iceberg, many others that we aren't even hearing about.
  
  The relentlessness of the pain, the disbelief of the corruption, the resignation that we can't beat The Powers That Be, will finally be the nail in Bend's coffin. There won't be anymore excitement, no more challenges. People's outrage will succumb to despondency. We'll all just give up on this place.
  
  Outrage Exhaustion. Great description. Because the vast majority of people in this town will realize at some point that there is an existing "Aristocracy" of sorts (GOB Network), and if you are not part of it, and you have Big Dreams for your life, that you will Not Make It In Bend. This is Not a meritocracy. Things are NOT done "for the People". They are done for a small inbred cadre of well-defined beneficiaries who rig every election.
  
  That's how it is in Bend, Oregon.
  
  Not real people. Not real children. Spending NOT real money, from not real jobs, in a not real place.
  
  OK, enough bitching about that. I just have a teeny-tiny outrage against my own kind.
  
  And I have to preface this with the idea that what is trying to be accomplished and the means by which so many think it will be acconomplished, is just sheer folly.
  
  And it is the passage of The Bailout. It's not a bank bailout. Nor autos. Nor any other particular thing. It's a bailout of this country. We are falling into the Abyss.
  
  And strangely enough there is an unassailable mentality that a BAILOUT will save us. OK, governements can produce nothing. Except money, which they can produce in unlimited quantities. And governments many times think the printing of it can cure all ills. Of course, that's ridiculous.
  
  Our problems will not be undone, until housing hits bottom. The bailout, and many other government measures are doing everything possible to avoid that. Forebearance on loans, delaying foreclosures, loan renegotiations. All these are failed ideas, and simply prolong the pain.
  
  And prolonging the pain, is just what the RePug's intend to do. These hypocritical, lying, thieving, conniving f**kers are as much to blame as the Lib's for this thing.
  
  But what's just classic, is that BOTH parties agree that the bailout is our only salvation (ridiculous, of course, it will only make things worse). But even in their idiotic agreement, they have put partisan politics FIRST, and the perceived needs of the American people a distant second.
  
  BOTH parties have done this. Yes hbm, BOTH.
  
  This is indicative of a country in decline. The elected aristocracy could give a f**k about the rank-and-file. Even when they are implementeing the most ass-backwards stupid plans imaginable, partisan wrangling is far more important than saving their own civilization.
  
  The most depressing part of this implosion will NOT be the dire & near-catastrophic economic consequences, it will be the loss of will, the loss of drive, the loss of cause-and-effect thinking that people have, where if they struggle, work hard, and strive against the odds, that they can make something of themselves in this country.
  
  That is what we are losing. We are rewarding FAILURE, EXCESS and EXTRAVAGANCE, and punishing prudence, thrift, and spending within your means. We're sending a message here with this bailout: Graft, corruption, and theft will be rewarded.
  
  We are a nation in decline.
  
  OK, finally I want to do a little re-print of an MSN article. It's got good info, but I suppose the big shocker is that mainstream press is starting to use The D Word. There is actually starting to be an open debate about whether a modern-ear Depression is possible. Maybe you & I are getting a tin-ear to this, because I have been banging this drum for 2 years.
  
  But you could NEVER find mainstream press even discussing it. NEVER. Until now.
  
  THAT is how BAD it is. All the hopeful sentiment that we are about to bottom imminently, has been replaced by How Low Can We Go? I think the past 60 days have been a wakeup call.
  
  Too late to avoid a depression?
  
  Policymakers are quickly running out of time and room for error. And even a brilliant plan -- which we haven't seen yet -- could fail without some good luck.
  By Jon Markman
  
  Over the past week, the world's intellectual, business, government and philanthropic elite emerged from World Economic Forum meetings in Davos, Switzerland, with grim faces and warnings of financial doom.
  
  You'd almost think they'd met to plot a suicide pact rather than global trade, as the headlines were so gory they could have been mulched into meals for vampires. Are things really that bad? Maybe not.
  
  Your contrarian antennae really have to go up in the face of consensus from a cohort of eggheads, politicos and jet-setters not exactly known for clairvoyance. Their big idea last year: that emerging markets' domestic economies had become so strong that a decline in U.S. and European growth would not derail them. Oops.
  
  Credible economic analysts now say there is still a narrow window of time in which policymakers in the United States, Europe and Asia can avoid a meltdown over the next year by immediately coordinating the injection of real financial adrenaline to banks, companies, households and local governments -- not just rhetoric and indiscriminate spending.
  
  Yet that window is closing fast, and if the right steps are not taken soon it may be shut for years. But governments don't know which steps work because economic theory breaks down at the level of human psychology.
  
  Given a set of stimuli -- ranging from tax cuts and longer unemployment benefits to new construction jobs and wider broadband access -- economists try to mathematically determine the choices citizens are likely to make, then use the results to recommend a policy mix to legislators.
  
  The problem is that the models often fail to accurately forecast human behavior, and politicians regularly screw it all up by ignoring the data and diverting funds to pet projects.
  
  History is rife with successful financial episodes, such as the New Deal, in which luck and coincidence are later misinterpreted as results of prescient planning. Slim hopes of an end-zone dance To prove the Davos set wrong, in short, congressional leaders must make the right choices at warp speed under pressure from special interests.
  
  It's a public-policy version of the Steelers' final drive Sunday with time running out in the Super Bowl. Pittsburgh quarterback Ben Roethlisberger, scrambling to elude a rush, had one good shot at throwing the football at an oblique angle to a receiver leaping among three defenders in the corner of the end zone.
  
  In times like these, the result set is stark and binary: hero or goat in football, recovery or disaster in the economy. The Davos pessimists' case for a severe economic dislocation over the next year -- let's go out to the extreme and call it a potential depression -- is easily made, as four key ingredients are in place.
  
  Their recipe calls for a blend of cyclical recession, severe deleveraging, a shift of demographics favoring savings over consumption, and inappropriate fiscal and monetary responses by policymakers. The first three are well under way, so the last one is the decider.
  
  Looking back at the Great Depression of the 1930s and Japan's depression of the 1990s, it's clear that government leaders in each case failed to respond quickly enough, then overcorrected, and in general took steps that at the time were considered best economic practices but actually worsened the problems.
  
  Our leaders will likewise now try to do the right thing based on currently popular theories, but we cannot confidently say whether they will turn out to be appropriate.
  
  You just never know.
  
  The only certainty is that measures must be taken immediately, and every day lost on minutiae such as bank executives' pay or Cabinet nominees' tax follies dampens the likelihood of success. Speed is of the essence, like putting up sandbags to stop a levee break, as we can see in daily headlines now that the darkness of Davos is descending.
  
  The incredible shrinking economies Layoff announcements over the past three months averaged 50,000 a week until they jumped to more than 100,000 last week. In an attempt to outrun revenue shortfalls, businesses are also cutting back on wages, travel and equipment purchases.
  
  But it's a losing battle. ISI Group analysts figure that U.S. corporate profits will decline from their 2007 peak to a 2010 trough by a record 30%, though a 50% fall is not out of the question. They're already down 20%. Customers are disappearing as wages and jobs falter and families raid their emergency funds. U.S. home equity decline has accelerated to a 30% annual rate, which combined with the stock market plunge, has slashed consumers' net worth by $12 trillion.
  
  The pervasiveness of the plunge in demand that animates doomsayers is breathtaking. Reis, a real-estate research firm, this week said rents nationwide fell in 43% of buildings of all types in the fourth quarter, up from an average of 25% in the first nine months of the year. In New York, where financial layoffs are surging, rents fell in 75% of apartment buildings last quarter. This puts securitized loans on U.S. commercial and apartment buildings on track for a default rate of 6% this year, up from 1.1% at the end of 2008.
  
  "We haven't seen this speed of decline before," one Reis analyst told Bloomberg. In Asia, the momentum of deterioration and thus the need for policy speed is even more dramatic. Japan's industrial production is falling at a stunning 63% annual rate; in South Korea, it's falling at a 43% rate.
  
  In China, real gross domestic production was unchanged in the fourth quarter, and ISI analysts expect it to be unchanged in this quarter, which would smash the GDP growth down to just 4% year over year, a stunning comedown for an economy that was growing at better than 10% last year and was once believed to be invulnerable.
  
  In contrast, government leaders appear to be moving in slow motion. The Federal Reserve last week said it was "prepared" to buy Treasurys to push down interest-rate costs even though 10-year-note yields are up a lot in the past two months.
  
  The Obama administration, meanwhile, has dawdled on plans to try to recapitalize the banking system or buy soured assets, and the fiscal stimulus package winding its way through Congress appears by independent estimates to be too small, insufficiently focused on real job creation and overly weighted on fiscal 2010 rather than 2009.
  
  Meanwhile, the head of the European Central Bank is dragging his feet, stating that he would not back an interest-rate cut. I would love to see the smug Davos crowd proved wrong, but the forces at work may have gone too far to be stopped. The nation may be on track now to spend $4 trillion -- more than on anything short of war -- to prevent the credit hole from getting so big we can't climb out.
  
  It's especially worrisome to see so much money used to shore up the worst-managed banks, a misallocation of resources that could haunt us for decades. In summary, total ruin can be averted and the Davos prophecy squelched if lawmakers seize the moment, aim true and get lucky.
  
  Even if the result is low growth amid a newly chastened business and social culture, re-ranking of national priorities to celebrate saving over consumption and acceptance of a lower stature in the world, it's superior to depression and chaos.
  
  Cross your fingers.
  
  Oh right, I did want to let you guys in on a little secret: I was one of the attending physicians when Thomas Beatie gave birth to the first goat-human. There's been quite a bit of consternation about how someone could possibly push a goat out through their cock. I am here to tell you that after I, and assisting physician Neil Patrick Harris (aka Doogie Howser, MD) crammed a giant metal spear into that bastards cock, the end result was not pretty:
  Asshole: The Other Pussy
  
  I also want to address the delicate topic of where a man holds a baby goat. It's not in the belly, it's quite a bit lower. Here is a never-before-seen picture of Beatie posing completely naked, just prior to birth:
  "Hi, I'm Thomas Beatie and there's a mother f**kin' goat in my nutsack! I'm calling Oprah!"
  
  OK, I'll wrap it up by throwing Dunc a Betty Boop Pinup bone'r two here:
  Please Dunc, don't hurt me!Dunc, I'm hankerin' for some spankerin'!
  And squat, and thrust, and in and out!I wish someone would go apes**t on me right about now...
  I wish there was a big strong Comic book retailer here to help me pet my pussy...
  
  I'll give you this Dunc, She Hot. If I was born during the Civil War, I'd also find this 1930's style porno pretty hot. There ain't many chicks that look bad in a ball gag.
• February 01, 2009
• 6:03

  Cascade Bancorp Seized By Regulators

   » ‎ Bend Bubble 2

  Tags:    [edit]

  I think one commenter put it best, we're seeing "The End of Days".
  
  Over 2 years ago, when I picked up BEM's mantle, and started this blog, I only knew a few things:
  
  

  • We were at or near the top of the biggest Bubble of all time
  • Bend was one of the most heavily participating cities in the country
  • It would all end badly

  But a lot of people like OR economist Tim Duy were still saying that things "could be" OK, or they might not be completely "OK", but there will be nothing catastrophic.
  
  But I think the World is coming around to this blog & it's commenters way of thinking, that this thing is going to be disastrous. That this thing will redefine Moore's Law, and everything that can go wrong will go horribly wrong. And a whole bunch of stuff we never even thought about in the early days, will also go wrong.
  
  Because if there is one thing we're all learning, implosions don't go "according to plan". "Project Management" won't help you during a catastrophe. Neither will Positive Thinking. In fact, positive thinking which leads to positive action can hurt you BADLY in many ways in our current circumstances.
  
  And of course, that is exactly what we are seeing. Jay Audia being a prime example, among others. THIS is Not the time to be "Optimistic". We've got a ways to go.
  
  And from the headline, you can see I've "taken a page" from The Bulletin, and put a somewhat misleading headline on this weeks post. Well, sorta, kinda. As the Bulletin always does. We will see CACB seized by bank regulators, sooner or later. NOW is the time to extract your funds. NOW.
  CACB, 5 days
  
  CACB is finally having it's Day of Reckoning; a time when we all realize that this Big Behemoth that represents our Diabolical Corporate Levaithan, is really just a decent sized fish in a very, Very small pond. CACB, while Big To Bendites, is Dogs**t on a Shingle to the rest of the World, and the banking federales will have no compunction about swooping in and closing this beast one lovely Friday Morning.
  
  In fact this past Friday, the FDIC saw fit to close 3 middling banks, but there was one point of interest in these closures: When shuttering the Magnet Bank in Salt Lake City, the FDIC found itself unable to find anyone willing to simply assume this business:
  
  Utah's MagnetBank closed without an acquirer
  
  FDIC shuts down three banks in one day amid ongoing credit crisis
  By John Letzing, MarketWatch
  Last update: 6:42 p.m. EST Jan. 30, 2009
  
  SAN FRANCISCO (MarketWatch) -- Federal regulators closed three banks in a single day Friday, as the ongoing credit crisis showed no signs of abating.
  
  Utah's MagnetBank became the fourth bank failure of the year, and the Federal Deposit Insurance Corp. was forced to directly refund depositors after being unable to find another institution willing to take over its operations.
  
  That marked the first time the FDIC has been unable to find an acquirer for a failed bank in nearly five years, according to FDIC spokesman David Barr. "This bank did not have an attractive franchise value, and not many retail deposits or core deposits," Barr said. The FDIC had conducted an extensive marketing process for the bank's assets, he said.
  
  Salt Lake City-based MagnetBank had total assets of $292.9 million as of Dec. 2, and
  $282.8 million in total deposits. "It is estimated that the bank did not have any uninsured funds," the FDIC said in a statement.
  
  The FDIC later said it has also closed Maryland-based Suburban Federal Savings Bank, and Florida's Ocala National Bank.
  
  Suburban Federal had total assets of roughly $360 million as of Sep. 30, and total deposits of $302 million, the FDIC said in a statement. Tappahannock, Va.-based Bank of Essex agreed to assume all of the failed bank's deposits, the FDIC said.
  
  Ocala National had $223.5 million in total assets as of Dec. 31, and $205.2 million in total deposits, the FDIC said. Winter Haven, Fla.-based CenterState Bank has agreed to assume all of the failed bank's deposits.
  
  The closures mark the fourth, fifth and sixth bank failures of 2009, bringing the total to 31 since the start of the credit crisis.
  
  The FDIC can almost always find someone willing to take over a banks operations. Almost Always. It's like getting the customers for free. All the bad stuff is wiped out. You just get a whole bunch of customers for almost nothing, and since they are free, you can cherry-pick and get rid of the crap, by imposing onerous fees, etc.
  
  What will be interesting to see, is if they can find a buyer for poor, sad little Cracker Ass Cracker Broke. Let's face it, CACB does have a decent presence in this dust-ridden s**thole. But that's about it. What we're seeing with Magnet Bank in UT is just the beginning; banking seems to be a business model that is again on the brink of complete failure.
  
  We saw this in the early 90's. Of course, we saw it en masse during the Depression. Banking is a business model that simply is compelled to undo itself.
  
  To become big, you must take risks & leverage to the hilt. You must participate in the bubble du jour, you must. Or you won't get big. But once the soup goes cold, you face calamitous implosion. And you are once again a nobody.
  
  Unless. Unless you can convince someone that you are Too Big To Fail. Then you receive Corporate Welfare, your corpse has new life breathed into it, and you go on your merry way, doing as you've done before, driven towards ever-larger temporary Bubble-fueled successes and subsequent Taxpayer-fueled failure-bailouts. Always becoming Ever Too Big To Fail.
  
  Which is where we are writ large. We've done this so often with banks, that it has now spread to autos. But NOT one auto maker. It's the industry that is failing. Like banks. It's the whole edifice that is crumbling. We can't move to another part of the cliff face & be safe, the whole thing is crumbling.
  
  And so shall pass our "Civilization". America. This crazy 200+ year experiment seems to be itself collapsing. Like Krugman says: This isn't cyclical, this is structural. There is a fundamental flaw that seems to have rendered Unbridled Capitalism as a system with no fundamental equilibrium point. The pendulum swings. But the force of the feedback mechanism (Greed) is rendering the entire structure supporting the pendulum, unstable.
  
  We've exceeded the engineering specs of capitalism. hbm may be right: Unbridled capitalism undoes itself. This got me to reading Marx:
  
  Political economy
  
  Marx argued that this alienation of human work (and resulting commodity fetishism) functions precisely as the defining feature of capitalism. Prior to capitalism, markets existed in Europe where producers and merchants bought and sold commodities. According to Marx, a capitalist mode of production developed in Europe when labor itself became a commodity—when peasants became free to sell their own labor-power, and needed to do so because they no longer possessed their own land. People sell their labor-power when they accept compensation in return for whatever work they do in a given period of time (in other words, they are not selling the product of their labor, but their capacity to work). In return for selling their labor power they receive money, which allows them to survive. Those who must sell their labor power are "proletarians". The person who buys the labor power, generally someone who does own the land and technology to produce, is a "capitalist" or "bourgeois". The proletarians inevitably outnumber the capitalists.
  
  Marx distinguished industrial capitalists from merchant capitalists. Merchants buy goods in one market and sell them in another. Since the laws of supply and demand operate within given markets, a difference often exists between the price of a commodity in one market and another. Merchants, then, practise arbitrage, and hope to capture the difference between these two markets. According to Marx, capitalists, on the other hand, take advantage of the difference between the labor market and the market for whatever commodity is produced by the capitalist. Marx observed that in practically every successful industry input unit-costs are lower than output unit-prices. Marx called the difference "surplus value" and argued that this surplus value had its source in surplus labour, the difference between what it costs to keep workers alive and what they can produce.
  
  Capitalism is capable of tremendous growth because the capitalist can, and has an incentive to, reinvest profits in new technologies and capital equipment. Marx considered the capitalist class to be the most revolutionary in history, because it constantly improved the means of production. But Marx argued that capitalism was prone to periodic crises. He suggested that over time, capitalists would invest more and more in new technologies, and less and less in labor. Since Marx believed that surplus value appropriated from labor is the source of profits, he concluded that the rate of profit would fall even as the economy grew. When the rate of profit falls below a certain point, the result would be a recession or depression in which certain sectors of the economy would collapse. Marx thought that during such a crisis the price of labor would also fall, and eventually make possible the investment in new technologies and the growth of new sectors of the economy.
  
  Marx believed that increasingly severe crises would punctuate this cycle of growth, collapse, and more growth. Moreover, he believed that the long-term consequence of this process was necessarily the enrichment and empowerment of the capitalist class and the impoverishment of the proletariat. He believed that were the proletariat to seize the means of production, they would encourage social relations that would benefit everyone equally, and a system of production less vulnerable to periodic crises. In general, Marx thought that peaceful negotiation of this problem was impracticable, and that a massive well-organized violent revolution would be required, because the ruling class would not give up power without struggle. He theorized that to establish the socialist system, a dictatorship of the proletariat - a period where the needs of the working-class, not of capital, will be the common deciding factor - must be created on a temporary basis. As he wrote in his "Critique of the Gotha Program", "between capitalist and communist society there lies the period of the revolutionary transformation of the one into the other. Corresponding to this is also a political transition period in which the state can be nothing but the revolutionary dictatorship of the proletariat."[24] While he allowed for the possibility of peaceful transition in some countries with strong democratic institutional structures (such as Britain, the US and the Netherlands), he suggested that in other countries with strong centralized state-oriented traditions, like France and Germany, the "lever of our revolution must be force."[25]
  
  Marx has a fairly compelling arguments here. The decline of Unions, the rise of vast capitalist fortunes. A lot seems to be going according to Marxist plans here.
  
  But there is one problem with the Marxist thought of 150 years ago, and today: We have lowered the barrier to capitalist entry so low, that everyone is a Capitalist Proletariat.
  
  Realtors. Graphic Designers. Web engineers. Even traditional employees. How many people do you know who have held their current position over 10 years? I never have.
  
  Marx said that politicos & proletarians would ultimately revolt against capitalism. But who do we revolt against? The division is so unclear, that like a terrorist cell, it's hard to figure out who the enemy really is.
  
  So we are headed towards something. I almost feel a sense of melancholy, watching as my beloved Capitalism dies a slow torturous death. Will it arise someday for my kids? Maybe. But it seems clear to me, that during the remainder of my working productive years, something will take its place.
  
  I don't think it will be straight up Marxist Communism. But it will be governmentally managed. The Invisible Hand will be cuffed. We'll become more like Italy or (gag) France. We'll bleed the patient with leeches to ensure This Never Happens Again. Cure worse than the disease, as is the way in circumstances like this.
  
  Nobody told me there'd be days like these
  Nobody told me there'd be days like these
  Nobody told me there'd be days like these
  Strange days indeed, strange days indeed
  
  ... most peculiar mama
  
  Moving on....
  
  I've found myself headed towards the business listings on craiglist. The Bulletin will not tell us The Bad News of small and middling businesses closing, and so we have to rely on the businesses themselves. And many will either come right out and tell you that they are closing their doors:
  
  The Children's Boutique on Kearney Ave is going out of business!
  
  everything is for sale, even the fixtures.
  
  I have two cash registers, credit card machines, slatwall, tagging supplies and more.
  come by and see what we have. Last day Feb 10th
  
  The Children's Boutique
  325 ne Kearney
  (across from Taco Bell)
  
  385-1168
  
  Or you can sift through the vast picked-over carcasses of your favorite ex-retailer. There's a lot of stuff there. If you have a urgent fundamental need, you can get pretty good deals there. Not great, cuz after all, This Is Bend.
  
  But people like Dunc, and other survivors can outfit the current shop at fairly decent prices.
  
  Of course I raise my usual caveat: Don't Buy Anything Unless You Absolutely Have To. We are in what Krugman calls a deflationary spiral. Cash is becoming worth more, the stuff we bought on the way up like homes, cars, fake titties, Hummers, Volo, City Council Seats, CACB shares, botox, and the rest is becoming worth-less. OK, I can't resist re-prodicing a short reprint of Krugmans Dead On Analysis:
  
  Nobel economist: 'Not your father's recession'
  
  Krugman has a recurring economic nightmare involving a syndrome called a deflationary trap, something that could conceivably last a decade. "This has me very frightened," he says, "and it's just starting to get under way."
  
  Deflation, the opposite of inflation, means that prices fall -- which might strike shoppers as a good deal. But as prices drop, consumers hold onto their money in hopes of even better bargains.
  
  Reduced demand sends prices lower, triggering a downward spiral as factories close, employment shrinks and loans default. Pay cuts mean that homeowners, who thought rising incomes would reduce the bite of their mortgages, instead see their house payments effectively increase, boosting their debt load.
  
  Japan suffered a lost decade or more to deflation after its 1980s economic bubble burst. Krugman says the current recession has disturbing parallels.
  
  During Inflation, your money becomes worth-less, and so it is best employed in real goods. Holding cash simply impoverishes you. Deflation is the opposite: Holding onto your money and not spending it increases your wealth. It is the unfortunate side-effects that collapse the economy.
  
  And spending DOES NOT REVERSE THE PROCESS. Same as holding cash during inflation doesn't STICK IT TO THE MAN or some such. You can't "reverse" deflation by spending. It's not an Entity, it's a state.
  
  This brings me to my final thought: BEDROCK. Seems like people are starting to wonder if there is a "base" to this collapse. Is there a bottom. Will we ever stop falling?
  
  I guess Great Minds Think Alike as Dunc had a recent post on this topic:
  
  It's the psychology, stupid.
  
  To follow up on the previous post, I'm starting to look at the psychology of the consumer again.
  
  While I wouldn't put in the dire terms that Buster put in the comments, there is a fine line between having a wounded consumer and a mortally wounded consumer. To my mind, it's better to be informed and skeptical, but not panicked.
  
  Last night, I began wondering about all those people who have secure jobs, or relatively secure jobs. This is probably the majority, even the vast majority of consumers.
  
  But they've cut back, nevertheless. It's a natural response. But most of them are still coming in and getting their favorite comics, or buying a book, or pulling the trigger for a toy that wows them.
  
  What would be very dangerous is if they didn't just cut back, but stopped spending altogether.
  
  I think that's what all the stimulus package talk is all about. Maybe Buster is right, and little of it will reach Bend in truth. But as long as the 'impression' is out there that SOMETHING is being done, I believe that the consumer will continue to be careful, but not stop altogether.
  
  Obama is a plus, because he holds out the potential for improvement. The stimulus package is a plus, because it looks as though something is being done. The bail-out -- god help me -- is a plus, at least psychologically -- because it keeps the Big Bank Fails headlines out of the paper.
  
  On street level, I saw the immediate impact of Bears, Sterns going down. Then the even bigger impact of Lehman brothers, and Bernie Madoff was the nail. I suppose, Murphy being a tricky bastard, that I should expect at least one more real eye-opener, and hope the psychology doesn't turn permanently bearish.
  
  The underlying conditions are stark, but I can deal with them as long as there isn't another total shift in psychology.
  
  People will start asking this question: What is Bedrock in the American Economy? Where is the bottom? What is fake & what is real? For every Madoff, how many non-shysters are there? Are there any? Is Buffett real? Who can I trust? Can I trust anyone ever again?
  
  Where's the Bedrock? There IS Bedrock in this country. OK, I sound pretty alarmist on here, I know. It's in large part because we are collectively being over-pacified by the local media, and someone needs to don some clapboards to raise awareness.
  
  But even in a place like Bend, people have to eat, they need to sleep largely under a roof, they need clothes. There is a ROCK BOTTOM here. I don't think we'll end up like Fossil or worse.
  
  But where is The Bottom? I don't know folks, but it seems to be that those who went up the most will fall the farthest. And No Where Went Up Farther And Faster Than Bend Oregon. No Where. And we've already seen that things are far worse than anyone thought possible even 1 year ago. A year ago McPain had a chance.
  
  So when I and others in the comments talk about this town going back to 40-50,000 people, homes reverting back to $125K, and unemployment going to 20-25% (or more), this isn't panic-mongering; its just a reversion to Bends Bedrock. Its base. A place where people eat, drive, dress, work and otherwise live simply. It's not bad. It's our bedrock.
  
  I'll end with a Bully piece about how bad this is already for select locals. And remember: This is the price we are paying for having as a community CHOSEN to have a 24 month unbridled Greed-fest primarily for those at the very top of our local socio-economic stratum. This is it. The hangover will affect everyone and will linger for a decade or longer. Was it worth it?
  
  Meet the people behind the numbers
  
  By Story by Lauren Dake Photos by Pete Erickson / The Bulletin
  Published: February 01. 2009 4:00AM PST
  
  Department of Human Services employees say they’ve never seen anything like it. Every month, the number of people seeking assistance rises. In December, 10,636 families in Central Oregon received food stamps. Statewide, they are calling it an emergency. But in Central Oregon, they are looking for an even stronger word. With a 29.5 percent increase in families receiving food stamps in December compared with December 2007, the tri-county area is the hardest hit in the state, when measured by the increased request for food stamps. Many families and individuals are seeking help for the first time in their lives, others are finding they need more. Below, a few of those people agreed to share their stories.
  
  Jeff Johnson
  
  Jeff Johnson’s chicken Parmesan dinner expired 22 days ago.
  
  In about a month’s time, he went from buying fresh foods at the grocery store to getting free, slightly expired food.
  
  A recent divorce came at a time when the 45-year-old, self-employed residential and excavation construction worker was experiencing slow times.
  
  The Bend resident went from living in a 2,552-square foot, five-bedroom, three-bathroom home on 40 acres, to a 35-foot fifth-wheeler in his church’s parking lot.
  
  Now, the man who lives in a $42,000, 2006 Weekend Warrior, which he bought with visions of traveling the state with his family, is answering questions he never dreamed someone would ask him.
  
  “How are you meeting your basic needs?” asked Department of Human Services employee Sue McDonald — a stranger to Johnson.
  
  His face flushed, Johnson shared the story of his first visit to the food bank, of living behind his church, of borrowing $20,000 from his parents.
  
  “Do you have any income?” she asked. The answer was no.
  
  She asks about assets.
  
  “It’s kind of hard driving a 2006 Chevy pickup to a food bank,” he said.
  
  He tried for military benefits but was told by officials in the Veterans’ Affairs office he was 33 days short of continuous active duty to qualify.
  
  On Wednesday, he decided he needed more help than he could get from the food bank and applied for state assistance for the first time in his life.
  
  McDonald gave him a list of resources, places to go for transitional housing, for clothes, for extra food.
  
  “Food stamps weren’t intended to carry anyone through today’s economy,” McDonald told him. “They don’t last a month.”
  
  In 2006, Johnson’s gross annual income was $170,000. His house, then appraised at nearly $1.2 million, was $70,000 away from being paid off.
  
  “There have been slow stretches during the last couple of winters,” Johnson said. “But not like this. This is just incredible.”
  
  It’s an odd feeling, Johnson said, to own expensive goods that aren’t worth anything. He tried selling his tools at Trade-N-Tools, where you can trade tools for money. But he quickly found out he wasn’t the first one with the idea; the place was inundated, he said.
  
  He was never irresponsible with money. He planned ahead. He had a savings account, but that was wiped out by lawyer’s fees.
  
  His parents, who also live in the area, are using their savings to help their son.
  
  “I grew up with parents that never took vacation; we drove a station wagon with a red-front fender. It was all mismatched and had snow tires on it year round,” he said, adding he intends to pay back every dime his parents have given him.
  
  Although Johnson never dreamed he would be in this position, he said, he’s being proactive about surviving. “There’s just no income. I just can’t get any money …” he said. “But it’s easy to find people in worse shape than me.”
  
  Joel Hall
  
  Joel Hall would like to leave Bend — but he can’t.
  
  “There are more job opportunities elsewhere … But I can’t afford leaving,” he said. “The economy’s impact on a small town like this …”
  
  When he first moved to the area, in 2005, 37-year-old Hall worked for the Bend-La Pine School District as a teaching assistant.
  
  He has a bachelor’s degree in education from California State University- San Marcos.
  
  Hall was laid off from that job. He was laid off from Flatbread Pizza. He’s been a bartender but was laid off there as well.
  
  "It was tough five years ago finding a job in this town,” he said. “Now, this town that seemed to explode for a while, it’s just imploded.”
  
  He’s getting by teaching snowboarding a few hours on Mt. Bachelor. But that’s only about two hours a week. And he hasn’t received unemployment benefits yet, because he’s been told it’s a four- to six-week wait.
  
  “In the meantime, there’s no income,” he said while waiting in line for food stamps on Wednesday. He’s dressed in all black, with The North Face sneakers. He’s clutching an issue of National Geographic magazine. “I wouldn’t be standing in this line if that wasn’t the case.”
  
  Hall has moved in with a friend to reduce expenses.
  
  “Thank God I have good friends,” he said. “But they are losing their jobs, too, and they have educations. They are lawyers …”
  
  Maybe, he said, it’s time for a career change.
  
  “I would like to get into a field that can withstand this stuff,” he said, mentioning health care as a possibility.
  
  Wednesday was his first time applying for food stamps.
  
  “I never though there would be this many people here,” he said, after waiting in line for about 40 minutes. “But it seems to be hitting people from all directions.”
  
  Although Hall said he’s determined to stay optimistic and keep his head up, it was a difficult decision for him to visit the DHS office.
  
  “I’m totally embarrassed,” he said. “I didn’t want to come down here and wait in this line. But six weeks with no income … I check Craigslist and the paper all the time. There’s just not much out there.”
  
  Kris Hakkila
  
  As soon as Kris Hakkila, 44, of Bend, noticed his work drying up, he started applying for jobs.
  
  He has yet to hear from anyone. In December alone, he sent out 40 résumés, looking for jobs at flooring manufacturing companies or as a project manager on different jobs — without a single call back.
  
  “Not a thing, not a letter, not a call,” he said. “You just know they are being bombarded with applications.”
  
  And so, on Wednesday, the self-employed hardwood floor contractor applied for food stamps for the first time.
  
  His sentiments echoed many others at the DHS office.
  
  “I’ve been through tough times,” he said. “But never this bad before.”
  
  Along with his wife, who works as an assistant to a financial broker, Hakkila has two daughters, 14 and 17.
  
  “All our money is going to pay our bills,” Hakkila said. “Soon, we’ll have absolutely nothing.”
  
  Two years ago, his business was bringing in around $60,000. He has a job lined up in March, but other than that his income is close to zero.
  
  He’s never even thought of applying for food stamps before. And he waited until there were no other choices.
  
  “You know, it kind of sucks,” he said.
  
  Karen Albert
  
  Nearly every weekday morning, Karen Albert took the Les Schwab Tire Centers shuttle from Prineville to her office at the company’s new headquarters in Bend.
  
  But last Friday, she decided to drive her own car.
  
  An hour into her workday, at 8 a.m. her boss called Albert into an office. The human resource director was waiting.
  
  “They told me they were letting me off due to the economy,” she said.
  
  The 48-year-old didn’t see it coming.
  
  “They told us they were done with layoffs.”
  
  Albert was one of 25 people laid off a couple of weeks ago. Earlier this month, the company also laid off about 25 people.
  
  “I just called my daughter and cried,” Albert said.
  
  Since she drove her own car, she didn’t have to wait until her shift was over for the shuttle to arrive and ride home with her former co-workers.
  
  “That was lucky,” she said. “I’m trying to find the blessings in all of this.”
  
  She drove home and cleaned the house.
  
  “And then I went online and applied for unemployment benefits,” she said.
  
  Albert worked for the tire company — Central Oregon’s second-largest private employer — for five years.
  
  A single mom with no other income, Albert immediately thought of her two children, ages 21 and 19. Her daughter, the oldest, has rheumatoid arthritis. And her youngest, a son, is a wrestler in college.
  
  On Wednesday, Albert sat in the Prineville office filling out an application for the Oregon Health Plan.
  
  “Amy can’t go without medical coverage, and my son is on the wrestling team,” she said. “If I don’t have coverage, I don’t care, but they need to be covered.”
  
  Albert said she’s hoping the insurance coverage will be the only assistance she needs.
  
  “I was raised in a family where you don’t ask for help. You take care of yourself,” Albert said. “So it’s rather humiliating. But you do what you have to do to take care of your family.”
  
  Mona Meeds
  
  Mona Meeds didn’t want her children to know.
  
  But she mentioned food stamps while speaking to her husband, and her children heard.
  
  “I didn’t want them to be embarrassed,” said the 31-year-old mother of four.
  
  “If I hadn’t mentioned the Oregon Trail card, they wouldn’t know,” she said.
  
  The Oregon Trail card is a debit-like card that makes food stamps available electronically.
  
  When it became harder and harder for her husband, who owns his own heating and cooling business, to find work, Meeds knew she had to apply for help.
  
  “The work just isn’t there,” she said. “During the housing boom, there was so much work.”
  
  She applied for food stamps and signed her children up for the free and reduced-lunch program.
  
  Without the aid, she’s not sure what would happen. Savings are gone, and her husband continues to take jobs farther and farther away from Prineville.
  
  Even though she is constantly on the move, picking up and dropping off her children, ages 5, 11, 14 and 15, she applied for a job at Rite-Aid.
  
  “It’s the only job I’ve seen posted,” Meeds said. “But they didn’t call.”
  
  Four years ago, the family built a home and had money in the bank.
  
  “Now, I try not to think about it,” she said.
  
  Her children took the news well.
  
  “I told them Dad doesn’t have much work and we’re getting assistance. When it gets better, we’ll get off of it,” she said.
  
  With Crook County’s unemployment rate recently reaching 14 percent, Meeds said her children took it well, in part because they are familiar with tough times.
  
  “They took it better than I thought,” she said. “They have a lot of friends that are having hard times too.”
  
  Keshia Yaw
  
  Keshia Yaw sat in the Department of Human Services office in Madras on Wednesday, waiting for her mother to pick her up.
  
  “I know what I’m going to do,” said the 18-year-old single mom from Warm Springs. “I’m going to find a job, work on scholarship forms, get re-accepted to COCC (Central Oregon Community College) and transfer to Portland State.”
  
  Maybe, she said, she would study something in the medical field.
  
  Although, she doesn’t like asking for help, Wednesday was the first step in realizing her goals.
  
  A blue folder, full of information, was on the table in front of her. Inside was information on how to receive cash assistance from a program called Temporary Assistance for Needy Families. The cash grants are $647 a month for families of four that earn less than $795 a month and have less than $2,500 in assets.
  
  More than money, she’s hoping the program will help her get a job. The goal of the temporary assistance program is to create self-sufficiency for participants. To receive benefits, job searches are mandatory. And the individual must participate in the services available — such as job training classes that help with résumés.
  
  Yaw lives with her mom, who receives food stamps and disability. She doesn’t have her driver’s license. It was too expensive, so any job needs to be near home.
  
  “I don’t like it, depending on other people,” she said.
  
  Yaw wasn’t the only young face at the Madras DHS office on Wednesday. Vicky Higgins, the operations manager, said her office serves a large teenage population.
  
  In 2007, the office helped nearly 40 homeless teenagers.
  
  “The biggest increase is those people who have never asked before,” Higgins said. “But the teen population is really increasing, too.”
  
  Basilio Gomez
  
  For the past 12 years, Basilio Gomez has worked at Bright Wood, in Madras.
  
  He’s no stranger to the economy impacting the hours he works.
  
  When times are good, the forklift driver is guaranteed 40-hour workweeks at the wood remanufacturing company. But lately it’s impossible to work enough hours to support his wife and four children.
  
  On Wednesday, the 44-year-old applied for more food stamps and filled out the paperwork to put his two older children, ages 12 and 11, on the Oregon Health Plan.
  
  The younger two children are already covered through the plan.
  
  He has insurance through the wood manufacturing company, but the deductible is too high.
  
  “It’s bad this year,” Gomez said.
  
  Jaimie and Dave Crockett
  
  Since September, Jaimie Crockett, 25, of Jefferson County, has been taking her résumé to any grocery store and gas station she can drive to.
  
  “I’m trying to find anything,” she said.
  
  Her husband, Dave, 36, was demoted from a salaried to hourly position at Bright Wood, Central Oregon’s third-largest private employer. During a recent week, he only worked 16 hours. He’s been with the company for 14 years.
  
  The couple waited Wednesday in the lobby of the DHS office in Madras for an appointment with a caseworker, who will explain how to apply for food stamps.
  
  Dave never imagined it would come to this point.
  
  “A couple of years we went through this at Bright Wood,” he said. “But that was for a month.”
  
  The couple has two daughters, ages 7 and 2.
  
  “This is horrible,” Dave said. “I’ve never had to ask for help for anything.”
  
  In September, Dave was bringing home about $3,000 a month. The money went to house payments and groceries. Last month, his income was $1,000.
  
  Although Jaimie doesn’t like it, she has an easier time asking for help.
  
  “I’m willing to do whatever to put a roof over our kids’ heads,” she said.
  
  Dave is also studying accounting at Central Oregon Community College, so there are student loans to pay. He’s hoping it’s a recession-proof job.
  
  As the mortgage payments pile up, the hardest part, Jaimie said, is not knowing if they will be able to stay in their house.
  
  “We need to have a safe, comfortable place for our kids,” Jaimie said. “And that’s in jeopardy. If I didn’t have kids, it would be different.”
  
  They are hoping the food stamps can alleviate some of the grocery bill costs so they can put more money toward paying off their house.
  
  “I just kept thinking we could do this on our own,” Dave said.
  
  But they couldn’t.
  
  “We tried to put it off, but it caught up with us,” Jaimie said. “We couldn’t think about it anymore; we just had to do it. So here we are.”
  
  (Kudos to The Bully for running this piece. Credit where it's due.)
  Post over.
  
• January 25, 2009
• 7:13

  Then and Now

   » ‎ Bend Bubble 2

  Tags:    [edit]

  Usually on these weekly posts, I wax on about how awful it's going to get. But I read the following piece, and this week I figured I'd wax off.
  
  Read this.
  
  Great Depression in the United States
  I. Introduction
  
  Great Depression in the United States, worst and longest economic collapse in the history of the modern industrial world, lasting from the end of 1929 until the early 1940s. Beginning in the United States, the depression spread to most of the world’s industrial countries, which in the 20th century had become economically dependent on one another. The Great Depression saw rapid declines in the production and sale of goods and a sudden, severe rise in unemployment. Businesses and banks closed their doors, people lost their jobs, homes, and savings, and many depended on charity to survive. In 1933, at the worst point in the depression, more than 15 million Americans—one-quarter of the nation’s workforce—were unemployed.
  
  The depression was caused by a number of serious weaknesses in the economy. Although the 1920s appeared on the surface to be a prosperous time, income was unevenly distributed. The wealthy made large profits, but more and more Americans spent more than they earned, and farmers faced low prices and heavy debt. The lingering effects of World War I (1914-1918) caused economic problems in many countries, as Europe struggled to pay war debts and reparations. These problems contributed to the crisis that began the Great Depression: the disastrous U.S. stock market crash of 1929, which ruined thousands of investors and destroyed confidence in the economy. Continuing throughout the 1930s, the depression ended in the United States only when massive spending for World War II began.
  
  The depression produced lasting effects on the United States that are still apparent more than half a century after it ended. It led to the election of President Franklin Delano Roosevelt, who created the programs known as the New Deal to overcome the effects of the Great Depression. These programs expanded government intervention into new areas of social and economic concerns and created social-assistance measures on the national level. The Great Depression fundamentally changed the relationship between the government and the people, who came to expect and accept a larger federal role in their lives and the economy.
  
  The programs of the New Deal also brought together a new, liberal political alliance in the United States. Roosevelt’s policies won the support of labor unions, blacks, people who received government relief, ethnic and religious minorities, intellectuals, and some farmers, forming a coalition that would be the backbone of the Democratic Party for decades to come.
  
  On a personal level, the hardships suffered during the depression affected many Americans’ attitudes toward life, work, and their community. Many people who survived the depression wanted to protect themselves from ever again going hungry or lacking necessities. Some developed habits of frugality and careful saving for the rest of their lives, and many focused on accumulating material possessions to create a comfortable life, one far different from that which they experienced in the depression years.
  
  The depression also played a major role in world events. In Germany, the economic collapse opened the way for dictator Adolf Hitler to come to power, which in turn led to World War II.
  
  II. Causes of the Depression
  
  It is a common misconception that the stock market crash of October 1929 was the cause of the Great Depression. The two events were closely related, but both were the results of deep problems in the modern economy that were building up through the “prosperity decade” of the 1920s.
  
  As is typical of post-war periods, Americans in the Roaring Twenties turned inward, away from international issues and social concerns and toward greater individualism. The emphasis was on getting rich and enjoying new fads, new inventions, and new ideas. The traditional values of rural America were being challenged by the city-oriented Jazz Age, symbolized by what many considered the shocking behavior of young women who wore short skirts and makeup, smoked, and drank.
  
  The self-centered attitudes of the 1920s seemed to fit nicely with the needs of the economy. Modern industry had the capacity to produce vast quantities of consumer goods, but this created a fundamental problem: Prosperity could continue only if demand was made to grow as rapidly as supply. Accordingly, people had to be persuaded to abandon such traditional values as saving, postponing pleasures and purchases, and buying only what they needed. “The key to economic prosperity,” a General Motors executive declared in 1929, “is the organized creation of dissatisfaction.” Advertising methods that had been developed to build support for World War I were used to persuade people to buy such relatively new products as automobiles and such completely new ones as radios and household appliances. The resulting mass consumption kept the economy going through most of the 1920s.
  
  But there was an underlying economic problem. Income was distributed very unevenly, and the portion going to the wealthiest Americans grew larger as the decade proceeded. This was due largely to two factors: While businesses showed remarkable gains in productivity during the 1920s, workers got a relatively small share of the wealth this produced. At the same time, huge cuts were made in the top income-tax rates. Between 1923 and 1929, manufacturing output per person-hour increased by 32 percent, but workers’ wages grew by only 8 percent. Corporate profits shot up by 65 percent in the same period, and the government let the wealthy keep more of those profits. The Revenue Act of 1926 cut the taxes of those making $1 million or more by more than two-thirds.
  
  As a result of these trends, in 1929 the top 0.1 percent of American families had a total income equal to that of the bottom 42 percent. This meant that many people who were willing to listen to the advertisers and purchase new products did not have enough money to do so. To get around this difficulty, the 1920s produced another innovation—“credit,” an attractive name for consumer debt. People were allowed to “buy now, pay later.” But this only put off the day when consumers accumulated so much debt that they could not keep buying up all the products coming off assembly lines. That day came in 1929.
  
  American farmers—who represented one-quarter of the economy—were already in an economic depression during the 1920s, which made it difficult for them to take part in the consumer buying spree. Farmers had expanded their output during World War I, when demand for farm goods was high and production in Europe was cut sharply. But after the war, farmers found themselves competing in an over-supplied international market. Prices fell, and farmers were often unable to sell their products for a profit.
  
  International problems also weakened the economy. After World War I the United States became the world’s chief creditor as European countries struggled to pay war debts and reparations. Many American bankers were not ready for this new role. They lent heavily and unwisely to borrowers in Europe, especially Germany, who would have difficulty repaying the loans, particularly if there was a serious economic downturn. These huge debts made the international banking structure extremely unstable by the late 1920s.
  
  In addition, the United States maintained high tariffs on goods imported from other countries, at the same time that it was making foreign loans and trying to export products. This combination could not be sustained: If other nations could not sell their goods in the United States, they could not make enough money to buy American products or repay American loans. All major industrial countries pursued similar policies of trying to advance their own interests without regard to the international economic consequences.
  
  The rising incomes of the wealthiest Americans fueled rapid growth in the stock market (see Stock Exchange), especially between 1927 and 1929. Soon the prices of stocks were rising far beyond the worth of the shares of the companies they represented. People were willing to pay inflated prices because they believed the stock prices would continue to rise and they could soon sell their stocks at a profit.
  
  The widespread belief that anyone could get rich led many less affluent Americans into the market as well. Investors bought millions of shares of stock “on margin,” a risky practice similar to buying products on credit. They paid only a small part of the price and borrowed the rest, gambling that they could sell the stock at a high enough price to repay the loan and make a profit.
  
  For a time this was true: In 1928 the price of stock in the Radio Corporation of America (RCA) multiplied by nearly five times. The Dow Jones industrial average industrial average—an index that tracks the stock prices of key industrial companies—doubled in value in less than two years. But the stock boom could not last. The great bull market of the late 1920s was a classic example of a speculative “bubble” scheme, so called because it expands until it bursts. In the fall of 1929 confidence that prices would keep rising faltered, then failed. Starting in late October the market plummeted as investors began selling stocks. On October 29, known as Black Tuesday, the worst day of the panic, stocks lost $10 billion to $15 billion in value. By mid-November almost all of the gains of the previous two years had been wiped out, with losses estimated at $30 billion.
  
  The stock market crash announced the beginning of the Great Depression, but the deep economic problems of the 1920s had already converged a few months earlier to start the downward spiral. The credit of a large portion of the nation’s consumers had been exhausted, and they were spending much of their current income to pay for past, rather than new, purchases. Unsold inventories had begun to pile up in warehouses during the summer of 1929.
  
  The crash affected the economy the way exposure to cold affects the human body, lowering the body’s resistance to infectious agents that are already present. The crash reduced the ability of the economy to fight off the underlying sicknesses of unevenly distributed wealth, agricultural depression, and banking problems.
  
  III. Economic Collapse (1929-1933)
  
  The stock market crash was just the first dramatic phase of a prolonged economic collapse. Conditions continued to worsen for the next three years, as the confident, optimistic attitudes of the 1920s gave way to a sense of defeat and despair. Stock prices continued to decline. By late 1932 they were only about 20 percent of what they had been before the crash. With little consumer demand for products, hundreds of factories and mills closed, and the output of American manufacturing plants was cut almost in half from 1929 to 1932.
  
  Unemployment in those three years soared from 3.2 percent to 24.9 percent, leaving more than 15 million Americans out of work. Some remained unemployed for years; those who had jobs faced major wage cuts, and many people could find only part-time work. Jobless men sold apples and shined shoes to earn a little money.
  
  Many banks had made loans to businesses and people who now could not repay them, and some banks had also lost money by investing in the stock market. When depositors hit by the depression needed to withdraw their savings, the banks often did not have the money to give them. This caused other depositors to panic and demand their cash, ruining the banks. By the winter of 1932 to 1933, the banking system reached the point of nearly complete collapse; more than 5,000 banks failed by March 1933, wiping out the savings of millions of people.
  
  As people lost their jobs and savings, mortgages on many homes and farms were foreclosed. Homeless people built shacks out of old crates and formed shantytowns, which were called “Hoovervilles” out of bitterness toward President Herbert Hoover, who refused to provide government aid to the unemployed.
  
  The plight of farmers, who had been in a depression since 1920, worsened. Already low prices for their goods fell by 50 percent between 1929 and 1932. While many people went hungry, surplus crops couldn’t be sold for a profit.
  
  Natural forces inflicted another blow on farmers. Beginning in Arkansas in 1930, a severe drought spread across the Great Plains through the middle of the decade. Once-productive topsoil turned to dust that was carried away by strong winds, piling up in drifts against houses and barns. Parts of Kansas, Oklahoma, Texas, New Mexico, and Colorado became known as the Dust Bowl, as the drought destroyed the livelihood of hundreds of thousands of small farmers. Packing up their families and meager possessions, many of these farmers migrated to California in search of work. Author John Steinbeck created an unforgettable fictional portrait of their fate in the novel The Grapes of Wrath (1939).
  
  IV. Initial Response to the Depression
  
  The initial government response to the Great Depression was ineffective, as President Hoover insisted that the economy was sound and that prosperity would soon return. Hoover believed the basic need was to restore public confidence so businesses would begin to invest and expand production, providing jobs and income to restore the economy to health. But business owners saw no reason to increase production while unsold goods clogged their shelves. By 1932 investment had dropped to less than 5 percent of its 1929 level.
  
  Convinced that a balanced federal budget was essential to restoring business confidence, Hoover sought to cut government spending and raise taxes. But in the face of a collapsing economy, this served only to reduce demand further. As conditions worsened, Hoover’s administration eventually provided emergency loans to banks and industry, expanded public works, and helped states offer relief. But it was too little, too late.
  
  The epitome of a “self-made man,” Hoover believed in individualism and self-reliance. As more and more Americans lost jobs and faced hunger, Hoover asserted that “mutual self-help through voluntary giving” was the way to meet people’s needs. Private giving increased greatly, reaching a record high in 1932, but charitable organizations were overwhelmed by the enormous number of people in need. To many, government assistance seemed the only answer, but Hoover was convinced that giving federal relief payments would undermine recipients’ self-reliance, and he resisted this step throughout his term.
  
  The tension between citizens seeking government action and Hoover’s administration came to a head in June 1932. More than 20,000 World War I veterans marched on Washington, D.C., to ask for early payment of government bonuses they had been promised. But the government refused, and when some members of the so-called Bonus Army didn’t leave the capital, federal troops used tear gas and bayonets to evict the men and their families (see Bonus March).
  
  Hoover and most of his Republican Party firmly supported protective tariffs to block imports and stimulate the American economy by increasing sales of American-made products. In 1930 they enacted the Hawley-Smoot Tariff, which established the highest average tariff in American history. This was a crushing blow to European economies, which were already sinking into depression. Other nations retaliated by raising their own tariffs. This action helped to worsen and spread the depression by choking off international trade. Between 1929 and 1932 the total value of world trade had declined by more than half.
  
  V. International Effects of the Depression
  
  Like Hoover, leaders of other nations around the world were determined to balance their budgets by raising taxes and slashing government spending. Germany, struggling to pay reparations imposed by the peace settlements after World War I, suffered to a larger extent than any other major industrial nation. Nearly 40 percent of the German workforce was unemployed by 1932. In these desperate economic circumstances, large numbers of Germans began to listen to the tirades of Hitler, who blamed the depression on Jews and Communists and promised to restore Germany to economic and military strength. After his Nazi (National Socialist) Party became the strongest political force in Germany, Hitler was named chancellor in January 1933. He soon seized absolute control of the German government.
  
  In Britain the effects of the depression were not as dramatic because the nation had been suffering from high unemployment through much of the 1920s. Unlike the United States, Britain already had unemployment insurance and government welfare payments to ease the burden on the jobless. The depression took longer to hit hard in France because it was less industrialized than the United States, Germany, and Britain. Also, because so many French men had died in World War I, the workforce was very small, and it took a severe economic decline before the demand for workers fell below the small supply.
  
  VI. Roosevelt and the New Deal
  
  By the election year of 1932, the depression had made Hoover so unpopular that the election of the Democratic presidential candidate Franklin Delano Roosevelt was all but assured. Confidence—Hoover’s elusive goal—was Roosevelt’s most abundant quality. Declaring in his inaugural speech that “the only thing we have to fear is fear itself,” Roosevelt quickly lifted the nation’s spirits with the rapid and unprecedented actions of the New Deal.
  
  Within days of his inauguration Roosevelt called Congress into a special session, during which many pieces of emergency legislation were passed. Following the example of many states, Roosevelt proclaimed a nationwide bank holiday, closing all banks to stop panicky depositors from withdrawing their money. A few days later he broadcast the first of many fireside chats on the radio, reassuring Americans that all banks that were allowed to reopen would be safe.
  
  The New Deal produced a wide variety of programs to reduce unemployment, assist businesses and agriculture, regulate banking and the stock market, and provide security for the needy, elderly, and disabled. The basic idea of early New Deal programs was to lower the supply of goods to the current, depressed level of consumption. Under the Agricultural Adjustment Act of 1933, the government sought to raise farm prices by paying farmers not to grow surplus crops. Parts of the National Industrial Recovery Act created codes for many industries that regulated competition while guaranteeing minimum wages and maximum hours for workers.
  
  The New Deal also tried to increase demand, pumping large amounts of money into the economy through public works programs and relief measures. Public works projects not only provided jobs but built schools, dams, and roads; the innovative Tennessee Valley Authority provided electric power and improved living conditions in an area of the southeast United States.
  
  However, Roosevelt never embraced the new ideas of British economist John Maynard Keynes, who argued that intentionally unbalancing the budget to a significant degree would boost demand to the point where recovery would take place. The U.S. gross public debt increased from $22.5 billion in 1933 to $40.44 billion in 1939, but Roosevelt was reluctant to accept any more deficit spending than seemed absolutely necessary to prevent mass suffering. He did not create an unbalanced budget on the scale Keynes advocated until World War II forced it upon him. Once the government started spending at the levels Keynes had suggested, the depression ended.
  
  The New Deal helped people to survive the depression, but acted as a painkiller rather than a cure for the nation’s economic ills. Unemployment was reduced, but remained high through the 1930s. Farm income rose from a low of $1.9 billion in 1932 to $4.2 billion in 1940. The demands of the depression led the United States to institute social-security programs and accept labor unions, measures that had been taken decades earlier in many European nations.
  
  VII. Life During the Depression
  
  The Great Depression had a substantial and varied impact on the lives of Americans. Physically and psychologically, it was devastating to many people, who not only lacked adequate food, shelter, and clothing but felt they were to blame for their desperate state.
  
  Although few people died from starvation, many did not have enough to eat. Some people searched garbage dumps for food or ate weeds. Malnutrition took a toll: A study conducted in eight American cities found that families that had a member working full time experienced 66 percent less illness than those in which everyone was unemployed.
  
  The psychological impact was equally damaging. During the prosperity of the 1920s, many Americans believed success went to those who deserved it. Given that attitude, the unemployment brought by the depression was a crushing blow. If the economic system really distributed rewards on the basis of merit, those who lost their jobs had to conclude that it was their own fault. Self-blame and self-doubt became epidemic. These attitudes declined after the New Deal began, however. The establishment of government programs to counteract the depression indicated to many of the unemployed that the crisis was a large social problem, not a matter of personal failing. Still, having to ask for assistance was humiliating for many men who had thought of themselves as self-sufficient and breadwinners for their families.
  
  Because society expected a man to provide for his family, the psychological trauma of the Great Depression was often more severe for men than women. Many men argued that women, especially married women, should not be hired while men were unemployed. Yet the percentage of women in the workforce actually increased slightly during the depression, as women took jobs to replace their husbands’ lost pay checks or to supplement spouses’ reduced wages. Women had been excluded from most of the manufacturing jobs that were hardest hit by the depression, which meant they were less likely than men to be thrown out of work. Some fields that had been defined as women’s work, such as clerical, teaching, and social-service jobs, actually grew during the New Deal.
  
  The effects of the depression on children were often radically different from the impact on their parents. During the depression many children took on greater responsibilities at an earlier age than later generations would. Some teenagers found jobs when their parents could not, reversing the normal roles of provider and dependent. Sometimes children had to comfort their despairing parents. A 12-year-old boy in Chicago, for example, wrote to President and Mrs. Roosevelt in 1936 to seek help for his father, who was always “crying because he can’t find work [and] I feel sorry for him.” The depression that weakened the self-reliance of many adult men strengthened that quality in many children.
  
  The depression’s impact was less dramatic, but ultimately more damaging, for minorities in America than for whites. Since they were “born in depression,” many blacks scarcely noticed a change at the beginning of the 1930s. Over time, however, blacks suffered to an even greater extent than whites, since they were usually the last hired and first fired. By 1932 about 50 percent of the nation’s black workers were unemployed. Blacks were frequently forced out of jobs in order to give them to unemployed whites.
  
  Yet the depression decade was one of important positive change for blacks. First lady Eleanor Roosevelt and several leading New Deal figures were active champions of black rights, and most New Deal programs prohibited racial discrimination. These rules were often ignored in the South, but the fact that they were included at all was a major step forward. Blacks were sufficiently impressed with the New Deal to cause a large majority of black voters to switch their allegiance from the Republican to the Democratic Party during the depression years. See also African American History.
  
  Other minority populations had experiences similar to those of blacks during the depression. Native Americans were even less likely than blacks to notice a downturn when the depression began; they already fared poorly by virtually every social or economic indicator. But Native Americans, like blacks, were brought into New Deal relief programs that in theory did not discriminate, and an attempt was made, through the Indian Reorganization Act, to enable tribes to reestablish their identities and cultural practices. In industrial cities such as Detroit, Gary, and Los Angeles and in agricultural regions such as California’s San Joaquin Valley, Mexican Americans were seen as holding jobs that should go to whites. Repatriation (meaning deportation) programs were instituted to persuade Chicanos to return to Mexico, often through intimidation.
  
  Groups of white Americans also faced discrimination during this era. Poor farmers evicted from their land or fleeing the Dust Bowl were often despised and abused when they arrived in California and other western states. They were commonly labeled “Okies,” whether they came from Oklahoma or other states.
  
  VIII. End of the Depression
  
  Although economic conditions improved by the late 1930s, unemployment in 1939 was still about 15 percent. However, with the outbreak of World War II in Europe in September 1939, the U.S. government began expanding the national defense system, spending large amounts of money to produce ships, aircraft, weapons, and other war material. This stimulated industrial growth, and unemployment declined rapidly. After the United States entered the war in December 1941, all sectors of the economy were mobilized to support the war effort. Industry greatly expanded, and unemployment was replaced by a shortage of workers.
  
  IX. Legacy of the Depression
  
  The impact of the Great Depression and the programs of the New Deal dramatically altered the relationship between the American people and their government. The federal government expanded its role in many social and economic areas, becoming larger and more powerful. Americans came to accept government involvement and responsibility in caring for society’s most needy members and regulating many aspects of the economy.
  
  The New Deal’s social programs reflected a shift in American values created by the shared hardships of the depression era. The depression experience discredited the extreme individualism and pursuit of self-interest that characterized the 1920s, and revived an emphasis on community, cooperation, and compassion. These values were reflected in the popular culture of the day and in political and labor movements that developed and expanded during the 1930s.
  
  One of the most far-reaching New Deal measures, the Social Security Act of 1935, guaranteed government help to citizens who were unemployed or disabled, to older Americans, and to mothers and children. The National Labor Relations Act (1935) provided protection for union activity, which contributed to the rise of labor unions in mass-production industries such as steel and automobile manufacturing. Unions and racial minorities, who had benefited from the New Deal, were among the groups who became staunch supporters of the Democratic Party, changing American politics for decades to come.
  
  The literature, films, and art of the depression era demonstrated the desire for a more cooperative, less fiercely competitive way of life. Many celebrated the common people, who were contrasted with greedy, powerful interests. Examples included films such as Mr. Smith Goes to Washington (1939), directed by Frank Capra, and Stagecoach (1939), by John Ford; paintings by Norman Rockwell; songs by folk singer Woody Guthrie; and novels by such writers as John Steinbeck.
  
  While many conservatives believed the New Deal was turning the United States toward socialism, other Americans felt it did not go far enough and sought more revolutionary change. Political movements to the left of the New Deal enjoyed considerable support during the 1930s. Among them were the Minnesota Farmer-Labor Party, which offered radical proposals challenging the capitalist system, and the unsuccessful campaign by novelist Upton Sinclair to be governor of California in 1934, proposing essentially socialist programs to “End Poverty in California.” By alleviating some of the worst effects of the depression, the New Deal helped defuse tensions and preserve a democratic, capitalist system at a time when other nations turned to fascism or socialism.
  
  The return of prosperity during and after World War II revived some of the forces that divided society and promoted self-interest in the 1920s. But the experience of the Great Depression left a lasting mark on the United States in the forms of a much greater role for the federal government, a new political alignment in which Democrats would retain the support of a majority for most of the next half century, and a general feeling that the free market must be regulated in order to avoid another such economic catastrophe.
  
  Contributed By:
  Robert S. McElvaine, B.A., M.A., Ph.D.
  Elizabeth Chisholm Professor of Arts and Letters and Chair of the Department of History, Millsaps College, Mississippi. Author of The Great Depression: America, 1929-1941.
  "Great Depression in the United States," Microsoft® Encarta® Online Encyclopedia 2008
  http://encarta.msn.com © 1997-2008 Microsoft Corporation. All Rights Reserved.
  © 1993-2008 Microsoft Corporation. All Rights Reserved.
  
  OK, at what point does this thing get a little eerie? OK, I'll agree it's not a carbon-copy of today. But it's Close. The Past is Prologue, folks. Get ready.
• January 18, 2009
• 6:16

  Free At Last, Free At Last, Thank God Almighty!

   » ‎ Bend Bubble 2

  Tags:    [edit]

  Welp, if it's Sunday morning and I'm hung over, well then it must be time for a post.
  
  And we are Free At Last! Free from endless Jew rants about AIPAC (whatever the f**k that is)? Well maybe, for now. Nope I mean we are free of Gee-Dub, perhaps the Worst President of My Lifetime or any lifetime. My God, what a turd. Nope, we're on to the next guy.
  Yup, by this time next week, we'll be an Obama-Nation. OK, this guy is going to have his flaws, but he simply cannot be worse than what we have just endured. Twice! We have only ourselves to blame for the past 4 years.
  
  And I'd be lying if I didn't admit that I am at least a little excited about this guy. I mean we're behind the 8 ball, and GeeDub has been a useless sack of s**t. If anything, we could have at least used some Reagan-esque "One for the Gipper" speeches from G-Dub, but we're only getting them from The O-bomber.
  
  Well, not much to do but wait... but it'll be nice to know that the next time I post it'll be with a chain-smoking black dude as our Prez. And we'll also have a Flilf in there too!
  
  "I break with thee... I break with thee.. I break with thee.. and then throw dog-poop on her/his shoes" (Steve Martin... and hbm)
  
  Well, we officially got dumped by hbm. How we'll survive is another issue, but his parting shot was rather interesting:
  
  ...why are you afraid to put your name on your posts, asshole?
  
  Oh, I know -- you're afraid Mike Hollern and I will order a "mob hit" on you. F**king psycho.
  
  I'm through with this blog -- too many psychotic trolls eaten up by hate and spite with nothing to do but vent it here on any target that offers itself. I'll read it, but I'm done commenting on it.
  
  Good bye.
  
  And he seemed pretty serious. I mean he only commented about 30-40 more times, and that was it!
  
  What's funny is that "hbm" really could be anyone. EVERYONE is anonymous on here. I mean, people put "handles" to comments, and some are quasi-public figures that many of us would recognize. But were it not for Buster, I wouldn't have a clue who "hbm" is.
  
  But it's curious Why hbm would make all these statements to begin with. This thing has always been anonymous, for obvious reasons. Read the title: it's a blog about the implosion of really the only large-scale industry in this one horse s**thole. And as we've seen, "continued prediction" of it getting ever worse by the minute is not a Make Friends And Influence People sort of recipe.
  
  hbm jokes about MOB HITS... well, everyone who posts on here knows DAMN WELL commenting on here could have almost nothing but negative consequences if identities became known. Even BendBB hides his identity. Curiously he also harvests IP's.
  
  So hbm, your accusations of Anonymous Comments = Worthless Blog, is itself pretty f**king worthless. You, and everyone else here, knows Damn Well the RE Juggernaut would not be above offing someone to clam them up. These f**kers are Killing Themselves over bad deals.
  
  OK next: This idea about claiming that unless every comment is backed up by a litany of Courthouse-Ready facts then it's 100% USELESS, is again Bulls**t. Your blog went on and on and on about what a TURD Gordon Smith was. OK, I agree... but none of that s**t is PROVEABLE.
  
  But hbm, I can agree with you on one thing: You open up a blog to Zero Moderation, and you're going to get some pretty lame s**t, as was witnessed Ad Nauseum in the past weeks comments Re Jew Bulls**t. Was that you hbm? Cuz if so, point made. I mean whoever posted that s**t makes me want to ease back on the Jew Bashing... whoever posted that inane s**t is doing enough J-bashing for both of us. My God.
  
  I've said this over and OVER: I cannot & will not "moderate" this blogs comments. First, I can't do it effectively. There's way the f**k too many comments. I think if I turned my posts and All Comments into a PDF, the thing would stack 3-4 feet tall. Just writing this f**ker is hard enough... it's like pushing a gigantic hemorrhoid back in: UNPLEASANT BUT IT'S GOTTA GET DONE.
  
  Second, I would NOT be a good moderator, I wouldn't know what to leave in or out. I probably would have nixed early JR-comments. Even City Hall & City Councilor stuff may have seemed outside the fray. But clearly a hell of a lot of s**t that doesn't seem relevant, is. The BAT buses? The water lawsuits? F**k, we're going bankrupt as a town, and that sort of s**t is a prime contributor. The finances of this town & the people in it are very interconnected in ways that aren't readily apparent at first blush.
  
  Finally, I just don't like moderated forums. I mean BEM moderated OUT a lot of my comments back in the day, and I assume others. And a lot of people complained about that, and the fact that NOTHING got posted until he approved it... which goes back to #1. And BEM only had 30-40 comments a week or so. This f**ker regularly breaks 500 a week. Without the immediate feedback of Immediately Live Comments, a lot of the vitality & back-and-forth "conversations" would just die.
  
  So hbm, you've got a point: Anon unmoderated forums have their problems, but so do the rest. I actually think that hbm sees the writing on the wall, and sees this blog as somewhat of a "competitor" to TSW. Not in any sort of stolen readership or financial way... but just that Bully-Bashing brings a decent audience for both. For better or worse, our beloved hometown paper is a last bastion of journalistic ethical selling out.
  
  And people are pissed about that. And this forum is Wide Open to bitching about it, something hbm also does on occasion. So he & I are birds of a feather really... but with the advent of blogging & open comments, combined with the irrevocable decline in print papers, there can arise the need to Impugn The Legitimacy Of Any Competitor.
  
  Which is sort of funny. As was said in the comments, this thing ain't about me... people like pics of big tits so they know where the end of my interminable rants are. It's about the comments, good, bad, ugly, or interminably idiotic, Thank You Jew-Busting Buster, or whoever you are.
  
  I do wish there was a solution to this. It would have to be Individual User Moderated though. Something where each individual could blacklist comments from given IP's... not me, mind you. You. Something that would simply mask or minify comments from user-selected IP's, or usernames, or something. I don't know.
  
  As can be seen, No User Tracking System Is Perfect and hence no comment masking system would perfect. Ask Becky Breeze over at BendBB. So I hear you hbm. But you declaring this blog Unfit For Your Pedantry Presence because of the Anony-Troll nature of the comments is simply a declaration that Only Your Opinion Really Counts And It's The Only Opinion That Should Count. Which I have to say, I disagree with.
  
  And you can disagree with me. As vehemently as you want. Cuz the comments are wide open.
  
  Well, you've probably noticed but the Bubble Implosion has started to take a toll so heavy that it's Damn Hard to even keep track of it. Used to be that there would be only one or two decent scale shutterings every month or 3. Now s**t is closing, or there are large scale layoffs or hourly cutbacks, happening so often that I can't even keep track of it all.
  
  So, if possible, I need you guys' help to keep track of this stuff for the RIP board, which I am going to make a New Years Style Effort (short-lived) to keep updated. So maybe put in comments the term "RIP" and a list of closed down businesses, or places making layoffs or mandatory hour reductions.
  
  I know the Bully has already instituted mandatory days off each month. I have to agree with this route, if it has to be done. Lots of places layoff people who they have expended lots of money to get proficient at their jobs, and with layoffs, this investment is gone forever, and you have to expend it again when things turn up.
  
  I guess everyone knows that Gottschalks declared Chap 11, something I think Dunc spotted early. And once I looked at it, it seemed pretty clear to me they were going down. You know something is wrong when a company of 60-odd stores spends 3X on one crappy store in Bend OR ($6 mill) over what Wall St values the whole shotting match at (sub $2 mill now).
  
  But anyway, I have a terrible memory, and the failures are coming fast & furious, and are too much to really keep up with. And, of course, rumors are Welcome! I know hbm, I'm opening this thing up to LIARS! Well, it's always been that way, and a whole lot of those rumors had a way of coming true. Even KTVZ has started to "speculate" on the true scale of the Cessna layoffs, cuz the company doesn't want a mass exodus of people they actually want to keep.
  
  So rumor has it's place. S**tloads of the Negative Rumors put here actually happened, and even legit rags like TSW print rumors. But those are supposedly more believable cuz the rumor-monger golfs with hbm, or some s**t.
  
  But I would like to know if anyone has heard any other juicy nugg's on Cessna. Last I heard it was another 1/3rd of the workforce, for a total of 2/3rds canned. And it'll happen in March. Is that right?
  
  I know The Bull has instituted 1 Mandatory Day Off per month for everyone. It's my prediction that they will start instituting large-scale layoffs there. Place isn't financially viable otherwise.
  
  On a smaller note, I'd also predict that these "Dinner Express" places will start to close. 4 of these sprang up overnight, and this town can barely support one.
  
  I know of some decent sized gyms are going to close. One is a biggie on the East side. Same reason as above, ridiculous overcapacity.
  
  Walked by the new Subway/Coffee Shop downtown. Very nice inside. Not a single customer though.
  
  I guess everyone knows the "temporary" closure of the Speedshop & Fireside Red are 100% bulls**t. Always suspect someone who is closing down for CHRISTMAS. OK, that is retarded.
  
  I know 12 O'Clock Tart is also gone, lunch delivered to you by The Hotness Owner. Too bad, she was hot.
  
  And there probably a long list of other small 1 and 2 man shops like this that are just gone one day. So send them along in the comments with title "RIP" so I can search for them.
  
  OK, you can stop scrolling! You've reached the comments!
  I wanna get titty-f**ked by Obama!
  
• January 11, 2009
• 6:39

  The Collapse of Bend, Continues...

   » ‎ Bend Bubble 2

  Tags:    [edit]

  Well, it's coming fast & furious now, Folks.
  
  A seeming swarm of layoffs from all corners. Epic Aircraft & Jeld-Wen should come as no surprise. But Cascade Heatlhcare? That stuff is supposed to be immune, right?
  
  No, seems when you do not have money, that visit to the doctor that used to be required can become "elective" pretty quick. You won't see a lot of folks out China Hat Road way clogging St Chas waiting rooms.
  
  Nope, nothing is immune, not healthcare, not recreation, nothing. We've seen store closings of little guys (Westside Video, Bond Street Market, childs clothing seller Bonkerz), big guys (Office Depot, Linens N Things), and we'll see more in the near future of all kinds (Gottschalks, Cessna, City of Bend, The Bulletin, Les Schwab).
  
  Retail is just the "face" of a slowing economy. There's plenty of "back office" type businesses closing; little public face, but quite a few jobs lost just the same. Even our little local Gubmint is in a constant state of layoffs.
  
  We're at 10% unemployment, businesses are closing so fast it's hard to keep count, we've watched our local medians drop from $396,000 to $226,000. OK, this is the s**t storm this blog has been yammering on about for 2 years as INEVITABLE. It's here. This is it. And NO, it is not even close to ending. The damage is not even close to being done.
  
  So what would you do, if your own personal life looked this shaky? Do you fall back on (hopefully) saved up reserves? Do you keep piling up the money in a Federally Insured bank account, if you're lucky enough to still have a job? Do you scale back your eating out? Do you scale back the wine from $40/bottle to $15? Do you actually, God forbid, start cutting some of this stuff out entirely?
  
  Or, do you borrow to the last of your ability and buy a new SUV? Do you expend the last of your reserves on building a fence around your back yard? Do you go for broke, and throw it all down on a new investment house with negative cash flow for as far as the eye can see?
  
  See, to me, the answers to these questions are just ridiculous. It's pretty obvious. You STOP spending. OK, you do that whether you still have an income source or not. There are some people who do this innately. They're called Rich People. Well, they are at least financially insulated. People I know who are doing well right now have been saving their pennies. And I mean pennies. They don't make a King's Ransom. But they do save, quite a bit more than most people. They aren't really "cheap", they just have "lean" tastes.
  
  But not our City Council. Not our local Paper. No.
  
  No, they are advocating that we all spend as much as we can as fast as we can.
  
  Yeah, we'll get great stuff, like a shed to house our broken down bus fleet. Or some blown up rock out in the Juniper Ridge badlands.
  
  Costa is trying to convince us that we should run out and BUY cars with incentives that actually don't exist West of the Rockies. And by gum, with medians in the low $200's, "Some interest rates also at historic lows, could drive buyers back into Bend market".
  
  Uh huh. Read the piece, and you'll find that "Some" interest rates applies to Bill Gates' FICO, not yours. Costa just doesn't get it.
  
  Brucey posted in the comments that we're getting 100+ NOD's a week. That's 100 people (well, maybe not quite, but you get the idea) who will not be able to buy s**t on credit for 7-10 years. You can lower the rates to ZERO (or less), and these people WILL NOT get extended one cent.
  
  The Fed can (and has) pushed the interest rate/monetary policy string as far as it can (rates at 0%), and nothing has changed. What's funny is that this country is simply returning to "normal". We're returning to fairly "normal" credit restrictions.
  
  But there's the rub. For about 7-8 years we extended credit to "non-normals", people who could NOT afford it. No income to afford the debt service. So how did it go on for all those years? Easy, simply "co-mingle funds", ala Summit 1031. Make "refi" money your New Income Stream. All that nasty old loan debt, is replaced by an even bigger loan, and what's great, is I Get Paid To Do It! Old $350K loan replaced by $500K refi loan and 2 years from now with a crooked appraisers help, I get another $175K, ad infinitum. Presto, Huge Income, No Work, Forever.
  
  Well, the Minsky Moment arived on this Enormous Teetering Edifice, and the whole thing began toppling the middle of last year. And NO WHERE did it stand taller, grander, more magnificently than Bend Oregon. No where. It literally DEFINES this place. Scam piled on graft piled on deceit piled on fraud piled on schemes.
  
  No where in the USA is the local economy more exposed to the crushing forces overwhelming our national economy than right here. I've said it before, Sit Back And Witness The Horror, Ladies And Gents. You are about to see an entire small city rip itself to pieces.
  
  The Hollern/Moss/Costa Triad is crumbling. Hollern drank the Kool-Aid and bought Ironhorse & Yarrow. Moss financed that, and much, much more. Costa is in a 100% Dead industry, and is desperately trying to hold the buggy-whip edifice that is The Bend Bulletin together.
  
  Again, you are about to witness a town completely implode on itself like nothing that has happened to any major town in the USA in 80 years. It's going to happen right here. This town will be the stuff of Legendary Collapses. This town will be the stuff of future editions of "Extraordinary Popular Delusions & the Madness of Crowds".
  
  You're seeing it now. Our unemployment rate is at 9.9%. That's just amazing, but it will get Far Worse. It's going to get worse than you or I thought possible. The Viscious Cycle of the Great Deleveraging will take down HALF this town.
  
  Of course, Costa will tell you with the Last Dying Breath of The Bulletin that Aspe... errrr uh, sorry, Bend is made up almost completely of multi-millionaire transplants from Saudi Arabia, Dubai or somewhere, and so employment doesn't really apply to this place.
  
  Ummmm, OK, a little test. I work for a living. Do you work for a living? Do most of the people you know work for a living? Of course, I do know retirees around here. But not many, certainly not many in proportion to the number of people I know who Have To Work For A Living. This is a WORKING TOWN. Employment DOES matter.
  
  And Bend has NEVER had a decent employment base. This place is built on low-wage s**t jobs. And those are being lost in waves. No big deal, it's always been that way. But now we're losing the small, core base of family-wage level jobs. F**k Gottschalks, we're losing jobs at St Chas & Les Schwab corporate.
  
  Head over to BendBB (anon proxy ONLY!), and check out recent price changes. Used to be that you'd see only a few price cuts in the double digits. Now their practically ALL double digit percentage cuts in price. And it's worse than it appears. Some of those homes have been flipped between Realtors like the crack-whores of RE that they are. Desert Skeeze listings can be counted on to have changed hands several times.
  
  When you look at the DOLLAR CHANGE in prices, you are looking at INCOME REDUCTIONS. These reductions USED to be INCOME GAINS, and these gains fueled Deschutes County growth for the better part of 30 years. This place slowly but surely went from one of the most undervalued to The Most Overvalued RE market in the country. The whole REFI-AS-INCOME game was played NOWHERE more intensely than it was here. And it was played far, FAR longer. In fact, a very precious few can attest to even pretend to remember the Bad Old Days of the laste 70's. This Game has been going on for 3 DECADES in Deschutes County. Not 5 years. Not 10 years. 30 YEARS.
  
  Don't think the Great Unwinding will be over here when the rest of the USA is done, it won't. Here's the point:
  
  There won't be a recovery here. Not in the way you think about it.
  
  Remember last year, early, when the market started cracking here? People who dodged the bullet renting (Timmy, etc) started talking about buying at fantastically lower prices? Like "$250K"?
  
  OK, so we all know NOW that is a suckers game. It's become clear. But that Speculative Mindset is STILL HERE. The idea that I will BUY AT THE BOTTOM in Bend.
  
  And what? What comes after? It's unspoken, but it's there...
  
  Yes. That little SPECULATIVE VOICE that tells you that YOU will make a great deal on a house... and then... the market will recover... AND YOU WILL GET RICH! Yeah!
  
  OK, this very vague and almost unspoken mindset subtley infects EVERYONE HERE. Everyone reading this blog probably has some deep-seated desire to scoop up the bargain of a lifetime at what seems to be a ridiculous bargain prices.
  
  BEWARE. OK. This is NOT going to happen.
  
  Here's a little chart from the Jap Bubble:
  You can see that once the collapse began, it was still going strong 17 YEARS later. Bend is going to have a Hockey Stick decline. It'll fall for years & years. And then it'll just flatline. Dead as a doornail, no Big Recovery, no Return to Normal, no Speculation, no Good Times.
  
  The malls will be half empty, as will downtown. Most of the STD's ringing the Eastside will have been sold off piecemeal, and will have weed-infested half-built s**tshacks sitting on them. HALF the retail will CLOSE. HALF the restaurants will close, at least. Cascade Business News is GOING TO CLOSE. The Bulletin is GOING TO CLOSE. Either Lowes or Home Depot will close. All these consumerist fueled nightmares are going down.
  
  There isn't going to be a recovery here. It'll be like living in a depressed little version of Detroit, where the Heyday is over. Never to return. You will need your little s**t job to pay for the little s**t house on your little s**t lot. And you will not make any money EVER on it. EVER.
  
  I'm telling you folks, you will NOT recognize Bend in 10 years. Many, if not most won't be able to recognize it, cuz you'll have left.
  
  OK, if you are thinking of buying RE, I ask you to think again. We're NOT EVEN CLOSE to fair value. Values are PLUMMETING. Rent-to-own ratios are STILL ridiculous. This town is going to go bankrupt. Industry & retail are being GUTTED as we speak. We're in a precarious period where it looks like a place you'll "want to be" for the long haul. But it's not going to be for long. Would you want to live in inner city Detroit at any price?
  
  Because that's what Bend is becoming. And medians BOUGHT at $225K will seem like a HORRIBLE, TERRIBLE ERROR in judgement 7-10 years from now. Medians aren't going to $125K for no reason. They are going there, and they will STAY THERE, for abundant reasons.
  
  No local incomes to support anything more. Burns-style entertainment. No restaurants. No fun places. Completely uncertain job prospects. No opportunity. Just straight depression. You WILL NOT want to be here.
  
  What to do:
  
  

  • Keep renting. Do NOT buy.
  • Pile up the cash. Don't BUY ANYTHING.
  • Cling to a paycheck as long as you can. If it's already gone, YOU LEAVE town.
  • List your EXCESS RE Now. And you mark it down BELOW MARKET. It'll be 20% lower in 12 months.
  • Start looking for INCOME PROSPECTS outside of Bend. Keep your eyes open.
  • Sell your cars. Sell your other toys. Sell your crap. Keep the money.

  
  Speculative Bend is done. Over. We're in Survival Bend now. No one makes DEALS anymore. No sexiness, no flash. What 's befallen Summit 1031 will BEFALL THIS TOWN. Utter collapse, with NO HOPE OF RECOVERY EVER.
  
  It's time to HUNKER DOWN.
  DO NOT BUY ANYTHING
  CONSERVE YOUR CASH.
  REMEMBER THE FOUR B'S
  
  IT IS OVER
  "I just come from Bend Orygun, where they done titty f**ked me atop Volo till I couldn't take it no more! I'm certainly glad I stayed as long as I did, with no visible ill-effects!"
  
• January 01, 2009
• 11:27

  A Look Back on our 2008 hero's: Hollern, Smith, Denton and Osama.

   » ‎ Bend Bubble 2

  Tags:  Bend Oregon   [edit]

  Wow.
  
  I can't believe this crazy-ass blog has survived over 2 years! My first post was Dec 17, 2006:
  
  And to explictly state what this blog is about: Bend Oregon Real Estate, whether it is or has been in a bubble or not, whether this bubble is/has burst, implications for residents, businesses and others, and just about any topic relevant to the Bend Oregon economy and the surrounding region, and housing in general. With unmoderated discussion, I suppose anything goes though. Hopefully, people will realize the value of staying on topic, and will minimize personal "flame-wars".
  
  I was so much younger then. And naive. In fact here is a picture of me eating breakfast right after that first post:
  
  "Hey, give that to me. I eat anything."
  
  And the greatest harbinger of things to come were the fanatastic 2 comments I received:
  
  Anonymous said...
  
  charlottesville real estate Was the Site I arrived at when I was offered the best real estate deal in my life you must contact this company.
  
  Anonymous said...
  
  Nice Blog. I will keep reading. Please visit my blog at: The Internet Marketing Genius, Carael Knight
  
  Both almost bought a tear to my eye, especially the blog-spam one. Oh right, they were both blog spam. Here's a picture of me crying, I'm so overwhelmed:
  
  IHTBYB crying his eyes out. (I am directly behind Britney in this pic, and only partially visible)
  
  My next post, the very next day, had precisely zero comments. I think I finished out the year with a post of such gut-wrenching emotion and tenderness that one commenter was moved to pen these touching words:
  
  Anonymous said...
  
  this post is so dull that, after reading it, i wanted to claw my eyes out.
  
  That's when I knew I had found my true calling: Inflicting pain on strangers via real estate blogging. Judging from the number of gouged out eyes I've seen in Bend, I would have to say: Mission Accomplished:
  
  I love Bend Bubble 2 and Osama!
  
  So there were humble beginnings. And most of the initial postings & comments were of a "defensive" nature: Even the idea that Bend was in a Bubble was widely derided as Insane. And there were some people who even denied (Bubble deniers) that a nationwide Bubble existed. Remember that?
  
  Cuz, if you really remember that time, and contrast it with today, and what has transpired since, it just seems unbelievable. Bend was still caught in just an endless euphoria about the future. Bend is Immune was the mantra.
  
  

  • deep, now closed, hadn't even opened way back then.
  • Sally Heatherton had not yet been "born".
  • Forum Meadows owner turned down ALL auction "offers" for his sacred Bend homes, before going broke.
  • Brooks resources blew out their River Wild condos at Mt Bach Village.
  • Yarrow & Ironhorse hadn't begun sales.
  • The collapse of the home builders stock prices was as bad as anyone thought it'd get.
  • No Bend developers had committed suicide.
  • At the time Columbia Aircraft was alive & well.
  • No layoffs at Brightwood.
  • Seaswirl still alive.
  • No firings at City Hall.
  • Fannie & Freddie in the in the $70's.
  • The DJIA had yet to hit 14,000, and fall to the 7,000's.
    
  • CACB hit $32 in the last week on 2006. Now $6 and change.
  • The Shire was still the proud brainchild of The Hatchery.
  • Becky Breeze still owned The Plaza.
  • Residential sales in Bend were in the hundreds per month.
  • Medians hit $396,250 in May 2007.
  • BendBB had not yet stricken any of my comments.
  • Buster had not called any of us Stincking Smelly Cunts.
  • I had not yet uttered, "It will get worse than you can possibly imagine."
  • People actually Raised their asking prices back then. Really!
  • That Olive & Nut store had yet to open & close.
  • I had not yet voted Dunc for Mayor.
  • We barely knew what SubPrime is, and no one knew what Alt-A was.
  • Citicorp was still the largest financial org the World had ever seen.
  • No bailouts of banks, automakers, or anyone else.
  • Lehamn was still alive & kicking. Smith Barney too.
  • No Cessna layoff's locally yet. The buyout was a "huge success".
  • Unemployment was below 4% in Bend.
  • Not a one Single Family Home was below $100/sf in Bend. No a single one.
  • I had not yet lost my bet to BendBB that medians would go below $300K.
  • Renaissance Homes was still smitten with Randy Sebastians flesh-eating AIDS.
  • Holtz-Tek had not yet blackmailed our fair city out of Millions for JR "Master Plan".
  • BEM had not yet penned his "cure" for Broken Bend.
  • I had yet to post my first Picto-Plummet.
  • I had yet to introduce into our lexicon the terms "Cali-Banger", "STD's" or "Flipper Bait".
  • The Oregonian had yet to run "Death and Specualtion in Bend".
  • Pronghorn & Brasada were still above the fray, and "selling out" on Day 1.
  • Volo was still a glimmer in Bledsoe's donkey-cum-encrusted eye.
  • The WSJ had yet to expose man-birthing or clothesline propoganda to the World.
  • The ferris wheel blackmail of Broken Top had yet to occur.
  • Bend was still in the grips of Tuscan mania.
  • The Redmond water park would save us all from Central Oregons terrible seasonality with high-paying lifeguard jobs.
  • We did not yet know that NOW is "The best time to buy in 20 years".
  • Bend was still the most overvalued city in the country.
  • Baby Jeebus had not yet smited us.
  • I had not yet declared Bend the Best 3rd World City ever.
  • Trono's Mercato had it's Australian financing All Lined Up.
  • Norma DuBois had sold out Franklin Crossing for the 18th time.
  • Measure 37 made every hillbilly Oregonian farmer a land baron.
  • Tiny Ashwood OR took the prize for most ambitious housing development: 5,500 homes in a town of 120 people.
  • NAR economist David Lereah still encouraged the financial merits of home ownership.
  • Crook County had not yet approved resort properties that would saddle the area with 75 years of inventory.
  • We didn't have a fleet of busted BAT buses.
  • The city hadn't lost multi-million dollar lawsuits regarding water systems and whatnot.
  • The August 2006 inventory top was still "temporary".
  • We still hadn't been shown how to get rich losing millions by Don Bauhofer (aka Bauhumper).
  • The Incredible Hulce continued to pander to RE developers in her completely discredited rag.
  • We were yet to be introduced to the merits of Capstone Turbine Buttplugs.
  • We were yet to receive a lesson in thermodynamics by a dude who dragged a tire behind his car to power his car, a guy who turned water into gas, and a company that turned trash into fuel.
  • I had yet to recommend Rent & Invest The Difference as The Only Investment Plan you could be sure of in a place like Bend.
  • There were many, Many businesses, largely invisible, that were still open, that have vanished in the meantime. Most mortgage brokers are in this category.
  • Re/Max was still open. So was Sunriver Realty.
  • COBA, COVA & the rest hadn't BOUGHT our City Councilors election for pennies on the dollar.
  • My prediction of a collapse in California RE was still widely ridiculed: "California is Immune."
  • 1031, Merenda, deep and other accessories of wealth for Bend's elite still held their glistening facade.
  • NOD's were not measured in the THOUSANDS here.
  • We had yet to have our first 1,000+ comment week.
  • The City was not perilously close to bankruptcy.
  • Black dudes were known for beatin' they wives, smokin the cracker, f**kin, and shootin whitey, not being President.
    

  
  And there is probably more. Much more. The point?
  
  It's been a hell of an eventful couple of years. Most of the real crazy s**t has happened in the last 6 months. I mean The Giants of The Financial Universe have been hobbled.
  Cathy Bates administer Good Olde Fashioned Hobbling. Feels so good.
  
  I guess my main point is this: Having seen how far we've come, how people like Jody Denton's business eyes were too big for their stomach, you might want to exercise some restraint. Because this thing is, AT MOST, about half over.
  
  We have gone from $396K medians to $239K, that's down 40% from top to bottom. Another 40% down is Very, Very Easily possible, which would take us down to $143K.
  
  Folks, when we hit medians in the $140's, and it will happen, Bend is not going to be a place that about 70-75% of the population even recognizes. The old codgers will, but it will be the 4 Bees that rule the roost: Butter, Beans, Bullets, and Bullion.
  
  This place will be like a hyper-magnified version of much of the US. We aren't going to sink back into the Stone Age, like some have posted here (IMO), but we will NEVER return to the hyper-consumption-fueled prosperity of the past 3 decades. That time is over.
  
  But you'd do well to read into Denton's comments about What He Is Doing Now.
  
  He's Leaving Bend, and He's Leaving Oregon.
  
  “I had a very long and prosperous career before I came to Bend,” he said, “and I’ll do what’s best for me and my family. It will definitely be outside of the state of Oregon.”
  
  He's telling us something.
  
  When all is said and done, Bend, In The Best Of Times, left this very talented & decent person, completely broken. Broken financially yes, but worse, just broken from the experience.
  
  “Getting to this point has been stressful and difficult,” the chef said. “For my wife and myself, there was a sense of relief once the decision was made.”
  
  Once you make the decision, once you realize that you can stop fighting the impossible battle, there is a Huge Sense Of Relief. Denton is a talented guy, a guy with resources, a guy with a plan & the ability to execute: And this place broke him.
  
  And I have to give him credit for one of The Best Lines Ever from a Bend Businessman quoted in The Bulletin:
  
  “But the question became: How wise is it to keep feeding this thing when all it does is eat?”
  
  I will leave it at that.
  I hope no one notice I stuffed that motherf**king BendBubble2 blog in my humungous smelly twat! The coast looks clear! I gonna make a run for it! Happy New Year you f**kers! I hope you suffocate & die in my smelly cunt!
  
• December 21, 2008
• 8:57

  [Message removed for violating bulletin board rules]

   » ‎ Bend Bubble 2

  Tags:    [edit]

  Interesting post over on BendBB this past week. Yet another comment by someone that began a chain of events all to familiar:
  
  Smart Creative Solutions said:
  
  What could be smarter or more creative than loaning yourself millions of your clients dollars?
  
  bendbb said:
  
  If you have evidence that someone illegally loaned themselves millions of client dollars give that information to the authorities, but if not I need to remind folks that the public record information posted in this topic doesn't prove any wrongdoing. There may be an innocent explanation for Summit Accommodators's "liquidity problem" so let's wait and see what develops rather than posting innuendos.
  Earlier in the thread St Paddy had posted from the County Clerks office this:
  
  TYPE: Deed of Trust / Mortgage CONSIDERATION: $5,000,000 DATE REC: 9/22/2008 8:52:58 AM
  
  DIRECT: NEUMAN, MARK A INDIRECT: INLAND CAPITAL CORP
  DIRECT: NEUMAN, JANICE L
  
  SUBDIVISION: AWBREY BUTTE HOMESITES PHASE SEVENTEEN LOT: 22 BLOCK: 6
  SUBDIVISION: AWBREY BUTTE HOMESITES PHASE 30 LOT: 7
  SUBDIVISION: HIGHLANDS AT BROKEN TOP PHASE 2 LOT: 36
  
  So when bendbb tells people to stop posting "innuendo", there's already a fair bit of PROOF that the principals of Inland & Summit are on the grift. They've already removed $10MM in commingled funds. And so it begins:
  
  Smart Creative Solutions said:
  
  Hold on there Mr. Internet Policeman-- I didn't say it was illegal. As a matter of fact 1031 accommodaters are totally unregulated so there is nothing illegal to report to the authorities.
  
  It is a matter of public record, not innuendo, that both of the principals of Summit Accomodators loaned themselves five million dollars from their company recently and that the security for these "loans" have an RMV that is a fraction of the "loan" amount--smart and creative.
  
  bendbb said:
  
  I'm glad to hear you don't think it was illegal, but your post explicitly said they loaned themselves millions of "clients dollars". That's innuendo, and that needs to stop.
  Guest said: Oh pleeeease --there is no innuendo that needs to be stopped. It is undisputed that these loans were made by Island Capitol, the company whose sole purpose was to hold "clients dollars".
  
  On their website they confirm these"clients dollars" are missing
  
  Currently, there are significant funds in the exchange fund accounts maintained by SAI. However, the balances are less than the total amount of all currently open exchanges for Summit Customers.
  
  This isn't an alleged incident--it really happened--the clients money isn't reportedly gone, it is gone.
  
  Panda said:
  
  bendbb you need to put the brakes on. I don't see how any of this discussion crosses any lines. People are offering their opinions as to what is going on here. They have a right, perhaps even an obligation to do that, as there is something very amiss here.
  
  I've had personal dealings with some of these principals and I'd be very worried if I had money in their company.
  
  Panda hits the heart of it right here. I'll put to you that at the heart of any thought suppression is SELFISHNESS. Not caring about anyone but yourself. It's how dictators operate, it's how BendBB operates.
  
  I can offer IRREFUATBLE (rhetorical) proof: If BendB was one of Summit Accomodators clients, and had, AT THIS MOMENT, a transaction that he could not complete because of the CURRENT LIQUIDITY ISSUES, that he'd be about as far away as he could be from his current stance:
  
  "Let's presume INNOCENCE of these grifters despite the fact that we have UTTER PROOF that they have VICIOUSLY VIOLATED THEIR FIDUCIARY DUTIES. No, no. Let's give them another chance. Let's see if they CAN WORK IT OUT. They've DIVERTED $10MM+ to themselves, thencly leaving an untold number of people in the Bernie MADE-OFF-TYPE Lurch of not being able to BUY ANYTHING. Yes. The CORRECT thing to do is GIVE THEM MORE TIME WITH OUR MONEY."
  
  But maybe IHTBYB is Too Cynical? Maybe bendbb is protecting people FROM THEMSELVES. He wll permit No Evil against these Reputable 1031 Exchangers:
  
  Freddi said:
  
  [Message removed for violating bulletin board rules]
  
  Guest said:
  
  [Message removed for violating bulletin board rules]
  
  St Paddy said:
  
  [Message removed for violating bulletin board rules]
  
  Freddi said (again):
  
  [Message removed for violating bulletin board rules]
  
  Then St Paddy posts something I used to exclaim on a regular basis when posting on BendBB, something that hasn't happened in over a year:
  
  WTF did I violate?
  
  bendbb said:
  
  I don't keep track of removed messages. Don't take it personally.
  
  Great thing about this, is there is no one who knows WTF St Paddy even wrote. It's all gone. No personal arbitration of truth, only bendbb's idea of What Truth Is. And so it degenerates into Parsing Every Word so as not to be called LIAR:
  
  Hypothetically Speaking said:
  How about if we say hypothetically; In a hypothetical situation like that, could people voice their opinion?
  bendbb said:
  
  Hypothetical situations are fine as long as they don't morph into thinly veiled allegations about real people.
  
  Ah yes, there's nothing like a spritzer of Oblique Language to put a spring in your step!
  
  "Thinly veiled accusations"? Really?
  
  So, the posting on the county clerks office Just Doesn't Hold Enough Water? Did you go along with If It Doesn't Fit You Must Acquit? I mean, WTF do you need?
  
  Thickly veiled Hypothesis said:
  
  Thanks for that ruling.
  
  To thicken up the veil, how about if we say the town was in Ohio, and that it was 2 astronauts that stiffed their 1031 customers?
  
  Perfect. If this CAN'T possibly indict the character of any of bendbb's Possible Associates in Bend, can we actually have a conversation about it? PLEASE?
  
  Then the sarcasm starts, because people can't believe they're being Shut Down for Stating The Incredibly Obvious:
  
  Queen said:
  
  I can't figure out if you're being sarcastic or if you live in a parallel universe where what these guys did is something less than reprehensible.
  
  The most obscene part of this is they are characterizing the the 10 million dollars they made off with as an investment.
  
  From their site;
  The current amount owing from Inland to SAI is approximately $13,706,557.21. The existing real estate investments will be made available to repay the loan balance and satisfy claims,
  
  The security for these 2 five million dollar "investments" that were both made 9/22/08 are third trust deeds on houses that were already seriously underwater.
  
  The second most obscene part of this is that were it not for these 2 "loans" and the opulent livestyle the principals treated themselves to, no customer would have lost any money.
  
  
  Bendbb; this is not innuendo-- I'm not insinuating these guys are scoundrels, I'm coming right out and saying it.
  
  Guest said:
  
  I'm being very sarcastic with more than a hint of criticism for the way bendbb handled this entire thread.
  
  bendbb said:
  
  So maybe I should make like BEM and moderate messages *before* they're posted -- is that what you want?
  
  My vision for the bulletin board is to keep it focused on issues, not on people or personalities. I don't understand why you find it necessary to call people names like "scoundrels". Can't you find another way to express your opinions without name calling?
  
  You BASTARDS! Besmirching BendBB with your flagrant use of terms like SCOUNDRELS! Jeebus would roll over in his GRAVE!
  
  bearishly happy said:
  
  bendbb.
  
  It seems like you have a bit of a tin ear for rumor. I know you got the Cessna guy to deal with (Cessna closing tomorrow!) and other scurrilous rumors, but not all rumors are false, either. I'm not sure why you and RDC feel it necessary to be apologists for obvious bad dealings. Scoundrels is the least word I would use.
  
  Guest said:
  
  bendbb you're really showing your colors on this thread. Do you have some skin in the game or some other association with people at this firm? Your continual chastising of people throughout this thread, at the risk of being being censored, has been childish and petty.
  
  BINGO!
  
  Guest said:
  
  So here's another hypothetical.
  
  I call you and say, "I'm new to Bend, and I need to invest in a 1031. I hear your'e the expert, here. What do you think of Summit?"
  
  Do you say nothing?
  
  bendbb said:
  
  I ask you, "How did you get my number?"
  
  Considering that Summit has filed for bankruptcy and isn't accepting new 1031 customers your hypothetical seems a little far-fetched, but maybe that's true of most hypotheticals.
  
  Ohhhhhhh.... there it is. "THAT'S TRUE OF MOST HYPOTHETICALS"
  
  Uh huh. Commenters held BELOW CONTEMPT.
  
  "You know what, I run this f**king board, and I'm not going to have the F**KING DECENCY to even put forth a useful answer. And I am going to ASSUME THE BEST about a bunch of thieving F**K STICKS and continue deleting posts as I see fit. AND BEST OF ALL, I am going to make THE 100% COMPLETE ASSININE statement that MOST HYPOTHETICALS ARE FAR-FETCHED. And no. I will OFFER NO PROOF. It's true BECAUSE I F**KING SAID SO!"
  
  Guest said:
  
  Of course you refer them to Summit, that is if you use the same reasoning processes as bendbb-- He has read their website where they confess to relieving their customers of 14 million dollars, but notwithstanding this admission, he sees no wrongdoing.
  
  Exactly. Do you realize bendbb that people are INCARCERATED EVERY F**KING DAY WITHOUT EVIDENCE. They are given their day in court, BUT FIRST THEY ARE ARRESTED ON SUSPICION OF GUILT. NO PROOF. Just suspicion. ALMOST EVERY PERSON IN JAIL WAS ARRESTED ON SUSPICION, BUT NO PROOF.
  
  And what do we have with Summit? My God, the evidence is OVER-F**KING-WHELMING... but bendbb doesn't have the critical thinking skills God gave a f**king rock, to realize his commenters have PILED UP THE SUSPICION PRETTY F**KING HIGH, and probably have the RIGHT to make... wait for it:
  
  INNUENDO.
  
  Yeah. These SUmmit f**kers are as guilty as Hitler in my book. This is FRAUD, and ALL BUT THE SENTENCING is f**king DONE. WTF else do you need? A f**king video where they are sitting around LAUGHING DIABOLICALLY ABOUT COMMITTING FRAUD?
  
  Well, apparently the answer over on BendBB is "YES".
  
  Guest said:
  
  Poor clients....
  Gotta do an exchange within 180 days to avoid paying taxes.
  Unable to close exchange within 180 days because the money's gone.
  Taxes now due. No money to pay them because... the money's gone.
  
  bendbb! ALERT! DANGER, DANGER!
  
  My God, this person is IMPLYING INNUENDO THAT THE MONEY IS GONE! AHHHH! INNOCENT UNTIL PROVEN GUILTY! Where are you bendbb? HELP US!!!
  
  Guest said:
  
  If you're the victim of a fraud it really helps you on taxes. This was discussed several places recently due to the Madoff case.
  
  Whew! Glad to hear about The Vast Upside of Summit's FRAUD.
  
  Guest said:
  
  Quote: As a long time reader and a poster a few times, I am in complete agreement with BB admin, If it's not the truth at the time of posting it is only an opinion.
  
  Apparently you and bendbb just aren't getting it.
  
  Does anyone ever know the Truth? Or the facts?
  
  Even when you think you've got Truth in a chokehold it gets away.
  
  I think the complaint is that unless bendbb knows for certain something is true (read above) he accuses everyone of spreading misinformation. If he's in a sour mood he deletes stuff.
  
  Which begs the question "How would you ever become enlightened if you weren't first willing to contemplate facts that you might not be certain of at the time?"
  
  Perhaps the funniest part of this whole debate is this board is edited as though its got the readership of the WSJ. But that's Bend. Everyone thinks they are a BSD.
  
  I like hanging out in smoky dark rooms to get the dirt, then I can follow up and figure out whether or not what I've read here is probable or not.
  
  You shut off that spigot and this board becomes worthless. I've watched over-zealous moderators do that time and time again. Pity. I think its happening here also.
  
  I like this guy. But not everyone did.
  
  bendbb said:
  
  If you think this bulletin board is over-zealously moderated feel free to go somewhere else because it's unlikely that the moderation is going to change.
  
  At this point, I'd suggest you go over to BendBB just to read the posting by "Deep Throat" on page 11 of this thread. I'd give a URL, but since bendbb has admitted many times to IP harvesting, I can only give a description of where to go. Deep Throat posts a pretty lengthy and informative comment regarding the Summit mess.
  
  And luckily this debate is nicely sewn up.
  
  Not Deepthroat said:
  
  [message removed for violating bulletin board rules]
  
  See, if you ARE someone WHO HAS ACTUAL real-World knowledge about the Summit-Inland FRAUD, you actually CANNOT post it over on BendBB. Why? Because it will immediately be deleted as INNUENDO.
  
  bendbb, bless his gristly heart, is one of a Vast Number Of Deluded Dumbf**k Who Thinks: This Is Bend, AND EVERYONE IN BEND IS A CUT ABOVE THE REST. EVERYONE. I am a cut above. I am Better.
  
  We're told this EVERY F**KING DAY by the POLLYANNA BULLETIN.
  
  "No, no. That business is NOT BAD. It's run by Bendites, so THAT IS NOT POSSIBLE. There can't be any FRAUD in Bend, because NOTHING BAD HAS EVER OCCURED IN BEND. THERE ARE PEOPLE WHO ARE TRYING TO F**K US ALL IN THE ASS, THEN KILL US. They are The Dissenters. THEY DO NOT think Bend Is Special. You MUST NEVER LISTEN TO THEM. EVER! Now Let Us Go Forth To Jonestown, where we might all partake in a glorious LIFE ENHANCING KOOL FLUID..."
  
  Ahhhhh cults. They systematically try to rob you of your ability to THINK. Because if YOU ACTUALLY KNEW THE TRUTH, they would LOSE ALL POWER OVER YOU. Have no doubt, BEND IS A CULT.
  
  And it is RUN by Real Estate. And this story is about a HIGH PRIEST of the Cult of Bend making off with MILLIONS, mind you they have ADMITTED IT and There Is No Doubt, and bendbb and every other Bend Media Outlet is True To Form, and STILL LEAVING OPEN TO QUESTION whether they are worthy of our suspicion.
  
  Even having to THINK FOR 1 MICROSECOND about that, is indicative of CULT-THINK. OF COURSE THEY SHOULD BE ARRESTED UNDER SUSPICION OF GUILT, RIGHT NOW. WTF, indeed.
  
  OK, MINDLESS F**KING CULT-FUELED CENSORSHIP aside, this Summit thing is a HUGE STORY. We've seen ReMax go down. There have been untold boutique mortgage shops & realtors & builders already bite the dust. We've even seen suicides.
  
  But Summit, like ReMax is LARGE. Now the CIRCUMSTANCES are totally different. ReMax just bled out & died, cuz RE is over in this town.
  
  Summit is PHASE II of the shutdowns. The ENRONS of The Bend RE Collapse has begun. Yeah, this is the Clusterf**k Black Hole Phase where the tide has gone out & The Big Boys are starting to be exposed for what they are. FRAUDSTERS.
  
  Bend RE is The Largest Ponzi Scheme FRAUD on the West Coast. We're penny-anti s**t, so I wouldn't want to say The Biggest In The US, or anything. But as PER CAPITA FRAUD GOES, this town is at The Top Of The Pile.
  
  Have no illusions, this place is DOOMED. Why? Because when you CANNOT TRUST the intermediaries & the principals, you CANNOT DO BUSINESS. People will not give WHAT MONEY THEY HAVE, to ANYONE. This town is like a GIANT WashMu branch right before the SEIZURE: People will begin BAILING LIKE MAD, JUST TO GET ANYTHING OUT OF THIS FRAUD-RIDDEN S**THOLE.
  
  Our motherf**king newspaper is ON LAND GIVEN TO THEM BY The Biggest Developer In Town. WTF?
  
  OK, I'll wrap this up. On a lighter note. Did anyone notice there was no "What's Going Up" section in the paper yesterday? At least not in the website of bendbulletin.com. The week before it was a picture of The Administrative BARN for the Sunriver Stables. THAT is What's Going Up. A barn. And not a big barn. A small barn.
  
  RIP "Whta's Going Up". You did manage to go out on a high note.
  
  Oh right... and file this under Not Everything Is As It Seems. Dunc filed a post, Why Open Now? He talks about Gottschalks, and some supplier problems and such. But here's the problem:
  GOTT, 3yr chart
  
  This company is about to go BUST. This company has lost almost 99% of it's value, and that is ALMOST ALWAYS a harbinger for DOOM.
  
  I expect a BK on GOTT very soon, within a month probably.
  
  GOTT & Summit illustrate ONE SINGLE TRUTH in times like these: Things are NOT as they seem. Bend Bulletin EXPOUNDED on the UNPARRELLELED ATTRACTIVENESS of Bend for setting up shop, by using GOTT's opening a store in THESE TRYING TIMES.
  
  Uh huh. And I suppose Mark Neumans 8,000+ sf mansion is PROOF that Summit is on FIRM FINANCIAL FOOTING.
  
  We've seen time & TIME AGAIN, that This Time It Is Different. THIS FINANCIAL COLLAPSE is a different breed. We've had 30 years built on phantom income built on credit card & home equity INCOME. This country is largely built on a base that DOES NOT EXIST. OK, NOT EVERYTHING in the US Economy is a PHANTOM, but far more than anyone ever thought possible IS.
  
  We're seeing WHOLE TOWNS and whole areas that were completely sidestepped by the bubble runup, and are now doing "fine". Look at Harney & Grant counties for high relief illustrations of this. These communities experienced BARELY A BLIP whether up or down in the past 10 years.
  
  But then there are places like Bend. Contrary to the 0% Exposure of places like Burns, we are Almost Entirely Dependent On Bubble Economics.
  
  Burns, strangely enough is The Wal Mart of The Bust, doing Quite Well Thank You. But Bend is The Office Max, Gottschalks, KB Toys, Circuit City of the bust All Rolled Into One. We doubled, tripled, and then QUADRUPLED down on REd.
  
  We are so ridiculously quadruple beta-positive on RE, that we will NEVER RECOVER. And note, 18 months ago I made similar statements and was chided as a Clap Board Lunatic.
  
  But this town will NEVER RECOVER. The tide is going out like NEVER IN HISTORY, and the Summit's of Bend are being exposed. Folks, it AIN'T FRAUD UNTIL YOU GET EXPOSED. Go ask Bernie MADE OFF. And the motherf**king tide is GOING OUT.
  
  You will NOT BELIEVE the damage that will be done. Medians at $120K doesn't really fully encapsulate it. $120K medians will happen for a reason. It'll be due to FEAR, FRAUD, and FIDUCIARY ASS F**KING. People will be SCREWED en masse in Bend.
  
  And I mean WORSE than we have been. Look at our Elected City Council.
  
  This place is 100% DOOMED. And if YOU STAY HERE, or BUY A HOME HERE, you deserve everything you get, including being 100% MADE-OFF'd by Bend's FRAUD-RIDDEN RE INDUSTRIAL COMPLEX.
  
  Bend will only be worth buying once the Emporers Clothes have been proven to be NON-EXISTANT in a court of law, and The Kingdom HAS BURNED. This place will be AWASH in vacancies, both residential & commercial.
  
  There will be a time to Buy In Bend, but that time will NOT BE FOR AT LEAST A DECADE. ALL THE FRAUD WILL NEED TO BE WASHED OUT. All the SCOUNDRELS will have to be THROWN OUT OF OFFICE. We will have to be cleansed, and that isn't even close to happening, if anything our elected slate of Councilors further delays the timeline to recovery. Probably 5-10 years, yet again.
  
  We're f**ked. Bend is F**KED.
• December 14, 2008
• 5:16

  Failure Nation

   » ‎ Bend Bubble 2

  Tags:    [edit]

  It's really sort of amazing what is happening in this country today.
  
  We've had a credit-fueled boom of consumerism these past 30 years or so. Just borrowing from the future to enjoy today. Not a horrible thing, until it goes overboard, which it did.
  
  So to fuel the boom, we've built out excess capacity. An enormous amount. Just a ridiculous amount in consumer banking, and Bend is exactly where it should be in this regard, Far Behind The Times. People are still building banks in Bend. They're still building Everything in Bend.
  
  This is exactly what the auto bailout is about: Taxpayer subsidizing of Excess Capacity. Keep It Alive, Keep It Going.
  
  We don't need it, and No One Can Afford The Products, The Horrible Management, or the Incredible Union Greed, but KEEP IT ALIVE, No Matter What.
  
  We, as taxpayers, are actually being force-fed failure-laden bailouts. We will soon bailout everything. Airlines are probably next. The only thing that won't get bailed out will be companies & industries that don't WANT it.
  
  So what is the upshot? We are expending BILLIONS, probably trillions, to keep excess capacity alive & well. Producing millions of cars we cannot afford and DO NOT WANT. Trillions are being thrown into bank coffers to get us to borrow, but strangely, nobody is.
  
  When it comes down to it, we borrowed to the hilt from the future, and now we can't repay. Everybody borrowed. GM borrowed to build plants. Banks, ironically, borrowed to buy mortgages, and were enriched per transaction. Individuals borrowed and bought the only asset that possibly could have absorbed this much lending capacity, homes, by the millions.
  
  We have too much of almost everything, and we can't make the payments to keep it. Can't pay it off. So "we" have gone to the government & asked for trillions. Well, the banks are getting it. GM, Ford & Chrysler are getting it. Defaulting borrowers are "trying" to get it via Fannie & Freddie's moratorium on foreclosures.
  
  In other words, Idiots Are Getting Rich and The Responsible & Prudent Are Funding It. Nice.
  
  So what's going to happen? Well, I suppose in the ordinary scheme of things, if you are demanding quantity X of something, and producers are putting out 2X, prices will fall. Right? But falling prices brings on failure, which we are of course, vigorously trying to avoid. So we Have To keep prices artificially high.
  
  So US Taxpayers are in the uncomfortable position of not just subsidizing current production that we do not want & can't afford, but owing well over $10 TRILLION dollars in future earnings to pay off government debts as well. And we will somehow have to keep prices HIGH to avoid failure.
  
  So our money is simply funneled to bank presidents. To union bosses. To government bureaucrats. To every FAILURE in this country.
  
  The More succesful you are, the MORE You Are Penalized. The LESS successful you are, the MORE You Are Rewarded.
  
  And THE BIGGEST FAILURES are actually holding out for the Most:
  
  ‘UAW bailout’
  
  It is a mistake to use part of the $700-billion rescue package to reward high-tax, non-right-to-work states such as Michigan, says Peter Flaherty, President of the National Legal and Policy Center (NLPC).
  
  “The automaker bailout is actually a UAW bailout,” Flaherty said. “The union will not allow companies to deploy capital in ways that the market would dictate, such as closing plants and layoffs.”
  
  Under Frank’s legislation, car companies receiving bailout money would face tougher restrictions on executive pay and dividends to their shareholders, the A.P. reported.
  
  NLPC says the UAW wants additional taxpayer money to enrich health and retirement plans it controls. Indeed, UAW President Ron Gettelfinger has urged Congress to act immediately to provide a separate, additional $25 billion in loans so auto companies can meet their health care obligations to more than 780,000 retirees and dependents.
  
  Awesome. The UAW will, HOPEFULLY, finally kill The Golden Goose. They are the 600lb suckerfish on the 20lb gristle-laden near-death automakers ass. I HOPE TO GOD they kill it. Because that is truly what the auto-bailout is: UAW payoff. We are paying big fat tubs of s**t $90/hr to do NOTHING. Heard of JOB BANKS?
  
  UAW is The Most Corrupt Bunch Of Greedy F**ks On Earth. Followed By Auto CEO's. There are actually thousands of non-union auto-workers, and extended industry workers, several of whom I Know, who think these two groups deserve each other, and deserve extinction. Even though it would probably threaten their own job. MOST of lower Michigan OPPOSES the bailouts.
  
  What the hell is going to happen? We're paying TRILLIONS to keep alive capacity, predominantly Credit Capacity, that No One Can Pay For Anymore. Even 800FICO's aren't getting money.
  
  Well, I can see a few things happening: Corporate ROI going to 0% or below. We are simply funneling money into products no one wants. Profit is simply (Unit Volume X Price) - Costs. And we are witnessing imploding volumes and prices, while Costs are being kept as high as they ever were. So I see permanent lowering of ROI as long as the Bailout Regime holds.
  
  FAILURE Must Be Be Allowed To Take It's Course.
  
  We are becoming Socialists Speculators. Our Government, is actually putting us into the auto and banking industries via EQUITY holdings. Believe me, they will SOON have us in the housing market. The government will soon start taking over HUGE housing developments. It'll happen.
  
  Innovation Lost. Failure is a CLEANSING PROCESS. Failure MUST happen, or necrosis sets in. We are subsidizing FAILURE, and keeping alive the Dead.
  
  War. We, or someone else, will be at WAR soon.
  
  In China, anger rises as economy falls
  The crisis in global capitalism has spelled trouble for the Chinese Communist Party, confronted by public unrest as factories shed workers and investments collapse.
  
  By Barbara Demick
  
  December 12, 2008
  
  Reporting from Beijing — The signs of discontent are small but unnerving in an authoritarian country where public demonstrations are not permitted.
  
  Laid-off toy company workers smash windows and computers and overturn police cars in Guangdong province. Employees of a liquor company in Harbin travel to their company's Beijing headquarters to demand back wages. Taxi drivers, as many as 20,000 of them, scuffle with police in protests that have spread into seven provinces.
  
  Even the police have gotten into the act. Auxiliary officers surrounded a Communist Party office last week in Hunan province to demand higher wages, said the Hong Kong-based Information Center for Human Rights and Democracy.
  
  As China's economy hits the skids, such protests have been sporadic and usually involved fewer than 100 people. But in recent weeks, they have cropped up across the country like brush fires.
  
  "Definitely, this is the most serious problem we have seen since 1989," said Zhou Xiaozheng, a professor of sociology at People's University in Beijing. "You have millions of college students who can't find jobs. . . . You have migrant workers who have lost their jobs at factories and don't have land to go back to."
  
  It is counterintuitive that a global financial crisis that started with the excesses of Wall Street should be undermining the Chinese Communist Party. But academics such as Zhou believe that the economic crisis could present the leadership with its biggest political challenge since the student protests at Tiananmen Square nearly two decades ago.
  
  To a large extent, China's fiscal problems pale next to those of the United States. The unemployment rate is not expected to top 4.5%, compared with the current 6.5% in the U.S. Although the World Bank recently slashed China's growth forecast for next year to 7.5% from more than 9%, even the lower figure keeps it at the top of the pack.
  
  The problem is that ordinary growth might not be enough for a system that's been sustained by double-digit gains over the last five years. New York University economist Nouriel Roubini predicted last month in a widely quoted newsletter that without 9% to 10% growth, China is headed for a "hard landing."
  
  Security in growth
  
  It is the conventional wisdom that Communist Party rule has survived into the 21st century because of the nation's extraordinary economic growth. China watchers often speak of an implicit bargain between the people and the party: Give up demands for democracy and free speech and we'll make you rich.
  
  "I think the leaders are scared stiff," said Susan Shirk, a professor at UC San Diego. "Certainly the Chinese Communist Party leadership believes there is a connection between economic growth, social stability and the survival of one-party rule."
  
  Even members of the intelligentsia have become more vocal, demanding political change in a petition released this week that was modeled after the 1977 one that challenged the Soviet Union's domination of Czechoslovakia. "In the world, authoritarian systems are approaching the dusk of their endings," says the document, signed by more than 300 prominent people.
  
  What makes the government especially vulnerable is that the people hurting financially have few legitimate outlets to air grievances. Unable to vote out their leaders, strike or collect compensation from the courts, they protest. And when the police wade in, things can quickly turn violent.
  
  That's what happened Nov. 25 after 1,000 workers were laid off from the Kai Da toy factory in Dongguan, a southeastern city often called the real-life Santa's workshop because of the toys manufactured there.
  
  As one former worker, a 36-year-old mechanic who agreed to be quoted by his surname, Zhong, describes it: A group of workers was in discussions with management about termination pay when a dispute broke out. "We saw the police beating five workers with sticks, several of them unconscious. . . . Then many workers rushed out and surrounded them. Later there were thousands of people there. They smashed police cars, doors and computers."
  
  The economic downturn is hitting hardest in places like Dongguan, where factories once churned out toys, shoes and clothing to satisfy the seemingly insatiable demand of American consumers. Now demand has plunged because of the U.S. recession and the scandals over tainted foods and dangerous toys produced in China.
  
  The Chinese government reported Wednesday that last month, for the first time in seven years, exports declined. In the toy industry alone, figures from the General Administration of Customs showed that half of the 3,631 companies had gone under this year.
  
  Almost all of the workers who are losing their jobs are migrants who may not have any place to return to.
  
  Zhong and his wife, who is seven months pregnant, came from an area in Sichuan province that suffered heavy damage during the May earthquake. "We are just wandering around now looking for work," Zhong said.
  
  Fears of instability
  
  This floating population of the unemployed and desperate is one of the government's nightmares.
  
  "The redistribution of wealth through theft and robbery could dramatically increase, and menaces to social stability will grow," Zhou Tianyong, an economist for a government think tank, said in an editorial last week in the China Economic Times.
  
  But it is not only the migrants who can turn unruly.
  
  Young professionals trashed the showroom of a real estate complex called Glamorous City in Hangzhou, Zhejiang province, after learning that the developer was offering a 25% discount to prospective buyers of units they had paid full price for.
  
  Middle-class Chinese are relative novices when it comes to investing, unaccustomed to the risks of real estate or the stock market -- and quick to blame the government when what they thought could only go up instead goes down.
  
  The anger was palpable at a Beijing stock brokerage where investors sat on a row of orange plastic chairs, sipping tea from jars they'd brought from home and watching the latest indignities flashing on the electronic board of stock prices.
  
  " Hu Jintao and Wen Jiabao did nothing to help," snapped one man in a voice that cut through the background clatter and made the others -- unaccustomed to hearing gripes against China's president and premier spoken so loudly -- turn around to hush him. ("Don't tell the foreigner too much about what's happening in China," hissed a woman sitting behind him.)
  
  The 53-year-old man, who gave his name as Lao Yang, or "old Yang," agreed to lower his voice and the conversation continued. He lost seven years' worth of savings from his job at a machine components factory, which is now closed.
  
  Others with him shared his fury -- retired factory workers, homemakers, a former post office clerk, all had lost large portions of their savings playing the stock market and felt the government had betrayed the laobaixing, the common people, by not protecting them.
  
  "Some people lost everything in the stock market. They sold their homes and borrowed money," said Xiong Huanyong, 66, a retired post office worker. "They think there should have been more regulations."
  
  A basic structural problem in the Chinese economy is that wages and living standards have not kept pace with the extraordinary growth. As a result, consumers aren't prosperous enough to pick up the slack and keep the economy rolling in the face of reduced demand from the United States and Europe.
  
  The Chinese government has lowered interest rates several times, and last month announced a $586-billion stimulus package. More moves are predicted, but economists doubt their effectiveness.
  
  "The government's economic policy is still geared to producing high growth figures, but not to producing jobs or raising people's disposable income," said Mao Yushi, a prominent Chinese economist.
  
  Shirk, of UCSD, believes that protests will accelerate as workers realize such actions can help them get what they want. For example, the laid-off workers at Kai Da received severance of about $900 each after their protest.
  
  But Shirk thinks the government will be able to manage the crisis as long as protests remain localized and the nation's leadership remains united.
  
  "They learned their lesson from the Tiananmen period," she said. "As long as they can prevent public splits, throw the ringleaders of the protests in jail, blame the problems on local officials, they can probably hang together."
  
  Something's going to give in Asia. All has been well for the past 20-30 years, even with Tiananmen, because the Commies Have Delivered. But no more. There's about 1.4 billion pissed off motherf**kers over there, and not nearly enough thugs to hold them off. That country is a powder-keg.
  
  China, India, Pakistan. That area is going to explode. Everyone of those f**kers has NUKES. And don't forget RUSSIA, who will do ALL IN THEIR POWER to foment anti-American sentiment. Or really, PRO-OIL sentiment.
  
  The Bursting Bubble now goes FAR beyond American Housing. RUSSIAN OIL is collapsing. Chinese production capacity is imploding. Pakkie's are terrorizing India. And India is RICH & THEY GOT NUKES. There's going to be a F**KING WAR.
  
  Plan Folks. Plan. This crazy f**king blog has been beating the drums for TWO YEARS. "BEANS, BULLETS, BOOZE, BULLION". DO NOT for a second think that can't happen. Don't think for 1 second you can't be relegated to GROWING YOUR OWN FOOD. And SHOOTING YOUR F**KING NEIGHBOR TO KEEP THEM FROM TAKING YOUR S**T. EVEN WHILE YOU ARE STEALING THEIR S**T!
  
  The recent local rash of shootings, robberies, and assaults is NOT a statistical oddity. People are getting desperate. Unemployment EXPLODED in Deschutes County over the past year. And it's going to get far, FAR worse. This f**king place will be a war zone before it's over. Instead of reading about someone getting shot, YOU'LL KNOW SOMEONE who Got Shot.
  
  So what's the solution to the Armaggedon Scenario? Actually Armeggedon IS THE SOLUTION. Got too many factories? Too much productive capacity? Too many unemployed?
  
  There's One Very Effective Solution: WAR.
  
  War tears s**t up, right quick. War kills motherf**kers who would otherwise be robbing you. War will put people back in Chinese, Indian, and Pakkie factories. At least until they are nuked.
  
  We are going to war soon. What do the RICH WORRY ABOUT? That's right, KEEPING WHAT THEY GOT. And India & China have watched the money pile up over the past few decades, and that s**t is threatened now. Don't underestimate the retaliation of a well-funded country.
  
  And what do WE do? Well, if we DO NOT side with China, we're f**king doomed. We OWE THEM $1 TRILLION, at least. In many respects, China runs this 2 bit s**thole already. Who will they go after? India? Japan? F**k, who knows. But it'll be US against THEM. And whoever THEM is, they have been our "Allies" for a long time.
  
  Some whacked s**t is going to happen. Government-owned EVERYTHING. Including your house, maybe. A tax-rate hike is coming that'll probably kill another 10-20% of this countries small businesses. And not just Federal. All the way down the line.
  
  Hunker down, Folks. The Big One is coming. War. Depression. Suicide. Remember your 4 B's. Stock Up And Lock Down.
  
  This is Going To Get So Much Worse Than You Thought Possible.
  
• November 30, 2008
• 8:02

  Bailout Nation

   » ‎ Bend Bubble 2

  Tags:    [edit]

  First, I just want to say that The Most Likely International Incident To Be Ignored As Insignificant And Boomerang On Our Corpulent AmeriKKKan Asses is this crap happening in Mumbai.
  
  I know, we've had to endure these low-grade terrorist boom-boom's since Osama showed the World How It's Really Done.
  
  But this one seems different. Blowing up a Train In Spain where the chards fall Mainly On The Plains is one thing. Spain is the trailer park of Europe.
  
  India, in case you've been lost in a fog of hyper-consumerism for the past decade, is RICH. India is extremely wealthy nowadays, and there is NOTHING up-and-comers like to prove more than I Can Kick Your Poor Ass. We've been doing it for 50 years.
  
  Just keep it in mind: That Mumbai s**t could escalate to NUCLEAR in no time at all. Always stay alert on where the next downleg can come from.
  
  Speaking of head-in-hand Pathetic, I still very occasionally head over to Bend Economy Board (via ANONYMOUS PROXY!!!!) to see if things are headed up over there. Well, except for BendBB's still kick-ass data collection, this thing has seemingly turned into a Ra-Ra board for RE. To wit:
  
  Housing Consumer Confidence Returns!
  posted by:
  No better time to buy
  
  All you have to do is read some of the comments to see few people, IF ANY, are buying this tripe. But there is the occasional Realtor plant:
  
  I will admit, having been actively in the real estate market (looking for a good deal on a house) for some time now, there has been an unmistakable uptick in activity.
  
  And there are the Ever-Ebullient Perma-Bulls, like Jack Elliott, for whom No Piece Of Bad News Is Truly Bad.
  
  And I'm sure a lot of people think that I am of the "100% All About Any Piece Of Bad News Is 100% True, And Any Good News Is Bulls**t" mindset. Not true.
  
  I just feel that we are in the post-traumatic throes of a Bubble Deflation that will bring down this country to a financial level we have not experienced in 50-100 years. And there will be nowhere in the US that suffers more than Bend.
  
  And I think what I've been saying here about the Nationwide Vicious Aftermath is pretty clear for all to see. Number 1 News Item for months now. But what about Bend?
  
  I'll tell you right now that Bend is going to be ravaged harder than anywhere in the U.S. There's a bit of a somber mood about town, and you can finally actually speak about The Current Bad Times at a cocktail party without fear of ostracism.
  
  But THIS is NOTHING. This is NOTHING compared to what is coming. Just take a look out the Side View Window:
  Bend Annual October Unemployment, Oct 1990 - Oct 2008.
  
  It's pretty plain to see that we spanned almost the Entire Gamut of the previous 19 years of economic activity, in one feel swoop, going from some of the lowest unemployment rates ever, to The Highest October Unemployment Rate On Record In One Year.
  
  This AIN'T a Bump In the Road. Wait for February. We will see The Worst Unemployment Rates In Modern Bend History. There's going to be some Major Epiphanizing going on; People realizing EN MASSE that YES, Bend Is Different. IT'S WORSE THAN ANYWHERE ELSE IN THE U.S.
  
  The Bulletin, of course, ran a piece regarding the Great Deflation Of Bend (Population), but it began with a hashing over of The Glory Hole Years.
  
  "This Here? Why, This Is A Little Bump In The Road! Bigger & Better Than Ever In No Time, And So Forth. Yes, Yes. Outdoor Recreation, Wealthy Widows With Big Ol Double Deez, Monsters Of Cock On 96 Year Old Men! It's A Paradise!"
  
  Yeah. Right.
  
  OK, here's an interesting piece that should get your pot boiling, if you managed to act in a fiscally responsible manner for the past 10 years.
  
  Why lenders might forgive your debt
  
  There was a time when lenders didn't want to work with you if you couldn't pay. Now they want to avoid foreclosure, lawsuits or repossession almost as much as you do.
  
  By Liz Pulliam Weston
  
  People who overdosed on debt in recent years learned the paradox of easy credit: While lenders were willing to let you borrow copious amounts, they weren't particularly interested in helping you work out a solution if you fell behind on repayment.
  
  Lenders often found it easier and cheaper to write off delinquent accounts as bad debt than work with you on a repayment plan. After all, they could get a tax break on the loss and then get on with the profitable business of extending credit to the next guy.
  
  Lately, however, lender perspectives have changed. Soaring default rates, a weakening economy and the credit crunch have rewritten the rules.
  
  * Credit card lenders charged off 5.47% of the total amounts owed on cards as bad debt in the second quarter, according to the Federal Reserve. A year ago, the charge-off rate was 3.85%.
  
  * Consumer bankruptcy filings in October topped 100,000, a 40% increase from a year earlier and the highest level since the federal bankruptcy reform law took effect in October 2005, according to the American Bankruptcy Institute.
  
  * More than 2.2 million homeowners are more than 60 days late on their mortgage payments, according to the Hope Now alliance of lenders and credit counselors, and one in six homeowners owes more on a home than it's worth.
  
  * With home prices plummeting, every foreclosure now represents a loss of 44% of the original loan amount, up from 29% a year ago, according to data from LPS Applied Analytics.
  
  That's why lenders are now looking for ways to keep people paying their bills, even if it means forgiving some of their debt. Now the paradox is that in order to qualify, you must be struggling, but not so much that a change in terms wouldn't help you.
  
  How the new programs work
  
  The most sweeping new program was announced Nov. 11. Freddie Mac and Fannie Mae, the government agencies that guarantee 31 million U.S. mortgages, will begin paying the mortgage service companies that maintain the loans $800 for every loan they modify. Borrowers would get help in several ways: Interest rates would be reduced so that borrowers would not pay more than 38% of their gross income on housing expenses. Another option is for loans to be extended from 30 years to 40 years, and for some of the principal amount to be deferred interest-free.
  
  The same day, Citigroup announced it would halt foreclosures for borrowers who live in their own homes, have decent incomes and stand a good chance of making lowered mortgage payments. Ultimately, it plans to modify the repayment terms on up to $20 billion in loans.
  
  Late last month, JPMorgan Chase expanded its mortgage modification program to an estimated $70 billion in loans, which could aid as many as 400,000 homeowners. The modifications were to include reducing amounts owed or the loans' interest rates, and replacing so-called "pay option" loans that typically resulted in mortgages growing over time.
  
  Bank of America, meanwhile, has said that starting Dec. 1, it will modify an estimated 400,000 loans held by newly acquired Countrywide Financial as part of an $8.4 billion legal settlement reached with 11 states in early October.
  
  Loan forgiveness is a key part of the Hope for Homeowners program. This is the foreclosure prevention program that Congress created as part of the $700 billion Economic and Housing Recovery Act of 2008. Lenders that want to participate typically must agree to reduce borrowers' principal to 90% of their homes' current value.
  
  But wait, there's more
  
  In late October, a coalition of lenders and consumer advocates asked banking regulators to approve a pilot program that would allow struggling borrowers to pay off, over time, less than they owe -- as much as 40% less. Under current rules, any repayment plan has to be for the full amount owed.
  
  Though the Office of the Comptroller of the Currency rejected the first draft over how banks would book the resulting losses, backers of the plan say they're committed to finding a remedy for overtaxed borrowers that's short of bankruptcy -- which would likely mean the banks see no repayment at all.
  
  In the first proposal, a joint project of the Financial Services Roundtable and the Consumer Federation of America, applicants would have been evaluated by certified credit counselors; those who couldn't pay off their debt under a regular debt management program would have been placed in one of four repayment plans that would reduce their principal by 10%, 20%, 30% or 40%. Only consumers closest to bankruptcy could have qualified for the biggest reduction.
  
  Travis Plunkett of the Consumer Federation of America said his group would continue to lobby regulators "to do everything they can, within bounds of the safety and soundness of the financial system, to help consumers," but that ultimately consumer advocates may have to turn to lawmakers for help.
  
  "It may be Congress that has to step in, and I think there's a lot of interest there" in doing so, Plunkett said. "We've got a train wreck coming."
  
  Student loans and car debt
  
  Meanwhile, makers of student and auto loans haven't announced any new plans for forgiveness. In recent years, in fact, both groups made escaping their debt more difficult. But:
  
  * Certain borrowers can still get portions of their federal student loans forgiven through volunteer work, military service and teaching in low-income communities. And Congress passed a law in 2007 that wipes out federal student loan debt for people who work in certain jobs and who make 10 years of on-time payments. Plus:
  
  * Auto lenders are stepping up their education efforts to let troubled borrowers know they have alternatives if they fall behind on their car payments. According to credit bureau Experian, more than 500,000 borrowers are 30 days or more overdue on a car loan.
  
  Yet fewer than half of consumers in a recent poll knew that auto financing companies often worked with troubled borrowers, said Eric Hoffman, spokesman for the Aware, an education group set up by auto dealers and lenders that commissioned the survey.
  
  Auto lenders may be able to modify a loan to stretch payments over a longer period or allow borrowers to make up missing payments, Hoffman said.
  
  "We tell people, 'Don't ignore the situation if you're having trouble,'" Hoffman said. "Get in contact with your lender and see if there's a way to work out a different payment plan."
  
  The same advice holds true for student loans. You may be eligible for income-sensitive or graduated repayment plans or, if you're facing economic hardship, forbearance or deferment that would allow you to skip payments for up to three years.
  
  Here's what to do about other debt:
  
  Credit cards. If you're already behind on your credit card payments, you shouldn't wait to see if you'll qualify for any loan forgiveness programs. Make two calls: one to a legitimate credit counselor and another to an experienced bankruptcy attorney. Between the two, you'll get the information you'll need to decide whether you should continue paying your debt or have it "forgiven" by the U.S. bankruptcy court.
  
  Mortgages. Gather your paperwork -- your mortgage documents, last year's tax return and some recent pay stubs -- and call a HUD-approved housing counselor to evaluate your situation and your options. If you qualify for a loan modification program, the counselor can help you get through to your lender's loss mitigation department, which will evaluate your application.
  
  A lender will want evidence that you're in trouble -- and assurances that any changes will keep the payments coming. Don't expect that it will immediately hack your loan balance to what the house is currently worth; it won't.
  
  Your lender has only a few ways to help you: It can reduce your interest rate, defer payments, extend the length of the loan or forgive some part of your principal.
  
  With your counselor's help, you should decide what solution you want before approaching the lender. If you have a temporary situation such as an illness that will be resolved soon, for example, ask for deferred payments. If your adjustable-rate mortgage is about to reset, use MSN Money's Mortgage Calculator to see if a reduced interest rate could keep you in your home.
  
  You may have trouble getting your lender's attention. That's particularly true if you haven't already fallen behind on your payments, something you should try to avoid, because late payments can kill your credit scores.
  
  In that situation, consider getting an attorney's help, said lawyer and mortgage broker Alan Jablonski, author of "Successfully Navigating the Mortgage Maze" and operator of the AJ Consumer Watch Web site.
  
  Unlike some of those who advertise loan modification help, attorneys have a fiduciary duty to put their clients first (and clients have many remedies, including lawsuits and disciplinary complaints to the bar association, if the attorney fails to fulfill those duties).
  
  That's a far cry from many of the fly-by-night outfits that demand big upfront fees and then fail to act, or disappear with the money.If you decide to hire an attorney, you'll have to find one on your own, Jablonski said; anyone legitimate has a full workload and isn't proactively contacting potential clients.
  
  Your state's bar association may offer referrals. In any case, you'll need to confirm that the attorney is in good standing with the bar, and that he or she has experience with loan modification.
  
  Published Nov. 17, 2008
  
  Just read that over. Sounds good, right? Actually, no. Most of these "workouts" are simple extensions of the loan term, or rolling missed payments into the principal.
  
  You've got to understand these loan workouts are a clusterf**k. They ACTUALLY REWARD PEOPLE FOR DEFAULTING. You are only eligible for The Best Workouts if You Are 3 Months Behind, or are on the verge of going bust. If you are playing by the rules, you get screwed. To wit:
  
  Feel like a sucker? You're not alone
  
  Bailouts are going to reckless Wall Street bankers, to homeowners over their heads and now maybe even to Americans hooked on credit cards. Where's the reward in doing the right thing?
  
  By Liz Pulliam Weston
  
  If you feel like you're being played, you're not alone.
  
  The financial crisis has deepened many people's suspicions that doing the right thing hasn't paid off. Instead, they feel it's made them chumps.
  
  You see it in the "Where's my @#$%ing bailout?" T-shirts, the despair about plummeting retirement accounts and the hostile comments that greet every news story about mortgage restructuring or credit card forgiveness.
  
  One reader put it this way:
  
  "Doesn't keeping your promises mean anything? Most if not all of the people who snagged these (mortgages) were well aware of the risk and the responsibility. It kills me that I'm playing by the rules and bailing out those who were greedy, stupid or both."
  
  Even when they're not directing their anger at anyone in particular, many of my readers feel like they've been led down the garden path.
  
  "I am 62 years old and HAD been planning to retire in 5 years," one wrote. "Although I have lived frugally my entire life and put away 15% of my income every year in a retirement account, my balanced portfolio lost 60% of its value in the last two months."
  
  What he wanted to know: Would he be a bigger fool for pulling his money out of the market now or staying in and possibly suffering more lumps?
  
  If you have similar questions -- if you suspect you're being a chump for making your mortgage payments, paying your credit card bills and continuing to invest in your 401(k) -- read on. You're certainly not alone as you watch others exploit loopholes, mistakes and well-intentioned remedies.
  
  Bailed out but still ruined
  
  The question of why some homeowners are getting bailouts has really been answered by the financial turmoil of the past few months. A huge spike in foreclosures, magnified by derivatives cooked up by Wall Street firms, nearly brought down the global economy. As it stands, we're still likely to suffer one heck of a hangover in the form of a serious recession.
  
  The foreclosure mess is far from over. Many of the riskiest loans -- the ones where homeowners weren't even paying all the interest that was accumulating on their loans each month, let alone touching the principals -- are just now resetting.
  
  Then there's the whole vicious-cycle effect, which I wrote about in April. As foreclosures rise, banks slash the prices of the homes they recover, putting downward pressure on everybody else's property values. With more homes "underwater," more fall into foreclosure when their owners lose a job and can't sell, or simply decide to walk away.
  
  That's why the Powers That Be are finally getting serious about working with struggling homeowners. Given how interconnected everything is in our economy, their success in saving your neighbor from foreclosure might ultimately reduce the chances you'll lose your job.
  
  I agree that a lot of borrowers were complete idiots for agreeing to mortgages that were eight or nine times their incomes (a mortgage that was three times your income used to be considered a stretch in the days before lenders went nuts). Smart borrowers fixed their rates for at least as long as they planned to stay in their homes; dumb ones agreed to adjustable-rate mortgages on their brokers' assurances that they'd be able to refinance before the payments reset.
  
  But borrowers didn't get these loans in a vacuum. Mortgage brokers and loan officers downplayed the risks. So did lenders, who gave the brokers and loan officers fat incentives to push them. The Wall Street machine encouraged looser lending standards and created exotic investment products that wound up multiplying, rather than reducing, the risks. Regulators, meanwhile, stood by and basically did nothing. No one involved is covered in glory.
  
  Neither is anyone getting an entirely free ride. Plenty of people will still lose their homes, and many who get workouts will have to live with trashed credit from the payments they missed before help arrived.
  
  Forgiven but not forgotten
  
  Personally, I wouldn't trade places with any of them, not even the ones who'll wind up keeping the bigger, fancier homes my husband and I decided we couldn't afford. I wouldn't want to live with the anxiety those troubled borrowers have faced ever since they got unaffordable mortgages or the uncertainty they're feeling as they wonder whether a workout will save their homes. Those folks made a hell of a gamble, and even with efforts to help on the rise, most of them are still going to lose.
  
  Give me a home bought with a fat down payment and a 30-year fixed rate any day.
  Forgiven but not forgotten
  So how about the people who may be about to get big chunks of their credit card debts forgiven?
  
  Major credit card issuers are seeking permission to knock down troubled borrowers' debts by as much as 40%. Debtors would get preferential tax treatment as well; they wouldn't owe income tax on the forgiven debt until they'd paid off the remainder of their balances.
  
  Credit card issuers are recognizing the obvious: that their free-lending ways have come back to bite them. Delinquencies are soaring, and issuers' charge-offs -- balances written off as bad debt -- are up nearly 50% compared with last year.
  
  The issuers figure getting something out of these debtors is better than getting nothing if they stop paying or file for bankruptcy.
  
  The number of people admitted to the issuers' proposed pilot program would be small -- about 50,000 -- although enrollments likely would rise if the plan worked as anticipated.
  
  You might have a beef with this particular bailout if you faced a huge pile of debt and opted to pay it off rather than have it wiped out in bankruptcy.
  
  But once again, I'd rather be financially responsible and conservative than not. I'm not sorry that we've always limited our credit card charges to what we could pay in full every month.
  
  Maybe we haven't bought as many toys as the folks who carried debt and are about to have some of it forgiven. But we also haven't spent a fortune in interest charges, which those people certainly have.
  
  And I seriously doubt I'd have to pay higher interest rates or suffer in any way from this program, even if it became wildly successful. Those of us with good credit still would get the best rates, as I explained in "The real victims of deadbeats? Other deadbeats."
  Investing blindly makes you a sucker
  
  How about the last station on the have-I-been-a-sucker line: investing. Surely we were sold a bill of goods when we were told stocks are a good long-term investment. Haven't they gone essentially nowhere for a decade now?
  
  Yes, except that those who continue to invest, in good times and in bad, inevitably come out ahead. MSN Money columnist Jim Jubak explains it best in "When to start investing? Now."
  
  The folks who blow it are the ones who take too much risk in the good times, then panic and bail out in the bad, locking in their losses.
  
  The reader who asked whether he should stay or go is a case in point. So close to retirement, he should have been ratcheting back on his risk. Although he thought his portfolio was balanced, it clearly wasn't -- otherwise, it wouldn't have dropped 30% during the worst of this fall's gyrations, let alone 60%.
  
  This just encapsulates somewhat, the Heinous Agency Problems we are in the midst of creating.
  
  We've already bailed out Huge Banks and Insurers. We are starting to bailout homeowners who have defaulted (ie; SPECULATORS). We're headed towards an Auto bailout, cuz Barack loves Unions, and the largely Muslim sections of Southern Michigan.
  
  Everyone, it seems, is being Bailed Out. Except The Responsible. Those who lived within their means. I'll agree that Hard Times can hit those who deserve it least. But I'll also put forth that ALMOST NONE OF THOSE WHO HAVE BEEN BAILED OUT SO FAR MEET THAT DESCRIPTION.
  
  They've said that They Will Print Money Until This Thing Is Solved.
  
  That will, of course, solve nothing. It simply devalues the proxy by which we exchange goods & services. It also redistributes that proxy. Those of least merit are simply given wealth.
  
  This is where we are on a slippery slope. We're a Bailout Nation 100% Addicted To Government Handouts. This should sound EXTREMELY FAMILAR to our local condition. Bend is NOTHING but a taxpayer boondoggle municipality where wealth is redistributed to those who know that local government is nothing more than a wealth redistribution mechanism. Ask Hooker Creek & Knife River: These are less profit seeking corporations, than Sucker Fish on the ailing Bend Slush Fund City Council.
  
  We're NOT governed as much as we are pilfered of our wealth in Bend. Look no further than the last City Council election. Bought & Paid For By COBA. We deserve whatever we get.
  
  And what we'll get is endless USELESS contracts to build infrastructure & "affordable homes".
  
  I actually saw cripple ramps next to The New COVA building on Harriman & Irving, REMOVED and replaced with regular CURBS. Our City, in it's Infinite Wisdom, has decided to allocate resources AWAY from frivolities like Firemen & Policemen, and TOWARDS bricking up cripple ramps at warp speed. Why? Cuz a cripple ramp built TWICE, and still FAILS TO MEET GOVERNMENT REGULATIONS, is a hell of a profitable racket, and THAT IS ALL BEND IS.
  
  That's us: Schemes & Scams that rob the citizens & reward GRIFTERS. And these poeple essentially RUN our EXECUTIVE & JUSTICE systems, as well. So what should we expect?
  
  Well, from my own experience, I can say NEAR ENDLESS ATTEMPTS TO SHUTDOWN UNSAVORY FREE-SPEECH RE BLOGS. Yeah, it's become an onslaught. And just so you know, if this thing just DISAPPEARS one day, THAT IS THE REASON.
  
  We can also expect cops & judges to be on the dole. This f**king place is going to be The Most Corrupt City On Earth, and we are well on our way. It's just going to be a bunch of suckerfish sucking on a corpse. Sooner or later, the money will go away, and all the Corporate Welfare Sleeze will just up & leave, and we'll be left with a hollow husk. It's already happening. They're gutting city services, while erecting ridiculous roundabout art.
  
  Simply incredible. We're going 100% BROKE, and they're still putting art on roundabouts.
  
  We're going BROKE, and they are WAIVING SDC charges to BUILDERS.
  
  Have no doubt: Bend is The Most Corrupt City In The U.S.A., and we are rapidly coming to the end of our RE lotto winnings. The Good Times are LONG OVER, and you are about to witness the most incredible financial implosion of a municipality EVER.
  
  And All There Is To Do, Is Stand Back And Witness The Horror.
  
• November 23, 2008
• 6:23

  The Rich Getting... Poorer, For Once!

   » ‎ Bend Bubble 2

  Tags:    [edit]

  Lib's LOVE a good conspiracy. Their favorite is that a small band of ultra-rich White bastards are in 100% complete control of the stock market, making it go up & down on a whim.
  
  You might have a look at what Rich Whitey has been "suffering" through recently:
  
  Back on Sept 19, Berkshire Hathaway, Buffett's holding company hit $147,000, probably putting Buffett near the $70 billion mark. But Berkshire finally succumbed to the stock market crush, and nearly got cut in half at it's recent lows near $74,000.
  
  And Lost In The Crushing is this: Remember Ye Olde NASDAQ Bubble? Yeah, those were good times. NASDAQ got poked for a near 80% beating, but then began it's slow but sure ascendance to new highs, right? Almost got to 3,000 during Oct 2007 highs, a pretty good convincer from the 1,100's seen 5 years before at implosion lows.
  
  Well, guess who's coming to dinner? A black dude to marry Whitey's daughter? Ahhhh... were it only that, Whitey could survive THAT. No, it's NASDAQ IMPLOSION PART II!
  
  It's been lost in the chaos, but the NASDAQ, and some of it's favorite, and putridly wealthy sons, are having their asses handed to them. Yes, the recent low on the NASDAQ near 1,200 are frightfully close to the Never-To-Be-Seen-Again lows put in almost 6 years ago to date.
  
  So Scions of Wealth, like Bill Gates, are watching the Redux of the MSFT Meltdown melt billions off their still ridiculous pile of wealth. MSFT started this year about twice what it is trading at right now.
  
  Even the Never Say Die Bubble Boys of BrinPage have watch the beloved Google get it's ass slashed from the mid $700's, clear down to the mid $200's.
  
  Some NASDAQ billionaires are holding up pretty respectably, thank you. Larry Ellison of Oracle fame, has merely lost 1/3rd of his pile, since ORCL has "only" fallen from $24 to $16.
  
  But if you want to plumb the depths of the Truly Shellacked, look no further than the Arab Prince, and his band of Shrieking Joobs.
  
  Arab Prince Alwalheed has simply been destroyed by the recent collapse of Citicorp. He owned (and still owns) 5% of a company that at the beginning of 2007 had 5.45 billion shares trading at $55, or right at $300 billion. That stack alone was worth $15 billion to Alwaleed, and I'm sure he had some oil wells and hot & cold running bitches, too.
  
  Well Wake Up My Bitches, cuz with the almost complete collapse of Citi, Alwaleed has watched that $15 bill pile evaporate in the Saudi Sun, to BARELY a billion dollars. He still rich, but he ain't BIG RICH. He ain't the Warren Buffett of the Middle East rich.
  
  It illustrates a point: You DO NOT want to own LEVERAGED COMPANIES when The World is headed into Great Deoression 2.0. And Citi is LEVERAGED big. They will go down. Their credit card portfolio will pull them under.
  
  What about the Never Say Poor Mega Rich Joobs? Well, Sandy Weil of Ex-Citi fame has no doubt suffered on par with his Muslim Master Alwaleed, with whom he is Great Friends.
  
  This illustrates Point 2: Joobies LOVE MONEY more than they hate Arabs. WWII illustrates my point that Joobers love money more than they hate Nazi's.
  
  But you want to see someone truly in pain? Well, then take fitty cent from a Vegas Jubber, Sheldon Adelson. This motherf**ker has had his financial pecker handed to him in the guide of Las Vegas Sands stock going from $140/sh, clear down to penny stock lows in the $2's.
  
  This poor f**ker has just been crushed. He is officially Not Very Rich, after being the 3rd richest person in AmeriKKKa just 18 months ago.
  
  This Financial Tsunami knows no boundaries, it is going to make the poor distitute. It'll make the middle class pretty f**king poor. But it is starting to FINALLY take down the Truly Ridiculously Wealthy. The Gates, Buffett's, Alwaleeds, Adelsons, and many, many other Hyper-Rich types are being CRUSHED. Granted, they are still rich as hell, but far less so.
  
  There is a Virginal Hestiancy Among AmeriKKKa's Capitalists, for the first time in our generation. I think they are actually unsure of just how bad it might get for them. Usually, you'll see one or two of them get shellacked in a market bump, but then it's off to the races again.
  
  Not this time. The Inflection Point seems to have been reached between Labor & Capital, Worker & Owner. Capital has been winning the race for well over 3 decades. Labor's relative wealth has fallen. It has paid To Own. I think those days are over. Capital suffered a crippling blow over the past year. It's not been a few noobs who took a hit, it's been the Biggest of The Big, and they are taking hits they've never, EVER seen before.
  
  What does this have to do with Bend? Quite a bit.
  
  Bend media has long said that due to our Capital-heavy population, our outsized proportion of Owners, that we would Never Go Down Hard. How could we? Everyone knows, The Rich NEVER GET POOR.
  
  And this has been true for several decades, especially the past three. Coincidentally, Bend has come up from the depths, and was for a time, the most ridiculously overpriced s**thole God ever crapped out. And we've been blessed with such wonders as Volo, the restaurant with the longest consecutive days without a single patron, and other economic bastardizations all over our wonderous city.
  
  THIS is what people thought about Bend: It is overrun with CAPITAL. OWNERS. And owning NEVER goes down. Only workers go down, as well they should. With a town so top heavy with owners, things like a blowjob-fueled wine bar, $35 lunch joints like Merenda, King of Sole $500 shoes, galleries, spas, and olive oil shops lining every block, catering to the VAST CAPITAL population base of Bend, it was a sure thing that Bend would only grow more glorious with age.
  
  Well, you're starting to see the first crack in Capital in our lives. Volo is DEAD EMPTY. NO ONE has ever eaten there. That spa where they feed you beer, suck your cock,& give you a haircut? Even that place is hurting. REI? Probably ready to close. The same is probably true for half The Old Mill. All the ridiculously overpriced crap shops that would supposedly be held up by the fickle power of Ridiculously Rich Capital Consumerists, what's happening to them?
  
  Yeah, they are getting crushed. We're the most Over Retailed, Over Restauranted, and generally Over Serviced city in the U.S. Look at Sunriver Realty: Big Splash building, tons of new yuppy agents, prosperity forever, right? No. Closed down, probably lost more money in the last year than the whole company has made during the bubble.
  
  So much of this town is STILL based on an assumption of Ever Ascending Wealth By Capitalists Into Perpetuity.
  
  Go to Tetherow. I did recently. That's a Great Big Empty out there. Go to preview Pronghorn homes at their downtown showplace. Oh right. Closed. Go to Brasada. No. Actually don't. It's too far & a waste of gas. Which is what everyone thinks once they're out there.
  
  "F**k, I might as well live in Burns."
  
  Yeah, this general sentiment is true for All Of Central Oregon. This place is Too Far From Cool Stuff. We have Bachelor, sure. But people have stopped that crap. Portlanders are going to Hood. Cali-Bangers are going to Mammoth or Reno.
  
  Bend is f**ked. We built a city predicated on the idea that Capital ALWAYS gets WEALTHIER. ALWAYS. Look around: This place is just overrun with $800,000 homes. We're out in the f**king desert, and we have like 2 million $800,000 homes. WTF?
  
  And it's going to get FAR WORSE. We've had the Good Sense to elect the Worst Band of Thieves to ever grace Public Office. From The Source:
  
  At What Cost? Record-breaking contributions raise questions about the role of campaign cash
  
  Written by Daniel Pearson
  Wednesday, 19 November 2008
  
  ... Critics say COBA is interested only in seeing that local developers and builders are able to continue making as much money as they have over the last several years at the expense of good planning and community sustainability.

  “I think what’s happening is, because of the housing crash, the builders and developers in Bend need to make sure that they can continue making the same amount of money they’ve made in the past, and the only way to do that is through the rapid expansion of the city’s urban growth boundary,” said Keith Quick, Deschutes County Organizer for the Oregon League of Conservation Voters, which worked on behalf of three of the four losing candidates.

  “The urban growth boundary was the key issue this year,” Quick said. “In the Bend City Council race, there was a clear line between four progressive candidates going up against four pro-growth candidates. The pro-growthers believed in expansion, and the other four progressives believed in a more sustainable approach to growth in Bend.”

  The most notable difference in campaign spending came in how Eager, Eckman and Greene used their finances for advertising. Each of them had enough funding to spend on televisions ads, as well as newspapers and radio, and that focus made all the difference in the 2008 general election, said Jodie Barram, vice chair of the Bend Urban Area Planning Commission who lost the race for Bend City Council seat one to Eager.

  “Advertising is not free by any means,” Barram said. “As non-incumbents, Jeff and I had an uphill battle getting our name recognized. In this race, especially, the difference came down to financing and being able to afford those TV ads. I chose to go with radio and print ads because that’s what I could afford. Jeff was able to afford plenty of TV ads, which got his name and face in front of another audience that I was not able to reach.”

  Quick said the TV ads had more of a dubious effect on the outcome of the elections than simply expanding name recognition.

  “The real fear about this election from a citizen’s perspective is that not only were Bend’s citizens duped into voting for pro-development candidates, the TV ads made them look like change candidates, or candidates that cared about the environment and the livability of Bend,” Quick said. “They have a lot to prove once they get on the council. I don’t think we will see them supporting livable communities like they said, but we’ll see. The real fear here is that special interests gave so much money to three of the four candidates who won, those special interests stand to gain monetarily from decisions the city council makes. That’s the real scary part here – the special interests, especially the Central Oregon Builders Association, bought those city council seats and now these councilors are going to owe them something. That’s really concerning to the OLCV and it should be concerning to other citizens in Bend who care about keeping the city council an independent body.”

  Wow. What a clusterf**k of stupidity.
  
  See, apparently CobaCo is run by dumbf**ks who have never read an Economic Textbook. They think opening up the UGB will return us to the Glory Hole Years?
  
  Wow. I say, Let 'Em Open 'Er Up, then. Expand that f**king UGB out to Millican. And you f**kers Just Start Building. Please. Yeah. That should put things right. Prices should stabilize once we have s**t shacks lined up as far as the wandering eye can see.
  
  Stupid f**king COBA dumbs**ts don't know whether to crap or blow goo.
  
  Worst Of All Worlds, folks.
  
  Labor is, as always, going to get f**ked in this thing. But for the first time, So Is Capital. That means no Mercato. No more Redmond Waterpark. Yeah, no more Tuscany Pines, and it's ilk (ie Moronic Ideas). And believe it or not, THIS CRAP, this stupid crap, is what we've pinned our economic hopes on.
  
  And to cap it off, we've just elected a slate of WHORES whose puppeteers believe an onslaught of supply is how you raise prices.
  
  $120K medians are on their way. $40/sf for the STD s**t, $60/sf for the granite counter crap, and $80 for the inner-circle, rental s**t shacks. This towns ass is going to get drilled unmercifully. In 10 years we'll be The Oakland of the high desert.
• November 17, 2008
• 7:15

  Bend -- A City in Tatters

   » ‎ Bend Bubble 2

  Tags:    [edit]

  A short little placeholder again, and I thought I'd post a story from The Bulletin that has a couple of breathtaking stats in it. It essentially confirms what has been said on this blog for YEARS: That Bend is essentially already broke, and cannot afford to upkeep or build STATUTORILY REQUIRED infrastructure. We're required to build it by law, and we can't.
  
  Economic troubles push Bend plans back
  
  By Erin Golden / The Bulletin
  Published: November 17. 2008 4:00AM PST
  
  From new roundabouts to sewer treatment upgrades and accessibility improvements, the ongoing economic slowdown is forcing the city of Bend to revise or hold off on plans for many large infrastructure projects.
  
  Over the past year, as revenues from development-related permits plummeted, the city went through three rounds of budget cuts, laying off 44 workers and leaving another 55 positions unfilled. Officials have slashed costs across the board by reducing employee overtime and using more energy-efficient computer systems and vehicles, among other changes. The city has even dipped heavily into reserve funds to keep services running.
  
  But for some projects, especially those with multimillion-dollar price tags, the cuts haven’t been enough.
  
  The city is required by law to keep up with some work, including accessibility improvements and sewer system expansions, but it says other plans for wider roads, updated intersections and even a new City Hall are simply going to have to wait.
  
  “As a result of revenue from the state going down, and on top of that, what our general fund is going through, we’re having to go through some reprioritization exercises,” said City Manager Eric King.
  
  Water and sewer
  
  After years of rapid growth across the city, many systems, from sewer to water to roads, are in need of upgrades and expansions. In some cases, the work is required so the city can stay in compliance with a variety of state and federal regulations.
  
  Public Works Director Paul Rheault said his department recently completed work on one major mandated improvement — an $8 million headworks facility, where sewage is filtered before it reaches the city’s wastewater treatment plant. The city is required to increase the system’s capacity as the population grows.
  
  Construction of the headworks project was supported in part by increased sewer rates, which went up by 14.5 percent in July.
  
  Though Rheault said the new facility will help reduce the stress on the wastewater system, it’s not the only upgrade the city will need over the next few decades. Officials are currently working on a sewer master plan that calls for about $100 million in major pipeline projects that would allow more areas of the city to connect to the existing system. Rheault said the city will probably have to spend another $52 million to update and expand the treatment plant between now and 2030.
  
  Though officials never planned to complete the work in the next few years, they say the budget cuts have pushed the time line even further. Now, City Engineer Michael Magee said the city will probably have to do the work in small sections. He said a project in southeast Bend to build an interceptor, or trunk line, will focus on the most problematic areas, one at a time.
  
  “Typically, if you had the money, you would start at one end of the project to the other and work in phases, start at one end and work your way south to hook people up with the sewer interceptor as you go,” Magee said. “But with limited resources, we have to go at it differently, and look at the bottlenecks.”
  
  The city is also working on a water master plan that would include about $100 million in upgrades to piping and treatment systems. Magee said plans for that work haven’t been narrowed down yet, but like the sewer projects, officials are looking at how to complete the upgrades in phases, rather than all at once.
  
  Rheault said some smaller stormwater system upgrades are still on track, including a plan that would reroute water from flood-prone underpasses to a state-owned drainage area near the Colorado Avenue interchange with U.S. Highway 97. That project is still in the planning phase, and officials have estimated that it could cost around $500,000, money that will come from stormwater fees charged to residents.
  
  Street upgrades and repairs
  
  The building slowdown has created a dramatic drop in revenues generated by transportation system development charges — money that is used to fund a variety of large street projects. Transportation Engineering Manager Nick Arnis said the city expected to bring in between $4 million and $5 million in transportation SDCs this year, but has only received about $550,000 since the fiscal year started in July.
  
  As a result, it might be awhile before a handful of major SDC-funded street improvements can get under way. Among the projects: a $20 million expansion and upgrade of Reed Market Road, which would include a roundabout at Reed Market and Southeast 15th Street, and $14 million in work along Empire Avenue, including a roundabout at Empire and Northeast 18th Street.
  
  Arnis said the city is looking to start with small parts of the projects, some with the help of developers who agreed to chip in as part of their development agreements with the city. He said some of those partnerships have already been formalized for the Reed Market work, which was supposed to have been finished last year but was delayed because of the tight budget.
  
  “I think taking the projects (and) phasing them is going to be really important; finding the partnerships with the state or private developers is going to be really important,” he said.
  
  Arnis said engineers are currently working to get the plans for the Reed Market and Empire projects and others, including a fix for the congested intersection of Cooley Road and U.S. Highway 97 in north Bend, ready so they won’t have to wait to start building when the money becomes available. Arnis said the city is working hard to look for additional grants and private funding options, but it isn’t yet clear how long it will take to find enough funds to complete the majority of the work.
  
  The tight budget situation also means smaller street projects will be tougher to finance.
  
  Street Division Manager Hardy Hanson said his office lost about $50,000 for paving operations in the last round of budget cuts. After three cycles of budget adjustments over the last year, he said the city has about $1 million in its fund for patching and paving roads, down from about $1.5 million before the local economy started to slow down.
  
  The division is funded with money from the city’s general fund, along with state grants and gas taxes. With fewer dollars coming in from all three sources, officials have dipped into the street operations reserve fund, which has dropped from about $1.6 million at the end of the 2006-07 fiscal year to a projected $613,000 at the end of the current fiscal year.
  
  Hanson said those numbers mean the city will only be able to repave most streets once every 36 years. He said the industry standard is to do the work every seven to 10 years — a level the city was working toward before the economic downturn hit and created a hole in the Street Division’s budget. Now, Hanson said the city is spending its limited resources sealing individual cracks and holes in the roads, rather than repaving them altogether for a more lasting fix.
  
  “A lot of what we’re doing is Band-Aids, where before maybe we could do surgical improvements,” Hanson said.
  
  Other projects
  
  Over the next few years, the city must also complete a variety of accessibility improvements.
  
  As a requirement of a settlement with the U.S. Department of Justice, Bend needs to make all sidewalks, curb ramps, parking spaces and government buildings compliant with the Americans with Disabilities Act by 2014. In addition, the city must bring all of its Bend Area Transit bus stops into compliance with federal regulations by 2012 because of a separate settlement with Disability Rights Oregon, formerly called the Oregon Advocacy Center.
  
  The city has made progress on some of the improvements, installing new handicapped parking spaces downtown and updating some bus stops. But there’s still more work to be done; officials have said there could be more than 1,000 ramps around the city that need to be fixed.
  
  The city set aside $1 million for the work, but King said it won’t be enough. He said officials haven’t narrowed down exactly how they’ll pay for the upgrades but said debt financing is one of the options on the table.
  
  “We’re under those settlement requirements, so we have to do our best to comply with those — we can’t not do them,” King said. “That’s something we’re going to have to figure out how to finance.”
  
  Officials said a variety of other large projects up for consideration over the past couple of years — a new City Hall, a permit center, the Heritage Square downtown concept — probably won’t see the light of day for a while. But King said he wants to keep the plans for those projects up to date for a time when finances aren’t so tight.
  
  “We definitely just aren’t able to move forward as quickly as we’d like. ... But that doesn’t mean that we’re completely abandoning those things,” he said. “We’re still trying to put ourselves in a good position so we’re ready when funding becomes available.”
  
  What's amazing is that these people look at a 80-90% drop in SDC's to $550K.... but, by God, they still got their eyes on a $20 MILLION roundabout on Reed Market. And luckily they had the FORESIGHT to "defer" (ie cancel) all builder SDC charges to fight this housing glut.
  
  Then there are the $250+ MILLION infrastructure required fixes. That's around $3,500 for ever person in Bend. And that's just to get sewer & water upgrades & improvements that we MUST HAVE right now!
  
  And of course NO ONE at City Hall will even acknowledge that we're in the Worst Slowdown in a Generation. No, it'll all be alright. We'll return to the Hyper-Growth Bend of the Past 25 Years, cuz that's all I can remember.
  
  Think again dumbs**ts. Businesses closing (Cessna, etc) and people LEAVING is going to be the DOMINANT THEME for the next decade, and almost certainly longer. These required fixes will probably go to $5,000 per capita at a time when incomes & profits are imploding.
  
  Again, not to rub salt in the wound, but THIS IS WHAT YOU GET FOR BLOWING THE LARGEST SURPLUS WE WILL EVER RECEIVE AS A TOWN, AND DOUBLING DOWN ON REd OVER AND OVER AND OVER AND OVER...!
  
  It should NOT SURPRISE ANYONE that this has happened. This city's infrastructure is IN TATTERS because we spent every f**king cent we got on PR & MARKETING and RE WELFARE, and NOTHING on infrastructure.
  
  "How could anyone have predicted...?"
  
  Right. That's like asking a slot-jockey if they think they'll lose everything. There's a difference between PREDICTION & MYOPIC OPINION OF THE DELUDED. Of course a gambler THINKS they'll win, that's why they're there. And of course, overall, they NEVER DO. THIS is why no one at City Hall could have predicted this slowdown: THEY'RE STUCK IN A GAMBLER MENTALITY. Always THE NEXT HAND is going to BRING ME BACK. The End Game of this mentality is ALWAYS THE SAME: 100% CRACKER ASS CRACKER BROKE.
  
  This is why almost everyone in City Hall is 100% unqualified to hold their position. "Cut SDC Charges" = DOUBLE DOWN on 12. Whn you're flat ass broke sitting at the blackjack tables, PR & MARKETING ain't going to do S**T.
  
  But that is what we will do. See, they aren't betting THEIR MONEY. They are betting OUR MONEY. They are betting OUR TOWN. They have NOTHING TO LOSE. They'll just lose their jobs. WE WILL LOSE OUR TOWN.
  
  We're going broke. And it's because NO ONE CARES. COAR & COBA bought City Hall.
  
  Don't think they'll push us RIGHT INTO THE ABYSS?
  
  Where's marge? Why is she GONE? Yeah. Free Speech is the sworn ENEMY of the characters who have BOUGHT & PAID FOR our City Councilor WHORES. RE has tapped into a multi-hundred-million dollar kitty... for LESS THAN PENNIES ON THE DOLLAR. They bought their City Councilor WHORES for next to nothing.
  
  They have zero incentive to save this place, and 100% incentive to enrich themselves as much as possible, before BK-ing this place. And when it goes BK, YOU & I will pay. For DECADES. They are lining their pockets, getting dollars for less than a penny, and you & I are supplying the dollars & taking the pennies.
  
  So I apologize to Buster & BEM regarding their optimism that Bend "can be saved". I don't think it can be saved. We've elected THIEVES to office, and their puppeteers DO NOT CARE about anything but lining their pockets. No COCC expansion. No road improvements. No statutorily required sewage improvements.
  
  We're already in hock for 10-20 years. And with our recent elections and the economic implosion, it's going to get worse. We're down to our last $100 (started with $100 million) at the blackjack tables, and we're going to go into PR & MARKETING OVERDRIVE (asking the dealer for money), and we're claiming that "we couldn't have possibly known THIS was going to happen".
  
  Really? Didn't think you were going to lose? Didn't think the dealer would tell you to F**K OFF? You're surprised?
  
  Yes, this is exactly what we are being told. And most people are swallowing it whole. No questions asked. Kool-Aid mania still running strong.
  
  WE'LL BE BK WITHIN A YEAR, 80-90% REVENUE REDUCTION, AND NO ONE AT CITY HALL ACKNOWLEDGES ANYTHING BUT A TEMPORARY SLOWDOWN.
  
  THIS is why we are doomed. This town is being 100% DESTROYED BY our elected officials. Why? They are WHORES for local development interests who BOUGHT them for pennies on the dollar. WE ARE DOOMED.
  
• November 09, 2008
• 5:45

  "Gotcha!", -- media

   » ‎ Bend Bubble 2

  Tags:    [edit]

  Well, we got confirmation of exactly what I said would happen in last weeks post, regarding our Bought And Paid For Whorehouse City Council:
  
  What do new faces mean for Bend City Council?
  

  (City Councilor Jim) Clinton said he expects much of the council’s business to carry on as usual but worries the three incoming councilors might have a shared support for particular industries.

  In total, Eckman, Eager and Green received more than $38,500 in campaign contributions from Central Oregonians for Affordable Housing, the political action committee run by the Central Oregon Builders Association. The three candidates received a total of $14,050 from the Central Oregon Association of Realtors, the group for which Greene serves as president.

  “I think there’s a danger signal that three of the new people were massively, disproportionately supported by the development industry — that’s something to watch for,” Clinton said. “We hope they’ll have a broader perspective beyond that.”

  It goes on to have the usual denials from each of these Bought & Paid For Whores. Big Surprise.
  
  So, we can pretty much expect More Of The Same. Such as pandering to builders with such great ideas as Attacking Bend's Mega-Glut Of Homes By Eliminating SDC Charges, and other such mindlessness. I guess I shouldn't forget the $4.3MM revenue shortfall at City Hall. And the layoffs.
  
  We don't need policemen, firemen, or roads! We need New Houses! Right?
  
  Yes, yes. Selling out our city to RE interests is just proving to be all kinds of smart. And here we've done it again.
  
  So what else happened during the recent election? Oh right! We elected a black dude!
  
  Like I said in the comments, this thing could go in quite a few directions. The worst is what I call The Jesse Jackson Reverse Lynch Mob route, where black men on meth, driving 120mph through a school zone with their kids in the bed of the pickup, who decide, "Hey, this is because I'm BLACK! I ain't doin' nothing wrong!", and so they start shooting.
  
  Or White Dudes in Cadillacs are pulled over and thrown to the ground & is given a Rodney King, ie "A White Rodney".
  
  This is the lowest, basest, most vile thing on Earth, and it's exhibited by all Black Leaders, and 99.999% of all Liberals: REVERSE RACISM. Like putting the word "Reverse" in there somehow gets rid of the RACISM. No. It doesn't. Just makes it a vicious cycle.
  
  OK, this is where it could go, and if JJ Jackson has his way, this is where we're headed.
  
  OK, read again KNEE JERK, SELF-HATING LIBERALS: I HOPE NOT. OK?
  
  This is where I HOPE & PRAY it goes: I hope Obama serves as a model for blacks. I hope he SAVES them from decades of VICTIM-MENTALITY BULLS**T that has been spewed by HATERS like Jackson for decades. I hope Obama KILLS the WHITE OPPRESSOR MYTH that bigots like Jesse Pedophile Jackson has spread his WHOLE LIFE for his own personal profit, and nothing else.
  
  THAT is what I hope.
  
  But this guy is up against entrenched forces that have a RACE-FUELED HATE AGENDA, and they see this guy as their "In" to getting WHATEVER they want. And they are going to PUSH, CAJOLE, THREATEN or whatever else they have to do to take over his position & turn him into a puppet. I pray to God Obama doesn't get Lewinskied by these f**kers.
  
  I am pulling for the guy. I want to believe that POSITIVE CHANGE is coming. I AM thrilled there is a black dude replacing the insular, inbred bulls**t we've had to put up with for 8 years. OK... 240 years. I just hope this guy can fulfill the promise by taking The High Road, when there is overwhelming pressure to take the Low.
  
  OK, moving on....
  
  I've noticed a trend that's been around quite a while, and I've commented on it several times, but recently I've noticed it's in Almost Every Single Negative Economic Piece in Cent OR media. I have in fact seen it already this morning. Here is the snippet, and see if you can spot the "odd" passage:
  
  GM, Ford woes impact Bend car dealerships
  
  The sputtering economy is clogging the engine that runs this industry. Auto sales are at a 25-year low and still falling.
  
  Dealerships in Bend say sales are down significantly, following the national trend.
  
  "Following the national trend".
  
  "We're just like everywhere else, right? We're not immune. How could we have escaped such an overwhelming force?"
  
  The other fairly obvious statement is along the lines of, "How could we have possibly known this was going to happen?"
  
  The Bulletin runs stories ad nauseum FILLED with these 2 statements by City leaders. You WILL NOT see these sorts of statements in any other self-respecting news organization, anywhere. Why?
  
  Because NO WHERE is local government, local media, and a dominating local industry so incestuously intertwined. RE interests BOUGHT & PAID FOR our local city council, as City Councilor Jim Clinton stated. RE interests donated a multi-million dollar property to the local newspaper. NO WHERE will you find such RIDICULOUSLY biased news reporting as you will find in Bend, Oregon. NO WHERE.
  
  THAT is why you find virtually ALL news pieces FILLED, sometimes very subtley, with odd statements about the BLAMELESSNESS of local government for the current financial debacle. And if you've been out, that debacle is the rapid bankrupting of this town that is 100% INEVITABLE.
  
  We are being conditioned for it. That's what these statements are: They are bracing us for the train wreck they KNOW is coming. We're in Layoff Round #3 at City Hall. They are NOW telling us they KNEW it was coming in September! But after the first 2 rounds, King proclaimed, "This is it, we're done." Of course, a 100% LIE.
  
  Just keep your eye out for this sort of thing:
  
  "We're suffering just like everyone else."
  
  Translation: We have to TELL YOU that we are suffering just like everyone else, because for 10 years we have told you that we WILL NOT SUFFER, EVER, because we Bendites are Gods Chosen People. Plus this statement cushions the inevitable blow of Bankruptcy that WE ALONE have pushed us into.
  
  "How could we have known this was going to happen?"
  
  Translation: We are headed towards bankruptcy, and we MUST find a way to HOLD OURSELVES BLAMELESS for the cataclysmic implosion of city finances that WE ALONE are responsible for.
  
  If you want to see ONE EXAMPLE of the ENLESS BOONDOGGLES we as taxpayers have funded, just go to Bend2030. Here's an excerpt of just what Bend2030 is STRAIGHT from the homepage:
  
  Bend 2030 is a private non-profit 501 (c) 3 organization, independant from the City of Bend.
  
  Ummmm, yes. Yes, Timmy. "independant". They are INDEPENDANT from the city of Bend, as well as a decent spell checker.
  
  Click on the Bend2030 "Action Plan & Progress Report". Their original action plan was published in Dec 2006, and they recently put out a Bend2030 Progress Report. Some excerpts of EXACTLY what has been accomplished with our taxpayer funds over the past 2 years:
  
  With respect to the Modal Connectivity Plan (yes, BIG WORDS & MYSTIFYING TITLES fill this thing):
  
  "...a Recreation Assets Committee... is identifying opportunities for recreation and connection in Central Oregon."
  
  Holy S**t! They've fired up the old RAC and are vigorously IDENTIFYING CONNECTION OPPORTUNITIES! Pardon me Sir! I stand corrected! Bend2030 is on the EVER-INCREASING "CONNECTION" problem we've got going! Whew! What a relief.
  
  Regarding the Mirror Pond Vision (these f**kers do a lot of VISIONING):
  
  "Bend2030 is in discussion with stakeholders about facilitating community forums concerning Mirror Pond."
  
  Ummmm. What? So the sum total of your PROGRESS with respect to the MIRROR POND VISION is that you have... talked.... to..... people.... about.... it. Ah ha.
  
  With respect to The Green Print Plan (no, I do NOT know what The Green Print Plan is, as it is not defined ANYWHERE. But it has the word GREEN in it, so it must be wonderful):
  
  "The need for a Green Print Plan was initially identified in the Bend 2030 Vision. Trust for Public Lands requested support from several partners including Bend2030 to make the plan a reality. TPL is close to raising the funds needed to support the plan."
  
  Seriously, that's all there is. Green Print Plan is 100% undefined. But the f**kers did decide we needed it. And the PROGRESS made by Bend2030 is that SOMEONE ELSE has started asking THEM for money, and the other party has not yet achieved their fund raising goal.
  
  OK, when someone asks me for a progress report of MY LIFE, I don't blow out a story about how the local Girl Scouts have STARTED SELLING ME F**KING COOKIES, BUT THEY HAVE NOT YET ACHIEVED THEIR GOAL. OK, that is NOT an accomplishment.
  
  OK, but enough soft-hearted BULLS**T. The Bend2030 is Dead F**king Serious, and has some MAJOR INVOLVEMENT in Real Community Issues, such as BAT & The Redmond Airport, Gat Damn It!
  
  Regarding BAT Expansion:
  
  "Bend2030 has approved a resolution in support of the November ballot measure."
  
  Holy S**tballs! They've APPROVED A RESOLUTION! I think all readers should know the IMPORTANCE of this SEMINAL EVENT. I also approved a similar RESOLUTION when I was taking crap this morning. Believe me, that s**t does not happen every morning. Sometimes I will go a week and only approve 3-4 resolutions when taking a dump.
  
  Regarding Redmond Airport Expansion:
  
  "Bend2030 continues to support construction on the Redmond Airport terminal expansion which is underway, and expected to be completed by 2010."
  
  Whoa! They SUPPORT construction of the Redmond terminal! F**K ME! So... the construction of the terminal is UNDERWAY. And Bend2030 CONTINUES to support this construction. Which is underway. It's already going.
  
  Ummmm... I'm just curious what sort of "resources" Bend2030 has CONTRIBUTED to this vast effort of SUPPORTING THIS CONSTRUCTION? How many vast LEGIONS of people are TASKED with SUPPORTING this terminal expansion?
  
  Funny, but this DOES NOT sound like PROGRESS to me. It sounds like a bunch of f**kwads patting themselves on the back for doing NOTHING. Here's how they describe themselves:
  
  "Bend 2030 is made up of 18 very passionate and deeply committed volunteer board members who are dedicated community leaders representing a wide-spectrum of backgrounds and neighborhoods from the community."
  
  "Passionate and committed"? Huh. "Wide spectrum of backgrounds and neighborhoods"? Really? OK. Let's name some board members:
  
  Linda Johnson - Bend City Councilor
  Peter Gramlich - Bend City Councilor
  Erik King - Bend City Manager
  Brian Shetterly - City of Bend Planning
  
  Yeah. It's real f**king diverse. Like most of Bend organizations, Bend2030 is a taxpayer funded boondoggle-circle-jerk that does NOTHING except increase the INFLUENCE PEDDLING POWER of BOUGHT & PAID FOR WHORES of the local RE industry. That's all.
  
  Yeah. It's DIVERSE. How many black motherf**kers are on Bend2030's Board? How many EAST SIIIIIEEEEEDERS? How many CITIZENS NOT in City or LOCAL GOVERNMENT? By my count? ONE.
  
  "Diverse" to these f**kers means that they got BOUGHT by COAR AND COBA! Holy S**T!
  
  "WE LIKE BOTH KINDS OF MUSIC, COUNTRY AND WESTERN!"
  
  And we have spent close to $1,000,000 on this. And what have we got?
  
  Real kick ass FAQ's on VISIONING:
  
  Q: What is community "visioning"?
  A: Visioning is a planning process that can help a community create a shared vision for its future.
  
  Q: What is a vision?
  A: Think of a vision as a community's preferred "destination" - where it would like to be in the long-term future.
  
  F**k me. "What is a vision?". We've paid these f**kers a million dollars for answering THAT? We're dead. Here's my F**KING QUESTION:
  
  "Can you define, or go 2 f**king seconds, WITHOUT USING THE WORD "VISION", "VISIONING", or some derivation of THAT F**KING WORD?"
  
  So what did our recent election accomplish?
  
  Well, we did manage to Throw The Bums Out. But they were replaced by Newer, More F**ked Up Bums. And these BUMS have, and will continue to work SOLELY for the local RE interests. Think WAIVED SDC CHARGES to "solve" the local "RE PROBLEM". These f**kers are SO MYOPIC, they can't even fathom a solution that does not DIRECTLY BENEFIT their PIMPS (ie HOLLERN).
  
  Go to the Bend2030.com website. And just prepare to be amazed at the WASTE of it all. BIG WORDS. COMPLICATED "VISIONS". Lots' of PROGRESS.
  
  Until you really start reading. And realize they have done NOTHING. Not a single f**king thing. So where is the MILLION DOLLARS? WHERE?
  
  Right. Boondoggle. A bunch of back-slapper, old boy network, bought & paid for WHORES sucking the cock of local Real Estate. All paid for BY US.
  
  Welcome to MOTHERF**KING BEND, OREGON.
  
  Addendum! Visit Bend's Newest Hilarious Blog:
  
  Bend Sux
  
• October 27, 2008
• 20:20

  Bend -- Closed for Business

   » ‎ Bend Bubble 2

  Tags:  Most Overpriced Housing market in   [edit]

  Welp, if you can't tell, I'm pressed for time, and people seem to want to talk about McPAIN no matter what I post, so this will be just a short weekly placeholder.
  
  I noticed something on Wall St that I haven't seen in a long, long while: 9, count 'em, NINE empty parking spaces in a row. Nine! I the middle of the day. Last year at this time, on a nice sunny day, you just started rounding Bond & Wall, and finally settled on something way off the beaten path.
  
  I can SEE Bend slowing VISIBLY. Which is bad. Cuz once you can SEE it on the streets, it's pretty damn bad.
  
  The Pita Pit, which opened with such fan-fair & crowds, similar to Sonic, was DEAD EMPTY. I mean, the half life of The Big Bang Openings, has gotten down to 1 week. It's just one week, and the honeymoon is over.
  
  And Bend's Beautiful People, you know, the people with 278 non-profits started in the past 3 months... you know, people with morals, looks, titties and MONEY so superior to you and me, that you & me make THEM wanna VOMIT.... well, those people have started engaging in the lowest, most VILE activity known to man:
  
  THEY ARE APPLYING FOR JOBS!
  
  AHHHHHHHHHHHHH! NOOOOOOOOOO!!!! MY GOD!!!!!!! NORMALCY IS FOR LOSERS!!! ONLY THE START-UP & ABANDONMENT OF NON-PROFITS IS GOOD ENOUGH FOR ME!!!!! AHHHHHHHHHHHHHHH!!!!
  
  Yeah. These people are applying for jobs. OK, this is like The Yankees putting a penguin on first base or something. It's so alien to these people to engage in NORMAL LIFE, even they don't know how to do it well, if at all.
  
  Well, if you have 2 cents to rub together this should all be obvious. Hard times are here to stay. If you're looking for The Turn, don't look in Bend. We're 18 months behind, and twice as deep in the s**tter.
  
  We're supposedly 3X the exposure to RE as the rest of the state. Bulls**t. We're 5-6X MINIMUM. 150% MINIMUM of this regoins growth over the past 10-12 years is due to RE. Without it, we'd have SHRUNK.
  
  This "Credit Crunch" is the End of Days for us. We're dead meat. $120K medians may look Way The Hell Too Optimistic at the end. Why? Bend was purposefully BILKED FOR EVERY F**KING CENT by RE INTERESTS. And they were enabled by our beloved City Council. Realize that these positions have NO PURPOSE but dispensing influence.
  
  TOM GREENE is the PRESIDENT of the Central Oregon Realtors Association, and I'm sorry, but we DO NOT NEED yet another BOUGHT & PAID FOR WHORE RUNNING THIS TOWN. We have FAR MORE than enough. My God.
  
  These people got us HERE. This is the "Who could have possibly predicted THIS would have happened?" types. They literally cannot predict the sunrise.
  
  Bend council candidates all over map in fundraising
  
  The second-highest fundraiser, attorney Jeff Eager, has brought in $17,563 in his bid for the seat currently held by Mayor Bruce Abernethy, who is not seeking re-election. About $4,000 of Eager’s money comes from Central Oregonians for Affordable Housing and the Central Oregon Association of Realtors’ PAC.
  
  In the three races with an incumbent seeking re-election, the challengers all have raised more money. Former Mayor Kathie Eckman, who is trying to unseat Councilor Linda Johnson, has raised the most of any candidate: $19,446. More than a third of that money has come from Eckman and her husband, Paul, but a large amount has also come from a handful of political action committees, including the Bend Firefighters Association, Deschutes County Republican Central Committee, Central Oregon Association of Realtors and Central Oregonians for Affordable Housing, a builders’ group.
  
  Eckman said this election is the first time she’s received money from political action groups. She said the builders and real estate agents are supportive of her because of her earlier work in city government.
  
  Fundraising efforts in the race between Councilor Peter Gramlich and Tom Greene, the president of the Central Oregon Association of Realtors, are more evenly matched. To date, Gramlich has raised $9,329 and spent $4,007, while Greene has raised $10,034 and spent $8,899.
  
  Gramlich has not received any contributions from organized PACs. Greene has received $3,000 from the Realtor’s association’s PAC and $1,000 from the builder’s group.
  
  In the race between Councilor Jim Clinton and propane company owner Don Leonard, Clinton has raised $5,149 — including $500 from the Bend Firefighters Association’s PAC — and spent $1,279. Leonard has raised $9,100 and spent $6,171. About half of Leonard’s bank account has come from the Realtor’s and builder’s PACs. He has also received $250 from the Deschutes County Republican Central Committee.
  
  No. That is NOT BULLS**T. Nearly every SINGLE F**KING CITY COUNCIL CANDIDATE is a bought & PAID FOR WHORE of the LOCAL RE PAC's. Every f**king one.
  
  This Jeff Eager f**ker takes the cake, in that he's a LAWYER too.
  
  OK, NONE of these F**KWADS are worthy of having me pee in their f**king mouths. they are to a one, INFLUENCE PEDDLERS. That is the ONLY GROWTH INDUSTRY LEFT in this town. Hell, it's almost the only industry, period.
  
  This is similarly how I feel about Obama-Nation & McPAIN: This country has become a nation of Politco's, influence peddling whores. WHY is the HELL would Osama spend $160 MILLION in one month?
  
  Because politics is the industry of SELLING OUT EVERYONE ELSE. Get as close to The Honey Pot as you can, and then F**K EVERYONE.
  
  This country is doomed. They're starting to raise the idea of AmeriKKKa as a second-rate power in mainline media. That means it's really already here. And believe me, it IS inevitable.
  
  Don't vote for these City Council f**kers. Write in someone. Write in Dunc. Write me in, I Hate To Baste Your BUTTERBALL. Write in someone. This town is going to s**t, and COAR has their hands firmly on the rudder, which is planted in the asshole of EVERY SINGLE CANDIDATE. COBA too.
  
  We're losing this place. To the worst f**king bunch of thieves on EARTH. read the above article and DO NOT VOTE FOR A SINGLE F**KER that is either:
  
  1) Supported by RE or builder PAC's, or
  
  2) Won't disclose their funding sources. Dallas Brown comes to mind.
  
  Send a message folks. Write in someone you know. This town is LOST cuz of these f**kers. They have put us on the road to OBLIVION. Go look around downtown. It's a f**king GHOSTTOWN.
  
  THAT is what RE has gotten us. We put ALL our eggs in ONE BASKET, because RE PAC's have bought every election for a generation in this town. You CAN SEE they are trying to buy this one. They will probably succeed.
  
  They will SUCK THIS TOWN DRY. They will DESTROY IT. They really already have. We are already totally doomed. Vote, and tell these f**kers to F**K OFF.
• October 20, 2008
• 7:20

  It's Guest Post Monday! The Mayor?

   » ‎ Bend Bubble 2

  Tags:  the Cult of Bend   [edit]

  I have to apologize for not putting these 2 submissions to bendbubble2@gmail.com up sooner. I am just lame. Anyway, 2 guest posts, 1 from the Mayor, and 1 from an RE dude. First, his highness:
  
  To whom it may concern ... (is this you Bruce?) I was looking at your blog and came across an amazing bit of text. A quote attributed to me that is not only inaccurate, but I never said it.
  
  January 3, 2008 you wrote "Green is not alone as a second-home owner in Deschutes County. These days, two of every three dwellings in Bend, Oregon is a second home, according to Bend, Oregon Mayor Bruce Abernethy, himself a real estate broker."
  
  What??? First of all, I would never say two out of three homes are second homes because it isn't true. Secondly, I am not and never have been a real estate broker. Where do you make this stuff up? I suppose I should give you some credit because you did get the part about me being mayor right.
  
  Bruce Abernethy
  383-6030 (w)
  
  Now the RE dude:
  
  General State of the Economy
  
  I am a Real Estate Appraiser. I have worked as a Realtor, Loan Officer and Real Estate Appraiser here in Central Oregon since 1995. While I agree with the majority of your opinions regarding our local real estate industry, I wholeheartedly agree with your comments regarding the "bailout".
  
  Bailout-
  I think the term "pissing in the ocean" applies here. There is a reason the administration rushed this legislation through congress. The bailout is the biggest hoax on the American people since Reagan's deregulation. It would have been better to let these financial institutions fail, because the free market has shown that something better and stronger will take it's place. Think of these mortgages as a game of musical chairs... taxpayers are once again out of the game without a chair, but holding all the debt. As you've seen from the stock market the last few days... those in the know are not buying into the bailout as a saviour.
  
  Family Wage Jobs-
  The Central Oregon area has some special challenges that occur in other areas of the country (Aspen, Durango, Lake Tahoe come to mind). Unfortunately, we have a number of groups which have formed political alliances to maintain the status quo. The number one priority of our local government should be in obtaining family wage jobs. The status quo group of Realtors, Politicos, Developers and the Bend Bulletin believe that we should be building additional resorts. While tourism brings needed dollars and businesses to our area, the minimum wage jobs these industries spawn does nothing to raise the standard of living for the majority of Central Oregonians. The developing of our land, for resort use, benefits those at the top of our economic food chain with very little dribble down to the majority of Central Oregonians. The time, effort and money wasted by our local government spent in kowtowing to this cartel would be much better spent in wooing businesses to the area with tax breaks and/or other benefits.
  
  The Local Housing Market-
  I told my clients at the beginning of this year, that I believed our local housing market was going to get worse. The bad news is that we have not hit bottom yet. This makes the March 2008 prediction of recovery by Dana Bratton, one of our local appraisers, look that much more ridiculous. Home pricing will continue to spiral downward as credit tightens - it's a horrible snowball that is still gaining strength as it rolls down the hill. Check out Kevin Phillips book - Bad money : reckless finance, failed politics, and the global crisis of American capitalism. This gives a glimpse of how short sighted politicians have allowed greed to ruin our economy. Locally, foreclosures are increasing and driving the median home pricing down. This will continue to snowball as local businesses begin to fail and thereby force more pressure on homeowners already struggling to pay their monthly mortgage. This financial pressure has tragically manifested itself through a number of suicides and a rise in divorce filings. The financial strain of our declining real estate market takes a very real toll on the personal lives of all Central Oregonians.
  
  Folks - it's going to get a bit worse before it gets better. There may be a very real up-tick in consumer confidence after the Presidential election. Look for positive signs in the economy after the first of the year. However, if this economic snowball continues, it could turn into an avalanche and take most of the world with it. Most economic experts are predicting a few years of stagflation. The only fix is to pry open the credit markets. This 700 billion dollars would have been much better spent establishing a direct government mortgage system. If consumers know they can once again have access to credit, then home pricing will stabilize and people will start spending again.
  
  Of course, Central Oregon is still a great place to live and work. I am heartened by the citizens of Bend who care deeply about this place. I moved here for the lifestyle and I have not been disappointed, those who moved here to "get rich" in the housing industry can't help but be disappointed.
  
  Thank you for allowing me to post...
  
  David Skelton
• October 12, 2008
• 8:14

  Great Depression 2.0

   » ‎ Bend Bubble 2

  Tags:    [edit]

  So... how's this Bubble Bursting working out for everyone?
  
  I guess I finally got the answer to my question, "How is the stock market going to discount a disastrous economic event that'll take years to play out?"
  
  Answer? Slowly at first, then all at once.
  DJIA, 5yr
  
  Or for a longer term view of The Pain:
  DJIA, 10 yr
  
  So this weeks little meltdown has put us on a negative 10 year return on the DJIA.
  
  And I don't want to say much this week, cuz I figure events are speaking for themselves, but on the hyper-long term basis, this week, is the first time in a long, long time that the DJIA has fallen to PARITY with its L/T trend.
  DJIA, 80 yr
  Here's a 80 YEAR chart of the DJIA, with a best-fit logarithmic estimate. Those 2 big humps on the right are of course, the 2 great bubbles of our lifetimes, The NASDAQ & RE Bubbles.
  
  You'll also notice that when NASDAQ cracked, it never really returned to trend.
  
  And it has been above trend every single day since Mar 24, 1995. Until Wednesday.
  
  The regression estimate for Wednesday is 9,390, and we closed at 9,258.
  
  This may be easier to see in a log chart:
  DJIA, 80 yr logarithmic
  That far right convergence of actual vs estimate doesn't appear to quite meet, but believe me, it does.
  
  Note that this time period includes all sorts of crazy things, from nuking the Japs, to putting man on the moon, WWII, WWI, and essentially the entire modern transportation & electronics era.
  
  It is tough to put some sort of parallel on today's events given the past. But it does look like we are experiencing a Super Wave correction similar to The Great Depression or The Great Malaise of the 1970's.
  
  Strating with the less wrenching meltdown of the 1970's, we see that after a Super Wave up that essentially began in the decades after The Great Depression
  
  I guess we can say The Official Start of The Great Malaise began on July 10, 1969. The DJIA crossed below the L/T least squares estimate of 856.18, and closed at 847.79.
  
  This put to an end an unbroken string of above-trend closes which began on Sept 13, 1954 at DJIA 351.10.
  
  So when did the prior below-trend string start? On May 10, 1940 at DJIA 144.77.
  
  I guess the point here is that what we've seen the past 30 years actually HAS happened, in some measure, before. Calamity following euphoria following calamity... The beat rolls on.
  
  The other point is that this is NOT a short term phenomenon. These long waves take an adult lifetime.
  
  The post Great Depression low of 41.22 was hit on Jul 8, 1932.
  
  A monster rally ended on Mar 10, 1937 at 194.40, or +372%.
  
  New lows were set on Apr 28, 1942 at 92.92, or down 52.2%.
  
  The coming mega-wave carried through to Jan 18, 1966, when the Dow settled at 994.20, or stunning +970%.
  
  But we then paid for it with a pounding that carried us to 577.60 on the Dow, on Dec 6, 1974.
  
  Here begins our modern comparison of the Super Wave Modern Age DJIA Bull Market.
  
  And if you look close and IGNORE the huge, but relatively short live burst from 1932 to 1937, and use the Great Depression low of 41.22 as a starting point, and the near 1,000 top in 1966 as a top, you see this mega wave had a bottom-to-top gain of exactly +2,300%.
  
  A Super Wave up that took 34 years.
  
  Then we had possibly the worst bear market in modern history that took us down 42%, ending 8 years after it started. This is the Dec 6, 1974 low.
  
  Here is the interesting part: We had a super wave higher from Depression lows of +2,300% which took 34 years, right? Extrapolate the 1974 lows forward +2,300% and 34 years and you get...
  
  Yes. Highs in the 13,862 area in 2008. Not perfect. But eery as hell.
  
  Our long wave recent (post 2000) "Opportunity Cost" top was hit July 19, 2007 at 14,000 even.
  
  We have subsequently fallen 40% from this Super Wave Mega-Top.
  
  So where do we go from here? Well, the mathematical nature of a least-squares regression is that the L/T machinations of the market, both positive & negative, will net to zero. And the subsequent negatives will cancel out the prior positives.
  
  On this count, we are in dire straights. Look at the 90th percentile confidence limits:
  80 yr DJIA, +/- 1.5 STD's
  
  In point of fact, we have NEVER been as overvalued as we were on Jan 14, 2000 at DJIA 11,722.98 on an opportunity cost basis (excepting the brief Euphoria of pre Great Depression). THAT was the maximum CASH OUT selling point. The only time we've been close to that overvalued was when the DJIA was crashing towards Great Depression lows.
  
  DO NOT believe the banter that we can't go incredibly lower from here. We can, we will. Here is a view of only the difference between actual DJIA closes & least squares estimates:
  DJIA, 80 yr Diff
  
  A short explanation: This is the log of the DJIA close minus the log of the least squares expected value. So at 0, the market is at "fair value" based on long term regression. "+.5" is actually e^.5 - 1, or 64%, above fair value. "-.5" is similarly 39% below fair value. It's no coincidence that (1 + .64) * (1 -.39) = 1.0. Both are equidistant from fair value logarithmically.
  
  You can see that the 2000 top was a selling opportunity of a lifetime comparable to the 1982 bottom was a buying opportunity. Unfortunately these Long Wave moves are just that: Long. They have staying power. This won't end soon.
  
  The Good News? We will probably hit nominal lows soon. That lower band stands at DJIA 5,190 today. I will state right now, that I would go all in at that point. That would mark an almost incomparable nominal low buying point in our lifetimes.
  
  The Bad News? Although nominal lows were hit in late 1974, REAL LOWS were not left behind until late 1982, about 8 years later. There were severe rallies in the meantime, and subsequent falls. Note: REAL LOWS rarely coincide with NOMINAL LOWS. Same for HIGHS. Our recent REAL HIGH was in 2000, the nominal high was late last year. The REAL LOW of The 1970's Malaise was set in 1982, while the NOMINAL low was set in late 1974.
  
  That said, if you do get the chance to buy stocks in the 5,000's, I would DO IT. But I would also consider the next decade a trading range market, and you should sell after significant rallies. That's doubles off the bottom.
  
  If you buy at mid 5,000's, I would consider a run to 11,000 a good sale.
  
  These gut-wrenching falls bring us closer to The End. Buy stocks in the 5,000's. These will be some of the best values of our lifetimes. They ARE coming. We are closer to a bottom than the top. It is too late to sell. Just hold, and buy on severe downdrafts. Scale in on The Horror.
  
  We are simply at fair value now. We might tread water here, we might implode, who knows. But buying stocks at mid 5,000's is a Dead Lock for the trade of a lifetime. Just make sure you sell near +80-100%. Because REAL LOWS will not occur until 2016. Probably in the 6,000's.
  
  THAT will be the Buy-And-Hold point of a lifetime.
• October 05, 2008
• 6:41

  Why The Bailout Is 100% Doomed, In Under 1,000 Words.

   » ‎ Bend Bubble 2

  Tags:    [edit]

  The bailout legislation passed Friday is doomed to failure. It CANNOT succeed.
  
  Why?
  
  First, it is too little, too late. $700BB is only about 3.5% of the total housing stock of around $20TT.
  
  Second, banks will have learned their lesson, and NOT lend to shaky credits. Or they will. And we will start this thing over, but there will be no accompanying price bubble. People will begin defaulting almost immediately because prices are falling.
  
  What the bailout actually does is ensure The Worst Of All Economic Worlds: STAGFLATION.
  
  The Cause Was A Price Bubble. The Cure Is Popping It. That's All.
  
  This bailout is like "bailing out" the hamburger market that has recently gone to $30/lb. But now, it's FALLING, and it's at $20/lb! OH NO! Let's BAIL IT OUT! Let's get it back to $30/lb.!
  
  Nonsense, of course. Goods that go to unsustainable prices must simply fall back to prices in line with incomes & substitutes. That means home must be in line with local incomes and must provide a comparable return as rentals. At the peak, Bend homes were priced at negative returns FOREVER. At the peak, 92% of all Bend homes were unaffordable to families making 120% of the median family income.
  
  Prediction: Obama wins, and he will oversee The Worst economic malaise since the Great Depression. Question is, will he be a Carter or an FDR?
  
  There is No Question, The Bailout Is Doomed. We will all begin to realize THAT in the coming weeks & months. There is ONLY ONE CURE: Home prices falling to parity with incomes. That's all. All else prolongs and intensifies the pain.
  
  We are in a death spiral of bad loans, default, and foreclosure, a cycle that will repeat itself until we hit bottom. So, in addition to local incomes & rental return parity, people must Get Loans to buy houses, and that will NOT HAPPEN until it looks like housing has hit bottom AND is headed up. Believe me, Banks Will Not Loan Money At The Bottom. Only after a few years of stable to rising prices will they lend.
  
  THAT Final Nail In The Housing Coffin is why home prices are headed LOWER than they were before this thing got started. That's why Bend could easily hit $120K medians AND STAY THERE FOR YEARS.
  
  Prediction: Banks will HORDE this cash. The Gov't will ultimately have to INSURE HOME LOANS to get lending going again. But all this will be after a wave of foreclosures & continuing PLUMMETING of prices.
• September 29, 2008
• 6:37

  Fear Nation

   » ‎ Bend Bubble 2

  Tags:    [edit]

  Want to submit a piece to BendBubble2?
  
  Send to: BendBubble2@gmail.com
  
  Well, I'm going to do a short entry to break up the comments. And call me stupid, but as I noted earlier this week, there is a Big Element of Fear to Gee Dub's agenda.
  
  This credit crunch is The Third Big One: First, the Iraq "War". And I always try to use quotes around "War", cuz it was never really a war, but more the annihilation of a country for oil, and a little payback for wanting to kill Daddy Bush, which I can understand.
  
  Second, I group into Katrina Fear, but it's really the fear of natural disasters, Katrina just made it possible.
  
  Third is this credit crisis. And this seems to be The Big One. I've heard such crap as we will be thrown into a Second Great Depression by today, if the Monster Pork Barrel $700bb bailout doesn't pass. THAT is how bad Wall Streeters want this thing.
  
  I guess I don't know what The Bush Doctrine is either, outside of this Rule By Fear Agenda he's got going. Is this what Hitler did? Seriously. This is starting to feel like some sort of whacked dictator is running things.
  
  And contrary to what hbm, Brucey, and Dunc think, I am a Repug that can think for himself. And if I had my druthers, McPain would come in Dead Last in the election, Osama would come in second, and some other Decent Candidate would win. Maybe Ron Paul, or someone. But that ain't gonna happen. It'll be one of these 2 ididots, both of whom are sellouts, and I suppose of the 2, I'd rather have Obama.
  
  So I can think for myself, which is more than I can say for a lot of people. I'm thinking of registering Independent. The Dem's and Repug's are turning into twisted abominations, that aren't even about representing this countries people, but are more about hating each other.
  
  Oy, this Fear Nation Rule has just reached a fever pitch, and there is no precedent for it. At least The "War" had 9/11. The hurricane fears had Katrina. I guess this bailout has...What? Bear Stearns going bust? Lehman? I mean, Who Cares? These things are MEANT to go down, if they have killed themselves.
  
  It starting to feel like we, and I mean the U.S.A. are The Next 800 trillion lb Elephant ready to fail. They are really afraid of something I said well over a year ago to much guffaw, that This Housing Collapse will bring down this country. We're starting to hear that from our "leaders".
  
  Maybe there is precedent. Maybe they do know we are knocking on Death's Door. Maybe this is The Big One, the one from which we will never really recover. Maybe we are, right now, The World's Fannie, Freddie, AIG, WaMu and a whole lot yet to come, All Rolled Into One. We are The World's Too Big To Fail Institution. Maybe the rest of the World wants us saved, because if we go down, so do they.
  
  OK, there's a pretty good piece about the rising vacancy rates in Bend commercial property today. Watch for the "Zingers", the Games People Play That Don't Make Sense.
  
  For businesses, a renters’ market
  By Jeff McDonald / The Bulletin
  

  With vacancy rates for Bend’s commercial office space at 13.5 percent — more than double the empty space available early last year and a number that is expected to rise — landlords are offering incentives that range from rent reduction to tenant improvements to handing out cash.

  The latest incentive for businesses looking to expand is geared toward helping companies overcome the financial hurdles resulting from the credit crunch; namely, the lack of financing available upfront for overhead costs such as new office computers and other equipment, and tenant improvements, said Brian Fratzke, principal broker for Fratzke Commercial Real Estate in Bend.

  “A lot of landlords will take the first tenant with a pulse and a pocketbook,” he said. “But when this thing turns around, they’re going to say, ‘Darn, I’ve just devalued my building.’”

  Instead of lowering lease rates, which devalues the building over time, one of Fratzke’s clients, owner of the 2,800-square-foot RedBend Office Building near the Redmond Airport, will give the tenant the first six months of rent free, up to $27,000, Fratzke said.

  This is equal to giving a free month’s rent at move-in and one every 12 months thereafter, which is a common incentive, Fratzke said.

  “What often happens in rent abatement is tenants will get one month free every 12 months,” Fratzke said. “Over the course of a five-year lease, that adds up to six months free. What we’ve done is offer the six months free upfront, so that the tenant can pay for their move-in and overhead costs.”

  Commercial brokers are offering more incentives to get deals done, trying to ease concerns about expanding during tight economic times, said Eric Strobel, business development manager at Economic Development for Central Or-egon, which promotes business growth in the region.

  “Anything that can be done on the commercial broker side to alleviate pressure on the company is helpful,” Strobel said. “Any help that can be given on the front end is a huge decision-making factor for the company.”

  While tight credit sometimes makes it difficult for a company to expand, that’s a better problem to have than needing more credit to survive, Strobel said.

  The slowdown in the commercial office sector has put growing companies in the driver’s seat when it comes to renegotiating lease terms or moving into new buildings, said Darren Powderly, a broker with Compass Commercial Real Estate Services in Bend.

  “If a client says to me they will pay the asking price, without tenant improvements, but they want a check for $10,000, we’ll look at that,” Powderly said. “Obviously we want to look at their creditworthiness, and get corporate and personal guarantees (that they will stay for the length of the lease). If they walk a month later, you’re not looking very smart.”

  Other trends include significantly cutting the rates on the first two years of a lease deal, Powderly said.

  “Ironically, the tight credit market is helping leasing,” he said. “Even if the company thinks they’re in a great position to buy, they can’t get a mortgage. There’s no other option but to lease. It’s added some activity that would otherwise go toward purchasing.”

  Bill Moseley, president of GL Suite, a software development company in north Bend, had planned to construct a new building in the NorthWest Crossing industrial area and move there when his lease expires in April.

  But the slowdown in the commercial office market, along with higher costs of construction, has made it more expensive to put up a new building than to buy an existing one, Moseley said.

  That, coupled with shrinking demand for space from real estate-related firms and several new, still-vacant buildings that have come online this year, makes leasing a no-brainer, Moseley said.

  “It’s been bad for everyone else, but if you’re someone leasing or considering buying a building, there’s no better time.”

  The Bulletin, Always Selling RE. Just can't help it.
  
  Vacancies rising? Hell, that's Great News!
  
  Vacancies falling? Hell, that's Great News!
  
  I like how giving 6 months Free Rent at an inflated rent rate makes the building More Valuable. Here's a pic of a Realtor & his reading material, who believes such tripe:
  Please, don't drop your monthly rate, just give 6 free months rent instead! That doesn't hurt property values! Now I have to go read something important that's been confusing me...
  
  Another good piece this week is by Fleckenstein.
  
  What's next, a ban on stock sales?
  
  Prices aren't to the government's liking, so it's changing the rules on the fly, and no one knows where or when new lines eventually will be drawn.
  By Bill Fleckenstein
  
  The Securities and Exchange Commission has a list, and it's checking it twice. It's a compendium of nearly 1,000 companies the so-called watchdog has now pronounced off-limits to short-selling.
  
  If this do-not-short list weren't such a travesty, it would be hilarious. Among the companies the SEC wants to "protect" are the ones -- Moody's (MCO, news, msgs) and McGraw-Hill (MHP, news, msgs), to name just two -- that did such a horrendous job rating the mortgage paper that helped cause this debacle in the first place.
  
  The Cox virus unleashed
  
  In the end, SEC Chairman Chris Cox and friends will discover that this will turn out to be an epic example of the law of unintended consequences. They've probably just succeeded in blowing up a tremendous number of quantitative-oriented money managers and hedge funds. In essence, this targets anyone who runs a long-short fund or arbitrage fund of any kind, and anyone who manages any sort of stock basket.
  
  To distill those gory details down to their essence, what the SEC has done is guarantee that less liquidity will be available for markets.
  
  I suppose that if this doesn't work, the next step will be to just outlaw selling altogether. After all, that does seem to be the government's response to prices it doesn't like. There was a witch hunt for speculators in commodities on the long side when oil (and various food items) went higher over the summer. Obviously, we've seen that lower stock prices have also precipitated a government response.
  
  So when the bond market eventually revolts -- because of the cumulative effect of the Federal Reserve’s monetizing any and all pieces of paper the Treasury buys -- is the government then going to ban the short-selling of government bonds? Will it eventually say you can't sell dollars? How is any rational person supposed to plan for where the government may draw the line as to what sort of "manipulation" it may condone?
  
  Meanwhile, one item you'll likely never see on the SEC's to-do list: leading the charge on reforming financial statements. Scrutiny of IBM (IBM, news, msgs) would be a perfect start, as the company has shown itself to be a financial engineer of the first order. Nevertheless, IBM last Tuesday begged its way onto the do-not-short list.
  
  This happened even as IBM has been borrowing money to buy back its own shares while it crows about what good shape it's in. The stock is off only about 15% from the highest price it's ever traded at. And it sports a short interest of 10 million shares -- not that much more than IBM trades on any given day and microscopic relative to the 1.354 billion shares it has outstanding.
  
  Any real, untroubled company would be completely embarrassed to be on that list. Thus, in my opinion, IBM's actions are perfectly fitting with how it operates.
  
  The on-closer-inspection rejection
  
  Of course, anyone with any knowledge of history and an IQ above room temperature knows that many of the financial institutions now in trouble have themselves, not the short sellers, to thank for their plights. I'd like to offer the following example, via a recent Bloomberg story headlined "Ten days changed Wall Street as Bernanke saw 'massive failures'":
  
  "The storm in the markets began with a long-deferred nod to reality by Lehman. The 158-year-old, New York-based firm had possible acquirers inspecting its books. They discovered that Lehman hadn't yet written down its portfolio of subprime mortgages . . . as aggressively as some other Wall Street firms."
  
  So, in all likelihood, what the short sellers are being blamed for is the harsh reality that Lehman shareholders would just as soon not take "ownership" of. That is not to say there wasn't any short-selling, but rather that short interest in Lehman was never large. In fact, short-selling was rather modest. As of the last reading, it had dropped to just less than 28 million shares from almost 54 million in June. (For reference, the company had 689 million shares outstanding.)
  
  Security says, 'Remove your shoes -- and your shorts'
  
  Nonetheless, despite any and all facts to the contrary, the SEC and the government have resolved to pursue their idiotic "solution" in terms of banning short-selling of certain stocks for the time being. They also have demonstrated that rules don't mean anything, because they are willing to change them whenever it suits their purposes, no matter how disruptive or foolhardy those changes may be.
  
  A friend summed up the situation by commenting that we're in an environment where "short sellers . . . are risking private money betting against badly run businesses and governments are risking public money betting in favor of badly run businesses. You don't need a Ph.D. in finance to know which group of folks believe in truth and free markets. . . . You can expect to see all foreign banks move their toxic waste to their U.S. subsidiaries for delivery to Henry's Helpful Handouts."
  
  One wouldn't have to be too cynical to conclude that we now know the real reason Treasury chief Hank Paulson decided he needed a $700 billion bazooka. I don't mind him helping out old friends at Goldman Sachs (GS, news, msgs), and I would prefer that the financial system not implode. But I find this bailout bill completely outrageous. Though I won't hold my breath, I hope it doesn't get enacted as currently proposed.
  
  The silver lining: Halting a money-fund run
  
  If I were to try to find the piece of last week's actions that was least objectionable, I would say it was putting a halt to the run on the money market funds. I know that places at a disadvantage all the people who prudently owned government-only paper, like many of my readers. But just as, when push came to shove, American International Group (AIG, news, msgs) had to be bailed out, a run on the money market funds would have been devastating to too many innocent bystanders.
  
  The bottom line is that the government has decided it doesn't like where the prices of houses are, where the prices of mortgage-related debt securities are, where the prices of commodities are and where certain stock prices are, so it has elected to change them all by fiat. It won't work, and one of these days, the bond market will be absolutely shattered.
  
  If Congress manages to agree on a bailout bill, the financial crisis will probably be over (but I'll reserve judgment until I see the action in all markets in the wake of the legislation).To that extent, the government's actions will keep the economy from getting "extra-worse" on the back of a stock market crash and a run on the money funds.
  
  Having said that, when folks discover just how weak the economy is, especially now that we've blown out all kinds of participants in the stock market, we may still get some sort of a crash or serious sleigh ride south, though it's really hard to draw conclusions at the moment.
  
  We obviously have been close to a crash in the stock market and a seizing up of the financial system. But regardless of what the "experts" say (most of them, after all, saw none of these problems coming), my fear is that the worst is still in front of us.
  
  Keep the plates spinning. Fear Nation. If we don't keep the plates spinning.... What? We'll all have to actually... My God.... Live Within Our Means? Guns, butter, beans, and Gallo?
  
  I don't think we'll collapse into a New Stone Age. We'll simply have to spend what we make, and Stop. And that's it. But to The New Corporate Government, that is Armaggedon. That's The End of the World. There's no point in even surviving such a disaster.
  
  I see the markets are cratering this morning. Citi going to take over Wachovia. Wachovia hasn't opened yet, but pre-market, it is indicated down 90%, from $10 to 90 cents per share.
  
  I really hate saying I told you so, but... well, let's say I was part of a small cadre of people who said this thing would end catastrohically early on. Over a year and a half ago. I said the US would, as a country, actually become Second Fiddle. We would become a has-been. You are watching The Fall of a Civilization. There are a lot of people for whom it will not be apparent until it is over, but it is apparent to me that it is inevitable. It's happening right now. We are bearing witness to a country destroying itself.
  
  It's why I disagreed with BEM & Buster about "doing something" to Save Bend. Bend cannot be saved, it is Far Worse Off than the rest of the country. This country will tear itself to pieces trying to save itself, like a wolverine in a burlap sack thrown into a river. Nothing will help. Nothing will save Bend either.
  
  I've also said that I hoped to position myself Delta Negative for this thing. Hell, that's like standing on the last point of the Titantic to go down. I'm probably only doing well with respect to those that are already in the water. This thing will take us all down.
  
  There's nothing to do about this thing. It's like the tsunami of ~3 yrs ago: It's an unstoppable force. It'll wipe clean everything in it's way. And right now, we are in it's way. This bailout is like building a 1ft tall wall of sandbags against an unstoppable tsunami, 100% futile. It makes The Bulletin's attempts to revive Bend RE pretty laughable. Remind me of yet another recent Fleckstein piece:
  
  Whatever we do, it will be wrong
  
  It's time to start thinking about digging out from this crumbled financial house of cards. With heaps of blame to go around, it's clear that past policies won't help.
  By Bill Fleckenstein
  
  Tread lightly and thoughtfully
  Events continue to move at a fast and furious pace. I don't think we've seen the last of startling actions. As for the investment ramifications of all of this action and potential future action, I think folks need to understand that amid the crosscurrents and head fakes, the potential to make mistakes is going to be extremely high. Probably the fewer decisions made right now, the better.
  
  However, all decisions should be made with the expectation that the economic and financial environment will get far worse. For those of us who are professionals, a friend suggested that Henry Kissinger's comments about the Balkans should be kept in mind: "Whatever you do will be wrong, including nothing." That seems an appropriate warning.
• September 21, 2008
• 5:29

  Just when I thought I was out... they pull me back in

   » ‎ Bend Bubble 2

  Tags:  Most Overpriced Housing market in   [edit]

  Hey... you hear that?
  
  What is that? What's that sound?
  
  Oh... right... the the disintegration of The Leveraged American Capitalist System.
  
  Wow. I knew it'd be quick, but not that quick.
  
  So we've got Fannie & Freddie a distant memory. Lehman, welp apparently the US Government doesn't like the Jews as much as they pretend.
  
  And then flip-flopping back to bailing out AIG.
  
  Anyone else? Seriously. Stuff is going down the s**tter so fast & furious, it's hard to remember. Oh right... Bear Stearns got this party started.
  
  So now we've got what amounts to a bailout of Capitalism itself. They are going to throw $1 trillion at this thing. I think they said it's only $700 Billion... but that doesn't count Fannie Mac, which is probably going to be a few hundred billion for the pair, at least.
  
  Yeah, this bailout, as expected, doesn't keep a single person in their home or anything else (not that I am for such inanity), but is a straight up dumptrucking of cash right into the pockets of hundreds & thousands of multi-million & billionaires. That's it.
  
  Bush team, Congress negotiate $700B bailout
  
  The government must bail out the financial system "because if we don't, it will have a tremendous impact on American consumers, homeowners, taxpayers and the rest," House Speaker Nancy Pelosi, D-Calif., said in San Francisco.
  
  Yeah, "the rest". What the f**k is this, Gilligan's Island? The Rest, my ass. This thing is a huge printing press operation for the pure benefit of Paulson's chums.
  
  I mean, this is AmeriKKKa, isn't Bad Stuff supposed to fail? Aren't bad ideas supposed to go down the crapper? We leveraged up at a rate untold in human history... aren't there supposed to be consequences?
  
  Yeah, well don't worry, there will be. I think I've said this before, This f**ker is Too Big For Any Organization On This Planet to save, even the US Government. The Cruel Irony of the siutation is we are doing EXACTLY what we told the f**kin Jap's NOT to do, when their property bubble dragged them into a mudpit, one they are essentially still in.
  
  I guess I'll say it again, like I'm a f**king broken record here: This will be so much worse than we thought possible.
  
  But all is no lost. Well, except for Randy Sebastian.
  
  Renaissance Homes faces bankruptcy
  by Jeff Manning and Ryan Frank, The Oregonian
  Friday September 19, 2008, 9:32 PM
  
  Sebastian promises his company will survive. Though he's learned to never again trust a market boom, he still believes in the Northwest and he still loves building homes.
  
  Anyone else see the irony in this? He'll never trust a market boom again? OK, but he will STILL keep building homes.
  
  Hey, RANDY: You might want to THINK for about 2 f**king seconds about building homes after The Biggest RE Bust Ever Recorded Since The Earth Was A Coalescing Gravity Well of Interplanetary Dust. See, it's a BUST. It's going to be about 63 trillion times harder than it was during the boom.
  
  Renaissance Homes saw its new housing starts decline from 305 in 2006 to 198 the following year. Through June, the company was on pace to build just 32 homes in 2008.
  
  Randy Sebastian, all I can say is that if the cross-armed homo-erotic flesh-eating AIDS doesn't get this motherf**ker, his utter stupidity surely will. What a dumbass.
  
  Wow, went through Forum Meadows today, yet another indicator that Valley builders should never set foot on Cent OR soil again, for fear of their financial lives. Forum Meadows, now that it's in receivership, is awash in For Sale signs that were not there just a few weeks ago.
  
  Yeah, see when your in Chap 11, all the game-playing bulls**t, like holding back 80% Dark Matter, is blown away cuz the banks want their f**king money. This f**ker has TONS of s**t for sale.
  
  And ordinarily this is Exactly the Situation that would have me come running. Blood in the Water. But I ain't even thinking about buying. Not even close. 2 reasons.
  
  First, we are still, even after the large price hit we've taken, WILDLY OVERPRICED. My God, I drive by places everyday, where I can see the owners are clueless about what is going on. These houses are 100% too high. Everywhere.
  
  Shame on your cohorts, marge. They need to wake these people up, and simply refuse to take ridiculous listings. They are throwing their OWN MONEY AWAY, as well.
  
  As usual, Cent OR is lagging as far behind as it is physically possible, while still being in the same country. We hit $396K medians one month, about 2 years back. We'll drop 60+% from there. Minimum.
  
  Second reason I ain't buying: The STD's PUKED forth, primarily on the East side, are s**tholes. Those things are crap-s**t-shacks, and they will begin disintegrating over the next 3-5 years.
  
  These things were barfed out in huge quantities by people who were looking for nothing else but to sell it to someone who had no intention of ever occupying these hovels, and get loaned money by banks who didn't care a wit about whether home buyers had income or not.
  
  In short, the East side, and much of the North & South are littered with deteriorating crappers, that are JUST LIKE MOBILE HOMES: They will actually GO DOWN in value over time.
  
  Mobile homes are like cars, they are worth the most while still on the dealer lot, they lose 15-20% of their value the day they are sold, and they lose about 20%/yr forever after. Sometimes they go NEGATIVE, as they have to be towed away, torched, or used as Army target practice to make way for yet another crap shack. That makes up most of what has been built here in the past 5 years.
  
  Yeah, this is The Big One. It's a testament to the severity of the problem, that we're getting about a 98% reduction in the number of comments regarding Sarah Palin's titties.
  
  Hey, I even came back for a short post! But I'm not sure I'm a good one for chronicling the Implosion of AmeriKKKa. S**t, I wanted to WARN people it was coming. I think they know. Well, mostly. Bend is the absolute last .000001% of the US population that is beer-bonging the Kool-Aid, and a LOT of people here still have their heads planted firmly up their asses.
  
  But they are starting to think. They are starting to read beyond Cascade Business Buttbangers, whose Editor is shown here busting ass with some nunchucks:
  The Incredible Hulce! Hi-ya!
  
  Yeah, it is people like this that should serve as a guiding light to our economic problems.
  
  But what the f**k is this?
  
  Good Riddance
  
  Well, Paul-doh is doing me a favor and pulling the plug on his BB2 plog.
  
  It had gotten more and more frustrating to me. I didn't mind the language, or the buster bluster, or the right wing loonies...but I never knew who I was talking to. Constant shifting of names, or no names, or even identity theft.
  
  It was like talking to a hall of mirrors. Pretty useless.
  
  I wouldn't go near the BB3 blog if you pulled a gun on me.
  
  So...that stuff is gone.
  
  Good Riddance.
  
  et tu, Dunc? I mean, damn. Not going near a blog unless you KNOW the identities? Really? I guess that's it for you then. This whole thing is pretty damned anonymousey.
  
  Anyway, I promised myself I'd keep this short, hell I wasn't going to write these anymore, right? But it's hard to resist at least acknowledging that The Greatest World Power Ever is starting to economically disintegrate. And it IS DISINTEGRATING. We won't be out of this thing for 20 years. Don't think so? Look at the Japs.
  
  And if you think NOW is bad? F**k, it is going to get SO MUCH WORSE. They're trying to push that the losses will be capped at $1 trillion. Bulls**t. These things ALWAYS go worse than anyone thought, because the losses are being instituted by a pack of incredible f**king liars. Remember the Iraq "War" was going to cost $80-100 billion? Yeah, that f**ker will run us $1 trillion when all is said & done. Minimum.
  
  This thing has a price tag today of a trillion. Expect several times that, maybe $5-10 trillion. Folks, $10 trillion is A LOT OF MONEY. That spells DEPRESSION for this country. I was never real confident of gov't stats, but if we even spend $1 trill on this thing, and we DO NOT go into a near-depression, you will be assured that they are 100% LIES.
  
  We can't LOSE $1 trillion & NOT be in a severe recession, or near-depression. Not possible.
  
  We are looking at Modern Unregulated Finances' 9/11. The S&L crisis was a lot of small planes running into low profile targets. Hundreds failed, mainly in the South. Texas has only recently recovered because of War-ge Bush.
  
  Todays implosion is FAR more DIRE. We have fuel filled disasters hitting 150 story tall behemoths of finance. These f**kers have manufactured derivatives with a notional value many, MANY times the Worlds GDP. There won't be nearly the number of failures we had in the early 90's... there will be 9/11-style failures of the Largest Behemoths Ever.
  
  This is only the beginning.
  
  Whoops... just found this at The Oregonian! Hey! Maybe we're just making the Front Page Bigtime...
  Bloggers speculate on developers' deaths in Bend
  Matthew Pruesch/The Oregonian
  
  Bloggers in Bend speculated for weeks this summer about the deaths of three developers including Jay Audia, whose Edge Development Group purchased 38 acres out of foreclosure in January. Last week, the site was empty and still.

  As mortgage defaults in Deschutes County soared to levels more often seen in the cratering markets of California, Arizona and Florida, a handful of bloggers raged at the greed that had spoiled their desert paradise, leaving it broke and broken.

  Then three Bend developers died this summer, and the bloggers soon spun theories about what would drive men to such desperate measures. Or maybe, the bloggers wondered, the mob was involved. The city at the foot of Mount Bachelor had a bad case of the jitters.

  At the end of a dizzying week -- crushing news for financial giants Washington Mutual, Lehman Brothers, Merrill Lynch and AIG amid grave concerns that Wall Street's woes are far from over -- the Bend case shows how easily the Internet can intensify anxiety in worrisome times.

  "The Internet speeds up the process of everything," said Michael Rabby, an assistant professor of communication studies at the University of Portland. "People don't get the chance to reflect. And that aspect of it can really change everything. Because the Internet seems more democratic, people are trusting it more. Sometimes they should. Sometimes they shouldn't."

  "Thrown under the bus"

  The Bend bloggers who speculated on the developers' deaths did not respond to The Oregonian's requests for interviews. On the Internet, they identified themselves by screen names. Among their favorite targets was Bend's daily newspaper, The Bulletin, which the bloggers said merely carried water for the real-estate sharpies.

  "They do not want you to hear any bad news about the RE market, and they are willing to manipulate local media to do it," wrote a blogger by the screen name IHateToBurstYourBubble.

  The bloggers chewed over their worries with verbose essays land-mined with f-bombs and served up with many hints at sinister behavior. IHateToBurstYourBubble: "You will always be thrown under the bus in Bend, if it means someone can sell a house to someone, even if you are screwed in the process."

  Blog posts led to links, which led to more blog posts that led to comments on other blog posts, on and on in a whisper campaign rendered loud and clear with the global megaphone of the Internet.

  Still, it was all just talk until the deaths. At first, the bloggers were cheeky. Then they were scared. Then they pointed to accomplices: the mainstream media.

  "Closures and Drug Busts and Suicides, Oh My!" ran a headline for a July 26 blog post. Two weeks later: "Bank Mob Hits Claim Lives of Bend Developers." A week after that: "Bend Media is Responsible for Bend Developer Suicide Crisis."

  "People have started dying over real estate in Bend," someone named BilboBend wrote Aug. 10, "and you shouldn't just accept the word of the local media, who essentially won't even acknowledge that a death has even occurred."

  The thing about conspiracy theories is that underneath the embroidery and the ravings, there can be a kernel of truth.

  First, the undisputed facts: Douglas Sokol, 57, a Sisters developer, died June 24 after falling from a height. Lynn McDonald, 58, a former emergency-room physician who had invested in a huge development called The Shire, disappeared July 6 and was found the next day in the Deschutes River. Jay Audia, 48, of Bend, who had recently purchased a 38-acre tract out of foreclosure, shot himself in the head July 19 at his home.

  None of their families could be reached for comment.

  Investigating the deaths fell to Dr. Chris Hatlestad, Deschutes County's medical examiner. For Hatlestad, the Internet is there-be-dragons territory: "I don't do blogging."

  So he wasn't aware of the energetic speculation about the three deaths at the blogs bendbubble2 and bendbubble3: "It's getting awfully strange," offered BilboBend. "Start combing the obits. Audia supposedly shot himself, a crime so easily done by someone else, a 2-year-old could have planned it. McDonald's story just doesn't add up at all."

  The bloggers offered no evidence or witnesses for their theories of foul play.

  Yet Hatlestad found Audia's death to be clearly a suicide. He called the cause of Sokol's death "undetermined" and said he probably would mark McDonald's the same way. Though he did not rule out suicide, Hatlestad said, there was not enough evidence, so he was perplexed when he learned of the bloggers' speculations.

  "I don't know where the heck somebody would get that kind of information," he said. "In my experience and understanding of the world, which I don't claim to have any special privilege of, when times are tough and there's plenty of fear to go around, people will continue to add fuel to the fire."

  A kernel of truth

  Yet the bloggers' ruminations about a suicide cluster also had an element of truth: Studies as long ago as 1987 and as recent as the mid-1990s show that suicides do increase in troubled economic times.

  Emile Durkheim, the 19th-century French thinker considered the father of sociology, concluded in his landmark study that people who fall the farthest in income during bad times develop a high risk for suicide.

  Research since then, however, has revealed that no single factor "causes" suicide. Having a suddenly thinner wallet by itself does not drain the last of someone's hope. Other factors working alone or in combination -- alcohol and drug abuse, legal trouble, divorce and mental illness among them -- usually drive suicides.

  In the past year, for example, at least five people elsewhere in the nation who worked in the real estate sector committed suicide. At first, the deaths defied explanation. But after the funerals, it turned out that, in each case, law enforcement was closing in.

  Separately, a Lake Oswego real estate broker who specialized in lakefront properties apparently was struggling with the downturn and killed himself July 23. As in the Bend cases, there's no hint that authorities had been interested in his business dealings.

  In Bend, even with the tough times, the medical examiner said he has not seen an uptick in suicides in Deschutes County. In fact, Lt. Kevin Dizney, head of the sheriff's detective division, said that aside from metal thefts, "I haven't seen the state of the economy having any direct effect on crime, period."

  Hatlestad said he wouldn't rule out an increase in suicides, but, "suicide occurs as an impulsive act almost all the time. People have chronic ongoing stresses in a variety of flavors and sizes, and financial is a big one. At what point does somebody decide, this is too much? It's not often very predictable."

  Filling information voids

  The blogging phenomenon -- thousands more people "publishing" on the Internet -- does pressure news organizations to respond, but it's a tough call. In the wake of the three Bend deaths, the bloggers hammered The Bulletin for sitting on a huge story.

  Not surprisingly, given the medium, the bloggers' theories about the deaths spread, prompting a small posting about The Shire and McDonald's death on The Wall Street Journal's Web site on Aug. 14. The Oregonian ran a column Aug. 18 mentioning the deaths in the context of suicide prevention.

  The following week, The Bulletin published a column by Editor John Costa in which he wrote that the bloggers did stir up the talk in town. But when his reporters tracked down what had happened to the three developers, the bloggers' theories didn't hold water.

  In an interview last week, Costa said, "I don't think there's anything unusual with people filling information voids. People will fill in a motivation that they can see and that conforms to their master narrative to what's going on in the country. In this day, what's different is that you can take that unfounded and speculative information, and you can spread it around the world.

  "Then you have the next question. ... Even if it isn't true, if there's a general belief out there, what is the journalist's obligation? Do we chase the same mirage? It's a very legitimate question. I don't have an absolute answer."

  Just so you know, Portlandians, this f**king town is Bank-Mob Run. These f**kers killed themselves for reasons probably VERY SIMILAR to why that Buena Vista contractor was arrested: This ain't CIVIL anymore. Ain't a misdemeanor to lose money around here anymore, it's CRIMINAL. Your ass will SERVE TIME. Either that, or they will find you & shoot you. Or throw you over Benham Falls.
  
  You don't f**king kill yourself over money, you kill yourself over someone whacking your wife & kids, or the idea that your ass is going to JAIL. People are losing BILLIONS in this One-Horse S**thole & they aren't just going to go to the courthouse & file liens & s**t to get their money. These f**kers KILL PEOPLE... or make them kill themselves.
  
  Yeah, this is a real f**king paradise. Best NOT amble through town if you're behind on your mortgage payments. Or ever. You can get caught in the crossfire.
  
  Yeah, our "theories don't hold water" cuz Costa is a RE cocksucker that doesn't want to get f**king shot. The theory that he is doing this for his innate LOVE of the RE industry, is about as valid as the idea that he is just one of the rabble, and will get his ass shot otherwise.
  
  Folks, if you are getting close to a point where you are going to be in arrears on your rent or mortgage or business loan, you best do a f**king midnight run. Pack it up & go. Run Lola, RUN!
  
  No one wants to see anyone else dying.
• September 14, 2008
• 6:59

  Time To Pass The Baton At BendBubble2

   » ‎ Bend Bubble 2

  Tags:  the Cult of Bend   [edit]

  First I have to re-post a great cartoon from over on Dunc's blog:
  
  
  That about sums it up, right there. Lib's in a festering ball of rage over Palin. BAM! McPain just barely taps the knee to get the reflex-action going.
  
  I throw out a little McPain love, and the Lib-Musketeers of BB2 (Brucey, Dunc, and a variety of hbm's) come out guns blazing.
  
  Duncan McGeary said...

  Yeah, but I'm not thinking it's funny.
  
  There are some pretty sick minds here.
  
  I'm with HBM.
  
  "...the troll stink in here is overpowering. Hasta manana, maybe."

  Oy. Played like a fiddle. By Buster, no less.
  
  hbm said...

  Gotta go -- the troll stink in here is overpowering. Hasta manana, maybe.

  And brucey-kins has posted a vast litany of Bush-hatin' goodness:
  
  bruce said...
  
  It's hard to run on your record of the last eight years, six of which you controlled Congress and the Executive. And the last two years you stopped anything you didn't agree with by making the Senate unable to stop filibusters.
  
  When your signature foreign achievement is a multi-trillion dollar quagmire in Iraq, and your signature national achievement is Medicare Part D, with it's prohibition on bargaining over drug prices with the drug companies and a donut hole big enough to sink a blue-hairs Buick halfway through the year, all you can do is run on lies and innuendo, hoping people believe that you will run things differently the next time.
  
  Even when you have the exact same guys behind the scenes. And as long as a significant percentage of Americans watch Faux News, they actually have a chance.
  
  The Homer Simpson channel, run by Reagan/Bush Sr comunications advisor Roger Ailes, will fight for the Repubs right to the bitter end.
  

  Oy.

  What's funny/sad is I have so many bionic-liberal friends (this is Bend, CA after all), who don't even identify with the Democratic Party anymore, because they are moving left at such a rapid speed, that even the Dem's sound like corporate suckups, spewing Nazi bile.

  Repugs? Well, they insist they don't even know what the Repug Party is about anymore. White Noise. Some sort of Phantom. Menace.

  Diane: Ahhh... this is probably going to be seem a little strange. We hear better on this channel. Don't ask me why. Well... ah... I guess I will call her. Carol Anne. Ah... i t's mommy, sweetheart. Ah, we want to talk to you. Please answer me baby. Please answer me. Please talk to me, bunny.
  

  Marty: Look at the dog.
  

  Diane: Are you with us now? Can you... can you say hello to daddy?
  

  Carol Anne: Hello, daddy.
  

  Steve: Hello, sweetpea.
  

  Diane: It's mommy, sweetheart.
  

  Carol Anne: Hello, mommy.
  

  Diane: Hello, baby. Can you see me? Can you see mommy?
  

  Carol Anne: Mommy? Where are you? Where are you?
  

  Diane: We're home, baby. We're home. Can you find me? Can you find a way to us, baby?
  

  Carol Anne: Mommy, where are you? I can't find you. I can't. I'm afraid of the Light, mommy. I'm afraid of the Light.
  

  This is a standard conversation with my liberal friends. Like talking to a possessed appliance, or something. No one understands it. Even I don't at times.

  This is the Achilles Heal of The Lib's, and they don't get it.

  The Neo-CON-VICTS are UNAPOLOGETICALLY engaged in RePugnant behavior that would make a f**king billygoat puke, AS USUAL. But they are still engaging MIDDLE AMERIKKKA, that vast bulge of sister-f**king hillbillies, called The Bible Belt.

  But the Lib's have gone off on some idealistic race to The Left, to see who can distance themselves from G-Dub's the fastest, and in the most sweeping, radical way they can.

  Quoth The Ravin':

  Willie Horton Revisited
  

  Written by H. Bruce Miller
  

  Saturday, 13 September 2008
  

  The Fall Slime Season is in full swing. If you doubt it, check out the two new TV ads just put out by Gordon Smith. In a tactic reminiscent of George H.W. Bush’s Willie Horton ad in the 1988 presidential campaign, the Republican senator’s ads try to portray Smith’s opponent, Jeff Merkley, as coddling child rapists.
  

  AHHHHHHHHHHHHHHHHHHHH!

  AHHHHHHHHHHHHHHHHHHHH!
  

  NOOOOOOOOO! AHHHHHHHH!

  Willy Week: Smith's Food Plant Hires Illegal Workers
  Written by H. Bruce Miller
  Thursday, 11 September 2008
  Although details are sketchy, Willamette Week is reporting that Gordon Smith’s frozen food plant near Pendleton has been employing illegal immigrants for years.
  

  I repeat:

  hbm said...

  Gotta go -- the troll stink in here is overpowering. Hasta manana, maybe.

  Now, see the problem with this DUMBF**K STRATEGY is that Lib's are leaving the ELECTION WIDE OPEN TO McPAIN.

  The Lib's think this is about BEING RIGHT. The RePUG's know better. It's about WINNING.

  The Dem's are moving left, LEFT OF EVERYTHING & EVERYBODY, in an attempt to distance themselves from Gee-Dub, possibly the worst President of the United States, if you don't count Hitler, Satan or Jeebus.

  GeeDub's may actually be the reason The Pug's are re-elected.

  Imagine a beach, walled off at both ends. And the beachgoers are dispersed absolutely evenly across the beach. This beach has only 2 snack vendors. The vendors are identical in every way, price, products, everything. Pure commodities. There is only one determining factor about which vendor to choose: The distance away from the vendor.
  
  Traditional American Politics resembles this situation quite closely, and it should be no surprise that what is ultimately achieved is a sort of Unstable Equilibrium, where the vendors move towards center, jockeying for position by millimeters in the center of the beach, despite the fact that there is a vast underserved population on the periphery of the beach.
  
  American voters resemble this situation, except they fall more along a bell curve, with right & left wing freaks on the edge, and the Big Fat-Ass Sister F**king Tubby Middle. For better or worse, this group actually puts people in office.
  
  And the vendors gravitate towards this center EVERY FOUR YEARS. Like clockwork.
  
  But this year, we're going to have CHANGE! Oh yes. Change. So, Oh-Uni decides to make a stand, and move away from The Middle, and goes LEFT... just a little.
  
  And just because he's a little closer to some people wayyyyyyyyyyyy out on the left edge of the beach, and because the other guy has been linked to salmonella, he gains a pretty good flock of new customers in a short time. Some from too far left to frequent either vendor in a long time, they just went without.
  
  Now the other guy sees this, and does nothing. His business was not so great to begin with, and it's still OK, but he feels worse cuz it seems like the other guy just got a bonanza for doing nothing.
  
  So then the other guy goes left a little more. And he gets some more.
  
  Wash, rinse, repeat.
  
  And so it goes with the LEFTY vendor quite a ways from Center & doing pretty well for himself.
  
  But then the guy in the middle decides to move left, because there are some people who are between him & LEFTY that he can EASILY pick up. LEFTY has gone quite a ways left and left a BIG F**KING GAP IN THE MIDDLE.
  
  So RIGHTY moves LEFT. And he picks up customers. Quite a few, in fact. He was going to MIRROR LEFTY's move, and go RIGHT at first, but then he thought about it: Why cater to those wayyyyyyyy out to the right? F**k them. Move left. In fact, move left with impunity. Follow LEFTY!
  
  This is a clusterf**k for the Dem's: They HAVE TO appear to be the George Bush Anti-Christ's. Again, Worst AmeriKKKan President since Idi Amin.
  
  But this GAP is what McPAIN & EVERY F**KING RePug with half a f**king brain is moving into. There isn't a RePug TV spot that doesn't disavow ass-f**king Geo-Dub's EVERY F**KING DAY for the past 8 years, despite the fact that Lib's & RePug's alike have sucked at the Bush Mega-Cock. Yeah, you f**kers voted into Law the Iraq War just as much as any Newt Gingrich Nazi dumbs**t.
  
  Look at the TV: Gordon Smith is running ads 24/7 about how he is GeeDub Hater. Why? Why is he "abandoning" the folks on the beach wayyyyyyyy off to the right?
  
  Because he can. The Lib's, many, like my friend, so far left, they are dry humping the leftist wall, and can't hear ANYTHING over the humpage. These people are not even going to VOTE DEM! They are going to either vote Cynthia McKinney, who is right there with them, humping the wall. Or, they'll fall back to Old Reliable and vote Nader for the 45th election in a row.
  
  And there appear to be many of these Left Wall-Huggers, which is why the Oh-Uni-Bomber started moving left to begin with. They would HOP OFF THE WALL & VOTE DEM if we JUST MOVED FAR ENOUGH LEFT, GAT DAMMIT!
  
  And so like Howard Dean, they start marching that way. Now, the Oh-Bomber has kept a f**king fork in his pocket to stab himself in the leg every time he gains some traction, unlike Dean who got 6-7 Wall Huggers to jump off, and promptly self-destructed.
  
  The Oh-Uni-Bomber has, to date, done it with a deft skill that puts many of his predecessors to shame. He's slick. He's well mannered. He's racially correct, which for a black dude, means he hasn't killed 3 wives, beat 5 kids to death, and contracted the AID's.
  
  So he is smooth. But the f**ker is still moving left. A little persistent voice is still telling him: Distance yourself from Gee-Dub & you shalt be welcomed into The Heavenly Gates.
  

  And so he does. Closely followed by the other guy(s). A whole country moving LEFT, it seems.
  
  But, it's really an illusion. The Vast Middle doesn't give a s**t about "faggots, queers, n****rs, or dykes", and they never will. They will vote the party FARTHEST away from that s**t that they can.
  
  And that party is STILL The Re-Capstone-Butt-Pugs. The bell curve isn't moving, but the parties are moving left, because the right has been poisoned by The Powers That Be.
  
  And Oh-Uni-Bomber is almost to The Left Wall, with McPain, Gordo, and a host of other Re-Pluggers running, not walking, as fast as they can behind him, all trying to distance themselves from The BushCo Nightmare.
  
  That WHOLE RIGHT FLANK is going to start walking to the polls (ie beach vendors) this November, and the first thing they'll find is McPAIN. Even a lot of Centerist Dem's will find McPAIN before they get to Oh-Uni-Bomber.
  
  Think about it Libby's. You're handing it to us on a platter.
  
  OK. I've been writing this crazy mixed-up blog for almost 2 years now. There has been some crazy s**t happen since BEM handed the reigns off to.... some dude he didn't even know.
  
  Remember, a fresh-faced CACB Shorter, selling at $32, and then covering at $24 or so, with an almost visible sigh of relief, and a bit of braggadocio.
  Cracker Ass Cracker Broke, 2 yr chart
  
  Little did he know this thing would implode down to the $6's.
  
  Even recently, there was the Bear Stearns fiasco. Can't show you a chart because it is largely taxpayer owned, and the gub-ment hates charts.
  
  Or Fannie. Or Freddie. Fannie went from $68/sh to 68 cents over the past 12 months. 99% LOSS on the largest holder of mortgages ON EARTH. DOWN 99%.
  Fannie Mae, 1 yr.
  
  Here's a BusWeek piece outlining The Nightmare Scenario:
  The Nightmare

  So we're golden, right? Well, maybe not. In the vicious-circle scenario, Treasury's intervention ends up being a replay of Japan's ill-fated effort to prop up crippled banks in the 1990s. Increasing the availability of credit delays—but does not prevent—the full price decline needed to clear out the daunting overhang of nearly 4.7 million unsold existing homes as of July.

  As the lender of last resort, the government throws good money after bad, first on housing and then on airlines, automakers, and other supplicants. All this against an undeniable backdrop of rising federal deficits: The Congressional Budget Office predicted this month that the federal budget deficit would remain above $400 billion annually from 2008 through 2010, up from about $160 billion in 2007.

  In the nightmare scenario, the descent into quasi-socialism balloons the national debt and wrecks foreign investors' faith in the economy. That's the vision sketched out by ultra-bears like Peter Schiff, president of Euro Pacific Capital, a brokerage in Darien, Conn. Schiff is passionate on the topic: "The dollar is going to go through the floor, interest rates are going to spike up, and we're going to have a complete financial meltdown. It's going to be the worst-case scenario."

  A different school of pessimists says the housing market actually does need a big adrenaline shot from the government. But they say it's unlikely to get one from either a McCain or an Obama Administration because the risk to taxpayers from a much bigger commitment to housing would be deemed too great. The only real beneficiaries of the takeover are the holders of Fannie and Freddie securities, who are bailed out of their bad investment choices, says Robert I. Kessler, CEO of Kessler Cos., a Denver investment firm. Says Kessler: "It's a great thing for the big banks. I don't see any benefit whatsoever to consumers."

  Specifically, the Fan-Fred takeover does nothing to help homeowners who can't refinance a home loan because their property is assessed for less than they owe. It also may not be enough to draw in buyers, who are focused more on the risk of declining home values than on the upside of a slightly lower mortgage rate. "I've sat in open houses, and you just can't get people to make an offer," says Edward Cudahy Spalding, a real estate broker in Fort Lauderdale. "You've got to reinflate values in the housing market. I don't know how you do that."

  Without more relief for homeowners and consumers, the housing-led recession is likely to deepen. In this vicious-circle scenario, the housing slump depresses consumer spending, leading to job cuts and thus forcing even more foreclosures and bigger spending reductions—in other words, the mirror image of the virtuous circle. Vulnerable sectors include finance; nonresidential construction, which tends to follow homebuilding downward with a lag; and retail, which has so far lost only a modest number of jobs nationally relative to the size of the sector.

  Away from Wall Street, the mood is glum. Douglas S. Bartlett, owner of Bartlett Manufacturing, a maker of printed-circuit boards in Cary, Ill., says competition from China has forced him to cut employment nearly two-thirds since 2000, to 87. He hasn't felt any reprieve from the dollar's recent depreciation against China's currency. Says Bartlett: "Fortunately for us, there's been enough of our competitors going out of business that we're able to pick up their work." In Sacramento, restaurateur Ali Mackani was forced to shut down his fashionable Restaurant 55 Degrees shortly after Labor Day because of slower-than-expected commercial and residential development in the area, which he had been counting on to produce customers.

  Today's business failures ripple across the economy, triggering more failures. And when the financial system is crippled by losses, the hoped-for V-shaped recovery can flatten out into a wide-bottomed U, says Dan North, chief economist of Euler Hermes ACI, a North American unit of Germany's Allianz Group (AZ) that insures accounts receivable. North says that because of business failures, the number of insurance claims processed by his company was up 80% in the first six months of 2008 compared with a year earlier.

  I actually see this country becoming an also-ran on the Worlds Economic stage. This thing will cripple us.
  
  The title of this piece is, "The Economy: Best- and Worst-Case Scenarios". This alone should make you wonder: Why are these people STILL wondering about a BEST CASE SCENARIO? Has it even happened ONCE?
  
  Fannie Mae & Freddie Mac f**king collapsed last week. Lehman will not survive the day. These f**kers are standing on the deck of the Titanic, at a 45 degree angle, and are debating Best Case & Worst Case Scenarios. Yeah. I'm sure this f**king ship will right itself by magic, and we'll end up safe & sound in NYC Harbor if we just think positive.
  
  The Shire went belly up, Thank God. Soon to be followed by Tuscan Buttplugs of AmeriKKKA, and a raft of other imbecilic ideas. Pollock built what is the Quintessential STD-fest in Forum Meadows, which is probably World-renowned for the Biggest F**king Weeds ever. Here is a picture I took last week:
  
  House in Forum Meadows, obscured by Worlds Largest Weed
  
  Let's not forget Randy Flesh-Eating-Virus Sebastian.
  Hi, I'm Randy Sebastian, and my asshole whistles when the wind blows, cuz I've done been f**ked by The Bend Oregon Housing Market (The BOHM)! Plus I got the motherf**king Flesh Eating AIDS!
  
  Can't forget Becky Breeze, the Matriarch of Bend Realty Agents. This woman made her first million through 25 years of hard work, persistence, and persevering through the toughest market in the USA. Then she proceeded to lose it all in 18 months due to RE greed-fueled Kool-Aid overdose, administered by her pimp, Umpqua Bank.
  
  We've watch Desert Skeeze crash through the $100/sf barrier. We saw COBA & Costa ethics vanish like a ghosts fart. We'll soon see many more fall, including our proud City itself, which will soon go broke. We can only hope every f**king City Councilor in Bend is ass-f**ked by Gayn****rs from Outer Space. In jail.
  Where Randy Sebastian? I'm gonna tear that White S**t Up!
  
  And not to mention the THOUSANDS of KICK ASS COMMENTS. All culminating in a hell of a onslaught, the likes of which I certainly have not seen anywhere before.
  Holy S**t! We hit The K-Burger...
  
  So we've had Good Times. But there have also been some Bad Times. The Audia - McDonald, et al suicides come to mind. Despite what others think about me -- that I'm a blood-thirsty dingo that would love nothing more than to rush into a neo-natal unit & tear the throats of 20 dying babies -- I am actually bothered when Bad Things Happen To People.
  
  And killing yourself is an indication that people are getting a little too Involved in this thing. Yes, it's an RE bubble, and there'll be some Winners & Losers... but KILLING YOURSELF? I mean, come on. Don't f**king kill yourself over this thing. That's just f**king crazy.
  
  S**t there was even THE OUTTING of IHateToBasteYourButterball! AHHH! I've been OUTTED! OH NOOOOO!
  
  OK, joking aside, it's still sort of weird, cuz someone was hoping some BODILY HARM would just happen to befall yours truly. THAT is how serious these local loons are about their RE. They are willing to KILL or DIE for their cause.
  
  I mean, DUNC (yes DUNC) -- a guy I forwarded as MAYOR -- started spewing like a Playa Hate Uh to ME!
  
  Duncan McGeary said...

  Yeah, but I'm not thinking it's funny.
  
  There are some pretty sick minds here.
  
  I'm with HBM.
  
  "...the troll stink in here is overpowering. Hasta manana, maybe."

  WHAT! He's talking MEXICAN! Oh no! What the hell's he saying? OH S**T!
  
  And I am starting to read general economic pieces that exceed mine in their dire prognostications:
  
  Bailouts Will Push US into Depression
  
  "We expect a depression in the United States. We expect a depression, very possibly, also in Europe," Hennecke said on "Worldwide Exchange."
  
  Admittedly, this is a f**king dumbass frog, and the sort of Depression France should go through is one caused by a volley of f**king THERMONUCLEAR WARHEADS that we rain down on their ass. F**kers. I WILL NOT forget Libya.
  
  Anyway, it's been a pretty weird couple of years. The RE Bust when from a DENIERS sort of phenomenon to Story One on the National News every night, as well as the Number 1 political hot potato. For the love of Christ, The Bulletin & KTVZ are actually running negative piece once in awhile. That's a f**king miracle.
  
  Cascade Business News is not. And I do not expect them to. Ever.
  Pamla The Incredible Hulce Andrews: Super Retard to The Rescue!
  
  But I think I've said my piece. It's time for someone else to have a go. Besides, as I've said before, I sort of "positioned" myself Delta Negative on this Housing Bust. So I started out this thing with not a lot of work & a whole lot'a bloggin'. But the tables have turned, and I am working more hours than I ever have in my life. And sometimes I hit the keyboard at the Wii hours of a Sunday morning to bust out a post, cuz I'm working like a dog, even on weekends.
  
  But fear not, I'm going to leave BB2 up, alive & kicking. My plan is to do a few more "Open Post" weeks, where I just have a token post entry to break up the comments into more manageable sizes. Thousand f**king comments is a lot to sort through. But pretty soon BB2 will go the way of the doo-doo. Yes Timmy, I said DOO-DOO.
  
  My hope is that someone starts BB3, or the like. It's still a hell of a popular topic. F**k.... 1,000 comments in a week in a little po-dunk town like Bend, on a topic as narrow as the RE bubble? That s**t is begging for an outlet. And the failure of Big Bend Media, despite their acknowledging it, is still grossly inadequate.
  
  I took over this thing from BEM, wayyyyy back in late 2006, back when BEM wrote these word on Dec 17, 2006:
  A transitional periodSoon enough this blog will be shut off. Not because I'm less interested in Bend's economy, but because the level of attention I was paying to it was unsustainable.
  
  I guess the same goes for me. I don't want to start neglecting this crazy thing. I've had a hell of a time with it. S**t... I had no idea I could write so much. Or maybe Buster is right; I wrote the same f**king thing 200 different ways. I don't know.
  
  I guess I had a great time responding to BEM & others at his blog. He would start a thread & there would be a hell of an exchange. Well, back in the Dark Ages of blogging in Bend circa 2006, BEM's blog would get 45 comments & we thought we were Kings of the World. It was awesome!
  
  But I think I've taken a lot of what was in my head, we have thrashed the hell outta the topic, and then we moved on. But I think someone else needs to "start the threads" for awhile. At least I hope someone will.
  
  And I guess I should put forth what are principles that worked for me: I started this blog with the idea that there would be ZERO INTERVENTION in the comments. I never deleted a single comment, EVER. I'm really not sure how I'm seeing some of those "Deleted by author" placeholders in the comments. I didn't think that was possible. Maybe you guys see something I don't. I don't even know how to delete my own comments.
  
  Hmmmm, point is, there is another Skywalker... nope wait, there is another blog on roughly the same topic, but for some whacked reason, it's moderators feel the need to collect IP's, and ban people, and, well, basically MEDDLE. I hate that. And as we saw with THE BECKY BREEZE FIASCO, it never works. If you're going to start something, open 'er up. It's going to hurt, cuz folks are going to stick a White Hot Poker up your babies ass. OK, that's just part of the deal.
  
  But if you don't open things up, you'll end up with dogs**t. Not to point fingers, I'm just saying. Even encourage "flowery:" comments: I have personally used the terms "smelly f**king cunt", "who's got the trench cunt", and "your cunt smells like a hobo died taking a s**t in an open-pit sewer" at least 100X on this blog so as to let the guard down of commenting women, children, and Buster, a well-known Super Cunt.
  
  Think about it: What has been the cornerstone for this blog's "success"? My riveting posts? My Lord, no. No, it's because Buster, brucey, Tim, hbm, et al can actually carry on an open, honest debate without FILTERS. Without bulls**t. That Buster calls all of us stinking cunt losers is just a bonus.
  
  Just think. It's going to be real tempting to moderate comments FOR THEIR OWN GOOD. You're thinking it right now, Brucey. Lib reflex. Would you have liked it if I DID THAT? OK? Don't moderate. People will just go to BendBB.
  
  Anyway, I also suppose I don't want to end up like one of those f**kers that hangs on too long and keeps going long past their prime. Like Lance Armstrong, Michael Jordan, or Rush Limbaugh. I can tell it's time for someone else to take over....
  
  What a long strange trip it's been. And I have had a hell of a time. But it's time to hand the reigns to someone else.
  
  Truckin got my chips cashed in. keep truckin, like the do-dah man
  Together, more or less in line, just keep truckin on.
  
  Arrows of neon and flashing marquees out on main street.
  Chicago, new york, detroit and its all on the same street.
  Your typical city involved in a typical daydream
  Hang it up and see what tomorrow brings.
  
  Dallas, got a soft machine; houston, too close to new orleans;
  New yorks got the ways and means; but just wont let you be, oh no.
  
  Most of the cast that you meet on the streets speak of true love,
  Most of the time theyre sittin and cryin at home.
  One of these days they know they better get goin
  Out of the door and down on the streets all alone.
  
  Truckin, like the do-dah man. once told me youve got to play your hand
  Sometimes your cards aint worth a dime, if you dont layem down,
  
  Sometimes the lights all shinin on me;
  Other times I can barely see.
  Lately it occurs to me what a long, strange trip its been.
  
  What in the world ever became of sweet jane?
  She lost her sparkle, you know she isnt the same
  Livin on reds, vitamin c, and cocaine,
  All a friend can say is aint it a shame?
  
  Truckin, up to buffalo. been thinkin, you got to mellow slow
  Takes time, you pick a place to go, and just keep truckin on.
  
  Sittin and starin out of the hotel window.
  Got a tip theyre gonna kick the door in again
  Id like to get some sleep before I travel,
  But if you got a warrant, I guess youre gonna come in.
  
  Busted, down on bourbon street, set up, like a bowlin pin.
  Knocked down, it gets to wearin thin. they just wont let you be, oh no.
  
  Youre sick of hangin around and youd like to travel;
  Get tired of travelin and you want to settle down.
  I guess they cant revoke your soul for tryin,
  Get out of the door and light out and look all around.
  
  Sometimes the lights all shinin on me;
  Other times I can barely see.
  Lately it occurs to me what a long, strange trip its been.
  
  Truckin, Im a goin home. whoa whoa baby, back where I belong,
  Back home, sit down and patch my bones, and get back truckin on.
  Hey now get back truckin home.
  

  Rock on, my brothers.

  Feel FREE to use the comments to organize, link & otherwise coordinate BendBubble3, or some such, to your hearts content!

  
• September 06, 2008
• 7:53

  MC Hammer vs Bay-Watch-Rock Oh-Uni-Bomber. Advantage: The Hammer

   » ‎ Bend Bubble 2

  Tags:  the Cult of Bend   [edit]

  Seems like the topic of interest was the unveiling of the McPAIN ticket.
  
  OK, say what you want about this gal on a personal level, and most of the knee-jerk lib's quickly revealed themselves as such when she was tapped, but it was a masterful strategic choice by the Repug's. They could NOT have made a better choice.
  
  OK, the situation was that Oh-Uni-Bomber was in an almost insurmountable lead, touting change, whatever the hell that means... I guess to lib's it means No More Bush. So then, even McCain jumps on the Change Bandwagon.
  
  See, that's a loser for McCain: He White, he Old, he Repugnant, he More Of The Same. Change does not work for him, no matter what he does. Oh-Uni-Bomber can legitimately tout change, McCain can't.
  
  Then what? Well, of course, Oh-Uni-Bomber tries to shore up his weakness, Experience, by choosing Joe Carpet-Bomber Biden. Oh-Uni-Bomber moves away from Change to a more Centerist ticket.
  
  There are two wonderful chances for the Pug's to take advantage of lib hot-bloodedness, their typical weakness, and why the Re-Pugsters typically kick their ass: Superior Strategic Game Play. First, Repug's have second mover advantage. Two, they know Oh-Uni-Bombers move.
  
  This race is like a sailing race, and the Uni-Bomber's boat looks thusly:
  Uni-Bomber sailboat, circa Aug 1, 2008
  
  And here is the McCain ticket:
  McCain Garbage Barge, pre-Palin
  
  See, when you're in a sailing race, and you have a huge advantage, you DO NOT try to keep winning, you don't try to GAIN on second place. You HOLD. You MATCH the loser, you match Second Place. You look BACKWARDS, and you do what they do.
  
  Well, when Oh-Uni-Carpet-Bomber looked back, all he saw was McCain flailing around, looking ahead, trying to do what The Bomber was doing. Change was being flogged for all it's worth by both ships. This is Good for The Bomber.
  
  But then the Dem's tried to cover their weaknesses by dragging Angry White Dude onboard, cuz Whitey loves to sail. He also loves to hurl black dudes over the side, but that's another story. So Uni moves centerist, by dragging Carpet-Bomber aboard.
  
  Uni-Bomber stops flogging CHANGE, and goes Old Skool Whitey. Uni, who has been flogging Change from Day 1, moves Away From Change, that which got him here in the first place. Strategically though, this is a game-theory dominant play. He looks backwards, and he see Whitey. He sees Whitey for 250 years. He needs Whitey.
  
  Now, Garbage Barge McCain sees this, more accurately The Strategically Superior Game Playing Repug's see this, and realize The Weakness:
  
  

  • They are HOPELESSLY behind.
  • They are sailing in a tub of s**t
  • They are flogging Change, but it comes out as Hypocritical Bile
  • Their Captain is a bumbler

  
  Someone, whether it was McCain or not, is debatable, but Someone sees the situation and divines some critical requirements:
  
  

  • Uni-Bomber has chosen his Path in the Woods, by moving first. He has chosen The Path MORE Taken.
  • McGarbage CANNOT compete head-to-head, he sails a Waterworld piece of s**t.

  
  The Uni-Bomber has made a potential mistake, and abandoned Change. He really had no choice. The question is: Can McGarbage capitalize?
  
  This is EXACTLY where we beat you hbm, every time. The Repug's are a repellent lot, usually have a boring, uninspiring message, and lie like rugs. But the f**kers can analyze a situation, and capitalize in cold, calculating form, almost every time.
  
  For this little scenario to work, McGarbage needed several things:
  
  

  • He needed to steal the Change Thunder.
  • He needed LESS of himself on his ticket, and more of the other guy.
  • He needed to Take The Path LESS traveled.
  • He needed to scoop up The Abandoned.

  
  My God, there is no argument he did it in commanding style.
  
  His choice could have been a weak, me-too shot across the Uni-Bomber bow. That would have been The Death Knell. Lieberman? Death knell. No-name Whitey Senator? Game Over. There were a plethora of Bad Choices. And Business As Usual lib's in the same spot probably would have f**ked it up.
  
  But Palin was just an inspired choice, and her "delivery" to the AmeriKKKan People was a masterpiece. Even her unveiling could have lost the Race, easily.
  
  The Change Thunder was convincingly torn from Oh-Bomber.
  
  "Change"? Oh-Bomber's NO-CHANGE choice was pushed right back in his face in a mega-stuff.
  
  McCain handlers KNEW that More Old Man Whitey was a dead-bang loser. Hot Young Sexpot was a Hail Mary. Admittedly, like most Hail Mary's, Palin had a hell of a chance of blowing up on McCain.
  
  But her speech was also PERFECT. It was flowery, devoid of detail, dodged issues, and almost certainly full of lies.
  
  But it worked, cuz it grabbed Hilary-voters by the boatload. Women voters will flock to this woman. She is flawed IN ALL THE RIGHT WAYS. And she knew it, and pressed all the right buttons. She scooped up The Abandoned.
  
  McCain took The Path LESS traveled, and believe me, the Road To the White House is almost ALWAYS won by taking The Road More Traveled. Someone figured out that if he followed the Uni-Bomber, he would never win: The Bomber would just look backwards, match the loser, and coast in to an easy victory.
  
  But now he can't look back: McPain has taken a different route & is off the map.
  
  Man, and you could see it in the Oh-Uni-Bombers face after the RNC: he was complainy, backpeddling, listless. In short, his thunder was gone. He looks tired. McPain is f**king on fire.
  
  Again, it does NOT matter who you are for: This thing is a study in Strategic Game Play Mastery. McCain was a hopeless loser, losing ground, bailing water, a sinking garbage barge.
  
  Now? He has singlehandedly ensured this will be a historic election: A woman or a black dude will either be Prez or runner-up. There was almost certainly HUGE pressure to go Old Man Whitey by McCain. Palin was the gutsiest, boldest, Hail-Mary, Road LESS Traveled play out there, and his only real chance, and he took it, despite the fact that it Almost Never Wins the White House.
  
  Now? He's got a chance. Palin brought him to even, plus or minus. She was PERFECT. Again, she is FLAWED in all the right ways. She's Spunky Porno Queen to McCains Grim Reaper Death Mask. She Hot, he ass-ugly. Those two are a dream team.
  Vote McPain, and no one gets hurt. And I'll do a pole dance.
  
  They may not win, but before the RNC McCain had ZERO CHANCE. I had NO PROBLEM jumping ship from my Repug-Independent stance, and put McPain back in the race for my vote. Palin brings a HUGE number of alienated Repugs back into the fold. She also appeals to the Lib-strong, Welfare Crowd, with her pro-breeding, unmarried statutorily-raped children.
  
  Retards? Again, what a masterful stroke. Redneck husband? Check.
  
  And top it off that she is a Hot As Hell MILF. Dudes vote for that s**t. Check Starz. Better yet, check Marz.
  
  When I watched this woman's speech, I got chills. Why? Was it cuz she was hot & I like The Hotness? Well, in small part, maybe.
  
  No, it was because I KNEW I was watching a hopelessly lopsided blowout, turn into a nail-biter with 2 minutes to go. Palin turns this thing from a boring, business-as-usual crapfest, into something I actually am interested in.
  
  I look at McCain with New Respect. Someone there is on the ball. Someone KNEW what had to be done. Go WAY off the Beaten Path to the White House, and just go into one of those plays where guys lateral the ball 20-30X because they are on the last play of the game, and crazy-ass s**t is their only hope. And it is working. And you can see The Whites of The Libs Scared-Ass Eyes.
  
  They had a Sure Thing in Oh-Uni-Bomber, it was a slam dunk. Palin reeled in the disaffected Repugs. She reeled in Hillary Humungous-Mega-Cock Followers. She reeled in The Special Olympics. She reeled in White Trash Welfare Single Mothers with 6 mongoloid illegit children fathered by 19 black dudes. That alone is about half the women in the Midwest.
  
  Again, it was a sight to behold. A gaping maw, an insurmountable lead, a smug presumptive winner, a sullen doomed loser, Game Over. All UNDONE in one night. The lib's quivered under The Hammer Stroke of Palin. You could smell the fear in the comments. McCain went from Inevitable Loser to seeing the whites of their eyes. And the libs quaked in their boots. The Oh-Bomber was visibly rattled.
  
  This thing went from Yawner to a Dog Fight in One Day. Again, it was due to Masterful Strategy by McHammers handlers. They saw a Lost Cause, and pulled a Desperation Hail Mary out of their hat, and it worked. I didn't find a SINGLE WOMAN who was not inextricably drawn to McPalin the next day. They were lib's. They were in Oh-Bombers pocket. Now, they were thinking. God, it was great.
  
  And I know this diatribe will bring out cries of IHTBYB IS A REPUG WHORE. OK. That's fine. But remember I like the Olympics, regardless of country, winner or loser. I like competition, I like a good fight. And McPain brings this thing from 100% Yawner blowout, to Close Call in one shot.
  
  I had 100% intention of going Oh-Bomber. Now? Palin is whackier, weirder, changier, and hotter than anything Oh-Bombers got. He chose angry Carpet-Bomber. Palin's got boobs. Again, a master stroke of Hail Mary game play. I'm thinking again, and last week I was not.
  
  You can gauge the effectiveness of MC Hammer-Pain by the vitriol of the lib's in the comments. They will whine, bitch, moan, and turn into Sullen Turds. Haven't learned a F**KING THING. Start thinking, you hot-blooded dumbf**ks. Repuggers stole your thunder via Superior Strategic Thinking. Start DOING THE SAME. Don't fall into your familiar rut. You emotional f**kers get completely worked up, rubbed into a lather by the Repugs, you can't subdue your Bush-hatred for 5 f**king seconds, and THINK.
  
  But you won't. You'll rant in the comments about my love of Nazi's or some s**t, and lose the chance to put your guy in office. We're PLAYING YOU AGAIN. And you'll get played. Cuz we know you better than you do.
  
  Know thyself? F**k that. Know thy enemy. That's where the Repugs steamroll over the lib's. We play you like the emotional puppets you are.
  
  You're at Even now. And it is Standard Op Procedure for Dem's to start their BITCHING, MOANING, and WHALING at Even. Look Bay-Watch-Rock: He's already STARTING.
  
  Know thy Enemy. F**k, when the lib's pull their head out & learn that, they'll be unstoppable. Look at the F**kStick that's been in office for nearly a decade. We elected this cocksucker TWICE. Repugs played us like a fiddle. TWICE. F**k, the Repugs have a leaden anchor in the form of Bush-Whacker, and we are PROBABLY GOING TO WIN THIS THING. AGAIN.
  
  F**k me. This is like 9/11 all over. We had overwhelming World-wide support & empathy. There was NO COUNTRY on Earth that wasn't "For" the U.S.
  
  Today? Due to BushWhacker, we are the Worlds Pariah. We are Has Beens. We are The Worlds Warmongers. No one feels sorry for the U.S. Even our staunchest allies are on the fence.
  
  We turned an INSURMOUNTABLE LEAD, into a SURE LOSER.
  
  Hello, Bay-Watch-Rock Oh-Uni-Bomber. Same s**t, different day. F**k. The Repugs ain't smart. But they are smarter than you. This is the Lib's 9/11. F**kers will turn Worldwide support into a cluster f**k.
  
  Pull your f**king heads out. That's you & your kind, hbm. Play it cool, aloof, emotionless, instead of sticking your f**king cocks in the Repug Glory Hole, and wondering why we put dobermans there instead of Starz strippers, like we said we would. F**k. Wake Up White Peepul.
  
  Lib's: "Gee, I hope there ain't murderous f**king doberman's in there again. But my Repug friend told me there definitely won't be, it'll be strippers this time. Is that Bay-Rock in the white van? It looks like Hillary is f**king him in the ass again with her Humungous Mega Cock. Cool."
  
  Folks, the Dem's could win this f**ker, but you watch: Brucey's cries of "McSame!" will start to appeal less than Palin's thong. hbm's cries of "I'm Scared!" will be drowned out by MC Hammers You Can't Touch This. Wash, rinse, and repeat... country-wide.
  
  They will stick their f**kin cocks in the Glory Hole, and wonder why they pull out Chicken Fried Steak. No thinking, just cram'er in there. Dumb f**kers. They need $10K for granny's operation, and Bob Barker is asking if they want to keep the $20K he's handing them... or take what's in the f**king little blue box.
  
  F**kers ALWAYS choose the little blue box. Like f**king clockwork. Repug's worked them into a lather, and they are already unzipping and walking towards the Glory Hole the second they saw Palin's titties. Pavlovian bitches. You watch.
  
  I'm trying to wake you f**kers up, but you will, as always, take personal affront, and cram'er in the Glory Hole, not thinking a wit.
  
  Think McFly. THINK.
  Repugs grab Lib's by the cock and lead them to the Glory Hole.
  
  Dem's remind me of people who troll the parking lot for 20 minutes to get a front row spot, and Bend home sellers who simply refuse to list or sell their home anywhere near market value: These people have forgotten Life's Objective Function.
  
  I LOVE people who do this in a parking lot. They will either wait right near the front row, or block traffic waiting while someone goes through the whole rigmarole of unloading their stuff, and getting ready to drive off, something that can take 15 minutes.
  
  And these f**kers don't give a f**k about the inconvenience they cause others or themselves. They've forgotten what the f**k they are really trying to do: Get in and out of the store with the smallest hassle & time expenditure.
  
  They will wait and wait and wait for a front row spot, but when it comes time to leave the store, they will still make the round trip to drop off their shopping cart at the nearest little cart depot. They make the round trip to one of these things in the end anyway.
  
  That's why I always park on the "edge" of parking lots, as close to a cart dropoff point as possible. I avoid the front row lunatics who clog the center, and I'm going to make a trip to the dropoff anyway, so I just park near one. I do this even when I can get a front row spot, because I feel that all the activity and franticness of front row headbangers increases the chance that my car will be scratched or hit.
  
  Same logic goes for most of Bend's current lot of home sellers: They are going to get MORE than they paid for their house, by God, or they just won't sell. Or they are going to get that 2006 fixated high price they can't let go of. Or some dumb s**t. These people have lost sight of Life's Objective Function: Like front row trollers, they believe that extracting Their Price from the World is the best way to achieve their end of maximizing their income or net worth, or whatever.
  
  But they don't take into account the opportunity costs of NOT receiving a sensible sale price. They don't take into account possible lost wages from unemployment here, and compounding that with NOT being able to have a job elsewhere. They don't realize they will maybe NEVER get their unreasonable sale price, and if they just took market prices today, they could invest & have more in 3-5 years. They forget that in a market gone to s**t, they MUST take a lower price... AND they will also pay less on whatever they buy next.
  
  And again, Lib's fall into this same trap. They FORGET that beating up the other guy, bitching, moaning, and complaining NEVER will get their guy elected. Bitching about McPain and telling people NOT to vote for him won't get Obama elected.
  
  Remember G Dub II: I mean Bush was loathed by the AmeriKKKan people, and Lib's just harped on the point, thinking that would win them the election. No. They forgot one little thing: Repuggers actually implore people to go out and... wait for it... VOTE FOR THEIR CANDIDATE. I know. A miracle of logic.
  
  Lib's Objective Function always seems to turn to beating up the other guy, while stupid old Whitey Repugs stay on target, and hound their base & borderline Repugnants to actually go VOTE. This is why Lib's always end up in the parking lot, when Repuggers are inside the door.
  
  OK, enough of that.
  
  From marge's blog:
  
  The Notices of Defaults in Deschutes County tops the sales. In August 211 Nod's were filed and there were 188 sales of all types of Residential real estate.
  
  Stats as of 9/2/08 for August 08:
  
  SFR, Bend Sold=89 at a Median price of $278,800
  SFR, Bend July Sold=103 at a Median of $289,000
  
  August 07 Sold=145 homes @ $350,000 Med.
  August 06 Sold =196 homes @ $377,000 Med.
  
  And you see from the recent National City survey, that at $285K medians, we are still 46% overvalued, the second highest in the country. That's a fair value around $195K.
  
  I remember near the middle of 2007, a fresh-faced, feisty BendBB took my bet that medians would go below $300K by the end of the year, a bet I narrowly lost. But here we are at $280K medians, and we are blithely getting predictions like this:
  
  Anonymous said...We were openly condemned here 2+ years ago when buster & homer said $180k, now we can argue how far below $180k.
  
  tim said...

  >>I agree that we will over correct however I don't believe it will go below $150k.
  
  Oh Marge, they will. How can they not?

  As I recall, most were fairly dubious of my thinking that we'd sink below the magical $300K mark (no one else took this bet), but what a difference a year makes. I guess you'd expect a lot of people on this blog's comments to have dire predictions of doom, but I am starting to hear this sort of thing out in The World.
  
  I have work acquaintances who are predicting absolute doom in Bend housing. Many times their accompanying remarks include the absolute shameful mismanagement of the City of Bend, and what they think is an inevitable BK by the City. They talk about the $40MM we'll have to spend at Cooley/97, $40 mill we clearly do not have. And they wonder how the hell SoniaCo can make revenue projections that include JR land sales, if we will never finish Cooley/97? And usually either they, or several friends of theirs, are losing their house or going BK.
  
  Seriously. Topics that drew baffled stares a year or two ago are actually being initiated by the general public. They're "informed" all of a sudden. They know about mounting financial issues in this town. And they are f**king pissed. People are starting to unveil the Kool-Aid fueled regime that has run this place for so long, and they are waking up & questioning what the f**k is really going on. They've been told every f**king day for years that Things Are Great, and they now KNOW that is 100% bulls**t.
  
  This is a place where the media WANTS you to forget Your Life's Objective Function. OK, it should be something along the lines of "I want to maximize my net worth over time.", or something like that. That's a Financial Objective Function, but you get the idea. Bend media doesn't really give a s**t about f**king you over in any other way than financially.
  
  But, stop for just a sec and think about this: Do you remember right after the top & prices were starting to drop a little, and people actually started making BUYING PLANS when medians hit $300K? Or $275K? Or whatever?
  
  Well, we're there. And what's funny is NO ONE is still talking about buying. Everyone is talking about selling & how much lower things will go. And there is a bone in my head that makes me BUY in the stock market when I hear this.
  
  But this ain't stocks. Stocks requires I HAVE MONEY to buy stocks when I get this feeling. This is housing. And for 9 out of 10 people, when they want to buy, someone HAS TO loan them the money, they don't have that much cash lying around.
  
  That's why this is different, that's why this thing will continue to go lower & traditional "contrarian" thinking won't work. It's a deflating bubble, and it'll carry on farther than most people think possible.
  
  And the lenders are going away:
  
  bruce said...

  Timmy, what do you think the odds are on Fannie and Freddie making it to Monday? 50/50?

  I mean, WTF? Did anyone even think that this would be a sentence that would ever be uttered? The answer is NO. Fannie & Freddie, the object of my last derisive post, are actually going away, make way for UnKKKle Sam. We might wake up one day this week & find these behemoths GONE.
  
  Housing is f**king dead meat. And if housing is dead meat, Bend is f**ked. Dead. This place will wipe out BILLIONS & BILLIONS of homeowner net worth in the next decade, and you don't just shrug that off, with no ill-effects.
  
  This place will actually start shrinking. I had occasion over the Summer to travel a bit, and happened across Idaho Falls. Nice place, 50K people or so. Close to the Tetons & Yellowstone. And it was like seeing Bend circa 2015.
  
  Abandoned malls. Everything in a low-grade state of disrepair. You could see the outer-reaches had gone to seed. Close-in, downtown? Still in relatively good shape. Hell, great shape compared to the Circle Of Death that ringed this place. There was just no sign of prosperity, and there seemed no real way to achieve it. People had this look of resignation on their faces. It was pretty depressing.
  
  We're on our way. The gleam will come off of some of our shiny, metal hulks on Colorado Ave after years of vacancy. Public works projects will just be abandoned or left in disrepair. Of course, we'll go broke. Weeds in all corners.
  
  Just as an aside, I went through Forum Meadows yesterday, and there is a hell of a Weed Grow Operation going on there. And it's the bad kind, not The Good. Yeah, the front yard kind that pushes down house values. Forum Meadows is AWASH in abandoned homes. HUGE f**king weeds. There is one in particular that actually is starting to look like a small tree. Seriously, it obscures the entire front of the house, it's HUGE. Go have a look, if only to witness a curiosity born of what has probably been the greatest weed grow conditions you'll see anywhere on Earth.
  
  Anyway, we're on our way to becoming Idaho Falls. And folks, when you're in a town like that, you FULLY UNDERSTAND why their median home prices are $140K or so. There's NOTHING to prop it up. No one makes anything. There's no way to pay for a really nice, expensive house.
  
  Kind of funny, but we have been so shot full of Kool-Aid in this place for so long, that most people have forgotten that INCOMES EQUAL PRICES ultimately. Someone on BendBB uses that in their signature.
  
  Almost EVERYONE I know whose bought a house in the past 4-5 years bought DESPITE the full knowledge that it was TOO EXPENSIVE, and out of their price range. But... remember.... "if you don't buy NOW, you may NEVER be able to afford a house!" Uh huh. I remember that well. And I remember how many people fell for it. That was the rallying cry for almost every single home sold in bend between 2004 and 2007. And that is a s**tload of homes.
  

  tim said...

  >>I agree that we will over correct however I don't believe it will go below $150k.
  
  Oh Marge, they will. How can they not?

  What a difference a year makes. But you think it's bad now? F**k, this is nothing. Bend still has a nice polish on it. Wait for a few years of deferred maintenance on EVERYTHING. We'll look like a tired old, worn out mountain town in no time. Man, and if you wanna see where there are a s**tload of desperate sellers, go into little dinky ass mountain towns. Half the people are broke, the other half are on their way.
  
  Fannie & Freddie gone. 46% overvalued. City on it's way to BK. Billions & BILLIONS of net worth wiped out. 40% vacancy downtown. Mass personal BK's.
  
  We are on our way to being another sad little town. And with incomes like ours, we're on our way to $140K medians.
• August 24, 2008
• 6:59

  The Cult of Bend Claims Another Victim

   » ‎ Bend Bubble 2

  Tags:    [edit]

  An interesting week, we saw what is The Beginning Of End of the private financing of home mortgages.
  Fannie Mae, 24 year chart
  
  Freddie Mac, Lifetime chart
  
  Fannie Mae and Freddie Mac both began a collapse similar to the Bear Stearns debacle, although far grander in scale. There again will be a familiar sucking sound from the South, that is if you live directly North of D.C.
  
  Look closely at these charts; there should be some instructive lessons to be learned about these two hugely leveraged levithans.
  
  First, almost ALL bubbles have some sort of leverage available to the participants, and the Ultimate Fatalities will be those that lent to the masses. Why? Because when you lend to speculators (de rigueur in Bubble Times), and the loan is secured against the Bubble Goods, YOU are on the hook for any large scale losses, while the speculator WISELY plays the equity side, a call option without any real prospect of loss.
  
  Second, leveraged institutions ALMOST ALWAYS are pulled into the maelstrom of what appears to be sound, prudent lines of business. Remember Lending To Brazil? Sure, sounds good, all they have to do is print whatever the hell sort of loser ass currency they have down there to pay us Wall St bigwigs off, right? Uh huh. That one didn't go well.
  
  Finally, there will always exist the extremely remote chance of some sort of catastrophe completely destroying a otherwise prudent loan portfolio. It just happens. Small mid-west banks learned this during the floods of 1993. It just goes beyond their thinking that there will be a 1,000 Year Event during their lifetime.
  
  It is the nature of banks to go broke. It is in their genome to go bust.
  
  It's probably hard to remember now, but a year ago the idea of Freddie or Fannie going broke was so patently ridiculous, it was hardly even discussed in polite company. I remember I thought the sky was falling, but when Jimmy Rogers brought up the collapse of Fannie & Freddie, I thought he'd pretty much gone off his nut.
  
  But look: Both institutions have wiped out a lifetime of gains, and will be summarily shot when the US Government takes over & begins operations under New Management.
  
  And not to scare anyone, but these are the same people who INVADED IRAQ TO CONTROL OIL PRICES. THESE ARE THE SAME MOTHERF**KERS WHO BOUGHT BEAR STEARNS DEBT. THESE F**KERS RUN THE IRS.
  
  The US Government is possibly the Worst Investor of All Time.
  
  FNM & FRE securitized over half the mortgages in this country. What happens now that they are gone & Uncle Sam is now in the house? I honestly don't know, but I have a bad feeling that their track record speaks ill of what will befall all of us.
  
  The End of An Era.
  
  Moving on, I noted in the comments that Buena Vista homes' (built Forum Meadows STD clap trap crap shacks) is going into foreclosure.
  
  Now, for the Noobs here, you should be aware that Wayyyyy back in mid December of last year, Roger Pollock, the anal dildo with arms that runs Buena Vista homes held a mass auction in Portland.
  
  141 homes sell for a total of $65 million at real estate auction
  
  OK, there is one particularly interesting quote in here that any mentally cognizant Bendite would readily understand (approx 2% of Bendites):
  
  Westside homes in Beaverton and Hillsboro sold best, Pollock said. None of the 29 Bend homes sold, and homes that are now rented didn't sell well, either.
  
  Pollock sold his ramshackle s**t-shacks ALL OVER OREGON... except for Bend.
  
  No. In Bend he didn't sell a single home. He actually accused those who bid on his Bend properties of trying to STEAL them. This is a clearly deluded idiot.
  
  Or is he? See, he sold ALL the rest of the sugar shacks he was trying to sell, except Bend. It's like he is of Sound Mind and Body when he is NOT dealing with Bend, but once he is in "Bend Mode", he is out of his f**king mind. He goes totally schizo when it comes to Bend.
  
  Any long timer to this blog knows that is the KOOL-AID EFFECT, foisted on man & beast alike via the Bend Media Propoganda Machine. ALL IS WELL. YOU ARE SAFE AS LONG AS YOU KEEP DRINKING THE KOOL-AID. WE NEED YOU TO BECOME PROSTITUTES SO WE KEEP BUYING YOU KOOL-AID AND MAKING YOU BEAR-BONG THE KOOL-AID.
  
  Bend is run like any self-respecting hedonist Meth Den: There is The F**king Man, The Grandmaster Pimp, The F**king Boss Hogg, and in this town it is The Builder, or is pimped out grandpappy, The Developer.
  
  And then there is the loose-stool f**king skanks that are drawn into the Grandmaster Pimps Meth-Den. That's us.
  
  We are pulled in with promises of perfect powder 24/7, even in July, good wine & ass f**king your best friends trophy wife above Volo, hummers in your Hummer by your Taiwanese pool boy, and finally meth shot into your scrotum by the finest illegal aliens Madras has to offer.
  
  And life is good for awhile. It's a hedonists dream come true.
  
  But after a few months, Grandpappy asks you to swallow a bucket of cum from some mules that were just jerked of by Drew Bledsoe, and some other unseemly s**t involving popsickles & your ass, and you're not thinking that you're living the Good Life like you once were.
  
  The Costs To Entry seemed low. The rewards seemed high. And they were. Shortly.
  
  But now comes the Exit Costs. And they're higher than you thought. In fact, they are barriers in your mind, because you can't, nay you WILL NOT, give up the other aspect of The Good Life, no matter what has to be sacrificed, no matter the cum buckets.
  
  This is us. This is you, this is me. This is Roger Pollock. This is Jay Audia.
  
  We are caught in the Bend Meth Den. Even when we want to really leave, we can't leave. This place has gripped us in some sort of catatonic fit that won't let us accept ANY reasonable offer.
  
  What is happening to Roger Pollock & his cracker shacker butt smackers, is going to happen to this town, and all of us, on a larger cost & temporal scope. It took about 8 months for The Bend Meth Den, The Kool Aid, The Cult of Bend to take down Buena Vista Homes.
  
  We are in for the same fate.
  
  Look around. No one will lower their price. Many CANNOT lower their price, but there are a large number that can (Pollock), but they simply REFUSE.
  
  Again, look at Pollock: A businessman, in this racket for the money, fairly geographically diverse. He holds an auction, and sells EVERYTHING HE'S GOT. Except for Bend, where he simply REFUSES TO ACCEPT REALITY. Why?
  
  Why does this happen to people here? Why is this less a town, than a Meth Den where the Zombie F**king Inhabitants seem to be robbed of all self-awareness & are completely oblivious to the catastrophe around them? Why?
  
  The answer is of course, Bend Media. Bend Media, is systematically & purposefully creating this Cult in a futile hope to ever expand the First, Last & Greatest Industry Bend has Ever Had: GROWTH.
  
  We aren't about actually DOING anything sustainable here. We are about getting the next mark. We grift marks. That is what this town does. We use up who is here in our Meth Den of Hedonism. Rob them of choice. Pump them full of Kool-Aid, and hand them buckets of chum.
  
  But unfortunately for Boss Hogg, the jig is up. THEY have run out of METH to shoot into our scrotes, and we are starting to wake up. Roger Pollock woke up. And he will lose Buena Vista.
  
  Well, who gives a s**t? Big deal. Because what has happened to Pollock will happen to us all. If you think Bend is special and you are special and your house is special, you are about to get a rude wake up call, because you have been medicated by propoganda for too long, and you're about to see that Grandpappy Meth has used you up.
  
  This is what you thought you was
  
  This is what you really is.
  "Holy F**k, I White, Ass Ugly & I'm in a Bend Meth Den!"
  Welcome to The Lollypop Guild, Motherf**ker.
  
  Bend Media CONTINUES to play Grandpappy Pimp to the populous, and the Bend City Council is ALL TOO HAPPY to suck their cocks as well.
  
  But Pollocks Wake Up Call is coming to all of us. It will be exactly the same, simply larger in absolute financial & time scale. This place is going broke.
  
  And NEVER FORGET what the true root cause is: It is NOT the housing boom or bust. That happened everywhere, and most of the country will survive. It is the media here, trying to hypnotize every single person into thinking their titties were 36DDDDD's, they looked like Angelina Jolie, they were swallowing Brad Pitts cum buckets, not old man mule jerk-off cum buckets.
  
  They are trying to convince you YOU ARE SPECIAL for their NEEDS, NOT YOURS. Growth is ALL THEY HAVE. Just like CRACK DEALERS. Bend Media does not GIVE ONE THIN F**K about you once you are here, only getting New Meat.
  
  Why do you think they PUSHED through the SDC deferral plan? If they actually THOUGHT about anything for 2 f**king seconds, they would realize that giving the money to PROSPECTIVE BUYERS, while still LUDICRIOUS, makes 1.76 quadrillion times more sense than giving the builders a deferral.
  
  But no. Once you are here, who gives a f**k. Keep entry costs low, keep rewards high... but DO NOT mention the motherf**king exit costs. And believe me, those costs will become highly important to you once you've swallowed your 14th cum bucket on the Volo Terraces.
  
  Bend, like Buena Vista Homes, is going to go 100% BANKRUPT. And just lke any decent meth den, the Pimps get f**king rich & leave town, leaving behind used up meth-huffers who can't even tie their f**king shoes.
  
  And it's all The Kool-Aid, it's all Bend Media. You think it's not 100% dead f**king real? Do you think it doesn't affect 100% of the local populous? Read this:
  
  No bids on Forest Service land
  
  Tuesday, August 19, 2008
  
  
  The clock ticked past 3 p.m. on Friday, August 15, and there was no sound of a gavel coming down.
  
  The approximately 62-acre parcel of land (50 acres net) the U.S. Forest Service put on the block in Sisters with a minimum bid of $14 million failed to attract any bids during an auction that closed last Friday.
  
  "It's a big disappointment," said Sisters District Ranger Bill Anthony, "and it's going to create some challenges for us."
  
  The no-bid means the Forest Service cannot move forward with plans for a new Sisters headquarters. Perhaps more distressing to the agency is the fact that proceeds won't be available to put into new facilities for the Bend-Fort Rock District, where lease costs are running the agency about $1 million per year.
  
  "We were dependent on the receipts from that sale to fund construction of those projects," Anthony said.
  
  The parcel, which lies along Pine Street in Sisters, was the focus of intense public interest as the possibility emerged that it could be sold to a private developer. Citizens were active in describing amenities they would like to see on the land, from more affordable housing to a public swimming pool.
  
  The City of Sisters summarized community input as a kind of guideline for prospective developers as to how the city would likely want to see the property developed.
  
  According to Anthony, there will be considerable discussion of options at the regional and probably at the national level. It is possible that the property could be put out for bid again in a better economic climate, but that's entirely speculative at this point, Anthony indicated.
  
  For now, what is certain is that the Sisters Ranger District will not be moving and that large parcel of land will not be redeveloped any time soon.
  
  "Fortunately, we have a home in Sisters," Anthony said. "It's a great location. It's not the kind of facility we need for the long term, but we can stay there for a while."
  
  Look at that. The STUPID F**KING FOREST SERVICE has inadvertently gotten PIMPED OUT. Yup, they think they got 36DDDDD's, when they just an asshole to 16 black f**kers.
  
  The stupid f**king Forest Service, LIKE EVERY SINGLE MOTHERF**KER EVER COME TO BEND, think they s**t don't stink, and their real estate is worth more than The Ginza. Dumbf**ks need to make way, cuz here come the cum bucket.
  
  Now, here's a story YOU WILL NOT READ IN THE BULLETIN:
  
  More people leaving Sisters area
  
  By Bill Mintiens
  
  Economic hard times are sending some local residents packing.
  
  Sisters Rental, which also operates the local U-Haul distributorship, has tracked a trend in their U-Haul customers this summer:
  
  "Although our U-Haul business is pretty close to what it was last year, we're seeing more people this year leaving the area than arriving," said Gilbert Porraz.
  
  Porraz noted that it seems to be certain types of people moving on.
  
  "I'm seeing people who've lived here for 5-7 years now moving on, mainly headed south, and most say it was just too hard to try to make a living in Sisters," added Porraz.
  
  But he's also seen a number of "newcomers" leave the area, particularly following a hard winter and lack of employment.
  
  "I know of several people, who arrived here all excited about a year ago, who had to move on for the same reasons. Mainly, no jobs," said Porraz.
  
  Nancy Lynch at United Van Lines in Bend has been writing a number of quotations recently for Sisters families.
  
  "We're definitely seeing more people leaving Sisters than moving in, several have said they have to go where the work is," said Lynch.
  
  Lynch notes that this trend is not confined to Sisters.
  
  "I can tell you that, in Bend, there are a lot of people wanting to leave - but can't until their homes sell," she said.
  
  A July 25 "homes for sale" report showed 239 Sisters-area homes on the market.
  
  "The cost of living in Central Oregon versus the pay in this area makes it very tough for people," said Lynch.
  
  Jason Taroli with Prestige Moving & Storage in Bend, the local Allied Van Lines agent, is seeing the same trends across Central Oregon.
  
  "There are definitely more people leaving than coming right now. We see this more in Bend, of course, due to Bend's population but it's happening everywhere," said Taroli.
  
  Wow. Imagine that. F**king houses in Sisters cost about 6 trillion times more than anyone makes there. And people are leaving. Is that true? They leaving?
  
  Yeah. They are leaving Sisters in droves. Of course, once the f**king cracker wears off & Whitey wakes up in Bend, they will leave here in droves as well AND there will be an article. Of course people are already leaving as FAST AS THEY CAN.
  
  Notice how YOU HAVEN'T READ ABOUT moving van survey's of arrivals vs departures in the Bulletin recently. Why? Right, the motherf**king departure department is PACKED. And arrivals is ZERO.
  
  No, what we read about is the VAST BUILDING OF SUCCESSFUL PROJECTS:
  
  Tall hotel may be in Sisters' future
  
  By Jeff McDonald / The Bulletin
  Published: August 22. 2008 4:00AM PST
  -
  
  An upscale hotel rising as much as 50 feet could be on the horizon for Sisters’ Western-themed downtown.
  
  Under plans submitted to the city in April, the 98-room, three-story Sisters Village Hotel at the west end of Sisters would give the city its tallest building and would be evaluated based on Deschutes County planning guidelines, according to Eric Porter, the city’s community development director.
  
  That’s due to an agreement made in 1998 between Pine Meadow Village LLC, the city of Sisters and the county that gave owners of the property 10 years to submit an application and fall under the county’s less-restrictive code for the Sisters area.
  
  Representatives of the project’s developer, Celia Hung, of Bend, turned in the hotel project application April 4, a day before the 10-year agreement expired, Porter said.
  
  Right, right, right. The old 50 ft tall Sisters Hotel is what YOU ARE READING ABOUT.
  
  Real estate is STILL GOOD. ALL IS WELL. Here is that bucket of cum.
  
  OK, here comes a Mark My Words Moment:
  
  This Celia Hung-To-The Floor has about a snowballs chance in HELL of ever building this monstrosity. NEVER HAPPEN.
  
  You want to see the Full Scale of the horror that is our local media, you can easily see it here:
  
  

  The phased approach would make sense in a tourism economy that is expected to experience a significant slowdown in the next 12 to 18 months, said Alana Audette, the president and CEO of Central Oregon Visitors Association, which markets tourism for the region.

  “Early indicators are that people are going to be very cautious and price sensitive,” Audette said. “It is a difficult time to launch new products.”

  Even the usually ebulient Audette thinks there are 200 different ways this thing SHOULD GET BUILT (remember, GROWTH is our ONLY INDUSTRY). Alana Audette is about the most ill-qualified dumbf**k the World has EVER KNOWN, but the Bulletin SOUGHT HER LYING ASS OUT for this "story".
  
  Standard Procedure in a Meth Den. Grandmaster Pimp tell me I pretty. I best swaller that cum. F**king unbelievable.
  
  Mark these Words: You wanna know how it'll go down here in a microcosm? You look to Pollock & Buena Vista Homes. Everything is Bend WAY TOO GOOD to be sold at market.
  
  I'D RATHER LOSE EVERYTHING THAN SELL FOR LESS THAN I THINK I SHOULD GET, AFTER ALL THIS IS BEND.
  
  So let it be written, so let it be done. Stupid Motherf**kers.
  
  OK, on to what I think is the DOMINANT THEME for this country & it's economy: STAGFLATION.
  
  U.S. Economy: Housing, Prices Raise Stagflation Risk
  
  By Shobhana Chandra and Timothy R. Homan
  More Photos/Details
  
  Aug. 19 (Bloomberg) -- U.S. builders broke ground on the fewest new homes in 17 years and producer prices climbed the most since 1981, providing no sign of an economic recovery or easing inflation.
  
  Housing starts fell 11 percent in July to an annual rate of 965,000, the Commerce Department said today in Washington. The Labor Department reported the producer price index jumped 9.8 percent from a year before.
  
  ``There's no doubt we're in a period of stagflation now,'' said Peter Kretzmer, a senior economist at Bank of America Corp. in New York who formerly worked at both the Federal Reserve Bank of New York and the Fed Board in Washington.
  
  Stock indexes posted their biggest two-day loss since June. The Standard & Poor's 500 Stock Index dropped 0.9 percent to close at 1,266.69, with the S&P Supercomposite Homebuilding Index down 3.5 percent. Treasuries were little changed, with 10-year notes yielding 3.83 percent.
  
  ``We are still in a fairly risky situation'' on the inflation front, Fed Bank of Richmond President Jeffrey Lacker, said in an interview on Bloomberg Television. He said that higher interest rates may be needed to curtail prices even before growth and financial markets return to normal.
  
  Compared with July 2007, work began on 30 percent fewer homes. Building permits, a sign of future construction, also fell in July, the Commerce Department reported. They were down 18 percent to a 937,000 annual pace.
  
  Starts were projected to fall to a 960,000 annual pace, according to the median forecast of 77 economists polled by Bloomberg News. The median estimate for permits was 970,000.
  
  `Pull Back'
  
  ``A recovery will not happen this year,'' said Russell Price, a senior economist at H&R Block Financial Advisors Inc. in Detroit. ``Not only are mortgage rates creeping up, but financing is becoming more difficult for a lot of people. Builders will continue to pull back.''
  
  The 1.2 percent increase in producer prices from the previous month followed a 1.8 percent increase in June, the Labor Department said. So-called core prices that exclude fuel and food rose 0.7 percent after a 0.2 percent gain in June.
  
  Prices paid to factories, farmers and other producers were forecast to rise 0.6 percent, according to the median of 77 forecasts. The core index was projected to advance 0.2 percent.
  
  Fed's Fisher
  
  ``The recent burst of cost-push inflation is giving the beast digestion problems that might manifest themselves in the form of a lingering inflationary fever,'' Dallas Fed President Richard Fisher said in a speech in Aspen, Colorado, today.
  
  Fed Chairman Ben S. Bernanke told U.S. lawmakers last month that officials ``continue to expect inflation to moderate in 2009 and 2010, as slower global growth leads to a cooling of commodity markets,'' while viewing the outlook ``as unusually uncertain.''
  
  The jump in the producer price index reflected a surge in commodity costs that has since waned. At the same time, the acceleration in costs excluding food and fuel raises concern about a pass-through to consumer prices.
  
  Producer prices are one of three monthly inflation gauges reported by the Labor Department. Import prices rose 1.7 percent in July and consumer prices increased 0.8 percent for the same period, the Labor Department said last week. Both figures were higher than estimated.
  
  Construction of single-family homes fell 2.9 percent to a 641,000 rate, the fewest since January 1991, today's report showed. Work on multifamily homes, such as townhouses and apartment buildings, dropped 24 percent from the prior month to an annual rate of 324,000.
  
  `Bad' News
  
  ``The news ahead for housing remains bad,'' Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York, said in a Bloomberg Radio interview. ``There's a corrective process we have to get through here.''
  
  The decrease in starts was led by a 30 percent decline in the Northeast. Construction fell 8.2 percent in both the South and West. Starts in the West slumped to a 26-year low. The Midwest showed a 10 percent gain.
  
  The magnitude of the July drop in the Northeast reflected, in part, a payback from an unexpected surge the prior month. Starts and permits jumped in June as builders hurried to break ground ahead of new regulations in New York City's building code that took effect July 1.
  
  Underneath the gyrations, demand is weakening. Sales of existing homes fell to a 10-year low in the second quarter, according to the National Association of Realtors. A third of all sales were foreclosures or ``short sales,'' in which lenders take a loss on a property.
  
  Financing is also becoming tougher, a quarterly survey of banks by the Federal Reserve showed. Compared with the April survey, more of the loan officers polled reported they tightened standards on prime mortgage loans and on non-traditional loans.
  
  Toll on Retailers
  
  The slumping U.S. economy is taking its toll on retailers from luxury chain Saks Inc. to discounter Target Corp., reports showed today. Saks reported its largest quarterly loss in two years, while profit dropped for a fourth straight quarter at Target. Home Depot Inc., the biggest home improvement chain, posted its seventh sales decline in eight quarters.
  
  Falling retailer earnings may signal that the U.S. economy will deteriorate further as consumers rein in spending to cope with rising unemployment and inflation. Home Depot Chief Executive Officer Frank Blake told analysts today he was ``cautious'' about consumer spending through mid-2009.
  
  The five largest U.S. homebuilders reported a combined $1.08 billion in losses in their most recent quarters.
  
  Builders are pessimistic as losses mount. The National Association of Home Builders/Wells Fargo's sentiment index yesterday showed optimism held at a record low in August for a second month.
  
  I've said this for many moons that the final upshot of printing TRILLIONS to "bail out" the housing mess would be STAGFLATION. Growth is coming to a halt anyway, but our government in its infinite wisdom, has decided to liquify (think throw-in-blender) the US economy.
  
  And another theme that I think will become even more important is The Marginalizing of The United States on the World platform. We will still be important. But we'll be like Great Britain. Flash in the Pan f**k-ups who royally screwed themselves.
  
  What's the next shoe to drop? Credit Cards:
  
  The next credit crunch
  Our easy access to plastic is about to dry up - and with it our ability to fake living the good life.
  By Geoff Colvin, senior editor at large
  Last Updated: August 20, 2008: 1:15 PM EDT
  
  (Fortune Magazine) -- We made it through the bursting of the Internet bubble and now the bursting of the real estate bubble. Next we may be approaching the end of the most worrisome bubble of all: the standard-of-living bubble.
  
  That conclusion comes from the latest data on credit card debt. It's growing fast, but the problem is bigger than that - and to understand what it means, we have to take a few steps back.
  
  For the past several years, the average inflation-adjusted total pay of American workers hasn't been increasing. That means we haven't been building a foundation for increases in our living standard. You might be tempted to say that by definition our living standard couldn't have increased, but that's not quite right. Even with stagnant real incomes, we can always live a little better every year through borrowing and pretending that our living standard is still rising, just as it was for decades.
  
  So the Great Bull Market made us feel rich, and we felt justified in saving less and borrowing - and spending - more.
  
  After stocks collapsed, home prices took off, making us feel rich all over again. So we continued saving less and spending more, creating the illusion that our living standard was still rising. In 2005 our personal savings rate went negative, but even that didn't slow us down, because our homes were still appreciating - and rising home values meant that household net worths weren't declining. (Don't be fooled by that saving-rate spike in this year's second quarter; it was probably a one-time event resulting from the federal stimulus payments.)
  
  Of course, we don't hear those assurances anymore. Stocks are back where they were eight years ago, and home prices are where they were five years ago. But personal debt is much higher than ever before, and average pay is still going nowhere in real terms. So now how do we live as if our living standard is still rising?
  End of easy money
  
  That's where the credit card reports come in. Last year, just as the subprime crisis happened, credit card debt took off. The home-equity ATM had been shut down, so people turned to the last source of easy money they had left, the most expensive debt on the menu, credit card borrowing.
  
  Since credit card debt has been growing much faster than the economy - more than 8% in last year's third and fourth quarters and over 7% in May (the most recent month reported)- people are apparently using it as a substitute for income. Thus, for the past year or so we have still maintained the standard-of-living illusion.
  
  But a big crunch is coming - and here's why. Credit card debt, like mortgage debt, gets bundled, securitized, and sold off by banks. Citigroup (C, Fortune 500), one of America's largest credit card lenders, just reported that it lost $176 million in the second quarter through securitizing such debt. That happens when the buyers of those securities observe rising delinquency rates and rising interest rates, and decide the debt is worth less than Citi thought. More generally, the amount of credit card debt that is securitized nationwide has plunged by more than half in the past five months because it's getting riskier. That means credit card issuers will be charging customers higher interest rates, and since the banks can't offload as much of the debt as before, they'll have less money to lend to cardholders.
  
  The squeeze has already started, which is why Congress is in the process of passing the Credit Cardholders' Bill of Rights, which would prevent issuers from changing rates and terms without warning, among many other provisions. But bottom line, the credit card money window is going to start closing - and soon.
  
  So now what? It's hard to see where consumers can turn next. Home prices seem highly unlikely to start rising again soon. Stocks? You never know, but the Great Bull Market looks like a once-in-a-lifetime event. Homes and stocks are households' biggest asset classes by far. There isn't much else to borrow against.
  
  It may be that the standard-of-living bubble finally has to deflate. Sustainable increases in living standards have to be earned, not borrowed, and that means performing ever higher value work that can't be outsourced. We haven't been meeting that challenge very well; doing so will probably require much more and better education for millions of Americans, which takes time and money.
  
  The result may feel like deprivation, but I don't see it that way. Who knows - we might even find that living within our means and saving a little money actually isn't so bad.
  
  I love that saying: FAKE LIVING THE GOOD LIFE.
  
  Who does that remind you of? I know, "America". But WHICH AMERICANS?
  
  Hmmm hm. Cali-Bangers. Cali-Bangers are living in the Biggest Meth Den in The World; California. A place where absolutely no one has a f**king clue what's really going on. The Cali-Banger will suffer a withdrawal so severe, that I actually believe many of them will WAKE UP WHITE PEEPUL and get the f**k outta there.
  
  Again, you can be forgiven if you have come here from Cali: Lie prostrate on the ground groveling before every native Bendite and beg forgiveness for a hundred years of theft, rape, and murder. Do that and your men shall live. Do it not, and every one of you will die today.
  
  Gat damn Braveheart! Well, anyway, you get the picture.
  
  This country has been living some sort of credit-fueled dream, and it's about to become a nightmare. We ain't got the 36DDDDD's. We crack-ass ugly. We have been living a fantasy, and it will fall apart because all such things do. They must. We will either wake up or DIE.
  
  Ask Jay Audia. You see Pollock KILLING himself over this s**t? F**k no, he's in MEXICO getting his 2" cock sucked by little boys. In Bend, once people wake up from the Cracker Nighmare, They f**king kill themselves.
  
  Barriers To Exit are high in this Meth Den. YOUR MONEY OR YOUR LIFE. Those are the costs to get out.
  
  Why are NO HOMES SELLING? Cuz they can't bring themselves to believe they are what they are. They believed the Grandmaster Pimp. They think they got the 36DDDD's. Everyone in Bend is an Olympic Athelete, right?
  
  But ain't none of us Angelina Jolie. We just stupid Whitey. And until people wake up & CUT THEIR F**KING PRICES IN HALF OR MORE, nothing will sell here. Just like no one really ever leaves whoring. They just take "breaks". Costs to exit are in your head, and that s**t is hard to undo.
  
  This is a town of HEDONISTS, because that is EXACTLY WHAT BEND MEDIA wants here. HEDONISTS will take the KOOL-AID, and not care what happens on The Back End. Even if it's losing everything. Hell, even if it's dying.
  
  GROWTH: Funny thing how some things have Unintended Consequences. We started a War with Iraq, whose main consequence was enriching our enemies at a rate untold in history.
  
  And the Growth Industry? Who knew it's primary byproduct is DEATH?
  
  That's Bend. We reeled in every crack-addled hedonist for 1,000 miles and know we will either use them up so completely that they won't recognize themselves when they leave, or we will bury them.
  
  Thanks Bend Media & Boss Hogg.
  
  
  
• August 17, 2008
• 6:53

  OK, I'd bettter come out and admit ...

   » ‎ Bend Bubble 2

  Tags:  Home Price Declines   [edit]

  OK, I'd bettter come out and admit something that may well affect the future of this blog:
  
  I am an Olympics Junkie.
  
  Now you know.
  
  When the Olympics are on, I can do little else than pee, eat, sleep, and watch the Olympics. I can barely form coherent sentence, I show up to work in a sleep-deprived fog, I sometimes don't shower for days.
  
  Why do I have this problem? I don't watch football, baseball, or basketball, or any other professional sport, except on rare occasion. I think watching sports on TV is actually pretty lame.
  
  But I can't help but enjoy what are for the most part, fairly regular-World people, gather together & compete in events that largely define these peoples entire lives. It's really more a real-World drama than sport.
  
  And I don't have a particular favorite sport, person, or team that I am watching, or cheering for. I like ALL of it, I like watching everyone, winners & losers alike. American TV is naturally slanted wildly towards American athletes, so it's hard to get unbiased coverage on this or any broadcast really.
  
  And the Olympics have been sort of commercialized & overrun with "Pros" like Kobe, etc., who you KNOW are going to win. Even the Grama swimmer Dara Torres employs a small scale army to get her in shape. This is probably my least favorite thing about watching the modern Olympics. Too commercial, and loaded with country-switching Pros. Yuk.
  
  But I still love watching. I remember watching the US beat the Ruskies in 1980, one of a precious few things that stays with me after that many years. I remember watching & thinking, "I am watching a historic moment here, and it'll be recounted till I am dead".
  
  And it was. And it is still easily the Greatest Thing I have ever seen on a TV screen. Maybe that's when I contracted this addiction.
  
  Anyway, if you've wondered here I've been, I've been glued to my TV. Can't help it, and I offer no apologies. OK? Sorry.
  
  So it may be for a week or two that you guys have to carry the day. I'm going to try to limit my Olympic fever to a few hours a day. Try.
  
  OK, that said, I busted out of my myopic Bend-addled fog last week, and went for a long drive last week in points beyond.
  
  And I guess it was curious to see this RE problem from a different perspective. I figured it was at it's worst here, and existed in far milder versions elsewhere.
  
  No. Well, yes & no. It is damn bad here. But it is Really Bad All Over.
  
  The truly strange thing that caught me off-guard was the "Commercial Development" seller. You know, because Bend is absolutely chucked full of them: The useless hunk of ground, butt-ugly, too ugly for homes in fact, in some semi-industrial Death Zone, with a For Sale sign on it declaring it fit for "Commercial Development".
  
  My God, this sort of thing is EVERYWHERE. It's along empty highways, next to schools, in neighborhoods, everywhere.
  
  I saw several worthless plots declared fit for Commercial Development in some of the most bizarre places. Empty grasslands, with not a soul for miles. It's like these people paid a few hundred bucks for scrub MORE USELESS than the badlands East of Bend, and all of a sudden decided that it's worth $2,000,000.
  
  Of course none of it is selling, you can tell by the weathered appearance of the signs. This stuff has been for sale for a few years.
  
  And then there is the VAST inventory of acreage properties. I guess living in Bend, and watching the stratospheric take-off of acreage properties made me think there is some sort of shortage, or groundswell in demand for these properties.
  
  No. Well, there may be decent demand, but there is a wave of supply. And it seems to be the same root cause. People either HAVE TO sell for some reason, or there is a gold-rush mentality to it. They think they can get 10-20 fold what they paid a few years ago.
  
  I suppose it was just strange to see that Bend is not that different. We do have a lot for sale, but the problem is far larger than I have ever seen it. I got a new appreciation for how mired in a quagmire the nations RE market is.
  
  It's hard to see how large the problem is until you actually lay eyes on the hundreds & thousands of properties that are out there, and are clearly not moving. Bend is not alone in its inventory problem.
  
  Oy, now for the tech-dregs. I got this from Buster or one of his clones:
  
  BESIDES it being f--king stupid, the CUNT must spend ALL his time looking at the f--king analytic data points, but then again, he's a f--king MBA, he can spreadsheet this generated data, and beat-off.
  
  Note one of the worst that HOME-BOY has enabled is urchin, this S--T is really NO f--king different than what BENDBB does, its just that homer gets away with it like HBM says, about the masses BEING F--KING STOOOPID.
  ...
  127.0.0.1 imageads2.googleadservices.com
  127.0.0.1 imageads3.googleadservices.com
  127.0.0.1 imageads4.googleadservices.com
  
  As I thought, this are /etc/hosts entries so that certain domains go to your local loopback address. This is perfectly fine with me. Disable any or all src or href attributes you want, that is fine with me.
  
  You'll find, if you take the time to View Source & search for the above terms ("googleadservices", for instance), you'll find they don't exist on this site.
  
  I'll go one better: Go find an anonymous proxy somewhere & only surf this or other "suspicious" sites using anon-proxy. I'd give you the one I use to surf BendBB, but then it'd be banned... this happens on occasion when they figure out that they are not getting your real IP.
  
  So go ahead & mislead, redirect & generally f--k with the system, it's all good with me. Some of these comments seem to imply that I give a s--t about the identity of commenters. I have no unilateral way to convince anyone unambiguously that is not true, but I can urge you to take measures to keep your identity private.
  
  There also seems to be this implication that I somehow "profit" from posting youtube, or other "off-site" crap on here.
  
  Oh yes, I shall soon retire on the vast wealth I am accumulating from my youtube embedded videos. Oh yes. I'm really watching the money pile up from that. That & the craigslist RSS feeds. Woof. You have no idea how many mansions & Lamborghinis that has paid for.
  
  OK, now for the non-borderline schizo's: OK, I just blog for my own enjoyment. I don't make dink, I DO have googles Urchin web analytics on the home page, something I check about never. I looked after I got "Pat-dotted", and got many thousands of hits out of nowhere. But that's about it. I don't care about IP's. I don't censor based on the offensiveness of anything. Hell, I encouraged people to go look at BendBB's "outting" post, cuz I knew that'd be gone before long.
  
  This is just a little blog for posting what Bend media won't regarding Bend RE, and business in general. That's it.
  
  I agree with the commenter, "Only the paranoid survive", and if you feel you are being "outted" here, you can modify your /etc/hosts file, or surf this site anon proxy. I NEVER go to BendBB except via anon proxy because it has been made clear via IP-banning policy that he IS keeping track of IP's over there. I HATE that.
  
  This thing is meant to be open, free, yet respect individual privacy. So I am more about obfuscating your identity than anyone. Type "free anonymous proxy" into google, and find one you like, and bookmark it.
  
  We ALL have a duty to Stick It to The Man in this regard.
  
  Speaking of Sticking It To the Man, it seems the Al Haig moment sprouted some other Bend RE-bubble blogs.
  
  http://benddenial.blogspot.com/
  
  Of course it is impossible for me to assert anything absolutely about who is doing what, but this appears to be a site fired up by our own dearest marge! Good going marge. Keep it up, and feel free to copy/paste stuff over here, URL's and all.
  
  http://angrybendbitch.blogspot.com/
  
  OK, I think this was started by Buster-Clones, as some sort of marge-proxy weirdness. Seems they didn't post since last March, until recently. This one is good if only for the horrible picture on the sidebar.
  
  The top one is classic Cali-Banger. My Lord. That is a real person, not animated horror. And almost certainly of Cali origin.
  
  http://bendbubble3.blogspot.com/
  
  Yup, this one is pretty good, featuring Post WWII apocalyptic pics. Anyone know who this is? Buster? In my Olympics-addled state, I'm finding it hard to keep up.
  
  Anyway, I've been saying for some time that I am all for someone else taking over the reins (reigns?) of this thing, so that we can get a new perspective. I hope one or all of these blogs does well, and someone can take the lead on the Bend RE issue.
  
  My primary objective has been "outting" Bend media as horribly slanted towards Bend RE, to the point of simply being PR whores. Some have not sold out so entirely. But if they are big & in broadcast or print, they almost certainly have.
  
  Finally, before I head back to Olyimpificating my life:
  
  tim said:
  I thought we had seasonally peaked on inventory a couple weeks ago (like every other year), but looking at Clive's chart, I'm beginning to wonder if 2008 doesn't mark the emergence of a new kind of desperate late-summer seller.
  
  anon said:
  Could be we hit the sweet spot in GREATEST FOOL THEORY, remember it was supposed to come back for two years no. I think that all but the BEND-DEAD know its NOT coming back, sell now while you have a prayer, that is what's going on.
  
  Yeah, I'm starting to question the validity of many Long Held Beliefs regarding the Bend RE market. Used to be you listed early Spring, sold in the Summer, and hibernate in the Winter. Easy, predictable.
  
  But we're entering a new phase here: Forced Selling. People are not going broke according to the seasons around here. And if you go to RealtyTrac.com, you'll see that foreclosures are what is fueling the local market. NOT the seasons.
  
  I figured the local inventory situation would look like a fairly gently rising sine wave, higher peaks & higher valleys. But I'm wondering if the coming valley fails to really materialize. And turns into more of a flat plateau. And next year begins a new wave up from there.
  
  This market is coming apart. It's hard to even predict things that have held for decades, like Bends yearly cyclicality. It think it'll remain, but it'll flatten & ramp up into a monotonic rising wave.
  
  My own view of the RE market outside Bend tells me that NO ONE is coming here to save us. They CANNOT sell what they have. As blindly myopic as I thought Bend sellers were, the rest of the country is pretty close. EVERYONE in this country is selling, or trying to, and they are not succeeding.
  
  The RE market seems well & truly screwed for many, many years.
  
  One more quick thing:
  
  Rent & Invest The Difference still rolls on as my favorite investment theme for Bend.
  
  There were occasional cries of "Invest in what?" several months ago, a legitimate question.
  
  Hopefully, I've answered this criticism. I DO NOT believe RE is a prudent investment for what may well be the rest of my working life. Medians would have to fall to parity with rents for me to become interested, and we're NOT EVEN CLOSE.
  
  Bonds, whether gov't or corporate, are an unknown quantity. Read the comments and you can see that these things are based on the re-payment capacity of some very marginal borrowers. And I believe there will be a cascading effect that we haven't even seen the beginning of.
  
  And as Buster said, Price Ain't The Problem. Banks are ONLY loaning to FICO 800, 75% LTV, pristine borrowers. That's a rare bird these days, and getting rarer. No one borrowing, no one loaning, and everyone throwing around homes like hot potatoes, dropping prices to no avail.
  
  It Ain't Price. We are tapped out or BK as a country. Every last dollar that could be borrowed, was borrowed and now we're coming to find that we can't pay it back.
  
  It'll take a few more years, but RE will hit & drag bottom for a few years. But don't buy it yet.
  
  Personally, I plowed into some spec stocks in July, and am doing OK. I think stocks are the Last Bastion of Safety, which is just strange. Stocks have traditionally been the Flight FROM Safety investment when things get uncertain.
  
  But the usual Flight TO Safety instruments (bonds of all maturities) are suspect. The Full Faith & Credit of the US is now MORTGAGE BACKED. OK, WHY we are BUYING this crap is beyond me. Bear Stearns gets KILLED in the mortgage-backed market & the US Gov't decides NOW is the time to JUMP INTO THE MORTGAGE MARKET.
  
  I don't get it. The outcome seems simple: INFLATION. More specifically, STAGFLATION.
  
  We will print our way "out of this thing". Of course this NEVER WORKS. And maybe sometime I can show graphically why I think that as interest rates go up, stocks actually become the Best Investment Bet.
  
  OK, so I must now return to my butt-cheek carved place on the couch, and watch the Olympics. I promise I'll try to comment more this week, and actually dedicate a brain cell or two to thoughts of RE and the like.
  
  But meanwhile.... Phelps awaits.
• August 10, 2008
• 6:59

  IHTBYB Outted on BendBB? I Can't Believe It's Not Butter!

   » ‎ Bend Bubble 2

  Tags:  Home Price Declines   [edit]

  Well, we knew it here first from marge, and The Bulletin reported it Friday that medians in Bend got killed last month.
  
  Median prices, sales mostly down in July
  
  Bend's median sales price for a single-family home in July dropped to $287,000, down nearly 9 percent from June, according to the latest Bratton Report, released Thursday.
  July's median was about 16 percent less than the July 2007 median of $343,000.
  The number of sales last month also dipped almost 9 percent from June, to 104. There were 152 sales in July 2007.
  The median sales price per square foot, considered by many real estate experts to be a better measure of value, dropped to $152 in July from $166 in June, the lowest since July 2005.
  ...
  
  Of the homes sold in Bend in July, the majority -- 29 -- were priced between $200,000 and $250,000. And additional 23 homes were priced between $250,000 and $300,000. Two homes sold for more than $1 million.
  In Redmond, the median price in July dipped to $215,000 on sales of 42 homes. The median price per square foot rose nearly 8 percent, from $127 in June to $137 in July.
  In other areas of Deschutes County, the median prices for July were $327,000 in Sisters, on sales of 7 homes; $564,000 in Sunriver, on sales of two homes; and $160,000 in La Pine, on sales of two homes.
  
  
  You can see that the high end stuff is hardly selling at all. It looks like the mix has definitely downshifted. Sunriver has all but dried up. La Pine as well.
  
  This was supposed to be our swan song, the time after we had hit rock bottom back in April. Supposed to be doing great, right?
  
  No, well after this month, you will quickly watch things go to hell. How far? I found this piece regarding rent-to-value ratios:
  
  

  Rent or Buy: Craigslist and Realtor.com
  by Brent Wilson
  Reochronicle.com/blog

  Home ownership is a deeply ingrained desire for most Americans. Who wants to brag about how nice their rental house is? Besides, home interest is tax deductible, so it isn’t really money, right?

  Normally it’s a good idea to buy if prices are in line with rents, but in many areas prices have shot way ahead of rents, although things are coming back into line.

  To compare rents and home prices, what follows is a comparison of home prices from Realtor.com and rental prices from Craigslist. This study is very unscientific, since it isn’t normally possible to compare the exact house for rent with the exact same house for sale–normally a house is either for sale or for rent.

  However, I’ll try to include similar sized and similar looking houses within a given city, at least based on descriptions and pictures.

  Thousand Oaks , CA

  http://ventura.craigslist.org/apa/776302660.html. This listing on Craigslist is going for $3900 per month, which includes gardener and pool service. The house
  is 3000 square feet, 3 car garage, etc. This works out to $46,800 per year.

  Realtor.com lists houses with 2700+ square feet in Thousand Oaks starting at roughly $675,000, on up to above $900,000. At the lowest price of $675,000, the total cost to own would run roughly $67,500 per year (7% mortgage, 1% property tax, 1% maintenance, 1% for insurance and general upkeep). A house more comparable to the one on Craigslist would probably run around $750,000-$800,000, or around $75,000 per year to own. Tack on $4000 a year or so for gardener and pool service for a total of $79,000 per year.

  Ventura, CA

  http://ventura.craigslist.org/apa/776165804.html. This house on Craigslist is renting for $2250 per month, 4 bedroom, 2 bath with a 2 car garage. Works out to
  $27,000 per year.

  Realtor.com lists a number of 4 bedroom, 2 bath homes in Ventura which look fairly similar, in the $400,000 price range. This would work out to roughly $40,000 per year to own.

  Santa Rosa/Rohnert Park, CA

  http://sfbay.craigslist.org/nby/apa/776298792.html. This house is in Rohnert Park, just next to Santa Rosa, CA. 4 bedroom, 2 1/2 bath, 2 car garage, rents for $2300 per month, $27,600 per year.

  Realtor.com lists a number of fairly similar looking houses for $375,000-$450,000, or roughly $40,000 a year.

  Reno, Nevada

  http://reno.craigslist.org/apa/776371760.html. $1600 a month will get you this brand-new looking house in Reno, 3/2/2. $19,200 per year.

  Realtor.com lists a number of similar looking houses for around $200,000, so this might be one place where it could pay to buy.

  Minneapolis, MN

  http://minneapolis.craigslist.org/apa/776338785.html. Just for variety, here’s a split level 4 bedroom in the Minneapolis area for $1500 a month, or $18,000 per year.

  Realtor.com lists a number of similar looking houses for around $200,000, so this might be another area where it could pay to buy (if you can handle the winter heat bills).

  Roseburg, Oregon

  http://roseburg.craigslist.org/apa/773994070.html. OK, so Roseburg is out in the boonies, but this house rents for only $850 a month and looks like new. $10,200 per year.

  Realtor.com lists a number of fairly similar houses for $175,000-$200,000 or so in the Roseburg area. Annual cost $18,000 or so annually, so it seems better by far to rent around there.

  Do Your Own Comparison

  You can do your own comparison in your area by just multiplying your rent by twelve, and dividing the purchase price by ten, to get a very rough figure to compare.

  This is assuming you have a good landlord who performs repairs on a timely basis, and that you are considering buying a well built house that doesn’t need much work.

  Realtor.com is a good place to look for comparable houses for sale, since it normally includes the local multi-list. Craigslist has a good selection of rental properties, although it has been my experience that you can usually find a place for less than on Craigslist by driving around, calling yard signs, local newspaper ads, etc.

  If you really want to compare prices, it’s probably best to just compare cash outlay between renting and owning. Over time, if you own, you will probably end up spending unexpected money on furnaces, air conditioners, sewer lines, water heaters, etc, and this amount of money will probably about equal whatever tax benefit you might have gotten from the mortgage interest deduction (if you are lucky). Have you checked lately what it costs to replace a roof? Or a furnace? When you rent, you don’t have to worry about what it costs–the landlord does.

  Lots of people rush into a home purchase without thinking about how long they might stay in a place. In general, if you think you could move within 3 or 4 years, you might just be better off renting. When you rent, you don’t have to pay 6-10% to move (Realtor’s commission plus a fee to every real estate service provider within 5 miles). When you rent, you just pack up and go.

  Overbuilding

  In many areas, way too many homes have been built and can’t be sold, so property owners are renting out brand new houses to at least get something coming in.

  If you can work it, you might be able to get a great deal on renting a brand new house for a few years, maybe for less than 2/3 of what it would cost you to buy. It might pay to drive around some areas where new houses have been built recently to see if you can find a rental.

  Landlords Provide a Real Service

  Landlords provide a valuable service–they provide you with a suitable place to call home, without you having to go into debt for decades to buy it. They also repair everything that needs it (at least most do), pay the taxes and insurance, and sometimes even take care of the yard and pay the water bill.

  When you get ready to move, you just give notice, pack up, and move! Some landlords will even rent to you for less than their house payment! Renting isn’t for everybody, but it makes sense to lots of people, especially if you can rent a place for considerably less than it would cost to buy, without tying up your money or going into debt.

  Regardless of what you do, it can pay to do a little off the cuff comparison of costs before you buy or rent, just to see how things stack up in your area.

  Incredibly, rents in Bend compare closest to Roseburg, where they advise Not Buying. And that's for homes in the $175-200K range! That bodes ill for Bend.
  
  This all goes back to ROI that is far below comparable investments. ROI on Bend homes while starting to rise recently, is still far below almost anything in the US.
  
  Don't think that $287K is a bargain, just because we haven't seen prices like these since Summer 2005. It is looking more & more like sub $200K medians will ultimately happen here.
  
  The Outrage of The Week has to AGAIN source from Don Bau-humper:
  
  “We had a lease-back program on our project out at Eagle Crest,” said Pennbrook founder Don Bauhofer. “With the downturn in the market, the company just ran out of money.”
  
  Nevada investor Chad Osorno purchased two homes from Pennbrook in January and February 2007.
  
  He entered into a lease-back agreement with Highland Investors in February, according to his suit.
  
  The companies stopped paying the $3,279 per month rent in November, Osorno’s suit says, and he’s seeking $69,158 in rent, late fees and interest.
  
  You wonder what the THOUSANDS of incorporations that spiraled into the stratosphere over the past 5 years, that's what this is. Sleazeballs like Bauhofer enter into these agreements with almost NO ACCOUNABILITY for paying you.
  
  Should have asked WHAT Highland Partners is? What happened to that MONEY? This thing SOLD you the houses, got a big wad of cash, and then shortly after DEFAULTED.
  
  Where's that BIG WAD of money? That should have remained in the partnership that sold those houses, and it was almost certainly bled out to Bau-humper himself.
  
  This guy was 100% scammed.
  
  Of course, these are some Nevada investors who had no business swimming with the Cent OR sharks. A Sale-Leaseback of a $500K house? WTF? Here's the Humper:
  
  But Bauhofer said the agreements ceased to make sense as the homes’ values dropped from more than $550,000 to less than $400,000. The companies, out of money, stopped making payments, Bauhofer said.
  
  Huh? He sold a $500K house to the guy, he's GOT THE MONEY. Now, he says since the house he SOLD has gone down in value... no wait, it's not that, it's because the shell company that engaged the transaction has run out of money, that he cannot fulfill the transaction.
  
  That's like Dunc saying he can't make his lease payments cuz the building has gone down in value. But then later flip-flops claiming poverty.
  
  See, I have a feeling if some "normal" tried this stunt, and they were hauled into court, they'd LOSE BIG. If some shopkeeper downtown tried this, they'd declare the rent + damages DUE & PAYABLE before they even walked in the court room.
  
  But Bauhofer will probably get away with it. It was a 100% SCAM SALE. There was NO LEASE BACK. Bau-humper had about 2 s--ts worth of intent to pay this guy his money. He inflated the price, with a commensurate PACK OF LIES about money he was going to pay the dude.
  
  Standard Ponzi Scheme. 100% lies about a HUGE PAYOFF to get your money up front.
  
  OK, moving on.
  
  Lookie here! Little old BendBubble2 is getting some play in the Source:
  
  Real Estate's Dead, But Weeds Look Healthy
  

  Is it just our imagination, or is Bend looking weedier (and seedier) than usual this summer?

  A month ago the BendBubble2 blog commented on the proliferation of weeds around town, attributing it to the real estate bust.

  “Problem is Bend is hucked-full of empty houses,” wrote “I Hate to Burst Your Bubble.” “These things aren't getting minimal maintenance, they're getting none. And you'd think that after a long, cold winter, things would brighten, and all would be well, and that at the very least, the landscape here would ‘stage’ itself. After all, many front yards are meant to mirror desert scrub. But it's not working out that way.”

  IHTBYB proves his point by posting a bunch of photos of really butt-ugly weed-filled yards (plus a lot of colorful, funny and obscene comments).

  Why can’t the city do something about all this unsightly – and potentially dangerous – overgrowth that threatens to make Bend look like some 1930s Oklahoma dust bowl town? We spoke with Bend Deputy Fire Chief Gary Marshall to get the straight skinny.

  The city has an ordinance requiring property owners to cut down weeds if they become a fire hazard, he explained. The problem, as always, is money.

  If the fire department finds high weeds growing within 10 feet of any building, tree or fence it will give the property owner 14 days to cut them down, Marshall said. If the weeds are still not cut after two weeks the owner generally will get “a few more days” to do it.

  Finally, the fire department can ask the city public works department to send out a crew to cut the weeds and bill the property owner for the work. The city also can slap the owner with a $250 fine, Marshall said. Trouble is, budget cuts resulting from the real estate collapse mean there aren’t enough city crews to get the job done.

  There’s another problem, Marshall said: “We have so many property owners that don’t live in the state. We send them certified letters [telling them to cut their weeds] and we don’t get a reply. We really have no way to go after these people.”

  The Eye has no way of knowing how many of those out-of-state weed scofflaws are former real estate “investors” (aka speculators, aka flippers) who just took off for points south, north, west and east when the Bend market went belly-up – but we suspect there are more than a few.

  Anyway, if you spot a weed problem you can call the city’s weed control hotline, 541-317-3002, Ext. 3. Good luck.

  This exacerbates the problem of selling. It's like a foreclosure in your neighborhood; it brings down the value of your house, even if you're down the street a ways.
  
  Head over to Forum Meadows, and there aren't even fences to break up the sea of weeds. Head over to mapbend.com, and look at Forum Meadows; listings are so thick, you can drill down far enough.
  
  From Nov 18, 2007:
  
  How builders plan to face housing slide
  

  Some aren’t waiting to find the bottom before they jump ship.

  Buena Vista Custom Homes, a Lake Oswego-based company that billed itself as one of the nation’s fastest-growing builders when it moved into the Bend market in early 2006, announced Thursday that it will put all 200 of its unsold homes in Oregon up for auction next month, including 29 in Forum Meadows, its brand-new east-Bend subdivision.

  “We were overaggressive and too slow to react to the changes in the market, and that has created an oversupply of finished homes,” Buena Vista President Roger Pollock said in a company press release. “Buyers are going to get amazing deals, but we simply have to reduce our inventory.”

  Then March 20, 2008:
  
  Bend subdivision faces foreclosure
  

  Elsewhere in Bend, Buena Vista Custom Homes has rented 18 of the 29 homes in its Forum Meadows development near St. Charles Bend since efforts to sell the homes in mid-December at auction failed to produce a single sale, said Mike Higgins, a spokesman for the Lake Oswego-based builder.

  “It was done in a loss position, but it was better than the alternative,” Higgins said. “If we can’t sell them, we’ve got to do something. We looked to auction the homes, but it didn’t work. Builders right now are just trying to make the mess go away.”

  Lemme guess: Buena Vista Homes WISHES they had SOLD these dogs at auction way back when. Remember, he accused bidders of trying to "steal" these homes with their PATHETIC bids.
  
  Now these s--t-tacular STD's have gone to seed. There should be some sort of Weed Formula for calculating how the height & thickness of weeds in a neighborhood discount area home prices.
  
  By my reckoning, Forum Meadows & several other places will be nearly invisible soon, swallowed up by an onslaught of weeds.
  
  Another interesting stat I ran across this week. Go to Realtytrac.com, and click on Oregon on the map on the home page.
  
  Yes, you see that "1 in 398 homes in foreclosure" gradient, The Highest Foreclosure Rate In the State?
  
  Yes, that would be Deschutes County. More foreclosures per 1,000 homes than anywhere in Oregon.
  
  The Source: Why don't you cover that? I ask you because I know full well The Bulletin would NEVER cover that.
  
  For perspective, the lowest foreclosure rate is in Lake County, with a mere 1 foreclosure per 12, 138 homes. The Meth-ford market is in 2nd place, with a still mild 1:559 ratio.
  
  And of course, we are nowhere near cycle bottoms.
  
  OK, moving on to Rent & Invest The Diff: Well, it had a pretty good week.
  
  I bought Lithia Motors several weeks ago, a little Medford-based car dealership with 110 locations. My own rationale was pretty simple: If these dealerships are worth about $5MM, then they might have rock-bottom cycle-low valuations of $500-600MM, net of debts & S/T payables.
  
  Well, Lithia announced earnings Friday, and they were horrendous. Right?
  
  Then why was the stock up 20%?
  
  Lithia Motors Announces Second Quarter 2008 Results
  

  MEDFORD, Ore.--(BUSINESS WIRE)--

  Lithia Motors, Inc. (NYSE:LAD) today announced that net income from continuing operations in the second quarter of 2008 was ten cents per diluted share, excluding after-tax adjustments for asset impairments of $243.4 million (or $12.27 per share) and a net loss from discontinued operations of $2.2 million (or ten cents per share).

  Then down in the dregs:
  
  Under SFAS No. 142, "Goodwill and Other Intangible Assets," the Company is required to perform a goodwill impairment analysis on an interim basis if certain events or circumstances indicate that it is more likely than not that an impairment loss has been incurred. Recent restructuring actions taken, including the placing of stores up for sale, an adverse change in business climate, reduced earnings forecast and the significant decrease in the Company's share price required goodwill to be tested on an interim basis in the second quarter. The Company performed the required steps for impairment analysis and concluded that the entire balance of goodwill was impaired. The Company recorded a non-cash impairment charge to write-off the entire balance of goodwill of $210.6 million after tax in the second quarter, of which $24.8 million is classified in discontinued operations. In the quarter, the Company also recorded a non-cash asset impairment charge of $32.8 million after tax related to certain indefinite-lived intangible assets (franchise value) and other long-lived assets, of which $10.0 million is classified in discontinued operations.
  
  They recorded a HUGE $210MM loss from the goodwill on their balance sheet. Did they actually lose $210MM this quarter? No, just an accounting entry.
  
  But it creates a HUGE tax loss carryforward, essentially making most if not all of Lithia's earnings from now on, virtually tax-free. And you can see that they are in small-scale liquidation mode:
  
  On June 2nd, 2008, the Company announced restructuring plans that would generate annualized savings of $18 million. Additionally, the Company outlined a list of steps it is taking to right-size and realign its business. Mr. DeBoer continued, "Those cost savings have all been completed, and we are now on track for $22 million in total cost reductions - as we have recently added an additional $4 million in planned annualized cost cuts. Since the beginning of the year, we have reduced the outstanding debt on our credit line from $184 million to $138 million. We have sold one domestic store and have agreements on six of the thirteen remaining store divestitures. An additional two domestic stores are pending sale as a result of an unsolicited offer, showing a demand still exists for domestic auto retail stores. These store sales are estimated to generate over $35 million in total net cash proceeds."
  "Through the second quarter, financing of real estate has raised net proceeds of approximately $65 million. The depreciated value of our real estate portfolio in continuing operations has book value of over $300 million, and we are confident it would appraise for significantly more; we have real estate debt of approximately $220 million - leaving substantial room for additional financing to be completed throughout the remainder of the year. This does not include $22.8 million in development properties and our airplane which are held for sale - many of which have pending buy-sell agreements."
  
  It's not entirely clear whether he's saying that Lithia will clear $35MM on six store, or 7. Either way, it looks like they are being forced to sell at cycle-low valuations of about $6MM/store.
  
  And these stores are fairly decent sized operations. Lithia grosses $3.2BB on these 110 stores, or about $30MM per. So that $6MM sale price is actually a bargain... maybe.
  
  So Lithia created a HUGE tax loss carryforward Friday, announced $.10/earnings after severe cost reductions, and showed they can sell dealerships at prices that put a valuation on the whole shebang at around $500-600MM, about half of it distributable tax free.
  
  The market value of Lithia is $108MM.
  
  So why do IHTBYB tout his stock? Well, I have said repeatedly that Rent & Invest The Diff is THE DOMINANT investing theme for Cent OR. Can't buy RE, you'll get killed. Can't buy bonds, you'll end up with toxic shock with the crap being sold (and now bought back) by Citicorp, USB, and others.
  
  That leaves stocks & commodities. I faded the oil frenzy hard, because I saw $150 crude hitting a demand wall. I personally am consuming FAR LESS. people are engaging in some wholesale behavior changes that will be tough to undo in the S/T.
  
  We're still consuming to much, and I still think inflation is a Big Problem, but commodities as an investment medium is black hole to me. I know me, and I would be easily scared out of a position. Besides, it's leveraged to much. Commodities is too much like pure gambling.
  
  So I am buying small-scale, workout-situations that are negative delta on oil. But their real, and required feature is Deep Value. I saw stocks that hit 80-90% discounts from fair value in mid-July. And I bought several, not in huge amounts, and I scaled down.
  
  I missed a few, such as US Airways & Six Flags which had a One Day Wonder implosion.
  
  But I remain with what I've got, they are situations that I've studied to the extent I am able, and I still feel like they have a rough row to hoe, but they seem very undervalued in some instances.
  
  This is what works for me. It may not be good for you. I can only recommend a widely diversified domestic & foreign blend of stocks & bonds (corp & gov't) for people who want minimal risks per the highest unit of return. This works.
  
  Finally, some are saying that I have been disrespectful to recently deceased Cent OR RE participants. Really?
  
  OK, use your browser search feature (Ctrl-F) right now and look for these people's names.
  
  There is NOTHING derogatory about any of these people. NOTHING.
  
  Have I said the RE game they were involved with is full of sleaze, slime, scum, Ponzi Scheme con-men? Well, maybe not, but it is. These guys were playing with sharks.
  
  But I never disparaged these guys. I disagree with their choice of investments. But I never said anything against them. Look for "Audia" on this page:
  
  

  • This McDonald guy buys Meyers chunk of the Shire for an unknown amount in May, and not even 2 months later, jumps over Benham falls? Really? That's an awful long distance to cover from doubling up on REd, to committing hari kari, in such a short time.
  • And Jay Audia shot himself? This is another vulture job in the works that seems to have driven it's principle to his grave awful fast.
  • It's getting awful strange. Start combing the obits. Audia supposedly shot himself, a crime so easily done by someone else, a 2 year old could have planned it. McDonald's story just doesn't add up at all.
  • Anyway, be concerned about your privacy. I'm not AT ALL convinced the Audia & McDonald deaths are suicides. There's a LOT of money being lost, and it would not surprise me in the least that deluded RE speculators would approach some seedier types to do a refi, to bridge the financing gap & keep a project alive.
  • I don't know who this Jay Audia guy is, but he swooped in on what is now the Mirada parcel, bought it at a pretty good discount, and was going to make low-end laborer shacks. We've talked about this in the past actually. I've actually put pictures of Mirada right here in this blog.
  • Apparently Mirada, at steep land price discounts, still did not work out. And this Audia guy took it to heart. Too bad. But it illustrates a point.
  • Jay Audia, I'm sure was a nice guy. But he bought into The Bend Dream, like thousands of others. But it's a DREAM folks. This place doesn't really have a sustainable economy.
  • And it's because the media WON'T let us BURN. Audia in the papers as a WARNING? No. Put out that fire. What's after Audia then? Someone going postal?
  • See, Jay Audia is the collateral damage of this firestorm. There will ALWAYS be losses. Anyone whose been in Cent OR for the Summer season KNOWS there's always going to be a spark.
  • But no one wants anyone to know that. They think that ARTIFICIAL CONTAINMENT is a sustainable practice, it is not. Jay Audia killed Jay Audia. But in some measure John Costa killed Audia. KTVZ killed Audia. Hell, even Alan Greenspan had a hand in it.
  • Jay Audia would be alive today were the NASDAQ recession allowed to run its course. But no, Greenspan had to resurrect the Cali-Banger ASAP. Who cares about Round 2, that's Not My Watch.
  • Drugs. Business Closures. Murder. Suicide. Speed traps. Bank failures. Homocide. Fannie. Freddie. Foreclosures. The Plaza. Meth dens. Robbery. Embezzlement. Fraud. Jay Audia.

  
  
  Here's someone's reaction on BendBB:
  
  Up until a few weeks ago, I thought a person had every right to be anonomous on the web, but seeing IHTBYB's writings about Jay Audia changed my mind. When anonymity is used to cause unneccessary and unwarranted pain to a family, it is much like using the right of free speech to yell FIRE in a crowded theater.
  
  Huh?
  
  You know, whoever you are, if Audia is a friend of yours, I'm sorry for your loss. I know people who knew him, and I heard he was a nice guy.
  
  But there is NOTHING in this blog disparaging the guy.
  
  "Jay Audia, I'm sure was a nice guy."
  
  I don't know the guy, but I assume the best.
  
  You are missing the point. I want people to WAKE THE F--K up. Is it worth KILLING yourself over a RE deal gone bad? I would say HELL NO.
  
  It WAS a warning shot that there may exist the possibility that there are some unscrupulous types who will attempt to engage you in a transaction. That is what happens when the money starts flowing, it attracts scammers, grifters, and in some cases much worse.
  
  This is a person who wanted to distort the FACTS as much as possible, and try to take a punitive action against me. Of course, I would never confirm or deny such silliness.
  
  But you might want to consider the idea that outting someone will be done erroneously. Certain situations can develop in situations like that, and they can have fairly unfortunate circumstances for those involved. These people own arms in abundance, and they don't take kindly to unpleasant strangers at their door.
  
  The Eastside don't abide that s--t, motherf--ker.
  
  I guess what I find most unbeleivable about this, is that people at first blush seem to believe this! Personally, I would take any such pronouncements with a HUGE grain of salt. My skepticism would be nearly 100%. Besides, what if it is correct? How will I ever KNOW that? What would I do anyway?
  
  If you want to "out" someone using some sort of warped logic, that is your business. I guess all I can say is I disagree with it. F--k, Buster has equated me & Dunc, me & Tim, and basically me & most other people on this thing. F--k, it's like it's me talking to myself on this thing.
  
  The only thing that worries me about this? Comment from BendBB:
  
  It's very dangerous to believe an address posted on the Internet. Someone can be trying to get back at someone and post an address.
  
  And if anyone gets hurt or harassed, the lawmen will be looking at IP. If you hid your IP, they'll be looking at ISP records.
  
  Posting someone's address in this context can easily be construed as some sort of retaliation. Why else would you do it? Try to imagine the following scenario:
  
  1) This person is NOT ME.
  2) They are well-armed.
  3) They are not pleasantly predisposed to a hostile visitor on their doorstep spewing bulls--t.
  
  Your little outting WILL come back to you. You'll need to be explaining to a Judge why you felt you needed to initiate a series of events that may have an unpleasant outcome. Think about it.
  
  And whoever did this will almost certainly construe such statements as a threat of some sort. Of course it is not. It is a POSSIBLE consequence of YOUR ACTIONS, not mine.
  
  "Outting" someone is an action so idiotic & fraught with negative consequences, you have to wonder about person doing it. I actually encourage people to go read BendBB's thread on this (anon proxy, of course). The comments are, as usual, the most interesting part.
  
  Anyway, I guess stuff like this is inevitable. All I can say is I have respect for the dead, no matter the circumstances. Audia & McDonald and others MAY have made choices in the investment arena that contributed to their demise. MAYBE. If so, I just disagree with their decision to kill themselves. IT AIN'T THAT BAD. My Lord. It's just f--king real estate. Your life is WAY more important than that.
  
  All I am saying is If You Are About To Invest In Something That Could REMOTELY Cause You To Kill Yourself:
  
  DON'T.
  
• August 03, 2008
• 7:01

  Bank-Ordered Mob Hits Begin in Bend Oregon

   » ‎ Bend Bubble 2

  Tags:    [edit]

  Only in Bend.
  
  I checked Busters (?) assertion that this rel="nofollow" thing exists on my template, and it does. Here is the low down from google (Which OWNS blogspot).
  Preventing comment spam 1/18/2005 04:28:00 PM
  
  If you're a blogger (or a blog reader), you're painfully familiar with people who try to raise their own websites' search engine rankings by submitting linked blog comments like "Visit my discount pharmaceuticals site." This is called comment spam, we don't like it either, and we've been testing a new tag that blocks it.
  
  From now on, when Google sees the attribute (rel="nofollow") on hyperlinks, those links won't get any credit when we rank websites in our search results. This isn't a negative vote for the site where the comment was posted; it's just a way to make sure that spammers get no benefit from abusing public areas like blog comments, trackbacks, and referrer lists.
  
  Q: How does a link change? A: Any link that a user can create on your site automatically gets a new "nofollow" attribute. So if a blog spammer previously added a comment like Visit my discount pharmaceuticals site. That comment would be transformed to Visit my discount pharmaceuticals site.
  
  Q: What types of links should get this attribute? A: We encourage you to use the rel="nofollow" attribute anywhere that users can add links by themselves, including within comments, trackbacks, and referrer lists. Comment areas receive the most attention, but securing every location where someone can add a link is the way to keep spammers at bay.
  
  Q: Should I put rel="nofollow" on the link to my comments page? A: Probably not, because lots of interesting discussion can happen there. Also, if other people link to your comments page, a spider can follow that link and find any spam that's lurking on the comments page. The best places to add this attribute are the actual links that other people can create. So on this page, for instance, only the links within comments and the link immediately after "Posted by:" would get the rel="nofollow" attribute.
  
  Q: Do individual bloggers need to do anything? A: Probably not. Updating the software that generates these pages will ensure that most bloggers get these changes automatically.
  
  Q: Is this a blog-only change? A: No. We think any piece of software that allows others to add links to an author's site (including guestbooks, visitor stats, or referrer lists) can use this attribute. We're working primarily with blog software makers for now because blogs are such a common target. Got more questions? Email commentspam at google.com. As we spot more areas where spammers still abuse the Web, we'll contact the appropriate people in order to keep fighting comment spam. Matt Cutts, Google Software Engineer Jason Shellen, Blogger Program Manager
  
  Update: The reaction to nofollow has really been quite positive, especially considering how diverse the web is. We're delighted to announce more support for nofollow:
  
  So there it is. I'm sort of ambivalent about it. I use a lot of links to sites like the Bulletin, or Cascade Business Buttbangers that I frankly DO NOT want to get a Page Rank increase from this blogs inbounds.
  
  But I took out the nofollow's for now, anyway. I figure I can reinstate them if there is a rapid increase in spam.
  
  And even more awesomeness from his High Busterness:
  
  Homer has every f--king kind of spybot in the universe enabled in his code with all the widgets and gadgets he uses
  
  Right now there are over 30 sites in my 'locale' to map all of homers spybots to NULL.
  
  Oh boy. I can only assume he's talking about the little widgets embedded on the right side of the page.
  
  These are little hunks of javascript that provide the craigslist RSS feed, the stock market widget stuff, and that's about it, to my knowledge. But if Buster can provide some sort of idea as to what these 30 "spybots" are, I'll take a look.
  
  I assume he has editted his /etc/hosts (or similar) file to map these "off site" http calls to his local. I suppose that's one option, but I've noticed that when you unplug your net connection, and try to load a page with say, a Yahoo map on it, that it'll grind away forever trying to grab the content.
  
  Anyway, I'm as paranoid as the next guy, and don't want my own data being gathered more than is necessary. But at some point you have to realize that using the Inner Nets at all requires some level of identification.
  
  OK, I take privacy seriously, but enough geeky bulls--t.
  
  Things are indeed getting strange in Bend. We knew they would, but The Mob? From Buster:
  
  Re: So that doctor Lynn McDonald killed himself on July 7th,... He was developer #2. First was Doug Sokol in Sisters, and third was Jay Audia. Things are getting ugly. * Real journalism would have a field day on BEND-OR, #1 over-priced RE in the USA, #1 RE-Developer per-capita 'suicide' rate, or death in unusual circumstance's. Well what do you expect the town is RAN by the BOSS-HOGG, the BULL&SORE are RAN by the BOSS-HOGG. In whose interest is any of this? Just sit on it for months or years, and then the Oregonian will revisit it when its long been over.
  
  A more interesting thing would be the insurance angle, especially in these cases of accidental death. Quite often on these BIG RE-POOL deals the mob takes out insurance policy's, in event of loss of money, your-out, and they collect. It's always been the honorable thing to do. It would be interesting if we could find out if DR. SHIRE who accidentally took a swim down Benham Falls, had lots of insurance by third partys??
  
  And from the Shire article:
  
  McDonald and his wife, Jan, had taken full ownership of the project in May with the hope they could sell it, Jan McDonald said Wednesday.
  
  Jan McDonald is trying to sell the 14 developed lots, one house and additional land before the 6-acre property goes to public auction in December, she said.
  
  The family owes Umpqua Bank $3.4 million on the project, according to the default notice.
  
  The notice also names Meyers as a guarantor.
  
  More from Buster:
  
  We have a lot of newbies in the last few days. I completely agree with fresh-blood that the reason is that blog's are few in BEND, and places where people can say their mind are even fewer. Thus folks flock to this rock in the desert, and leave their mark. I have said many a times, that this is a mob town, and people will kill. It is essential for everyones safety to remain anonymous. Suicides will become all too common, and it will even become easier to disguise an act of aggression as an accident. There has NEVER been a better time to be anonymous in Bend.
  
  Now maybe you can see why I start out this piece with some sort of geek-ridden crap about anonymity. Things really are starting to go in a weird direction.
  
  This McDonald guy buys Meyers chunk of the Shire for an unknown amount in May, and not even 2 months later, jumps over Benham falls? Really? That's an awful long distance to cover from doubling up on REd, to committing hari kari, in such a short time.
  
  And Jay Audia shot himself? This is another vulture job in the works that seems to have driven it's principle to his grave awful fast.
  
  I don't know. These may have been perfectly legit suicides with 2 despondent dudes who couldn't bear the thought of going on without getting blowjobs on Volo's upper deck every Friday & Saturday night.
  
  But Buster raises an interesting alternative: These are bank ordered mob hits.
  
  There are people in the World who DO think that when you owe them money, and you don't pay, that your life is forfeit. And it'd be easy to do & get away with:
  
  "Listen, you either pay up, or I will kill your wife, your kids, and everyone you know. And if you say one word, I kill 'em all. Now, you get me that money, or that's it. You either do the right thing, or we will. You savvy?"
  
  Here's the quote from the Bulletins crack team of Investigative Journalists:
  
  The Shire concept originated with Ron Meyers, who sold his share in the development for an unspecified amount to Dr. Lynn B. McDonald — a former emergency room physician at St. Charles Bend. McDonald died July 7.
  
  Wow. So they're doing a piece on foreclosure at The Shire, and the owner DIED.
  
  That's all. He just died, and they fail to mention HOW. Here's an interesting quote from helpfindthemissing.com:
  
  Deschutes County Sheriff's Search and Rescue and U.S. Forest Service crews were scouring the Deschutes River and its banks late Sunday in the area of Benham Falls, southwest of Bend, after a Bend man's bicycle and pickup truck left in the area prompted concern that he might be lost in or near the river.
  
  If they were checking the banks, they should try the refi department.
  
  So this guy DROWN going over Benham Falls. An Emergency Room physician, heads out to LA PINE, gets MIXED UP, and goes over the falls?
  
  Here's some more from The Bulletin piece covering his death:
  
  He owned the Parrell-Sisters Mobile Home Park, which was placed in receivership in May, as well as unsold properties in The Shire subdivision in Bend.

  “He was actually getting over some big hurdles in his life,” Stuman said. “The last e-mail I got from him on that subject was last Friday, and it was just kind of like ‘Let’s get the investors paid off, except me, and move on.’”

  So he's trying to "move past" this thing & get his ducks in a row, he's got a wife & 16 year old twins, and he... KILLS HIMSELF?

  I don't know. That sounds Real Strange. First, jumping off a waterfall is not a guaranteed suicide. A lot of times it's just a severe "hobbling".
  

  And read the article: Doctor's body found below Benham Falls. Look for the word "died". Not there. Look for "suicide". Not there. "Killed", ditto. "Jumped", ditto. "Drown", same.

  There's no mention of any sort of CAUSE OF DEATH. He was just FOUND. How was he found, in what state? Well, search for the word "dead", and of course you can't find it. But certainly, he "died", right? Well, you won't find that word in the piece, so possibly he survived.

  His body was just FOUND, and there is no mention of him being "dead", or having "died", or having "drown", or having "jumped", or anything else. F--k, maybe he jumped from an airplane, and his chute didn't open. Hard to say, cuz the Bulletin MAKES NO MENTION OF ANY FACT WITH RESPECT TO THIS MANS DEATH. None whatever. What do they say?
  

  Two rescue boats and two divers discovered McDonald’s body under about 10 feet of water, less than one-quarter of a mile upriver from the Slough day-use area, Mills said.

  Mills said he had known McDonald since he started working at the St. Charles Bend emergency room and called the doctor a “longtime friend to the Deschutes County Sheriff’s Office.”

  Officials have no indication how or why McDonald got into the river, Mills said, and an investigation into the circumstances surrounding his death will continue today.

  Yeah, investigations will continue, my ass. Yeah, like f--king OJ is going to find Nicole & Ron's killer if he has to work forever. Investigation, my fat ass.

  Now, I'm not saying this guy did NOT commit suicide, but this is awful strange. If I wanted to kill some f--ker for not paying me back, this would be one of your more obvious routes to go. Drown the bastard, then cram the body UNDER 10 FEET of water.
  
  UNDER 10 FEET OF WATER?
  
  I mean, What The F--k? I thought bodies floated. Right? And how in the f--k did they KNOW TO LOOK were he was, UNDER WATER? That f--king body may have well been on the moon. I don't know, this doesn't add up.
  
  If McDonald can’t sell the development, Umpqua will hold an auction at the Deschutes County Courthouse on Dec. 2, according to the default notice.
  
  Umpqua, citing privacy and pending litigation, declined to comment.
  
  Yeah, I'll bet Umpqua has no comment, cuz they had this guy offed.
  
  It's getting awful strange. Start combing the obits. Audia supposedly shot himself, a crime so easily done by someone else, a 2 year old could have planned it. McDonald's story just doesn't add up at all.
  
  But you won't hear dink from The Bulletin. They won't even use words commonly associated with death or suicide. It's like they won't admit that these people are really dying.
  
  Anyway, be concerned about your privacy. I'm not AT ALL convinced the Audia & McDonald deaths are suicides. There's a LOT of money being lost, and it would not surprise me in the least that deluded RE speculators would approach some seedier types to do a refi, to bridge the financing gap & keep a project alive.
  
  People have started dying over RE in Bend, and you shouldn't just accept the word of the local media, who essentially won't even acknowledge that a death has even occurred.
  
  Would they try to find commenters or, God Forbid, Blog Posters for negative dissemination of opinion? F--k, who knows. The Bulletin won't even admit people are dead, for the love of Christ. Who the f--k is really running the show over there?
  
  OK, moving on from Obvious Bank-Ordered Mob Hits, marge, The Goddess, posted the following:
  
  July 08 99 Sold @ $284k median
  June 08 114 sold @ $315k median
  July 07 112 sold @ $342k median
  
  That's a Big Negatory of 17% YoY. You may have noticed that the recent April $270K lows, were only mentioned in "hindsight".
  
  Bend and Redmond home prices jump in May

  By Andrew Moore / The Bulletin
  June 10, 2008

  Median home prices in Bend and Redmond rebounded in May to $303,000 and $245,000, respectively, according to the latest report from the Bratton Appraisal Group.

  In Bend, May’s median price climbed more than 12 percent from its April level of $270,000, which had been the lowest median....

  I would expect the Bulletin to stay true to form, as they did with the murder/suicide of McDonald, and not even acknowledge that the market has resumed its implosion.
  
  Folks, it is AUGUST. Remember when I said Things Will Get Better? Well, I said that back in Feb, as Feb is ALWAYS The Bottom of Bends yearly cycle. And of course things DID get better, and even I was surprised by the inanity of the RE comments about how we'd turned the corner, because there'd been an UPTICK IN VOLUME.
  
  Wow. Seriously, how STUPID does local media & their Lackey Ass RE "Experts" think we are? I am always amazed at this. Even marge has indicated that we are DOWN over last month, something rare in the ANALS of local RE history.
  
  Here's more marge goodness:
  
  Here's a new stat.
  50 of the 99 sales were vacant while on the market.
  514 of the 1600+ active listings are vacant. Yowser!!
  4 of the 99 sold broke the $100 ppf.
  
  Interesting that 1/3rd of the total listings are vacant, while a full half of the solds were vacant. Conclusion? VACATE your house if you want to sell.
  
  I know. Just kidding. But for a comparison of where Bend is with respect to the rest of the US in regards to vacancies, I found this:
  
  Yes, Bend is different. We have 33% vacancies, while the rest of the US endures the HORRORS of vacancy rates BELOW 3%.
  
  I got this graph from seekingalpha.com, and they talk about working off the excesses of the boom, normalizing vacancy rates, and the like.
  
  But they fail to acknowledge what I feel is the big BINARY SWITCH that has occurred: People have LOST THEIR CREDIT RATINGS.
  
  This is The Thing we cannot UNDO. THIS is the demand killer. This is why the housing market has, for the foreseeable future, changed WHOLESALE from "where it was" pre-bubble.
  
  There are MILLIONS, and there will be many MILLIONS MORE, who will simply be unable to purchase a home in the foreseeable future (10 years), because their FICO has gone bye-bye. Trying to sell to these people is like pushing on a string; no amount of price lowering will really "induce" these people into buying, they can't.
  
  We're entering into a Serfdom economy. The Landed Set, and the Vast Rabble who rents forever. This will affect MILLIONS, many more than it does today. THIS is why housing will probably NOT return to normalcy in any relevant time period. This is why ANY purchase that could require a loan (car, appliance, etc) will not return to normal anytime soon.
  
  We've crossed over into a state we haven't seen since The Great Depression. From Timmy:
  
  So that means 10 months of vacant inventory and 33 months of occupied inventory.
  
  I'm guessing the occupied houses are priced way too high.
  
  From what I've seen lately, houses at $400k should be at $300k. Houses at $600k should be at $400k.
  
  That's roughly speaking. Individual cases vary.
  
  I'm seeing stuff bought at $290k in 2006 being priced at $400k. Get real, people. Or you won't sell.
  
  This looks about right. Especially the last line.
  
  Bend is different. Classic. Homes that are occupied ARE NOT SELLING. F--king Classic! This is a perfect insight into the Psyche of Bend: Bendites Are Completely Deluded About Their Own Importance & Self Worth.
  
  People still here can't sell to save their lives, people who've accepted their mortality & have moved out, actually are selling. Or maybe it's the banks REO that's selling.
  
  What's truly awesome is that The Bulletin is shielding us from the Truth; Nobody Dies In Bend... they're just "found". Yeah! Finding someone is a Happy Event! Nothing ever goes wrong in Bend! From The Shire piece:
  
  

  “It was Ron’s concept, and it was a good one,” Jan McDonald said. “Had the market not gone to where it went, it had the potential to be successful.”

  The project — whose features include unique stonework, artificial thatched roofs, terraced gardens and a network of streams and ponds with a pathway leading to what’s called “The Ring Bearer’s Court” — captured media attention outside Central Oregon, including a December 2006 feature on BBC Radio.

  The development drew about 6,000 visitors over two weekends in summer 2006 at the Central Oregon Builders Association’s Tour of Homes and has continued to attract curious onlookers, Meyers said.

  Meyers and McDonald drew up a set of rules — similar to codes, covenants and restrictions that govern rules in many subdivisions — and called them the “Declaration of Interdependence.”

  “We wanted to create a community — not just another subdivision,” Meyers said.

  The Bulletin is STILL SELLING THE PROJECT.
  
  "Not just another subdivision".
  
  "It was Ron's concept, and it was a good one".
  
  "The development drew 6,000 visitors".
  
  Somebody's DEAD, and The Bulletin is concerned about RESELLING THE THING. Always New Money. Gotta Get The Money. We Need New Investors.
  
  That? Oh, that's nothing. That's just the burial of the last guy who owned this project. We're not sure what happened. He was found. That's all we know.
  
  Now let's sign these papers. One last question: Are you dying for this project to succeed?
• July 26, 2008
• 17:47

  Closures, and Drug Busts, and Suicides, OH MY.

   » ‎ Bend Bubble 2

  Tags:    [edit]

  A lot of people wonder why, after the business of Bend RE has finally begun its Great Implosion, why would I or anyone want to remain anonymous? Why not come out of the proverbial closet, and say who I am. Even BendBB? Who is he?
  
  Well, we found out this week. People in Bend take their real estate seriously. Real serious. Dead serious. People around here will KILL when RE deals go South on them.
  
  I don't know who this Jay Audia guy is, but he swooped in on what is now the Mirada parcel, bought it at a pretty good discount, and was going to make low-end laborer shacks. We've talked about this in the past actually. I've actually put pictures of Mirada right here in this blog.
  
  Apparently Mirada, at steep land price discounts, still did not work out. And this Audia guy took it to heart. Too bad. But it illustrates a point. From the comments:
  
  I have to conclude you don't know what your talking about when you're talking about SF. I think it has more to do with your propensity toward creating artificial stereotypes and projecting your bottomless hatred at them. Sorry, but it ain't reality. Personally, I hate SF. But it is quite sound economically. It is an endless fountain of endless 100K + jobs. If you don't make that in SF, you don't even exist or must have no motivation whatsoever. There is so much money there I don't think you can fathom it.
  
  And another:
  
  You're right the Cali-banger isn't a real person. It's a meaningless stereotype used to make you feel better about not taking responsibility for the conditions in your own community.
  
  Hmmm. People have a passion about it. An irrational passion. They'll kill over it. Themselves when necessary.
  
  They'll accuse me of hate crimes of a sort. "Bottomless hatred". Can't even see the forest for the trees anymore. Mention "Cali-Banger", and they go into attack mode, can't even think straight. Buster said what I couldn't:
  
  The cali is a very real person. They can be seen speeding through Bend round-abouts daily. They can be seen by their car, they can be seen by their dress.
  ...
  A cali is a f--king disease, and is a real person. HOMER trys to call the whole USA cali-ism, but cali is really about california, and what it does to people, and the kind of people who leave the east-coast and come to cali, and then migrate north.
  
  Florida has its own breed, and in general the east-coast are all mother f--kers, classic americans, in the sense of complete f--king dog-eat-dog americanism. I concur with homee that mid-west is the salt of the earth, but that don't mean they'll inherit the earth, history shows the meanest junk-yard always wins.
  
  The bible is full of f--king s--t, about the meek inheriting anything. The law of the jungle is the jungle-law. The USA will continue to rape and pillage the world,, and the citizens of the USA will continue to rape and pillage one another. Cali-ism, or its particular type of consumerism, is of course non-sustainable.
  
  Our current post 1998 cycle, where they could sell the $1M, and come to Bend and buy 1/2M, and live off the other 1/2M is OVER. No more perpetual money machine in Bend. The cali lifestyle and visible wealth will go the way of the do-do, just like visible wealth post-depression.
  
  They are real, they walk the streets here thicker than the indigenous Original Bendites. They are easy to spot. They just have the most severe case of some sort of disease that is creeping across this country.
  
  And it's so subtle, it's hard to catch it anymore. It's ubiquitous. My least favorite commercial is by American Express. It's supposedly narrated by a series of telephone operators who tell these Amex Success Stories. A man buys a diamond ring, but is approached STERNLY and is told, "There's a problem". A couple wants tickets to a show and some Amex phone operator weasels tickets for them. Another is what appears to be a ridiculously expensive restaurant.
  
  It GLORIFIES excess consumption. It's so over the top, it makes me want to gag. But I watched that commercial probably 100X with complete accepting indifference before I realized how horrendous the message was. And how absurdly over the top it was. And how COMMON that sort of thing is. Now I run to change the channel or mute the TV whenever that crap comes on, cuz it is sickening.
  
  Cali-bangers are real. The Real Problem is wanton excess. In cars, in clothes, in homes, in everything. It's not knowing what to think about your life in terms other than consuming goods & services. And it's a very easy trap to fall into.
  
  I feel like I have to maintain constant vigilance not to fall into this trap. I feel I have one real weakness, and that's books. They are work related, which helps me rationalize things. I've probably spent $150 on books this year alone. That's a LOT for me. I just don't buy stuff.
  
  I can afford a lot of "stuff". But I have no interest in buying crap like that. I have 2 cars, food to eat, a few computers & books. Don't need much else. Although I do want a house someday. I'm pretty sure that when the time is right, I'll be able to buy a house for cash. Maybe. From the comments:
  
  I knew a guy who had the saying "He Who Dies With the Most Toys Wins" on his license plate. He was a native Oregonian. The attitude you describe is an AMERICAN one, not just a California one.
  
  This ludicrous excess consumption is the #1 Social Problem in this country. IT'S DEADLY because there's No Institutionalized Cure. In fact almost every large scale economic force is DEDICATED to making it worse.
  
  This is why the current BAILOUT is doomed. We are band-aiding the problem, AGAIN.
  
  Dropped rates the for the NASDAQ bust, don't wanna feel the pain. No way. Keep spending, keep the party going.
  
  Second tinderbox, the housing bust, well they're going to bailout the banks. Notice they're BUYING foreclosed homes; f--k the inhabitants, pay off the banks.
  
  Reminds me of Old School forest management. Fight the fire. PUT IT OUT. Think about the destruction. Prevent it at all costs. We can HARVEST that wood, if we put out the fire. Squelch the flames before we suffer!
  
  We found out the ignorance of our ways.
  
  Fires periodically burn the fuels on the floor, and if they burn frequently enough, and nature takes its course, then the fires don't burn as hot. Big trees remain, the ecosystem rejuvenates itself, and growth begins anew.
  
  But humans intervened to STOP THESE NATURAL PROCESSES. Selfish, stupid & short-sighted.
  
  The old NEEDS to be PURGED. It NEEDS to burn. If we don't let it burn now, the next time it goes up it will INCINERATE EVERYTHING. It will go out of control.
  
  Fannie & Freddie should be allowed to go down. Otherwise we end up with companies famously contained in Mr Burns stock portfolio:
  
  Amalgamated Spats. Confederated Slaves Holdings. Baltimore Opera Hat Company.
  
  We're in our Second Huge Firefight. We saved NASDAQ in 2000-2004. We are now saving Fannie & Freddie, and it's burning HOTTER. This time it is WAY BIGGER than last time.
  
  We should let them BURN. We should allow nature to take its course. Let homes be foreclosed on. Let banks lose trillions. We'll survive & move on in a few years.
  
  But the government is GOING TO FIGHT THIS FIRE, because The Religion of Excess Consumption would be sacrificed if they did not. They can't even allow that to ever even be considered. Excess Consumption is What We Do.
  
  Mark my words: Fire #3 won't be containable. They are going to LIQUIFY THE US ECONOMY. Maybe Fire #3 is Hyper Inflation, maybe a huge f--king war. I don't know.
  
  I only know that the US economy is being manipulated to an unnatural demise. We've got to allow FAILURE. We NEED TO BURN. We need to cleanse this desire to consume well beyond our needs.
  
  Moving on...
  
  Dunc had a pretty good post, Greenwood status report.
  
  I travel Greenwood quite often, and it has become riddled with "For Sale" and "For Lease" signs, or the true harbinger of doom, "For Sale or Lease".
  
  If you want to watch the gutting of Bends bread & butter businesses in high relief, then go to Greenwood, mainly between 3rd & downtown. EVERYTHING is empty. It's happening everywhere, but this is a main artery & heavily traveled.
  
  Good training ground for future generations on how to destroy property values. Raised lease rates beyond reasonable, and now vacancy rates are exploding. Once you hit that tipping point of excessive EMPTY, you can't lease anything at any price.
  
  There are in fact many Cent OR standby businesses that are shuttering their doors.
  
  Kayos is closing both locations. Blue Teal. Ernestos. Jokers is now called something else (I forget), after its owners had to kite checks. Tum-A-Lum lumber.
  
  This is Tip-Of-The-Iceberg reporting. For every 10 that is reported as closing, 90 are simply shut down.
  
  Bend media. Just like the US Government. Amex too. Wants to keep you spending. Blow sunshine up your skirt. LIE about the magnitude of the problem. Act like its not even there.
  
  TETHEROW OPENED TODAY!
  SPEND! SPEND! BE HAPPY! SPEND!
  
  No one is killing themselves over bad real estate deals. No businesses are closing. Just spend.
  
  No. Bends true character is coming out nonetheless:
  
  Tumalo barn yields record $2.8 million pot haul
  A raid on a large barn in Tumalo turned up almost 650 marijuana plants worth more than $2.8 million on the street, the largest indoor pot grow ever dismantled in Central Oregon - and it was still gearing up for full operation, officials said Thursday.
  
  Madras meth raid busts 'major supplier'
  A raid on a southwest Madras home Tuesday morning led to the arrest of two residents, one described by drug agents as a major methamphetamine supplier in the area.
  
  Bend police capture second fugitive after chase
  
  Driver charged with hindering prosecution; handgun found By Barney Lerten, KTVZ.COM The second of two Bend men wanted in a recent assault and robbery was located by police Friday night and tried to run away but was soon spotted again and taken into custody, officers said.
  
  Bend fugitive on the run captured in Idaho
  
  Knocked on Nampa woman's door, asked for water - and place to hide By Barney Lerten, KTVZ.COM A Bend fugitive wanted in an armed robbery and assault who fled pursuing police late last week, triggering an intensive manhunt, has been captured in Idaho, authorities confirmed late Thursday.
  Bend manhunt: Knife-wielding suspect eludes police
  Residents get warning; search scaled back at midday By Nina Mehlhaf and Barney Lerten, KTVZ.COM Wanted since Monday for armed robbery and assault, a Bend man forced south Bend residents to keep their doors locked while a manhunt went on for hours Thursday.
  
  Yup. When the rubber meets the road, Bend reverts to its True Self, a crime & drug haven.
  
  No. It ain't "just you". These stories ARE happening with increasing & alarming frequency. Hell, I didn't even mention the huge increase in vandalism.
  
  Look at what's happening. We are all of us consuming lemmings. They want us to keep buying NO MATTER WHAT. Even if it kills us. Even if CONSUMING means ME KILLING YOU. Even if it means ME STEALING YOUR S--T. Even if it means ME SELLING YOU DRUGS.
  
  Jay Audia, I'm sure was a nice guy. But he bought into The Bend Dream, like thousands of others. But it's a DREAM folks. This place doesn't really have a sustainable economy. That's how 19 year old punks rent HUGE mansions: DRUGS.
  
  Bend is becoming & will become a town of crimes, drugs, vandalism, murder & suicide.
  
  And it's because the media WON'T let us BURN. Audia in the papers as a WARNING? No. Put out that fire. What's after Audia then? Someone going postal?
  
  The Shire shut down. Are they going to kill Peter Jackson? Hey, I'm NOT kidding. Read the comments. People are MAD AS HELL because I'm advocating WE LET IT BURN THIS TIME. "Bottomless hatred" they call it.
  
  City of Bend. American Express. US Government. Bend media.
  
  All want to let it ride. Put out the fire & LETS GET BACK TO NORMAL. Worked out with that NASDAQ snafu, right? It'll work this time again, right? Not going to happen.
  
  IF, and it's a big IF, we manage to avert disaster this time, we simply have built a tinderbox that will rage out of control next time.
  
  The current crisis is so large it will require liquefaction. Fire up the printing presses. Economy turns to mud beneath our feet. Hyper inflation. That'll be it. End of Story.
  
  See, Jay Audia is the collateral damage of this firestorm. There will ALWAYS be losses. Anyone whose been in Cent OR for the Summer season KNOWS there's always going to be a spark.
  
  But no one wants anyone to know that. They think that ARTIFICIAL CONTAINMENT is a sustainable practice, it is not. Jay Audia killed Jay Audia. But in some measure John Costa killed Audia. KTVZ killed Audia. Hell, even Alan Greenspan had a hand in it.
  
  The last containment creates more victims The Next Time. And believe me, There Is Always A Next Time. If you notice, this country has begun to be run as if there isn't.
  
  Not On My Watch. I don't care what happens, just not on my watch. That's how it's being run. Give it to Obama.
  
  The first cycle, I had friends who lost lots of money. But nobody DIED. Now in Round 2, we're starting to see what happens when nature is NOT allowed to take its course. People we KNOW have started to DIE.
  
  Jay Audia would be alive today were the NASDAQ recession allowed to run its course. But no, Greenspan had to resurrect the Cali-Banger ASAP. Who cares about Round 2, that's Not My Watch.
  
  Folks, we need to let this thing go, run its course & burn like hell. I DO NOT have "bottomless hate" for you or your excessive ways, Cali-Bangers. I have quite a few friends who probably scored over 50 on my little Cali-Test. I had a few points too.
  
  But the Cali-Banger lifestyle is going to INCINERATE this country. Negative Savings? We've started acting like it's OK! What? We've gotten used to it.
  
  For each one of us, our government owes FOREIGN GOVERNMENTS hundreds & thousands of dollars. We are transferring our wealth, built over the course of centuries, to foreign governments & corporations at a rate unheralded in history. We only have to buy 400 billion barrels of oil, and we'll be broke. $700 billion a year OUT THE DOOR. Your 3 humungoid SUV's & 2 White Liberal Guilt Prius' are why that's happening, Cali-Banger.
  
  Who cares about what we owe each other. Credit cards, budget deficit. Blah, who cares. That's just us owing us. But when we owe others, we are well & truly going broke. The budget deficit won't kill us, the Trade Deficit WILL. And the Trade Deficit is the DIRECT RESULT of the Cali-Banger lifestyle, a lifestyle that has the decision makers of the World scrambling to preserve it AT ALL COSTS.
  
  Simply realize it CANNOT be saved. Negative savings? My God, talk to anyone about a topic like that prior to the last 30-40 years, and they'd have thought you crazy.
  
  At some point 'we the people of bend' have to take action, and collectively edoocate the BULL&SORE that having +50% of homeless beggars roaming in BEND will NOT fix the f--king bubble.
  
  If we stay on this bailout track, the US will be the beggar out on the course, picking up balls. We will be the Worlds beggars, if we aren't already. Centuries of work, wiped out to preserve an artificial lifestyle.
  
  You need only educate yourself on the aftermath of artificial forest management to see where the US is headed. We did it for a hundred years. Just meant forests overrun with fuel, tinderboxes, burned out of control "next time". We couldn't "save" them, the Big Trees were not big enough to survive & they burned.
  
  What are these "Big Trees"?
  
  Note, also before one jumps to some huge f--king conclusion, the oil will be gone as know its use in 20-40 years, and the USA has the biggest COAL deposits in the world. Our coal will ten-fold, the rest of the world will be buying coal derivatives in the form of liquid petro from the USA in the next century.
  
  Your cali-ism of excess, is just a 1920's blip. The world moves on, I think the logical assumption would be that if the USA continues to impoverish itself, that you can expect China or some 'super-power' in the future to invade the USA to secure our coal deposits.
  
  We are. The US itself, is. We need to let this fire burn. We didn't last time, and now this time it is burning so hot it threatens our very financial system. It threatens to take down a system that has put MILLIONS of people in homes for the past 40 years.
  
  If they liquify our economy to preserve the Cali-Banger this time, there won't be a place left worth going here. Des Moines, Wichita? No, the whole mess will be taken down, no matter its participation in Round 2.
  
  S--t get an old boat, or an old RV, and head down to mexico and live on $500/mo or less, or s--t go to thailand, and live on $500/mo or less and get a 20 yr-old wife even if your 80..
  
  We've talked back in the day about some pretty weird stuff. Gardening for your food. Caching gold, for the love of Christ. Real survivalist stuff.
  
  (How about this: Historians might look back on George Bush as one of our greatest, most prescient Presidents! After all, he created the Great Country of Amer-Iraq-ica, 3rd largest oil reserves in the World...)
  
  And this stuff is actually starting to make A Lot Of Sense.
  
  Did you think people, people you know, would start DYING over this thing?
  
  People are dying, collateral damage of artificial maintenance of a natural process. If they're DYING this round, what happens Next Time.
  
  China takes us over? Buster & his clapboard; Looks less & less crazy everyday. It ain't Wichita or Charlotte we'll flee to, to escape Round 3, it'll be Thailand or Australia or China.
  
  We need to let this fire burn. Let it burn, or there won't be a country worth having next time.
  
  Drugs. Business Closures. Murder. Suicide. Speed traps. Bank failures. Homocide. Fannie. Freddie. Foreclosures. The Plaza. Meth dens. Robbery. Embezzlement. Fraud. Jay Audia.
  
  All for want of the Cali-Banger lifestyle.
  
  They are all of the same origin. Round 1 wasn't allowed to run its course. These are the offshoots of that decision. They are the fuels of Round 2. And they are AGAIN not going to let the fuel BURN. And so begins Round 3. Hello Bangkok, goodbye Wichita & Charlotte.
  
  We should LEARN from our own mistakes & the mistakes of others and Let It Burn. If we do not, this time will be remembered as the most backward & uneducated period in our financial history. The Great Depression... The Japanese Bust of the past 20 years... both the DIRECT RESULT of Well-Meaning, but ultimately DESTRUCTIVE intervention by governments who wanted to preserve the status quo At All Costs. And the costs ended up being high indeed.
  
  When you want to know The Real Costs, the Total Costs, of this bailout, look around. It's everything. It's all around us. We'll lose this country. Let It Burn means making do with your car for another 2-3 years. It means NOT buying $200 in clothes this weekend. It means waking up & not being lulled into a coma by some f--king Amex commercial. You DO NOT NEED 90% of the s--t you think you need. You don't need that f--king iPhone, PS3, big screen TV, or all that other crap. You don't.
  
  Consuming in excess of what you're making, and pre-consuming all your future earnings is the road to complete disaster. We can't survive as a country & think that's even remotely possible. We're transferring $700 billion overseas every year JUST FOR THE OIL needed to perpetuate this myth. And it is a myth, a 100% fantasy, and it cannot go on.
  
  But our government & corporations are doing everything possible to keep this dream alive. Despite the fact it will ruin us. 100% ruination.
  
  We Need To Let It Burn.
• July 19, 2008
• 19:40

  "The government doesn't have any money."

   » ‎ Bend Bubble 2

  Tags:  the Cult of Bend   [edit]

  Everyone seems to take offense at the "Cali-Banger" moniker these days.
  
  Let's get this straight: Cali-Bangers are more about lifestyle than place of origin, although the two are correlated eerily most of the time.
  
  Cali-Bangers lead a life of excess, of excess in almost all aspects of their life. Their motto, "I can sleep when I'm dead", seems appealing on some levels, squeezing every last drop out of life & such. Seems even admirable, on some level.
  
  But Cali-Banger excess has no limits. It leads to competitive excess, a need to "out do" everyone, in everything. You got a big house, mine's gotta be bigger. You make big money, I gotta make more. You got a hot wife, mine's gotta be hotter & younger, even if it means surgery. And on and on.
  
  What does this have to do with Bend & it's housing? Well, think about the Coasts, in contrast to the Mid-West. The Midwest is priced where it is because large chunks of the Midwest population simply refuse to work 2 jobs, and have their kids working too. They care less about $800 iPhones than Cali-Bangers. They care more about raising their kids than yanking out their wifes C cups & stuffing in double D's. They care more about human decency than Botox.
  
  And this might sound high-falutin', holier-than-thou bulls--t, but actually it will lead to the Coasts, and Cali-Bangers especially, falling farther than anywhere else in the Country with respect to housing.
  
  Think about it: Say you're a Midwest family, Dad working, making blah money in some blah town. OK, your house cost $75K. Everythings OK, making ends meet.
  
  Then the s--t hits. Dad gets injured, car wreck, or something. What to do?
  
  Well, in that case, Mom can work. She won't make a fortune, but she really doesn't have to. They aren't the vassal's of their possessions. They own little, they owe even less. Mom will get them by, and Dad has friends who will help & they're insured. Their means are modest, but so are their needs.
  
  Enter the Cali-Banger. They own 3 huge SUV's, plus a sports car despite being a family of 3. Their house is too big for them. They simply don't even comprehend that they didn't need all that room, they needed to keep up with the Joneses. Same with the cars. Same with the gadgets. Same with their bed sheets, clothes, jewelry, and everything else.
  
  They are making a TON of money, and they work all the time for it. They own a lot, and they owe far more, because they don't buy anything that appreciates, only depreciation. Boob job & Botox, and fat sucked out here & blown back in there. They only value their lives in terms of what they have IN EXCESS of what their friends have.
  
  What's wrong here?
  
  I'll tell you; There is no slack in the system. There's nothing left. The engine is running at max, and it can't give anymore.
  
  The Cali-Banger is self-destructing. It has mortgaged it's life for more. The Cali-Banger is 150% maxed out. It's not just fueling all the possession-obsessed idiocy it can, it's borrowed ALL IT CAN. There's not a penny that isn't already spent, whether earned today or in the future.
  
  This is why I hate Cali-Bangers. Their morals are repugnant, but so are many whitey-ass hillbillies. So are many blacks. But Cali's are worse.
  
  Cali-Bangers will ultimately self-destruct. They will ultimately be carried out. California will suffer like no where has ever suffered in the ANALS (yeah, I said ANALS) of financial history. It's no coincidence they have suffered the first BANK RUN in our lifetime.
  
  California is self-destructing, and it is The Cali-Banger that is their undoing. The hypocrite that preaches Green living & business from their 8mpg SUV. That is a Cali-Banger. Excess, hypocricy, competition, ego, and consumerism gone completely berzerk. THAT is the Cali-Banger lifestyle.
  
  And one other thing: A Cali-Banger will ALWAYS DEFEND, and will never understand why anyone could possibly want to live any other way.
  
  Look at where home prices are the highest. The Coasts. Why? Cali-Banger lifestyle. 2 1/2 incomes. Work more to spend more. Keep up with the Joneses. Period. Midwest? 1 income. There's slack in the system. There's capacity. There's breathing room, financially & otherwise.
  
  Where has this brought us? Besides kids unable to communicate besides txt msg, people working themselves to death? Nothing. This country has adopted the Cali-Banger lifestyle. What is our ONLY REAL ASSET? Our ability to work. And that resource is 150% tapped out; We are not just spending 105% of what we make, we have mortgaged our future consumption to the hilt. And beyond. We have almost NOTHING left to give. Our only Real Resource, OURSELVES, has been SOLD.
  
  In the 50's, we were poor. Sort of. But our expectations were not huge & we saved. Then it was realized that there was HALF this country that wasn't earning. So women began working. On the Coasts. Largely. Then kids.
  
  And so now, to adopt a Cali-Banger lifestlye of 100% gadgets & Paris Hilton dogs that we see on TV, we've mortgaged our lives beyond the hilt. We can thank The Cali-Banger. California is the Detroit of tomorrow. We are digging a hole so large it will bury us all.
  
  The Cali-Banger has made it NECESSARY that EVERYONE MUST WORK to even afford a house. How many people have had to start working in Bend because the Cali-Banger lifestyle has been so whole-heartedly adopted. More for everyone, right? Sounds great!
  
  We all get gadgets, and little dogs, and cars, and big fake titties, and all sorts of great stuff. We've become slaves to Our Stuff. We are living for The Stuff. We'll die to get more Stuff. We have spent everything we will ever earn to live for today. Our government has likewise done the same.
  
  Concern grows over a fiscal crisis for U.S.
  

  Carolyn Lochhead, Chronicle Washington Bureau

  Thursday, July 17, 2008

  (07-17) 04:00 PDT Washington - -- As the Bush administration proposes backstopping mortgage giants Fannie Mae and Freddie Mac with a $300 billion line of credit and Congress contemplates another economic stimulus, the question is who will bail out the government?

  "People seem to think the government has money," said former U.S. Comptroller General David Walker. "The government doesn't have any money."

  A rare consensus has developed across the political spectrum that the government's own fiscal affairs are precarious, with an astonishing $53 trillion in long-term liabilities, according to the Government Accountability Office.

  To put that number in human terms, the debt has reached $455,000 per U.S. household. As that debt grows, the United States increasingly relies on foreigners, including China and Middle East oil producers, for financing.

  "The factors that contributed to our mortgage-based subprime crisis exist with regard to our federal government's finances," said Walker, now head of the Peter G. Peterson Foundation, a group established to raise alarms about the nation's budget. "The difference is that the magnitude of the federal government's financial situation is at least 25 times greater."

  Baby Boomers

  This year's presidential election coincides with the first retirements of the 78 million people born between 1946 and 1964. The first of this Baby Boom generation may now collect Social Security. In three years, they will join Medicare, the giant health care program whose finances are commonly described as out of control. Medicare accounts for the bulk of the nation's long-term liabilities.

  The presidential candidates, Republican John McCain and Democrat Barack Obama, have not addressed what the aging of the Baby Boom generation means for the federal government. Their brief forays - Obama's suggestions to raise the payroll tax on high-income earners to buttress Social Security and McCain's description of Social Security's financing as a disgrace - have been met with furious attacks.

  Both promise to spend hundreds of billions of dollars on new tax cuts and spending programs. Their health care proposals concentrate more on expanding access than controlling the soaring costs that are driving the federal budget problems and squeezing workers and businesses.

  Health care costs

  "Health care costs are just amazing," said John Shoven, director of Stanford University's Institute for Economic Policy Research. Total health care costs now consume 16 percent of the economy and are headed quickly toward 30 percent, Shoven said. "Social Security is a big problem, but it's dwarfed by health care. Even the housing problem is dwarfed by health care."

  Just the built-in rise in spending on programs for the elderly will cost about 25 percent of workers' payrolls over the next generation, said Richard Jackson, director of the Global Aging Initiative at the Center for Strategic and International Studies.

  Robert Greenstein, director of the liberal Center on Budget and Policy Priorities, agreed that "the nation faces large, persistent, long-term deficits that ultimately risk damage to the economy. We agree that policymakers have to make tough choices soon."

  There is consensus, too, on what needs to be done: Cut spending and raise taxes. A bigger problem is how to contain health care costs, but some form of rationing is necessary, experts said.

  Only disagreement

  The only real disagreement is whether the government's fiscal condition will lead to a financial meltdown, or whether the U.S. economy is strong enough to right itself without a sudden loss of confidence and a flight of foreign capital.

  "People on Wall Street think I'm Dr. Doom & Gloom," said Kent Smetters, an economist at the Wharton School of Business at the University of Pennsylvania and a former Bush Treasury official. "I believe we could have a financial crisis like we've seen in South America or Asia. It could easily happen, and under current policy will happen in the United States. People say, 'Gee, give me a date.' Obviously, that's impossible, but the longer we wait, the higher the probability. Could it happen in the next decade? Absolutely."

  Alice Rivlin, budget chief in the Clinton administration, discounts the possibility.

  "We're a much stronger economy than Argentina," Rivlin said. The government "can handle borrowing in the range that would be necessary in a recession," she said. "What we can't handle is the cumulative long-run obligation."

  Financial markets are often fixated on the short-run, and the government's finances are far from transparent. Unlike corporations, the government is not required to state its long-term obligations. Crises of confidence, like today's banking problems, strike suddenly when a tipping point is reached and investors decide to flee.

  The government's fiscal problems are "like termites in the house," said Jackson. "You don't notice it until foundations are eroded."

  "I had such a frustrating meeting the other day on the Hill, where one staffer said, 'We don't have a problem until Wall Street tells us we have a problem,' " said Maya MacGuineas, head of fiscal policy at the nonpartisan New America Foundation. "By the time the financial markets tell us we've gone too far, it will be too late to fix this in any rational way. We are the toad in boiling water, where it's getting hotter and hotter and nobody's really noticing."

  Will they still buy?

  The key is whether foreigners will continue to buy U.S. debt. They now hold 45 percent of U.S. Treasury securities, and in all about $11.5 trillion of U.S. public and private debt, say UC Berkeley economists Ashok Bardhan and Dwight Jaffee.

  Chinese entities, including sovereign wealth funds that invest government savings overseas, own about 10 percent of U.S. Treasury securities. Even a minor change in China's investment policy could have a major effect on the dollar's value and cause "a sizable increase in interest rates," the economists said.

  Still, because of a shortage of creditworthy debt instruments worldwide, and the large role of U.S. institutions in global credit markets, foreigners have little choice but to invest in the United States, they said, predicting "slim chances of abrupt change."

  Action needed soon

  Whoever's right, all agree that the sooner the problem is tackled, the better. "Like almost any financial problem, if you don't work on it, what happens is it compounds with interest," Shoven said. "There are lots of ways to fix it, and what we pick is none of the above."

  The staggering U.S. debt

  The federal government's finances are in worse shape than its annual budgets show, because the government is not required to state its long-term obligations, which work out be about $455,000 for every household in the nation.

  Breaking down the numbers

  Current liability:

  Social Security: $6.7 trillion

  Medicare: $34.1 trillion

  Total long-term government liability: $53 trillion

  Source: Government Accountability Office, Long-term Fiscal Outlook, Jan. 2008

  Where it goes

  U.S. debt held by foreigners as of mid-2007:

  -- Foreign holdings of U.S. equities: $5 trillion

  -- Foreign holdings of U.S. corporate bonds: $3 trillion

  -- Foreign holdings of U.S. Treasury securities: $2 trillion

  -- Foreign share of U.S. Treasury securities: 45 percent.

  
  We are a country on the precipice of utter destruction. It is due to The Cali-Banger. The 3 hybrid SUV-driving, fake tan & fake tits, 3 iPhone, celebrity-worshipping, self-obsessed, self-consumed, 4 mortgages, hideous Cali-Banger. And they've come to Bend. And they are remaking it in their image. And everyone seems to think this is fine.
  
  Our one past savior is productivity. The rate at which a static amount of work yields still more output due to efficiency & improved tools we use.
  
  But we have always grown at faster than this rate, because we were on a slow but continuous borrowing slope. We consumed more than we produced by borrowing. The crisis you are seeing today is the result of that lifestyle. So we produced extra purchasing power with 2-3% productivity gains each year, but we also borrowed 3-4% from future earnings, which is essentially negates our future earnings.
  
  You might think that some slimey bastard you know, who's just moved in and brought all his heinous Cali-Banger toys with him is The Ultimate Cali-Banger. No. No, the Ultimate Cali-Banger would need to continuously spend so far beyond their means, it is literally unbelievable. The Ultimate Cali-Banger would actually FIGHT to spend money on the utterly ridiculous. The Ultimate Cali-Banger would be REVILED The World over, and looked upon with complete disgust.
  
  It seems obvious that The Ultimate Cali-Banger is:
  
  The US Government
  
  Our government, AT OUR BEHEST, is pissing away our efforts at a catastrophic rate. We are at war, yet again, and The Spoils? Right, the spoils are basically a Huge Toilet. The Worlds Biggest Outhouse. The Spoils of War are CRAP.
  
  We are The Worlds Colonialist. Duck & Cover, cuz Here We Come. And as just about any Colonialist can tell you, COLONIALISM IS HIDEOUSLY EXPENSIVE. It costs much, and yields next to nothing.
  
  We are worth LESS now than at any time in recent history.
  
  How much oil it'd take to buy the US
  

  At the recent price of $140 a barrel, it turns out to be a mere 400 billion barrels, or just about the combined reserves of Iran and Saudi Arabia.

  By Scott Burns

  Most of us view the world through dollar glasses. It's perfectly reasonable. Dollars, after all, are the currency we use in daily life. And those lenses, until recently, were distinctly rosy.

  When we asked, "How much is that in dollars?," we usually liked the answer.

  But it may be time to ask another question: "How much is that in barrels of oil?"

  Trust me, others are doing exactly that.

  That's when the world starts to look very different. It also looks more than a little scary to the U.S. Today, the net worth of the entire country is equivalent to a mere 400 billion barrels of oil. That's a smidgeon less than the proven reserves of two Middle Eastern countries: Saudi Arabia (264 billion barrels) and Iran (139 billion barrels).

  At more than 40 times its 1970 price, oil has outstripped the value created by a full working generation of Americans in a period of dramatic technological change and innovation. During the same time, the value of American business shares, as measured by the S&P 500 Index ($INX), has risen only about 15 times above its 1970 level.

  I find that hard to believe. After all, in 1970 the Internet was only an arcane toy for academics. Computer memory was desperately expensive. Intel had just been formed and was introducing the first dynamic random access memory chip. Bill Gates had yet to enter (or drop out of) Harvard and was five years from founding Microsoft. Steve Jobs was years away from creating the Apple II and was decades from launching the iPhone. AT&T was still a single national company, owning all of the regional Bell companies.

  No one was yet thinking the U.S. post office was a quaint institution, soon to be treasured for its many buildings that could be converted to trendy condos. Phone calls were expensive. Sears, Roebuck was an important retail stock, not a real-estate play by a hedge fund manager. All surgery was invasive. And it was still believed that stomach ulcers were caused by stress. Google founders Larry Page and Sergey Brin had not yet been conceived, let alone applied to Stanford, where they would create Google.

  All of that dynamism and creativity pale against the price of oil. Looking as far back as 1970, America has never been worth less in barrels of oil.

  I learned this by measuring the net worth of all U.S. households and nonprofit organizations in barrels of oil. Every three months the Federal Reserve estimates the value of our collective tangible assets, financial assets and liabilities to arrive at our net worth. It's the whole enchilada -- all our cars, our houses, our durable "stuff," bank deposits, stocks, bonds and mutual funds. Everything. Then it subtracts all our mortgages, consumer credit and other debt to arrive at our net worth.
  

  This year's floods in the Midwest are projected to reduce the corn harvest by 700 million bushels. Look for higher prices on meat and soda, and more ethanol imports from Brazil.At the end of March, for instance, our collective net worth as a nation was $56 trillion, the second straight quarter it had dropped. Divide $56 trillion by the recent $140-a-barrel price of oil and you get 400 billion barrels of oil as the value of America, a fraction of our national value in 1998, 1995 or even 1990.

  Either oil is too expensive or America is too cheap.

  YearHousehold net worth* Price of oilBarrels to buy America

  1970

  $3.4 trillion

  $3.18

  1.1 trillion

  1975

  $5.1 trillion

  $7.67

  670.3 billion

  1980

  $9.5 trillion

  $21.59

  438.6 billion

  1985

  $14.2 trillion

  $24.09

  589.7 billion

  1990

  $20.3 trillion

  $20.03

  1.1 trillion

  1995

  $27.7 trillion

  $14.62

  1.9 trillion

  1998

  $37.4 trillion

  $11.18

  3.3 trillion

  2004

  $48.1 trillion

  $42.00

  1.1 trillion

  2007

  $57.7 trillion

  $120.00

  481 billion

  2008

  $56 trillion**

  $140.00

  400 billion

  
  The last time we worth this little, was 1980. We were practically just hobbled by an oil shock. We were mired in a quagmire of stagflation.
  
  And guess what? Things got really great after that. Well, mostly. Reagan-omics itself almost crippled this area in the 80's. But the country as a whole experienced HUGE wealth gains. Times were good.
  
  So it'll happen again, right? Great time to buy, right?
  
  I don't think so. Back then, we weren't leveraged to nearly the extent we are today. We were still coming into the Great Computer Revolution, and the Chinese were still yet to become the HUGE producers (not consumers) of junk beloved the World over. Oil & commodities entered into massive price declines.
  
  Of these things, we can at best look forward to some unknown technological revolution, which is at best in it's infancy today. And even if we do find it, it's gains have been largely spent by a pattern of government individual borrowing. We are tapped out. That's why it really is different this time.
  
  And it's a Global Phenomenon. Everyone (except for the Chinese & Middle East) is tapped out. In a planet of Cali-Bangers, we are clearly the Head Banger.
  
  Producers will out.
  
  Producers will win, consumers will get crushed, and we are the ultimate self-medicated (on debt) consumer. And I'm sure the Chinese & Iranians are chuckling everyday, KNOWING that capitalism has had it's run. And it's finally going to collapse in the Ultimate Minsky Moment.
  
  And if the US is the Ultimate World Cali-Banger, then Bend is the Penultimate Cali-Banger town. I've never seen a place so consumed with it's own munificence. Celebrating & wallowing in it's own glory. Holding up a mirror to behold it's own beauty.
  
  F--king pathetic.
  
  Listen, being a Cali-Banger doesn't mean you have to come from Cali, it's just a hell of a correlation. But it has been known that Cali-refugees were literally born in the wrong place, and they knew it. Like a transvestite, they knew they were inhabiting the wrong body right away. Here is a test to compute your Cali-Banger Quotient:
  
  1) Do you own a Denali, Yukon, or Escalade? If yes, and you are a 2 person household, add 10pts. If you have 2 kids, or haul crap in it in a true work-related fuction, add 5 pts.
  
  2) Are you from Southern Cal? Add 10pts. Did you arrive between 2003 and right now? Add another 10pts. Did you BUY anything (home, townhome, doesn't matter) on the Westside? Add yet another 10pts.
  
  3) Did you start up your own business when you got here? Add 10pts.
  
  4) Eaten at Merenda, Deep, or anywhere in The Old Mill in the past month? 10pts.
  
  5) Fake titties anywhere in your family or bloodline? Add 20pts. Realtor? Make it 30pts Botox? 40pts.
  
  6) Bend Athletic Club? 10pts. Juniper Center? Subtract 10pts.
  
  7) Did your last bike cost over $1,500? 10pts. When you roadbike do you where spandex? 10pts.
  
  8) Did you sell a Cali house, move here & pay cash for you first Bend home? 20pts.
  
  9) Own a iPhone or Blackberry? 10pts, I don't care if it's for work. I know an iPhone doesn't work here. Cali-Banger don't care.
  
  10) Are you pro-"Green"? Have you bought Yet Another Automobile, parked a gas-hog, and started driving a Prius or some s--t to work? Add 20pts, you f--king idiot.
  
  You pass the Cali-Banger threshold by scoring a 50 on this test. Actually a true Cali-Banger will get a zero on this test. They simply refuse to listen to reality.
  
  Cali-Banger isn't really a person. It's a code for what's wrong with this country. We're all of us turning into these wretched monsters. It's our tolerance that allows it.
  
  We have started to tolerate this horror. We glorify it. We glamorize it. We worship it.
  
  I, for one, have not. I HATE Cali-Bangers. I don't suffer their bulls--t in silence. I don't fall for their wounded puppy bulls--t. I loathe them. They ARE WHAT'S WRONG WITH THIS COUNTRY.
  
  Go back to your s--thole & corrupt your own kind. F--k you & Get Out.
• July 12, 2008
• 6:37

  Bend's Newest Landscaping Craze? Weeds!

   » ‎ Bend Bubble 2

  Tags:  Home Price Declines   [edit]

  Well, here was the suggestion, short of anyone actually accepting the Guest posting challenge, that I thought was the most interesting:
  
  The other thing cuz obviously homer doesn't need to work so f--king hard, is to post questions every sunday, and comment highlights, and then let everyone respond, and then the following week post conclusions, and MOVE ON. ( More of a socratic method )
  
  This will be tough, because I have an absolutely awful memory, and this will require that I actually try to write a lot of stuff down during the course of the week, that I can write about. There's no shortage of material, it's just a shortage of mental goo that keeps it held together until the weekend which is lacking.
  
  I suppose the highlight of the week locally, was the centraloregonrealtors.com quarterly summary was released. There were a few points of interests.
  
  First, dollar sales are below 2004 levels. There was $92MM at this time in 2004, and there is only $85MM so far this year. That is down 47.24% from 2007, and down even more from the peak in 2006.
  
  If you recall, the real signals that Bend was not exempt from the slowdown came in the Fall of 2006. That's back when I was on BEM's board, and we all watched in amazement as inventory went ballistic. If you don't recall, well then click on Clive's inventory counter to the right.
  
  We are, of course, at all-time highs in inventory, this place is awash in it.
  
  It seems like just about every "superlative" has been exhausted describing the depths of Bend's RE problem. And it is clearly getting worse. But call me crazy, but DOWN 47% is starting to sound... OK.
  
  "Down 50%? Eh. I've seen worse."
  
  I don't know about you guys, but I am actually becoming accustomed to The Horror. Down 20%?... I mean, damn that would be reason to celebrate!
  
  And actually, local Bend media did EXACTLY what I said they'd do: They celebrated the 100% PURELY SEASONAL UPTICK in Cent OR RE as The Turning Point. As a reminder, here is what I wrote way back on March 3 of this year:
  
  February in Bend -- The Real Estate Calamity Continues
  
  The Good News? Well, Deschutes County traditionally "bottoms" in February. Things usually get better from here, for about the next 6-8 months. Sales will pick up, things will be declared "OK", and such. But if you really need to sell, realize that this yearly game of musical chairs ends as predictably as it starts, and if you Need Out, this is Your Time.
  
  And so we had Yet Another In A Long Line Of Stories declaring Things Are All Right:
  
  June uptick ‘good news, but barely
  
  June produced a glimmer of hope for a Bend real estate industry that reached its lowest depths in early 2008, according to a report this week from Bratton Appraisal Group.
  
  Ah yes, Bratton Appraisal Group, the RE Genius' who brought us the April 25th Low In Cent OR Real Estate.
  
  What's really great about this, is The Bulletin PRINTS stuff from Dana Bratton AD NAUSEUM, and they PRINTED his "tongue-in-cheek" April 25th Rock Bottom Prediction. This was, of course, RIDICULOUS, so ridiculous that lots of people sort of chuckled an uncomfortable chuckle, and said "Well, maybe... maybe... maybe..."
  
  But you know, LOTS OF PEOPLE, including Dana Bratton were hoping beyond HOPE that he was right. I mean, The Bulletin & just about everyone else in town PRINTED this little "joke". No, it was NOT really a joke. It was what just about every other thing printed in this town regarding RE is: A 100% hope-based puff piece meant TO SELL HOMES.
  
  Don't think Bend media had pinned their hopes on this little "joke"? Here's The Incredible Hulce from her most recent editorial (OK, there is no link, because Hulce keeps her piece of s--t website about 2 months behind the print edition. Wake up White Peepul. Geez.):
  
  While we all wanted to believe that Dana Bratton was right and the housing market turned on April 25 -- it didn't happen. It is more likely throughout 2008 that housing prices in Central Oregon will drop more, that gas prices will continue to go up, that the stock market will be tedious and no one will suddenly solve the healthcare crisis or end the war in Iraq.
  
  Yeah. See? It was NOT a joke. You think Bend media remembers a "joke" told back in Feb-Mar, only to reveal the "punchline" on July 2? No. This entire area is founded on the idea that The Perpetual Motion Machine is REAL. And if we can just BELIEVE ENOUGH, that The Perpetual Money machine can be fired up again.
  
  Always Cause, never Effect. "I'm not responsible for the consequences.." Complete disconnect, 100% Selfish. Californicated. People here have become so delusional from the Kool-Aid they don't even realize what they're saying is INSANE. Again, the Incredible Hulce in the SAME EDITORIAL:
  
  So we ask: what would you do? Would you make gas prices go down, the housing market boom again? Of course you would, but how?
  
  My God, this woman is INSANE.
  
  I WOULD NOT make gas go down, and I MOST CERTAINLY WOULD NOT "MAKE" housing boom again. Why? For the love of Christ...
  
  OK, first oil. We need go NO FURTHER than The Incredible Hulce herself to hear the problem; Again, same piece:
  
  We all know America is addicted to oil. This addiction plagues our health, our environment and our society. Given that two-thirds of our oil comes from foreign nations leaves us open to the whims of potentially hostile foreign governments and the combustion of oil in our vehicle chokes our skies with smog and contributes greatly to global warming.
  
  Oh yeah, this "oil" s--t sounds great. The Incredible Hulce, earlier in the same f--king piece, advocates DROPPING THE COST OF OIL, such that we might feed this addiction, because it seems to have SO MANY positive side effects, such as turning this planet into an Easy Bake Oven & placing our collective cocks on an Iranian chopping block.
  
  Seriously, is it just me, or is Bend media run by infantile, selfish lunatics?
  
  Hulce actually wants RE to go into another BUBBLE. She wants it to BOOM again, and ASSUMES that EVERYONE with half a brain would obviously want the same thing. Yet, here is a piece that made THE FRONT PAGE of her moronic rag (Oct 3, 2007):
  
  Affordable Housing Expert Adderesses Key Issues Facing Region
  
  The most significant workforce recruitment and retention challenge for local businesses in Central Oregon is predicated on the shortage of housing affordable to workers, according to a survey by the Central Oregon Workforce Investment Board.
  
  That is the first sentence, front page piece.
  
  So the NON-AFFORDABILITY of housing is THE WORST problem for employers in Cent OR, and HULCE wants it to get WORSE. And what's worse, she sees NO CAUSATION between BOOM & BUST. The BUST we are now seeing is in NO WAY connected causally to the BOOM.
  
  And OIL, which causes INTERMINABLE HEALTH & ENVIRONMENTAL PROBLEMS & MAY WELL KILL US ALL, yeah, she says in the same f--king breath that she wants it cheaper so we can consume MORE OF IT.
  
  What a f--king myopic lunatic. Only a complete nut would run a front page piece (Sept 19,2007):
  
  Deer Ridge Welcomes First Inmates.
  
  For the love of Christ. I'm sure it was a joyous time for all involved.
  
  Pamela Hulce Andrews: So Warden, how is opening day?
  
  Deer Ridge Warden: After being confined to prison buses all day for the trip to Deer Ridge , many of the large black inmates convicted rapists celebrated their reunion with deep expressions of love for the smaller White convicted child molesters, by embracing them with the deepest penetrating act of love a man can give another man. It really was a touching sight. And Pamela, the guards were so happy to be reunited with these convicted felons, that they tear-gassed the lot of 'em on Day 1 out in The Yard.
  
  Pamela Hulce Andrews is INSANE.
  
  The point? This place is SEASONAL. My God, it's so fundamental to anyone who's been here for more than 5 minutes, it's not even worth repeating. But Bend media wants you to think WE'RE TURNING A CORNER. No. We are NOT.
  
  Sales up? Of course, but anyone who can fog a mirror knew that back in Feb. Feb 1947, that is. We ALWAYS turn up from a bottom in Feb, and get smacked RIGHT BACK DOWN in Oct. Always have, always will.
  
  YoY is THE ONLY COMPARISON THAT MATTERS.
  
  "Hey Pat, I'm predicting that this December is going to be strong! And I'm going out on a limb here, but I'll predict right now, it'll be stronger than November!"
  
  Oy. If ordinary businesspeople actually RELIED on the media & their CONSTANTLY
  INTERVIEWED EXPERTS in this town to run their businesses, they'd all be dead.
  
  Six months ago, in the garage of his west Redmond home, Carl Ylvisaker started tinkering with a tire, a trailer hitch, an alternator, car batteries and a power inverter.

  The result: a device with the potential to complement alternative power sources like solar panels and windmills. And if everything falls into place, something that could help resolve the world’s energy crisis, says Ylvisaker, a retired physical therapist.

  “We’re in an energy crunch right now,” Ylvisaker says. “This will certainly help defray that.”

  My God. You hear that Timmy? We're in a f--king energy CRUNCH here! And this motherf--ker has got a gopher wheel, a rubber band, f--king fishing line, and the complete McGyver DVD series that is going to DEFRAY THAT.
  

  I read things like this, and it pushed my Recovery Date farther out, and my estimate for the bottom DOWN.
  
  Ok, moving on...
  
  Stocks got roiled this week, officially entering Bear Market territory for the first time since the NASDAQ crash.
  
  I still find this one of the strangest things about this Housing/Credit bust: Not that it happened, but that it happened so late. This countries markets are populated by vultures that would hurl their mother under the bus to scalp an eighth. These guys are smart & they are motivated by making money before the next guy & that's it.
  
  And I don't know about you guys, but this thing seemed clear WAY OVER a year ago.
  
  I haven't bought stocks in many moons. Last time I bought was 2002. I thinned my meager holdings in 2005-2006 on housing fears. And subsequently watched IN HORROR as things continued ever upward.
  
  I got that confused feeling that I got in the late 90's; I just did not understand why people were buying. Quagmire-war, gas going up (although it was still in the $2's back then), rising inflation, and a housing crash seemed inevitable to me, at least. Worst of all Worlds.
  
  Not for the S&P. Ever upward.
  
  And my hard-won experience has taught me to stand aside when I don't fundamentally understand pricing on the upside, and to also jump in when I similarly don't understand why things are so cheap on the downside.
  
  And then Bear Stearns when bust in March & I got some measure of vindication. But still, things were very good, and they bounced really strong after that, and The Bottom was declared from every corner.
  
  Every corner but here. I said sell the rallies, cuz the Most Catastrophic Destruction Of Wealth Ever Recorded doesn't end in one day. And I'll say it again: Sell rallies.
  
  But I have started to find bargains. And these are not slimly underpriced, fundamentally strong issues. They are deeply & obviously troubled. Big RV sellers, car dealers, and big pharma with weak pipelines.
  
  Are we at "Fair Value"? Well, for me, we haven't been there almost ever. Why? I am a cheap bastard. I only really like buying individual issues that look underpriced by 80-90%; ie: potential 5-10 baggers. Many times these things are headed from $50 to $.50, and I will pick them up at $2, thinking I am King Of the World.
  
  No. Most of the time the Market is Dead Right, and these things get killed. But occasionally the market is wrong, and these things end up as Huge Winners. My approach very much reminded me of the Taleb interview where he advocated buying small amounts of many extremely speculative issues, and also keeping a big wad of cash in reserve.
  
  To date, it's been my selling discipline, not my buying, that has been my fatal flaw. After sustaining short term, excruciating losses (30-50%), I always swear I'll sell at breakeven & NEVER DO THIS STOCK THING AGAIN. And so I do. Right before the 10 bagger hits.
  
  But I hope to have solved it this time with this bit of knowledge:
  
  KNOW THYSELF
  
  I know I am HORRIBLE at selling, so I simply will not sell. And it's funny, but once I truly accepted that I was going to hold this litany of lottery tickets, I became much calmer & less involved in the daily machinations & price movements. I could actually think much more clearly about the markets than I ever have. I have simply eliminated the option of selling.
  
  And I also understand why Buffett advocates that The Optimal Holding Period Is Forever.
  
  It clarifies, and makes buying a much more thoughtful process. I finally understand that to CAPTURE a 10 bagger REQUIRES that I hold stocks for The Long Haul, Thru Hell & High Water. The last near 20 bagger I bought took 5 years to get there & got almost cut in half 3X on the way there.
  
  It is impossible to hold a 20 bagger when your concerned with selling at breakeven.
  
  Second stock-related question is the Freddie-Fannie collapse.
  
  Now, on Friday, after a heinous drubbing in the morning, both FNM & FRE staged pretty impressive rallies. Freddie actually dropped as low as $3.89, before recovering to almost $8! That's like 4-5 years of appreciation in 1 day.
  
  And consequently, The End Was Declared as having come and gone Friday morning. My Lord, they trotted out Bernanke, Bush and a litany of minor Senators to jawbone this thing higher. And to good effect.
  
  But this changes NOTHING. Fannie & Freddie are some of the most leveraged companies on the planet & the Tsunami of credit contraction & The Great Deleveraging will take them down.
  
  People, the Federal Government is FLOODING our financial intermediaries with money, and it does not matter. It simply delays the inevitable. Bear Stearns was not The End, and neither is this. It is simply a short-term Band Aid that lets the inflation genie out of the bottle. Last time this happened, it took the most severe medicine The Fed had ever dished out, 20% interest rates, to end it. Worst recession since the Great Depression followed, as is expected.
  
  We're digging our own graves, and bailing out Freddie & Fannie should simply tell you that oil, food, and everything else EXCEPT YOUR SALARY, is about to do a quick double.
  
  I am, nevertheless, buying auto dealers & big RV makers & fading this hysteria. The Worst Of All Worlds seems like it's already priced in.
  
  OK, I'll end it this week with the headline! Yeah!
  
  Don't know if you've noticed, but there seems to be a little landscaping problem in Bend.
  
  Cali-bangers brought with them this sort of minimalist idea of small grass patches, surrounded by rocks & these sparsely scattered "plants"; they look like really tall grass and small shrubs, I guess. Sort of a Japanese-ish theme. Seems low-maintenance, I guess. Not a lot to mow, and the scattered stuff sort takes care of itself, mostly
  
  Problem is Bend is hucked-full of empty houses. These things aren't getting minimal maintenance, they're getting none. And you'd think that after a long, cold Winter, things would brighten, and all would be well, and that at the very least, the lanscape here would "stage" itself. After all, many front yards are meant to mirror desert scrub.
  
  But it's not working out that way. Let's take a look at The Eastside first:
  Darnel & Moisha Estates, Tumbleweed Field
  
  Right next to the sub $100/sf Darnel & Moisha Estates, where Bends rich, black pimp elite have chosen to "crib out", you see that The Bleeds like ta bust out they ho's more than they like to water the yard.
  
  Sheeeeet N****r! I want my f--kin money, you Ho bitches! I don't ho you bitches out to water the motherf--kin YARD!
  
  Another Darnel Estates grow operation
  
  Yeah, yet another vacant STD used as a weed-grow operation. Someone need to call Joshua Grossman to get his ass out there with a weed-whacker. Motherf--king weeds are actually growing out of the garage here.
  
  Paul-doh buys RV makers cuz they slowly being consumed in weed bogs
  
  I expected Swamp Thing to come out from under this f--king RV, which is being consumed by weeds.
  
  Now moving on to Desert Skeeze:
  
  Desert Skeeze Field Of Dreams
  
  Besides being The Home of $50/sf Abandoned Hulks, Desert Skeeze got the Weed problem. I can only imagine the woman of this house got a motherf--king humungous bush, look like she got Buckwheat in a leg-lock.
  
  Classic Desert Skeeze backyard. Or is it Forum Center?
  
  Drive by The Skeeze & Forum Center you'll see an entire block of vacant homes being consumed by weeds. It's a sea of weeds that runs the entire block at Forum, uninterrupted by fences or other impediments to offend the eye.
  
  Hay fields in Bend?
  
  Yeah, this Coldwell broker might wanna hire a band of illegal methers to come out and whack down the f--king hay field that sprung up here. What'll happen if they don't?
  
  Notice on yo front door when you don't trim the bush
  
  NIGGA PLEEZE! Nigga know you gotta keep that bush trimmed, or you be scarin' away Whitey.
  
  Holy S--t, Buckwheat spotted on The Westsiiiiiiiieede!
  
  Yup, they be weeds sproutin on the Westsiiiiieede as well. You drive by Newport Market, and you can see that these Westside macro-shacks be in need of illegal landscaping. White bitches: You just need go to Madras, pick up 'bout 200 illegals (even millionaire methers will cut yo mutha f--kin yard for 5 bucks cuz dem bitches done communicated with Jeebus when they out dying in the AZ desert. He toad 'em "You Mexican bitches will go forth & cut Whitey's yard for 3 bucks plus tip, and you'll like it, or I smite your asses with NO MORE tiara's for graduation and no more humungous pink fake silk square-dancing dresses for bridesmaids. Now Go!"), and get them f--kers to trim your yard.
  
  Eco-Modern Whorehouse
  
  Yup, guess we should have known the Eco-Modern Soviet-designed whorehouses across the street from Newport market would go to seed. This is where they really get you wondering if this is landscaping or f--king weeds.
  
  Yeah, it's weeds. But they mix it with that 12ft tall grass & the weediness is actually muted some.
  
  F--kin Cracker be Pimpin'
  
  Yeah, here you got a flop house, run by Cracker Ass Cracker. Clearly Cracker don't know that Whitey like a mowed field.
  
  Yup, I got more, but you get the idea. The Vast STD fields have finally been abandoned to the elements. Ain't got the cash for upkeep. F--k, ain't even making the mortgages anymore.
  
  THIS, my friends, is why Bend is headed to $50/sf.
• July 06, 2008
• 6:27

  Guest Posters Wanted!!

   » ‎ Bend Bubble 2

  Tags:    [edit]

  Well, clearly The Outrage Of The Week has to cum from COBA & The Bend City Council. Excerpt from the comments:
  
  Builders may get more time to pay Bend SDCs
  (subscription req'd)
  "The Bend City Council will get a look at a new plan Wednesday that would give builders a nine-month window to pay system development charges, a move designed to help residential and commercial builders get through the current economic downturn. While many of the efforts have been in place for a while, there are two new options the city is extending to builders for at least the next year, Community Development Director Mel Oberst said. The council will get a briefing on the issue at a work session Wednesday evening. Builders currently have to pay their SDCs, which can top $13,000 for a single-family home, when they pick up construction permits. A new plan the council would first have to approve would give builders up to nine months after picking up permits to pay their SDCs, Oberst said. For homes that can be built in that amount of time, builders hope they would be able to pay the SDCs with revenues from selling the completed homes, rather than financing the SDCs upfront with high-interest construction loans."
  
  I just sit & shake my head at this sort of thing. From the comments:
  
  Anonymous said...

  "And, while the change will delay the collection of fees temporarily, there will be no reduction."
  
  More bulls--t math from The Bulls--ttin. The city will be giving a nine-month, interest-free loan of $13,500 per house to the builder. The only collateral will be the house. At best the city loses nine months interest on the $13,500. Worst-case scenario, the city loses the $13,500 PLUS the interest and ends up owning a crapshack that nobody will buy.
  
  Yeah, looks like a real "win-win" here ...

  And then read this, with respect to the Bear Stearns bailout:
  
  Anonymous said...excerpt from the WSJ: Bear Stearns Assets Accepted By Fed Lose $1 Billion in Value "What it looks like ... is that we've socialized risk and we've privatized reward," Sen. Christopher Dodd (D., Conn.), chairman of the Senate Banking Committee, said at an April hearing while acknowledging that the Fed had little time to carry out the deal. "We're on the hook. Hopefully it doesn't happen, but we're on the hook."
  

  What the hell is going on in this country? We are doing exactly what Dodd said. For the love of Christ, this guy is Democrat!

  We are trying to turn fundamental economics on it's head. Commenter "wsj" posted a really great piece about Ted Forstmann. Here's one of several great lines:

  "You've got [Treasury Secretary Henry] Paulson saying 'Oh, you see the good news is it's over.'" The problem, according to Mr. Forstmann, is that it's far from over. "I think we're in about the second inning of this." And of course, the credit crisis wasn't even supposed to last this long. "This all started in August [of 2007], and it was going to get cleared up by October. It hasn't gotten cleared up at all."

  Actually, this really started in March 2007, when the short-lived subprime implosion came to light.
  DJIA - 2 year
  
  You can see this thing has not been all that bad. I think it became clear early on, that Wall Street billionaires would be taken care of. My thinking at the time was that No One could possibly bail out a situation like the one we were facing. No One.
  
  And they did put a band aid on things, and that seemed to assuage fears of Total Collapse, for a bit. And we had a quick run from the Bear Stearns low of 11K to 13,000 on the DJIA. If you remember, I said fade that thing at 12,500, which we seemed to hit just 2 DAYS after the BS panic lows.
  
  Anyway, this ties back to COBA, Bend City Council, and the imposing of RISK on Bend taxpayers, and cordoning off of PROFIT to builders. What we are doing is actually FAR WORSE than the BS bailout: The purpose of the BS bailout was to calm markets & restore some semblance of normal functioning AFTER the essential collapse of one of Wall Streets cornerstone players.
  
  We, as in TAX PAYING BENDITES, are expected to financially SUPPORT an industry that has simply built itself into a glutted supply situation. And as I have said before, BUILDING is NOT really an industry at all. It's DUDES. Yes, it's just DUDES in pickups who know other DUDES, who know Mexicans, who do NOT KNOW S--T, except they will work for f--king peanuts so they can expend 112% of their annual earning blowing off illegal fireworks.
  
  Because think about it: Most companies will demand that The Corporation somehow benefit from such a boondoggle. But COBA & Bend builders KNOW FULL WELL that their little incorporation bulls--t is a thin veil that allows them to appear to be building PRODUCT for the ILLUSION of somehow making a profit ON SALE.
  
  There is NO SUCH THING. Builders are F--KING DUDES. Just Dudes. The LAST THING they care about is selling the house they are building. They just want to siphon off money by PAYING THEMSELVES some sort of hourly rate. NO ONE HERE cares one wit about selling the homes they are building.
  
  So what happens? Ultimately, it appears Bend is looking to become a landlord, just like The Fed. When The Fed bought Bear Stearns toxic waste, they were buying mortgages. You'll recall I quoted a pretty decent piece by Bill Fleckenstein who was pretty outraged that the US Government was going into the loan servicing business. This is where the City of Bend is headed.
  
  Again, what happens? This country, and this town, are headed down the same path: towards Democratic Socialism.
  
  Democratic Socialism - A leftist political ideology that emphasizes the principle of equality and usually prescribes a large role for government to intervene in society and the economy via taxation, regulation, redistribution, and public ownership.
  
  As usual, I just sort of wonder how can I benefit from this. How? Seems the answer is similar to How do I benefit if I am living in commie Russia in 1975?
  
  Leave. Get the hell out.
  
  I'm not sure there is anything to do when government bodies CAN & WILL bail out private investor losses of any and all types. The City of Bend will INEVITABLY begin to have a stake in the private ownership of homes, government housing. Believe me, government housing DOES NOT WORK. It is synonymous with DRUGS & HOMOCIDE. That's ALL that goes on in gov't owned housing.
  
  We are entering a dark, slippery slope. The loaning of money is really only meaningful if there is some onerous, burden of repayment. Paying it back is THE ONLY sufficient impetus for the RE-LOANING of money. When borrowers default en masse, and there appears to be no further real enforceable incentives for repayment, the jig is up.
  
  The whole depositer & borrower scheme just implodes. And banks are just middlemen in this process, who don't REALLY have anything of their own. They have OUR money, that's it. And they all hopped on the "abstraction of ownership" bus over the past 3-4 years, taking PROMISES TO PAY, cutting, slicing, dicing, and reselling them between each other, and making a hell of a lot of money doing it. THIS PROCESS was pivotal in creating the credit bubble.
  
  No one knows who owns what, or who owes what to who.
  
  The Great Deleveraging is going to sweep away this entangled mess. There is more collapse waiting in the wings.
  
  THERE IS ANOTHER BEAR STEARNS COMING. Mark my words. Bernanke, Bush, BendBB and other PERENNIAL OPTIMISTS will tell you over & over & over that this thing is NEAR OVER.
  
  Ain't NEAR OVER. This thing is the Greatest Financial Calamity of All Time. Hell, Forstmann says we're in the Second Inning. He's even more pessimistic than I am.
  
  For the love of Christ, we are in the throes of some sort of Biblical Seven Horsemen of the Apocolypse. We can't eat CORPORATE PROCESSED FOOD, for Gods sake! They can't even figure out what's the root cause of the biggest poisoning of Americans EVER.
  
  I mean marge & them were talking about GARDENING AS A FOOD SOURCE, something about which I sort of chuckled about 2 months ago.
  
  Now? F--k, now I am asking my wife about how to plant OUR FOOD in the back yard.
  
  THIS is another trend that I think is very interesting, and it has less to do with a poisoned food supply than it does gas & transport costs.
  
  The One Thing PRE-SOCIALIZED America could do pretty well, was look at their own income statements, look at the high-cost items, and DISINTERMEDIATE THEM. Get rid of them.
  
  Now, The High Water Item Everyone Wants To Get Rid Of, is fuel costs. Transport. We pay billions to ship all sorts of stuff All Over The Place. We pay a hell of a lot to ship food to this country. Timber? Again, millions to ship here, mainly from Canada. Look around your desk; there was probably $.10-20 of every dollar spent to ship that stuff around, INCLUDING your gas money to go get it at the store.
  
  Think about what Exorbitant Transportation Costs mean. Can you think of a time when transport costs were truly mond-boggling? Try 1,000 years ago. Overland treks could cost you your life. They took major chunks of your life.
  
  What about space travel? Going to Mars or something.
  
  OK, when transport costs become outrageous, we do it FAR LESS, and we try to be Internally Self Sufficient; ie we bring all our s--t with us. We have to be able to make stuff, fix stuff, and soldier on By Ourselves.
  
  This seems to be where we're heading. Communes. The Texas Polygamists. Internally self suffiecient units that make & build they're own supply of just about everything, including food.
  
  Small lots, small runs of production of a wide variety of items. No HUGE corporate industrial food suppliers trucking & shipping stuff Worldwide, because the ALTERNATIVES are cheaper: buy seeds & plant it. Little socialized farms. Rural China is what we're turning into.
  
  I don't know. I just try to look at what is happening & deduce from Standard Human Nature & what I know about it, to figure out The Big Picture. We might be real s--tty at a lot of stuff, but Americans as a group are a damn crafty bunch, and our economy, with its heinous inherent flaws, is pretty good at allowing people to do what the hell they can to make a living.
  
  And we will beat this fuel problem not really by any sort of Reduction Planning, but by Elimination. We simply will NOT ship things. We'll produce it locally.
  
  An example that just popped into my head is produce in Alaska. You wanna see truly ridiculous costs & poor value, head up to the outer reaches of Alaska & (try to) buy produce. It's awful, barely edible stuff. And it costs a fortune.
  
  What to do? Small greenhouses? Social gardens protected by the elements somehow? There's money in them thar hills.
  
  A LOT of people have gotten on here & said that I am trying to somehow INFLUENCE PEOPLE'S DECISIONS, OR SOCIAL POLICY, or some weird ass s--t like that. Of course I am not. I am trying to read The Big Picture, INTERPRET social policy, and combine it with my ideas about human nature (self-centered searching for utility optimization) & figure out WHAT WILL BE BOUGHT in response, if anything.
  
  We are socializing the building of homes in Central Oregon, taxpayers will own, in part, several homes as a result of tragically flawed City Council enactments. What to do? Property management? I've said before I think this is a good way to go in Cent OR. Move out cleanups? Again, the methers LOVE to turn on the water & plug the sink 2 days before their lease is up. Motherf--kers LOVE to leave landlords a swimming pool.
  
  There seems all sorts of Management & Remediation Businesses that will result of bend City Councils actions.
  
  This rationale also seems to apply at the Federal Gov't level: We are BUYING MORTGAGES at an untold rate. What to do? The Fererales LOVE to hire contractors to manage their messes for them. F--k, that's really ALL Soviet Russia was.
  
  Speaking of which, they also produced & consumed ENORMOUS amounts of alcohol. Buffett, you sly devil!
  
  We're in the throes of transforming the US Economy folks. I know it doesn't seem like it, but have you actually considered GARDENING a proper use of your time in ANY past years? I NEVER have. It's STILL sort of on the border.
  
  But f--k, that means we're entering into a WEIRD ASS AGRARIAN phase. I mean, WHAT THE F--K? AGRARIAN? That s--t was put down 200 years ago, right?
  
  Again, the after effects of this f--king housing bust are going to be weirder & more severe than we ever thought possible.
  
  OK, you might think that all this talk about the deleterious effects of High Costs as sort of abstract & maybe irrelevant, but there is an industry in the country that has stoically maintained ridiculous wage levels for it's rank & file, far above the competition. Here's an excerpt:
  
  Is the American Dream in business?

  With barely four months to go to the day of the US presidential election, the BBC's James Naughtie finds Americans worse-off than they were seven years ago - and worried about the future.

  East Grand Boulevard in Detroit is still handsome, in its way. There are wooden and brick houses on spacious plots, with trees front and back. They have that early 20th Century confidence that American architects were able to exploit, with high chimneys, wide porches and plenty of room inside.

  But many of them are not homes any more. They're empty, bricked up, maybe open to the sky or burnt-out. As a street, it represents a generation of inner city decline.

  You can find plenty of prosperity around the edges of Detroit. But take a trip down East Grand Boulevard and into the enclave of Hamtramck, which was the heart of the American car industry, and you can sense the economic angst that's gripping the country.

  It's not simply that there is poverty in Detroit - which you can find at the busy soup kitchens that were established in the Great Depression - but that a city which once boasted some of the best-paid industrial workers in the US is in steady decline.

  Politics in Detroit is a mess - the mayor has just been deposed by his own Democratic supporters over his use of public money to try to cover up an extra-marital affair - and economic prospects are bleak.
  

  People who thought they would remain reasonably comfortable are discovering that rising medical bills, falling wages and petrol at $4 a gallon are making life difficult. Add to that the pressures from the banks and mortgage lenders, and you find trouble.

  Watershed

  More than 73,000 homes were repossessed in the city in the second half of 2007 because the owners couldn't keep up with loans: Detroit is a prime example of a contagion that's sweeping the whole country.

  In the course of this year, between two and three million homes are expected to be the subject of "foreclosure".

  This is one of the painful facts that lie behind the rhetoric of the presidential campaign. The reason why both John McCain and Barack Obama talk about "change", is that most Americans feel that this election year marks some kind of watershed.

  They're not agreed, of course, about which way the country should turn. But there is a general sense that after the eight Bush years, in which the country has been tormented by post-9/11 national security worries and war, and in the course of which government spending has soared and personal debt has become an obsession, this electoral choice will be important.

  Searching for the worries that give rise to that belief, you first of all confront the lack of economic optimism.

  Although you can find those who talk of a cycle that will turn once again, about the long-term inevitably of recovered prosperity, it's much easier to find people who are starting to question their birthright. Is it true, as they've always been taught, that the next generation will always be better off than the one before it, that hard work will produce rewards and the freedom to choose a lifestyle?

  In short, is the American Dream still in business?

  'Katrina-like crisis'

  I found in Detroit that there are doubts. Among car workers, who were once the elite of the labour force, there is deep gloom.
  

  While I was in the city, a strike at the component manufacturer American Axle was settled with a deal in which the workforce accepted much lower wages and health benefits. They got what they could, and it wasn't much.

  Talking to some of those who are losing their homes through foreclosure, having stumbled into loan agreements that allowed interest rates to be ratcheted up, I became quickly aware that the problem is not one that is confined to what might be called, over-simplistically, an "underclass".

  As one woman put it, it's a "Katrina-like crisis" - the waters are lapping around the feet of those who never thought that their homes would be inundated.

  In America, it's always important to balance bad news or public anger with the country's innate capacity for ingenuity and recovery. But, as Joe Stiglitz, Nobel-prize winning economist, put it to me: "The reality of each generation being better off than the last is becoming destroyed."

  Most Americans, he says, are worse off than they were seven years ago. So, when they come to make their political judgements this autumn, this is what will affect them most.

  Remembering the effectiveness of Ronald Reagan's question in 1980 after Jimmy Carter's four years - "Are you better off than you were four years ago?" - you realise how important this is. Many Americans aren't convinced that this downturn is another blip in a cycle that will quickly correct itself; they worry about something deeper.

  They know that China holds much of America's public debt, and that jobs are going overseas. And they're aware that the weakness of the dollar overseas can be seen a measure of the troubles of the superpower.

  They wonder, therefore, whether they can assume that in the 21st Century their country will remain an economic superpower, even if its military strength is still unmatched.

  It's a deep question, lying far beneath the surface of a presidential campaign in which the personalities of the candidates and a speech here or there often determine the headlines and the tone of the exchanges.

  The truth is, this is a troubled nation. And one of the problems is this: change may be necessary but where should it lead? In the next four weeks that's what I'll be trying to find out.

  You might say, "Hey, the car business is a TERRIBLE EXAMPLE! It's old & industrial, it was bound to fall apart"!
  
  Umm, no. Look at Honda & Toyota.
  
  The market cap of GM is $5.8BB. Ford is $9.9 billion. Yes, Ford is worth about twice what GM is. Weird.
  
  But Toyota is worth $144.9 BILLION. Toyota is worth 25X what GM is. Honda is worth $61 billion.
  
  There is HUGE amounts of value being created in auto assembly. But US automakers have had to deal with a century-old suckerfish: UNIONS. Unions have jacked up the cost of every single car made in this country to the point that the industry has been destroyed, AND THE ENTIRE SURROUNDING AREA where they are built has been 100% destroyed.
  
  If you're a freaked out self-delusing liberal, keep telling yourself that THE UNIONS ARE NOT THE PROBLEM, IT'S THE GREEDY CORPORATIONS! OK, settle down Tim Robbins.
  
  All corporations are greedy. You're greedy. I'm greedy. And corporations are JUST US.
  
  Anyway, if you want a PRESENT DAY example of what non-competitive cost dynamics can do to a city, state or country, just look at Detroit. It becomes less & less relevant, less & less able to sustain itself, and decays more & more until it is simply abandoned.
  
  WE, Bendites, are living in the Next Detroit. Oh yes, the Auto Unions succeeded brilliantly, but they have killed the hosts. Bend City Council will succeed in perpetuating the Suckerfish, BUT THE HOST WILL DIE. Iran and Russia are succeeding brilliantly in feasting off the host, but it will INEVITABLY DIE. The Saudis understood this.
  
  Massive hyper-inflation, and stagnating growth; Worst of all Worlds. We're headed for disaster. What to do?
  
  Remember the fundamental: People in a "free" society maximize their own utility. We get the most for our money. We purchase the low cost to disintermediate the high cost. And salmonella is a COST, just like oil.
  
  So what are The Costs? What is Their Origin?
  
  It is BIG BUSINESS. Corporations. We've endowed these things with sustaining our lives. Big Oil. Big Food. Big House. Big Computer. We're going to start disintermediating these enterprises. Small lots. Short runs. All is Local. Can't afford even to pay South American peasants 2 cents to pick bananas, cuz it costs $20 to ship them here. All is LOCAL.
  
  We will work in Bend. We will be taxed to pay builders for unsaleable homes. This is a fact. What to do? Leave. Leaving is all we can do to disintermediate the cost. WE will be Detroit. We'll still be here; Detroit is still here. But things will look different.
  
  Bend circa 2015
  
  
  On a different tack: I will ask again, does anyone want to write a Guest Post? C'mon! It's got all your standard chunks of Reaping The Goodness Of Fame! Getting whaled on by Buster! Being Told Your A Lunatic! Absolutely NO Monetary Payoff!
  
  It's fantastic. I wanna hear from YOU! I'm going to setup an anon email, & YOU TOO can be the next contestant on BendBubble2. I truly suck, and I know it. I think my strengths lay in CONVINCING people that The End is Nigh, but that phase is clearly over. The Chronicling of The Calamity is where we are, and I question my ability here.
  
  AS you can tell from my recent comments, I play the other side of stuff: I load up at the bottom... and typically unload somewhere just off the bottom, about 1% above my breakeven. So I tend to become progressively more optimistic as things collapse. THAT is why I believe in Detroit: ALL THE BAD NEWS IS OUT THERE. TWICE. Can't really get worse. Even an open field is worth more than what is there now.
  
  I am actually starting to fade the oil hysteria. I bought a bit of Monaco Coach this week.
  
  MNC, 1 year
  
  To repeat, this ain't for everyone. I have sort of a Taleb-esque approach to things: Spread 10-20% of your portfolio across a thin veneer of lottery-ticket style holding, and hold the rest in cash. And going from $16 to $2.86/sh in one year qualifies as a lottery ticket in my mind.
  
  I am becoming more optimistic AS THINGS IMPLODE, as is my nature. I am compelled by LOW COSTS to buy things I wouldn't touch a year ago. And things are beginning to get cheap, fast.
  
  So I wonder if I am The Prophet Of Doom this blog seems to require. I am STILL HORRENDOUSLY BEARISH ON BEND. I can't possibly understate that. Bend is the Detroit of the 1960's: Doing OK now, but literally facing it's own long term doom. Barring a complete cleaning of house, Bend will self-destruct.
  
  We need to adopt the Economics of Small Lots & Short Production Runs Of a Wide Variety of Goods. We need to become Self Sufficient. We are an island. We're a spaceship headed for Mars. Well, we need to act like we are, because we are incurring all the same costs.
  
  I don't know. Costs need to fall precipitously here for me to switch from Rent & Invest The Difference, to Buy Bend. So maybe I can gab on about the Fall of Bend, which will stay the course for at least 5-10 years.
  
  But I would like to post different ideas here. What will work? What will kill this place? Some people seem to have a good handle on things that I don't. I'd like to post pieces that present a variety of positions. Even RE-friendly stuff. If I got enough, I could post more than once a week.
  
  And this blog is getting tough for me to keep up. I've eaten my own pudding, and positioned myself "delta negative" on this housing collapse, and I am also Renting & Investing The Diff. And I am busy because of it. I am working more than ever. I used to have a spare couple of hours to even think about housing issues. Now, I am just working all the time. It's becoming difficult to take 5 seconds to write anything.
  
  Anyone want to help? Write a guest piece? Doesn't have to be totally agreeable to me or the bent of this blog. I just want a diversity of thought & opinion.
  
  All is not bile and loathing.
  
• June 28, 2008
• 12:20

  Bend Housing Market Hits Rock Bottom in 2012.

   » ‎ Bend Bubble 2

  Tags:  the Cult of Bend   [edit]

  First of all, I'm ready to call The End of The Real Estate Crash:
  
  March 2010.
  
  A few things: First, it will inevitably happen several months later, so The Real End will be Oct 2010. But again, later, so March 2011. A few months after that.
  
  Why?
  
  Well, first of all, besides the fact that I AM ALWAYS EARLY, AND from Case-Schiller data & anecdotal observation, RE seems to move in big waves. Most macro-economic events seem to. It's our reactions that are hyper-magnified.
  
  So here is The Biggie of the week, Case Schiller:
  
  Case Schiller, April 2008
  
  
  CS comes out on the last Tuesday of the month, with a 2 month lag. CS is considered the least "biased" measure of home price movements, as it uses sale pairs for the same house, with various adjustments & exclusions for excessive rehabbing & such.
  
  So why am I even coming out with a call For The End? Well, it appears that things have maxed out their "stretch" on the downside. Before I explain, here's a graph that shows the YoY gains/losses in Case Schiller from inception:
  CS, YoY gains/losses
  
  Now, if you look close, you can see that Jul 2006 was The Top of The US Mega-Housing-Bubble. That was also a little ahead of when YoY returns sunk to 0%.
  
  YoY returns actually maxed out June 2004 - Oct 2004, when they were +20%.
  
  You can see from the top graph THAT was a pretty damn good time to own a home, or RE of any kind probably.
  
  YoY returns finally hit 0% in Dec 2006. Nationwide that was probably past the prime. In Bend, where IQ's & the housing market are 18 months behind the times, that was STILL a pretty decent market. Things had slowed, but you could still actually sell, given sufficient incentives.
  
  So in a shorter term sense, the housing bubble began in the Summer 2002. It hit it's max gain inflection point 2 years later. It was rising at it's fastest rate at that time. It finally peaked 2 years after that, in July 2006.
  
  Conversely, we are now almost exactly 2 years off the top. We are also approaching a point of max pain, down 16% YoY. But the growth of max pain may be slowing here. That might imply that the downturn is half over. That means a July 2010 bottom for the housing bust.
  
  Again, in Bend OR, Home Of The Worlds Biggest Cock fighting Ring, things move a little slower, and besides we are still one of only 8 markets nationwide deemed to be far overvalued.
  
  We will, of course bust harder & farther than anywhere else, and will not pull out of this thing till Jan 2012. Medians will fall below $200,000.
  
  Actually, it looks like we'll see 2001 prices, nationwide. And it really shouldn't surprise anyone if most places fall back, several markets excepted as they never really participated.
  
  Where is Bend headed? Well, as a commenter over on BendBB is fond of saying, "Home prices will reflect local incomes"... or something. So here is the answer... or at least part of it:
  
  Monday, June 23, 2008
  Ratio: Median Home Price to Median Income
  
  by CalculatedRisk
  
  The Harvard Joint Center for Housing Studies report: "The State of the Nation's Housing 2008" is now online. Unfortunately the table I was really hoping they would update is the House Price to Income ratio by metropolitan statistical areas (MSA).
  
  Here is the excel file from the 2007 report: Metropolitan Area House Price-Income Ratio, 1980-2006 Here is some price-to-income data from the 2007 report (data through 2006). I picked a few random cities and plotted the national average (dashed).
  
  Check out the excel file for your MSA. House Price Income Ratio Click on graph for larger image in new window. Different areas have different price to income ratios. There are several reasons for this (land restrictions, demographics), but on a national basis, the median price to median income ratio rose from around 3.0 to 4.6 by the end of 2006 (and has probably declined sharply since then).
  
  This would suggest that a combination of falling prices and rising incomes would need to adjust this ratio by about 1/3 from peak to trough. For Los Angeles, it is reasonable to expect the price to income ratio to fall to between 4 and 5 (the historical average).
  
  This suggests price at the peak were about twice as high as normal. Imagine buying a home at 10 times income. With 10% down, and a 6.0% 30 year mortgage, the P&I payments alone (pre-tax) would be about 54% of the homebuyers gross income. Add in taxes, insurance, maintenance and this homeowner is "house poor" from the get go.
  
  And that brings us to table A-7 in the current report. This table shows that 8.8 million owner occupied households dedicate more than 50% of their income to housing in 2006. Another 13.3 million owner occupied households dedicate 30% to 50% of their income to housing.
  
  Of those 8.8 million owner occupied households with housing a severe burden, approximately 3.3 million are in the middle 50% of household incomes - and this is the fastest growing segment - the middle class with housing a severe burden.
  
  So "3.0 X median family income" was a long held historical standard, and it seems reasonable we'll return to that when all is said & done.
  
  But that "said & done" part is a stickler. See, banks have a funny way of cyclically going bust. It's actually in their nature to go broke. Banks, from a historical perspective appear to be a pretty damn good investment, but actually there is a strong survivorship bias; ie a lot of banks from previous busts actually no longer exist. So current bank indexes (that passes the spell test Timmy, "indicies" doesn't so... ) exclude a lot of 100% losses.
  
  So, as is starting to happen now, banks are actually exacerbating their own demise with STARTLING RAPIDITY. Yup, they are actually doing everything in their power to make things better, but they are making things worse. Far worse:
  
  Credit scores hit by card limits
  
  By Rachel Beck, AP Business Writer
  Credit-card lenders lower borrowing levels, which hurts consumers' credit scores NEW YORK (AP) -- Just as Americans grow more reliant on credit cards to help pay monthly bills, they're being hit with a one-two punch: Card companies are reducing borrowing limits for tens of thousands of consumers, which then can lead to lower credit scores.

  Those facing this predicament might not even know it until they apply for a loan or another credit card, and then get denied because their credit score has dropped.

  This is an unintended consequence of the financial world's widespread ratcheting down of risk. Banks and other card lenders are trying to better protect themselves from more massive losses like those they've seen from subprime mortgages.

  As a result, they are looking for ways to reduce their exposure to cardholders more likely to default. That's why they are lowering credit limits, which means they are reducing the maximum amount of credit extended to an individual, along with boosting card interest rates and allowing fewer balance transfers.

  "This is what they have to do at this time," said John Hall, a spokesman for the American Bankers Association, a Washington-based trade group.

  Such moves come as consumers are increasingly using their credit cards as a source of liquidity, especially since it's becoming harder to tap their home equity as much to pay for everything from renovations to vacations to trips to the mall. As the housing and mortgage markets have collapsed, lenders have also reduced the limits on what are known as home equity lines of credit, or HELOCs.

  Net home equity extraction fell nearly 60 percent from a year earlier to $205 billion in the first quarter, according to Merrill Lynch. The investment bank also notes that some $1.2 trillion in equity and housing wealth was wiped out in the first quarter alone because of plunging home values.

  At the same time, revolving credit usage -- which includes credit cards -- accelerated sharply to a year-over-year growth rate of about 8 percent in recent months. That's the fastest rate in seven years and well ahead of the 2 to 3 percent rate of growth from 2004 through 2006 when home equity lines of credit were a bigger source of cash for consumers, according to Merrill.

  But as credit cards are used more frequently, that often results in bigger balances left on the cards. What's worrisome is that consumers who are faced with a number of ugly economic scenarios hitting at once -- falling home prices, surging commodities costs and a weak job outlook -- won't be able to pay their bills.

  American Express warned Wednesday that more of its customers were falling behind on their payments. That led some Wall Street analysts to forecast that the card company may soon lower its predicted earnings growth for 2008.

  "Business conditions continue to weaken in the U.S. and so far this month we have seen credit indicators deteriorate beyond our expectations," American Express' CEO Kenneth Chenault said in a statement.

  That's why card companies including Washington Mutual, HSBC and Wells Fargo are lowering their credit limits, according to data from the consulting firm Institutional Risk Analytics.

  Consumer advocates aren't saying that is bad news -- in fact, they believe it helps prevent cardholders from overextending themselves and is preferred to having a sudden surge in card interest rates.

  "In the purest sense, it is the better way to manage the risk of a cardholder," said Linda Sherry, director of national priorities for Consumer Action, a national non-profit consumer rights and education group. "But a low credit limit can also unknowingly hurt a credit score."

  Here's how that happens: Let's say a cardholder has a credit limit of $10,000 and a balance on the card of $4,000. The card company worries that large balance may increase the prospects for default, so it lowers the credit line to $5,000.

  But in doing that, it completely changes what is known as the credit utilization rate, raising it from 40 percent to 80 percent. That is then factored into the calculation of one's so-called FICO credit score, which measures creditworthiness, according to Craig Watts, a spokesman for FICO-creator Fair Isaac Corp.

  A lower FICO score could make it more expensive for someone trying to borrow money. For instance, someone taking out a $25,000 36-month auto loan would see an interest rate of about 6.4 percent and a monthly payment of $765 if they were in the highest range of FICO scores of 720 to 850, according to Fair Isaac's Web site myFICO.com.

  That then jumps to an interest rate of 7.3 percent and a monthly payment of $776 for those with a score of 690 to 719 and as much as 15 percent or $866 a month for those with the lowest FICO range of 500 to 589.

  According to the Comptroller of the Currency, one of the government agencies that regulate U.S. banks, companies must notify cardholders at least 15 days in advance before making changes in the terms of their account, such as lowering the credit limit. But they don't have to explain how that could change an individual's credit score.

  That puts the burden on consumers to watch out for this. They better so they don't get blindsided.

  See, in this Great Deleveraging, they are pulling in their marks as fast as possible. Well, no one ever thought it'd come to this (having to actually pay this debt back out of their own pocket), so people are defaulting far, FAR faster than ever in history. So they are flooding the market with stuff from the ASSET side of their balance sheet. See, when you owe, you either MAKE THE MONEY, or YOU SELL YOUR S--T to raise the money. That's it. That's all you can do when you cannot borrow more.
  
  And we, The Royal We, cannot borrow anymore. Minsky Moment. Tapped Out. Gotta Sell Our S--t. That's ALL WE CAN DO.
  
  So banks are de-leveraging & will continue to de-leverage. And like they always do, they will go too far, and unnecessarily restrict credit from people who can almost certainly repay their debts. But banks are like jilted stupid broads, they go f--king whacko over the last mega-dump they endured. Cries of "NEVER AGAIN!", and all that frantic bulls--t.
  
  So banks will loan to Bill Gates & Phil Knight, and like 3 other white bitches, and that's it. You and I will not get squat. So the historical mulitplier of "3.0" will have to be scaled back for a time. Probably as long as my last fight with my wife. Like 10 f--king years, or something.
  
  It'll probably hit 2.5X.
  
  Now the other problem.
  
  Bend's median family income is around $60K. But.... of course THAT figure has been built on a long, LONG history of a mini-bubble of sort. We have gone, in 25 years, from one of the most undervalued markets in the US, to the single most overvalued.
  
  THAT takes a lot of excess gains not seen by anywhere else in this country for sure, probably on Earth likely as well. Norma DuBois stated some assinine thing like we'll return to a healthy "7-10%" annual returns, or some whacky-ass crap.
  
  Norma: 7-10% is 1,000,000% UNSUSTAINABLE. We hit the f--king lottery.
  
  And it AIN'T cuz we're special. No. As Taleb would tell you, given a sufficient starting population, there will almost certainly be a money that flips a heads 20X in a row. Literally a statistical certainty. We are THAT monkey.
  
  But you will hear local deluded dumbf--ks proclaim to High Motherf--kin Heaven that we are EXCEPTIONAL. No. We are not. Listen to this:
  
  Bend Housing Market Second Highest in U.S.
  
  The housing valuation analysis, released by Massachusetts-based Global Insight, says the average home price in Bend runs about $290,500, which is overvalued by 49.5 percent, a slight decrease from first quarter 2007 when median home prices reached $319,900 and were overvalued by 65.7 percent, the study says.

  In other words, the study claims a house in Awbrey Butte appraised at $500,000 is really worth only $250,000.
  
  At least one local real estate observer says that is ridiculous.
  
  Bill Robie, director of government affairs for the Central Oregon Association of Realtors, said the results of the study, and others like it that are released from time to time, are misleading because the methodology leaves out huge chunks of information that need to be considered when determining market prices – land permit fees, system development charges, the time it takes to build and the price of the land where the house will be built, to name a few.
  
  “These kinds of statistics have come out before and they do not take into consideration the many local factors that contribute to Bend’s housing market prices,” Robie said.

  A local news story that came out a few months ago highlighting a similar report used a similar index, but the problem with those studies is that the index used is inappropriate, Robie said.

  “I don’t know the elements, or how they were put together, but I can’t imagine they apply directly to Central Oregon,” he said.

  WHEW! What a f--king moron!
  
  Awesome. This Bill Robie guy is clearly a genius, naming several tenants of housing market values, such as SDC charges, land permit fees, and time to build. He left out donkey porno meth shack density, an anal capacity of local City Councilors to take a watermelon up the butt.
  
  "Yes sir, I see you are asking $350,000 for the house. All well and good, but can you tell me about the local SDC charges, land permit fees, and whether my cock will fit in the mouth of COBA's chairman? All these things determine the market value of this home, in case you didn't know."
  
  What a f--kin idiot. Of course you can immediately see the true motivations behind Cascade Business Cali-Bangers in quotes like this: They do not give 2 F--KS about current residents selling their homes, or buyer looking to purchase an existing home. All they care about is BUILDERS SELLING NEW HOMES.
  
  Land use permits? Did you give 2 f--ks about that when you bought your last STD crapper?
  
  Land costs? SDC charges? All that s--t is BUILDER COSTS. That's ALL LOCAL MEDIA GIVES A F--K ABOUT. Sucking Mike Hollern's mega-cock.
  
  “I don’t know the elements, or how they were put together, but I can’t imagine they apply directly to Central Oregon,” he said.
  
  Seriously. Read that. That was a quote from "Bill Robie, director of government affairs for the Central Oregon Association of Realtors".
  
  "What? Where? Who? Whoa. OK, I don't who, what, where, when, what, why, how, who, when, where, how, who, why, what or what the f--k is going on, I just know that it applies to 99.6734% of the rest of this f--king country, just not where I live.
  
  Why? WHY?
  
  OK, I don't who, what, where, when, what, why, how, who, when, where, how, who, why..."
  
  OK folks, we live in a place where THIS MOTHERF--KER is the Director of Governmental Affairs for the local Association of Realtors. Unbelievable. And The Incredible Hulce sought out this walking schizoid embolism for a front page interview, because of his MOTHERF--KING EXPERTISE IN REAL ESTATE. F--k me dead.
  
  OK, where was I... before I was torn off topic by Pamela The Incredible Hulce Andrews, who can leap over the truth in a single bound? Is that a mixed metaphor Dunc?
  
  OK, needless to say we are in a state of dire f--kin straights. Yeah, I said "straights". I want my MTV, motherf--ker.
  
  We have had quite a few years of Sons Of the Soil (Burns Hillbillies) making $60K/yr. Why? We have been in the midst of a 25 year mega-mini bubble, that hopped onboard a national bubble in it's final death throes, and that pushed us up to 6.5X median family incomes locally, or almost $400K at one time.
  
  OK, to reiterate, we ain't special. We are, many of us, like Bill "I put the MENTAL in governMENTAL director" Robie, 100% deluded into thinking what has happened in that period is the result of this places divine munificence. It ain't. Munkee flippin. It HAD to happen somewhere, it just happened to happen here.
  
  National mutiples are going to 2.5 - 3.0X median family incomes. And we shall also go there. But... we will suffer from a horrendous shrinkage, not from Costanza shriveling cold water, but from a mass exodus of our population, which will happen because INCOMES ARE SHRINKING RIGHT NOW, AND THEY WILL CONTINUE TO SHRINK.
  
  They will go to $50,000. Maybe less. And we will go to 2.5X medians.
  
  When we bottom out in 2012, medians may go to $125-150,000.
  
  Yup. We got another 50% from here to fall.
  
  But even then, DO NOT buy Bend RE as some sort of "investment". It will, as it has always historically been, terrible. It will NOT outpace inflation. You will pay a higher interest rate than your home will rise in value.
  
  The NOMINAL LOW will be in 2012. The real low will probably be 8-10 years after that. We will drag along the bottom, increasing at a rate well below the inflation rate. Your house MIGHT go up in dollars, BUT your purchasing power will be bled off as you pay interest that swamps any appreciation. Plus, you could have done better in stocks.
  
  By 2020, we'll probably be close to breaching $200K again.
  
  But we WILL endure the worst economic times this area has EVER SEEN. EVER. Timber Bust will look like a tea party. We'll actually be a smaller town, with everyone making LESS MONEY. It'll be a TECHNICAL DEPRESSION.
  
  We will be in a full-fledged DEPRESSION.
  
  You DO NOT want to buy a home here, unless you are fully cognizant that you will lose at least half your money, and have your purchasing power decimated as well. Bend is headed for The Greatest Bust Any US Town Has Seen Since The Great Depression.
  
  If you believe these deluded whackos who are assuring you that All Is Well, then you deserve what you get. Bend is 100% DOOMED. It is worse than you ever thought possible.
  
  Why It’s Worse Than You Think

  For months, economic Pollyannas have looked beyond the dismal headlines and promised a quick recovery in the second half. They're dead wrong.

  Daniel Gross NEWSWEEK Updated: 3:25 PM ET Jun 7, 2008

  The forgettable first half of 2008 is stumbling to a close. On Friday, the Labor Department reported that American employers axed 49,000 jobs in May, the fifth straight month of job losses—an event that signals a recession sure as the glittery ball dropping on Times Square augurs a New Year. The report, which inspired a 394-point decline in the Dow Jones Industrial Average Friday, was the latest in a run of bad news. Auto sales, the largest retailing sector in the U.S., were off 10.7 percent in May from the year before. And housing? Ugh. Nationwide, according to the Case-Shiller Index, home prices in the first quarter fell 14 percent.

  Yet hope springs eternal that the second half will be better than the first. Economists polled by the Federal Reserve Bank of Philadelphia in May believe the economy will grow at an annual rate of 1.7 percent and 1.8 percent in the third and fourth quarters, respectively. Lawrence Yun, chief economist at the National Association of Realtors, tells NEWSWEEK that "home sales and prices in most of the country will improve during the second half of 2008." (Yun is the Little Orphan Annie of forecasters. He's always sure the sun will come out tomorrow.) Last month, Treasury Secretary Henry Paulson said, "We expect to see a faster pace of economic growth before the end of the year."

  The cause for optimism: the U.S. has called in the economic cavalry, which has responded in textbook fashion. The Federal Reserve has aggressively cut interest rates, bringing the Federal Funds rate down from 5.25 percent last September to 2 percent. Earlier this spring, Congress and President Bush, in a rare moment of bipartisan accord, passed a stimulus package, which will shove nearly $100 billion into the pockets of American consumers by mid-July.

  But this downturn is likely to last longer than the eight-month-long recession of 2001. While the U.S. financial system processes popped stock bubbles quickly, it has always taken longer to hack through the overhang of bad debt. The head winds that drove the economy into this dead calm— a housing and credit crisis, and rising energy and food prices—have strengthened rather than let up in recent months. To aggravate matters, the twin crises that dominate the financial news—a credit crunch and the global commodity boom—are blunting the stimulus efforts. As a result, the consumer-driven economy may not bounce back as rapidly as it did in the fraught months after 9/11.

  As it seeks to regain its footing in the second half, the U.S. economy faces two significant obstacles, neither of which was evident in 2001. The first is entirely homegrown: the self-inflicted wounds of the promiscuous extension and abuse of credit in the housing and financial sectors. The second is a global phenomenon that has comparatively little to do with American behavior: rampant inflation in commodities such as oil, food, and steel. These trends have conspired to inflict genuine economic pain and deflate consumer confidence. The Conference Board's Consumer Confidence Index in May slumped to a 16-year low.

  While the treatment of the current malaise has been essentially identical to the reaction to the 2001 slump—aggressive Federal Reserve rate cuts and tax rebates—the symptoms are quite different. In 2001, an implosion in the technology sector and a slump in business investment pushed the economy over the edge. Even though some 3 million jobs were shed between 2001 and 2003, consumers soldiered on through the downturn. "We had a massive reduction in both long- and short-term interest rates, which set off the housing and consumption boom," says Ian Morris, chief U.S. economist at HSBC. (Remember zero-percent car loans?) This time, it's the opposite. While businesses—especially those that export—are holding up, the economy is being dragged down by the cement shoes of a freaked-out consumer and a punk housing market.

  The difficulties today start—as they began last year—with housing and housing-related credit. Last Thursday, the Mortgage Bankers Association quarterly report showed that the percentage of mortgage borrowers behind on their payments—6.35 percent—was the highest since the MBA began tracking the number in 1979. It's not just subprime. In the first quarter of 2008, 36 percent of all foreclosures initiated were on prime adjustable-rate mortgages in California. Mark Zandi, chief economist of Moody's Economy.com, says the decline in home prices has slashed $2.5 trillion from household wealth, or about $25,000 per homeowner. The fall has also removed an important source of support for consumer spending, as Americans who grew accustomed to borrowing against rising home equity to finance car purchases or vacations now find themselves bereft. Banks are extricating themselves from the home-equity-line-of-credit business in the same way college students get themselves out of relationships gone bad: abruptly. Judi Froning, a second-grade teacher in San Diego, was surprised last week when she received a letter from Chase informing her that it was terminating her untapped HELOC. "In the light of declining home values, they said they are stopping, effective May 31, any draw on my line of credit," she says.

  Despite repeated claims that the damage has been contained, the banks that recklessly financed the housing boom—and then traded mortgage debt even more recklessly—are still cleaning up the mess. But it turns out (surprise!) the same sort of clouded judgment led banks to excesses in commercial lending, and in loans to private-equity firms. The battered financial system, which has raised tens of billions of dollars on onerous terms from new investors to shore up balance sheets, is still likely to suffer more pain from the popped credit bubble, said Bruce Wasserstein, the CEO of the investment bank Lazard, speaking at a New York breakfast. "The harm will radiate for another year." The latest victim: Wachovia CEO G. Thompson Kennedy, cashiered after the North Carolina-based bank suffered a string of losses. Next up: write-offs for bad credit-card and commercial realestate debt. After a serene period between 2004 and '07 in which the Federal Deposit Insurance Corp. went without a single bank failure, four have gone under so far this year. FDIC chairperson Sheila Bair warned of the "possibility that future failures could include institutions of greater size than we have seen in the recent past." In preparation, the agency has brought staffers out of retirement.

  The financial system is supposed to be a tube, transmitting lower interest rates. Banks borrow from the Fed, and pass through lower costs to customers and to the markets at large. But today banks are acting more like dried sponges, absorbing the liquidity the Fed is providing to shore up their balance sheets and make up for losses, rather than releasing the cash into the economy. The Federal Reserve reports that in April, 55 percent of commercial banks said they are tightening lending standards on commercial loans, up from 30 percent in January. Judy Eisenbrand, a Moorpark, Calif., real-estate agent, notes that buyers also can't get loans as easily today, even in strong markets. "The standards are so much stricter than they were during the boom days," she says.

  The upshot: the Fed's adrenaline isn't really circulating through the commercial bloodstream. According to mortgage-data firm HSH, rates on conforming 30-year mortgages (under $417,000) have only fallen marginally since the Fed began cutting rates, from 6.4 percent on Sept. 21 to 6.17 on May 30, while jumbo loan rates haven't budged at all. Worse, this may be as good as it gets. Last Tuesday, Federal Reserve chairman Ben Bernanke indicated that the Fed may be done cutting rates. Why? "Inflation has remained high," Bernanke said, "largely reflecting continuing sharp increases in the prices of globally traded commodities."

  Economists say it generally takes nine to 12 months for Federal Reserve interest-rate cuts to work their way into the system. By contrast, sending checks to consumers tends to produce quick results. Some retailers have reported a surge of business spurred by the tax rebates. But consumers are shopping for necessities, not discretionary items. Sales at Wal-Mart and Costco were up in May, while sales at Kohl's and Nordstrom were down. David Rosenberg, chief economist at Merrill Lynch, argues that higher food and gas prices are eating the rebate. Follow the math. The rebate checks will total about $120 billion. Studies suggest that about 40 percent of that total, or about $48 billion, will be spent in short order; the rest will be saved or spent later. Rosenberg reckons that higher energy costs—crude-oil prices are up 40 percent so far in 2008—are draining about $30 billion out of household cash flow per quarter, and that food inflation, running at a 9 percent annualized rate, drains another $20 billion per quarter. "So instead of the stimulus being filtered into real economic activity, it's being diverted into the checkout counter at Albertson's and the gas station," he says.

  Last November, retired school principal Barbara McGeary, 75, of Camp Hill, Pa., switched from a Toyota Rav 4 SUV to a Prius. But the savings she realizes are eaten by a higher food bill. "When I go to the grocery store, I see prices have doubled on some of the things I'm purchasing," she says. Last year she paid $3.99 for a container of about two dozen brownies. Now that they're retailing for $8.49, she bakes her own. McGeary and her husband are also eating at home more than ever. "Restaurants, of course, have had to increase their prices," she says.

  While the housing and credit crisis is homegrown, the higher prices for high-octane gasoline and corn chips are effectively imports. Historically, or at least since the end of World War II, if the U.S. sneezed, the world caught a cold. When we used more gas, oil prices rose, and when we used less gas, oil prices fell. As GM vice chairman Bob Lutz points out, "Usually petroleum prices were the first to react to a severe U.S. slowdown." In the past it would have been unthinkable for oil to spike if Americans were cutting back.

  Many factors, from a weak dollar to rising speculation, are behind the higher commodity prices. But at root, $4-per-gallon gasoline and $20-per-pound steaks are largely a function of the changing economic geography, and the diminished stature of the U.S. Last January, the talk of the World Economic Forum in Davos (aside from the locale of the Google party) was the prospect of "decoupling"—the notion that India and China could maintain their breakneck economic growth rates even if the U.S. pooped out. Five months later, the global economy seems to have decoupled faster than Jessica Simpson and John Mayer. The world is growing without us. "My impression is that China and India both have sufficient domestic demand-led growth to continue to have vibrant growth even if the U.S. has a sustained period of difficulty," former Treasury secretary Robert Rubin tells NEWSWEEK. Producers of commodities are enjoying the fruits of higher prices. Sorry, Tom Friedman, the world is no longer flat. "It is upside down," says Mohamed El-Erian, co-CEO of bond mutual-fund giant PIMCO. "The growing robustness of the emerging economies enables them to step up to the global plate at a time when the U.S. has to take a breather in order to put its financial house in order." This rampant global economic growth—more people eating better, more people driving, more people using electricity—is translating into higher prices at the Stop & Shop.

  The situation we're in is nowhere near stagflation—the consumer price index is rising at a 3 percent annual rate, compared with 13 percent in 1979. But it's still a shock to the system. Fuel surcharges have become de rigueur from exterminators to personal trainers. On May 28, Dow Chemical announced it would increase prices 20 percent to compensate for higher energy prices. The realization that the U.S. no longer controls its economic destiny is contributing to the widespread feeling of unease and crisis of confidence. Economically speaking, the 1990s belonged to the U.S. and New York and Silicon Valley. But as this decade motors toward its close, it seems powered by China, and Russia, and Dubai and Mumbai. It's as though we're home watching reruns while everybody else is out partying. Worse, some of those benefiting the most from the new tilt on the Risk board are hostile to the U.S., like Hugo Chávez of Venezuela. In a recent study, Mary Egan, a partner at the Boston Consulting Group, found that 71 percent of those polled agreed with the following statement: "Because the world has changed so much, the U.S. economy will not be as strong as it was—or at least not for the next several years."

  Such surveys measure sentiment, and any analyst worth his weight in PowerPoint presentations will tell you that sentiment doesn't always translate into cash activity in the marketplace. But there's one marketplace where sentiment—and especially consumer confidence—matters greatly: politics. The last time consumer confidence was this low was in October 1992—the month before incumbent George H.W. Bush won 37 percent of the popular vote, the worst performance of any incumbent in history. "The economy is always the biggest issue in a general presidential election," says Tom Mann, a senior fellow at the Brookings Institute, because it's a referendum on the party in power. A recent CBS News poll showed more people identified the economy as their leading concern (34 percent) than identified oil prices (16 percent) and Iraq (15 percent) combined.

  Yale economist Ray Fair has developed a formula in which particular economic factors can foreshadow election outcomes. Crude summary: when there's lots of good news on growth and inflation in a presidential term, it favors the incumbent party. With growth low and inflation high, John McCain comes out with 44 percent in November. (Before Obama-ites go making reservations for the Inaugural, consider that the formula misfired in 1992.)

  All things being equal, the limping economy should favor Obama. While McCain has taken pains to distance himself from the Bush administration, he has heartily embraced the most significant component of Bush's economic legacy: the tax cuts. But in presidential elections, all things are never equal. Obama and McCain have staked out different economic turf. For Obama, it's middle-class tax cuts, and creating new jobs in environmental and tech fields; for McCain it is repealing the Alternative Minimum Tax, expanding free trade (a winner in an age of rising exports) and a summer gas holiday. But if the economy worsens significantly, if oil spikes to $150 per barrel and unemployment becomes more widespread, the campaign will likely take on a different tenor. The typical dialogues about taxes and spending, health care and pensions will assume a greater prominence. But a crisis atmosphere would require both candidates to come up with big-picture narratives about America's role in the world economy, and how the nation can re- assume financial leadership—something neither has yet done comprehensively.

  It's not all doom and gloom. Businesses that thrive on a weak dollar are holding up nicely. "In fact many sectors are benefiting from strong growth overseas, including high-tech, capital goods, chemical and other raw materials, aircraft," says Nariman Behravesh, chief economist at Global Insight. Bob Toney, president of Ft. Lau- derdale, Fla.-based National Liquidators, which auctions repossessed boats and yachts, has doubled his staff to 78 employees to pick up around 120 boats a month. "Two years ago, we had 200 cases in our inventory and now we have 610," he says.

  But it's the mainstream indicators—not countercyclical businesses—that will point to a recovery. For signs that tomorrow really is a day away, look to the thing that got us into this mess: housing. "Housing doesn't have to return to the bubble era. It's just that the rate of decline has to stop," says Lakshman Achuthan, managing director at the Economic Cycle Research Institute. Reductions in the level of housing inventories for sale will be a hopeful sign. Other tea leaves are the weekly reports on jobless claims, retail chain stores, and mortgage application activity. "This will give you an early read on potential trend shifts in consumption," says Ian Morris, chief U.S. economist at HSBC.

  Just as sharp spikes in the price of oil and commodities have dented confidence, precipitous falls in the commodity markets could bolster consumer confidence. But that doesn't seem likely any time soon: on Friday, the price of a barrel of oil rose $10.75 to a record $138.54.

  marge even gave me a link to the CS futures, and it ain't good:
  
  Maybe you can't see it, but CS is predicting a peak-to-trough decline from $910K to $543K in San Fran medians. You can't yank $366K from each homeowner in a city of millions & think it'll all be OK. It won't.
  
  And this scenario will play out MILLIONS of times in almost every city & town in this country. MILLIONS of people LOSING THEIR HOMES & everything they've ever worked for. All gone. It is 100% ARMAGEDDON. It's coming, it is inevitable.
  
  And Bend Oregon is Ground Zero.
  
  But there is a silver lining. It'll all be over by 2020.
  
  Finally, chew on this. This is a broad banking index, 5 year chart:
  Bank Stock index, 5 yr
  
  Banks are in one of their "1,000 Year Markets", which just happens to occur about once every 10 years. Remember, the "1,000 Year Floods" of 1993? Yeah, we're dumbf--ks.
  
  Anyway, WHEN this thing is going to get bad, and many players will be gone at the end. But, as usual, the survivors will be one hell of a play. They will have to survive, of course, but those that do will do great.
  
  Look for thick, THICK equity cushions. The ones that have done the most stringent cleansing of their balance sheet will be worth a look. I had a BUY screen open for CACB for a short time this week. Again, a PERFECT signal that a quick -10% is coming. I didn't buy, so it may well be -30% now.
  
  These little regionals will be worth a look in a bit. CACB is already well below book value, and falling fast.
  
  As a short aside, you will soon begin why banks go broke so fast. It is because, Young Grasshopper, they are Leveraged Beasts. And they are ALWAYS leveraged the most at exactly the WRONG TIME. Always. Except for Goldman. You leverage at the BOTTOM, and de-lever at the top. Or close. Banks ALWAYS do the opposite. ALWAYS.
  
  They are at 20:1, and when that 20 drops to 19... welp, that's All She Wrote. Banks typically need to have assets impaired 5% and they are dead. This happens all the time. It will happen at a rate & scale in the coming years never witnessed since the Great Depression, in case you are curious.
  
  There will be signals WHEN to buy these beaten down beasts. One might be a turn in the homebuilders:
  
  Home builders, 5 yr.
  
  You can see from the above bank & home builder charts, that housing topped out a full year & a half before the banks. And the builders appear to at least be trying to find a bottom. We're probably not there.
  
  But the timing is interesting. If builders, hellish borrowers of money, can actually turn a corner, it might make sense that the lenders are also ready to turn. Look for builders to turn up markedly for a sustained time, and banks to sink ever lower & you might be able to pull the trigger on some decent bank stock buys.
  
  Hell, even CACB may be worth a look someday. If they don't go broke.
  
  One last thing:
  
  I have been writing this blog, week in and week out since the end of 2006, or so. Whenever BEM quit. Maybe Jan 2007. Anyway, it's been a while.
  
  And I have not wavered on my thinking that This Will Be Worse Than You Ever Thught Possible, and Bend Will Be Ground Zero. Never.
  
  When I got started, things were still pretty fluid, people thought, "Hey, a quick dip & up, up and away", and I have resolutely said "No." to that.
  
  
  And I've heard the old Contrarion Saw that "I will buy when everyone else is bearish", and I am starting to doubt THAT.
  
  This isn't the stock market. The stock market has a precision to it, that homes & housing markets don't have. You can call a stock market bottom, TO THE SECOND. Not housing.
  
  This thing is like turning the Titanic: It started turning 2 years ago, and we're only about 1/2 way through the turn. Everyone KNOWS this f--ker is going lower. Look at that Case Schiller chart: You think that f--kin thing is going to STOP FALLING next month, and advance 4%/yr forever after?
  
  Hell no. It's going to go lower for quite awhile. And EVERYONE knows it. Well, except for Bill Robie & every Realtor in town. Do not use traditional metrics of "bearishness" to gauge a bottom in this thing.
  
  There won't be a statement from COBA about how great Bend homes are as an investment at the bottom. Why? COBA will have disbanded. COAR? Nope. Cascade Business Buttplugs? Same thing. Downtown will be 40% vacant. Cali-bangers will have retreated to Des Moines, cuz they have an uncle there who didn't lose 100% of his 401K in an adolescent pipe dream.
  
  You will know The Bottom, because it will be accompanied by DEAFENING SILENCE.
  
  There will be no one left to congratulate you on your great buy.
  
  I have been saying THE SAME THING for over a year & a half, and local REAL ESTATE EXPERTS, AND BEND'S LOCAL MEDIA HAVE BEEN FEEDING YOU LIES.
  
  Best Buyers Market in 20 Years? Remember that one?
  
  
  I simply ask, Who Has Been Right? No. That ain't it. It's this:
  
  WHO HAS BEEN 100% WRONG?
  
  Right. It's been local experts. The local RE Industrial Machine. Local Bend Media. They don't give a f--k if you breath or suck goo. They have been persistently & consistently 100% DEAD WRONG.
  
  And they are trying harder than ever to get you to listen to them & do what they want. How have they done so far?
  
  A year and a half. Look at that bank chart. When did the s--t hit the fan? This blog, and it's many commenters have persistently said It Is Bad And It's Going To Get Worse.
  
  Bend RE said the Sun Will Come Out Tomorrow.
  
  THINK FOR YOURSELF.
  
• June 21, 2008
• 6:02

  The West Coast Economy Begins To Collapse

   » ‎ Bend Bubble 2

  Tags:    [edit]

  I've thrown just about everything under the bus in this massive financial collapse, including Bend (of course), California, and the U.S. at large. But nothing engenders the vitriol of readers like hucking San Fran under the bus.
  
  I'm just curious, Why? Even old farts like Buster, who seem to loathe California, its inhabitants, and all it represents, defends the economic impenetrability of The Bay Area. Why?
  
  Is it because the Bay seems to emerge from each downturn of the past, stronger & more vibrant than it ever was? Really? This can be said about many places & organizations and people.
  
  The Bay is ALREADY as bad off as Bend:
  
  Bay Area home prices fall by 22%By Alex Veiga, The Associated PressArticle Last Updated: 06/18/2008 09:23:50 PM PDT
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  The median price of a home in the San Francisco Bay Area tumbled 21.7 percent in May to the lowest level in nearly four years, a real estate research firm said Wednesday.

  The annual decline drove the median price to $517,000 in the nine-county region, according to DataQuick Information Systems.

  The median price was $660,000 in May 2007 and $510,000 in September 2004.

  Last month's drop was fueled by a surge in sales of heavily discounted foreclosed homes, a trend that appears to be building across many inland areas of the state.

  Earlier this week, DataQuick reported the median home price in May plunged 26.7 percent to $370,000 in a six-county region of Southern California.

  Despite increased sales of foreclosed homes, overall home sales in the San Francisco Bay Area notched their slowest pace for any May in DataQuick records, which go back to 1988.

  Some 6,216 new and resale homes were sold last month, down 23.1 percent from May 2007, when 8,080 homes were sold, the firm said.

  Sales declined 1.5 percent last month from 6,310 in April. The median price remained flat during the same period.

  Some 25.6 percent of the homes resold last month had been foreclosed on sometime in the previous 12 months, up from only 3.3 percent in May last year, the firm said.

  In Solano County, where the median home price sank 31 percent to $300,000 compared with the year-ago period, more than half of all resold homes were foreclosed properties.

  In Contra Costa County, which saw its median home price tumble by nearly 34 percent to $390,500 compared with last year, foreclosed homes accounted for 43.3 percent of all homes resold.

  In contrast, foreclosures made up only 5.8 percent of resold homes in San Francisco County, where the median price slipped 5.4 percent to $790,000 since May 2007.

  Six Southern California counties experienced a similar trend. Nearly 38 percent of all the homes sold in the region last month were in foreclosure at some point during the past 12 months.

  So San Fran proper seems to be holding up relatively well, but I do not expect this to last. Yup, I know, limited space, international demand, impenetrable, etc, etc. The surrounding disaster will breach the San Fran walls. Believe it.
  
  Similarly, it was only 1 short year ago that money center banks and the Wall St investment houses would escape the credit crunch relatively unscathed. Here's Citicorp, the 800lb gorilla of financial services for the last 25 years:
  
  Citicorp, 5 yr
  
  It's DAMN EASY to sit here, look out the side window, and make "predictions". Even "predicting" something like Lehman or Merrill going down at this point is not that much of a stretch.
  
  I guess I don't give a f--k if people agree with me or not on the idea that San Fran is going down hard, but I do find it interesting that EVERYDAY this thing seems to reveal a new level of financial rot in this country. But they still believe that certain small sectors are immune.
  
  If you're going from past experience, then you're being led astray. San Fran is THE White Hot Center of long-term collapse in the wildly over-leveraged financial system of this country. Don't believe it if you don't want to.
  
  Speaking of collapsing mega-bubbles, we saw Cracker Ass Cracker Broke (CACB) slump to new multi-year lows, hitting the $7's.
  
  CACB, 10 year
  
  You can see that at current prices, CACB has had a net gain of a buck or 2 over the last decade. Incredibly, MossCo, like a cancerous goiter, remains.
  
  The regional banks continue to be the hated pariahs of the collapsing housing market.
  
  
  Fallout From Bad Loans Rocks Regional BanksBy ERIC DASH

  In Ohio, the Panic of 1907 drove the Fifth National Bank into the arms of the Third National Bank, creating the singularly named Fifth Third Bank of Cincinnati.

  But today Fifth Third and other regional banks across the nation are being shaken to the core by a 21st century financial crisis. For many of them, things are going from bad to worse.

  Home mortgages and other loans that the banks made in good times are souring so fast that many of the lenders are scrambling to prop themselves up. If the pain worsens — and many analysts say it will — some of these banks, like Fifth Third’s predecessors, may eventually seek out suitors, most likely large national rivals.

  For now, however, no one seems to want the regional banks. Stock market investors are deserting them en masse. On Wednesday, Fifth Third’s share price plunged 27 percent to $9.26, its lowest level in more than a decade, after the bank said it would cut its dividend and seek to raise $2 billion. Other financial stocks, particularly regional banks’ shares, also tumbled. The Standard & Poor’s 500 Regional Banks Index sank 6.8 percent.

  “Everybody is trying to figure out where the bottom is,” said Jennifer Thompson, a regional bank analyst for Portales Partners in New York. “Every time a bank reports another capital raise or reports that things are worse than they anticipated, there is another round of selling.”

  But Wednesday was just one more bad day in what has been a horrible year for small and midsize banks. Their descent in the stock market has been remorseless, reflecting the economic pain in their own backyards. Weakening housing and construction markets in regions like the Midwest, Southeast and Southwest have hit lenders in those areas hard.

  For the banks’ shareholders, the numbers tell a sad story: Wednesday’s decline brought the loss for the S.& P. bank index to 39.3 percent so far this year. Fifth Third’s odd name almost seems like a bad joke. Fifth Third has lost two-thirds of its value this year. Shares of two other banks based in Ohio, the National City Corporation, of Cleveland, and Huntington Bancshares, of Columbus, have suffered similar declines.

  Banks based in the Southeast are hurting, too. The Regions Financial Corporation, the biggest bank in Alabama, has lost half its value. Standard & Poor’s predicted this week that Regions would cut its dividend to conserve its capital in the face of rising losses on real estate loans. The share price of SunTrust Banks, which operates across the Southeast, has fallen almost 41 percent.

  Small and midsize lenders are in far less danger than they were during the 1980s and early 1990s, when about 1,600 federally insured institutions failed during a savings and loan crisis. But the breadth and depth of the current troubles have caught bank executives by surprise. Federal regulators are particularly concerned about the exposure of smaller banks to the commercial real estate market, which has softened in some parts of the country.

  But another worry is that raising money will become increasingly costly for banks that need capital. In a report issued this week, analysts at Goldman Sachs said banks might need as much as $65 billion on top of the $120 billion they have already raised.

  But so far the vast majority of investors who bought into financial companies in the hope that the industry was out of the woods have lost, and lost big. As a result, many investors are reluctant to sink more money into regional banks, fearing their investments will be diluted if the banks sell even more stock. While many regional banks are trading far below their book values — at $4.83 on Wednesday, National City fetched just a fifth of its book value per share — many people are simply afraid to buy.

  “You are in this death spiral of dilution,” said David Ellison, the chief investment officer of FBR Funds, a mutual fund company based in Arlington, Va. “It’s this toxic math.”

  The need for new financing highlights the trouble many banks are having in selling assets like mortgages and home equity loans. They are trying to offload these assets to reduce amount of capital they are required to hold.

  But more than anything, the problems confronting regional banks underscore the extent to which the housing crisis has spread throughout the country. In the Southeast, Regions and SunTrust are reeling from loosely underwritten mortgages now that real estate values are plummeting in the region.

  In the West, Washington Mutual, the nation’s largest savings and loan, is being hurt by loans that it made to borrowers with shaky credit. Fremont General, the parent of a big subprime lender and a bank in California, filed for bankruptcy protection on Wednesday. Customers’ accounts, insured by the Federal Deposit Insurance Corporation, are safe.

  A handful of tiny banks have failed in small towns in Arkansas, Minnesota and Missouri. Rust Belt banks like National City and Fifth Third, in the meantime, have been stung by losses not only on their home turf but also in Florida, where they expanded in recent years. Initially, the push into Florida helped the banks increase growth rates as their hometown economies worsened. Now, these lenders are challenged on two fronts.

  Bankers, who tried to assign innings to the credit crisis only a few months ago, are now resigned to participating in an extra-inning game. Several analysts now think that industry losses will not peak until next year.

  “We have gone from shock and awe to blocking and tackling,” Mr. Ellison said.
  

  And just to show you how the herd-mentality dominates Wall St; SunTrust Banks affirmed their dividend payout yesterday. Here's a graph of yesterdays trading action in the stock & I'll leave determining the timing of the news release as an exercise for the reader:

  

  STI - 1 day. When did SunTrust Bank assure grama of dividend payment?
  
  So SunTrust is an Atlanta based regional, but when they announced that they will be able to hang on to their 8.3% div yield for a few more months, well Wall St rallied the whole sector. Not just the Dukes of Hazard stuff in the SE, but all regionals, including our beloved CACB, got onboard the rally train.
  
  This should tell you that many of these fund managers are driven almost completely by instinct.
  
  Wow, if things are OK in Atlanta, they MUST BE OK in Florida! And if they're OK in Florida, then they're OK in AZ... and hell they gotta be OK in Cali. And even that Bend OR place my cousin told me about. Hey, maybe this credit crunch is actually coming to a close because some hick-ass regional down in the swamps is going to make one more liquidity-constricting payment to a bunch of mutual funds.
  
  To date (ie, before the credit crunch), I have largely been mystified by the prescience of financial market participants. It's like they have crystal balls. Ahem. But something about this current implosion just seems to elude them. They will rally a regional in Central Oregon because of the cracker-ass decision of some nuts in Atlanta. Again, I don't get it.
  

  And while the DJIA continues to fall, it isn't really suffering from massive collapse:

  

  DJIA, 1 year
  
  We're sitting near the lows of the year, down a little over 17% from the years highs. Financials, autos, airlines, home building, and just about anything involving leverage or having a gas tank getting killed.
  
  But still, it doesn't really seem all that bad for the stock market. Is it exports keeping things alive? The dollar, after all, is trading like the peso. Buying our exports, and hell, our real assets, like bonds, stocks, and RE is cheap for just about everyone else in the World.
  
  But things are going horribly wrong:
  
  When will the market face reality?

  Oil prices are soaring, inflation is raging, a recession is taking hold, and Wall Street continues to pretend the worst is over. But these problems won't just disappear.

  By Bill Fleckenstein

  Recently, I remarked that the stock market action has been echoing a familiar theme, whereby nothing seems to matter except the action itself. Some days, near euphoria on the part of bulls has trumped negative macro/corporate news and, more importantly, an economy that struggles as a result of the burst credit/housing bubble.

  For a sense of that fantastical thinking, look no further than the recent spirited action in tech stocks. Their upside performance, as I have noted often, suggests a resurgence of the all-will-be-well mind-set.

  Or, consider how all dips in oil inspire spikes in equities generically. Last Tuesday, as oil dropped a dollar to $134 a barrel, one would have thought -- judging by folks' giddiness for buying stocks -- that oil was closer to a six-month low than to an all-time high.

  Eventually, though, reality will hit the stock market hard, just as it has hit the real- estate market, after much denial. When that happens, the market will head lower -- just how much lower is impossible to predict but certainly below the lows for the current cycle set in March.

  Paper-trained bulls Perhaps part of the strength in equities stemmed from folks' belief that the Federal Reserve will not tighten interest rates after all. (In last week's column, I noted that the chance of higher rates was essentially zero.)

  No fewer than four newspapers ran stories midweek to the effect that the Fed is unlikely to tighten at its meeting this week -- unless, to quote The Wall Street Journal (subscription required), "the inflation outlook deteriorates considerably."

  Of course, when you look not at inflation but the "spun" version of inflation that's championed by the Fed, you can always find a reason to avoid raising rates. It continues to boggle my mind how anyone can think the Fed is serious about fighting inflation. The central bank is trapped -- unwilling to raise rates even as inflation ratchets higher-- because it (rightly) fears what higher rates would do to a weak economy.

  Likewise, I find it stunning that anyone would take any prognostication by Alan Greenspan or Ben Bernanke, on any subject, as worthy of consideration, given that the past and present Fed chiefs, respectively, apparently understand nothing about what has been the engine of the economy for more than a decade -- that is, speculation.

  Muzzle the (never-wuzza) maestro Just last week, Greenspan could again be heard shooting off his mouth. He now sees the reduced possibility "of a deep recession" and said, regarding the mortgage crisis, that "the worst was over or soon would be" (as paraphrased by Bloomberg).

  What really made me burst out laughing was this headline (again on Bloomberg): "Risk managers should learn from market turmoil." What's so ironic is that the man who created the turmoil is the one person who has never seemed to learn anything.

  Meanwhile, one can only wonder if any Fed heads (they, of the inflation-ex-energy-and-food camp) have gassed up their cars in the past several months. Of course, the bullish contingent still wants to believe that somehow the Fed will make inflation go away without raising interest rates and that somehow oil will trade lower -- thereby sustaining the fantasy that our economy will have a Goldilocks outcome.

  Recently, a friend shared a noteworthy statistic: An oil exchange-traded fund is among the most heavily shorted ETFs in existence. In the first five months of this year, as oil rose 33%, the short interest soared 140%. Parenthetically, I might point out that another heavily shorted ETF happens to be SPDR Gold Shares (GLD, news, msgs).

  I agree with Fleckenstein here. I think this country is going to undergo a fundamental transformation, where we "look" more like the rest of the World: Look at just about any BBC broadcast & you see about half the people on little scooters, not cars, and sure as hell NO SUV's. Little dinky-ass houses. A level of consumerism that is just quite a bit lower.
  
  Everyday, I hear about these supposed "intelligent" & "informed" high-level financial types calling "The End" of this little financial hiccup. Huh? These Ivory Tower types are clearly out of touch. This thing is nowhere near over.
  
  Why Real Estate Market Is Nowhere Near a Bottom: Caroline Baum
  

  Commentary by Caroline Baum

  June 18 (Bloomberg) -- Every time a housing statistic emits a faint heartbeat -- last week's 6.3 percent increase in the April pending home sales index, for example -- there's a flurry of pronouncements that the residential real estate market has bottomed.

  Hope springs eternal. Housing has been down so long it looks like up, especially with the graph turned upside down.

  New and existing home sales peaked in July and September of 2005, respectively. It took a while for homebuilders to catch the drift: Starts didn't top out until January 2006, leaving a huge inventory of unsold homes in their wake.

  Single-family starts, which are the most sensitive to changes in interest rates, are down 63 percent from the January 2006 peak, easily topping the 38 percent peak-to-trough decline in 1973-1975 and 57 percent 1984-1991 dive, and vying for first place with the 65 percent plunge in 1977-1981.

  No wonder homebuilders are glum. In a departure from normal practices, the National Association of Homebuilders elected to release its monthly builder survey to the media via conference call on Monday. I received so many advance e-mail alerts I was starting to wonder if the index had sunk to zero in June, and the NAHB wanted to soften the blow.

  The quantitative results weren't that bad: The housing market index fell 1 point to 18, matching the all-time low of December 2007.

  The qualitative context was awful. David Seiders, NAHB chief economist, called the ``persistence of the low level'' of the HMI, a measure of housing demand, ``pretty troublesome.''

  Price Option

  The index ``has been in a tight range for a 10-month period,'' he said, ``unlike the 1990s, when there was a quick rebound. None (of the news) is encouraging at this point.''

  As downbeat as Seiders was on the June survey results, the builder responses preceded ``the run-up in interest rates,'' he said. ``I haven't factored that into the outlook yet. The risks are piling up to the downside.''

  While homebuilders are pressuring Congress to enact a tax credit for first-time buyers, they are resisting the one thing that requires no legislative action to spark buyer demand, according to Thomas Lawler, founder of Lawler Economic and Housing Consultants in Leesburg, Virginia: Cutting prices. ``Builders are reluctant to do that'' to compete with the growing volume of distressed sales of properties in various stages of foreclosure, he said.

  Forget the Granite

  In Southern California, for example, one of the areas where the bubble started early and ended hard, median home prices are down 27 percent in the past year, Lawler said.

  ``If you look at observed transactions on distressed sales, you could make a case that we are closer to a bottom because prices have plunged so rapidly,'' he said. ``But that's no solace to non-distressed prices.''

  In Florida, another epicenter of the boom-bust in real estate, ``sales are 20 to 30 percent below year-ago levels, but prices haven't moved very much,'' Lawler said.

  Builders have been reluctant to slash home prices for fear of alienating previous customers and encouraging current buyers to wriggle out of their contracts.

  ``Once clearing prices are way down, you can't attract buyers with granite countertops and gold trim,'' Lawler said.

  Foreclosures rose to a record 2.47 percent in the first quarter, according to the Mortgage Bankers Association.

  Future Inventory

  Using the MBA and other data, Lawler calculates that there are 1.34 million one-to-four family first-lien mortgages in the foreclosure process, which amounts to 27 percent of the inventory of existing unsold homes. A year ago, foreclosures represented about 18 percent of the unsold inventory, he said.

  As scary as that number sounds, so far it's just on paper. It takes about a year for today's foreclosures to be dumped on the market, adding to the already-bloated inventory of unsold homes, according to Michael Carliner, a former NAHB economist and now an independent housing economist in Potomac, Maryland.

  The foreclosure process varies from state to state and in the length of time it takes from the first default notice to the assumption of the title of the property by the bank.

  A few relationships are constant. New home sales lead housing starts. It is starts (residential construction) that contribute to gross domestic product. Housing's drag on growth won't lift until builders whittle away their backlog. Lower prices seem to be the quickest means to that end. (At lower prices, the quantity demanded increases.)

  ``We are unlikely to see a sustained increase in nationwide new home sales until builders are willing to cut prices to match the plunge in the prices of existing homes in seriously distressed areas,'' Lawler said.

  If and when they do, you might not have to turn the home sales graph upside down to see the improvement.

  (Caroline Baum, author of ``Just What I Said,'' is a Bloomberg News columnist. The opinions expressed are her own.)

  To contact the writer of this column: Caroline Baum in New York at cabaum@bloomberg.net.

  Finally, if you missed it, the perp walks have begun in the mortgage mess. Proving Yet Again, that the U.S. Government Regulatory System is totally powerless to prevent fraud, only to punish those involved when it is too late.
  
  "Operation Malicious Mortgage" nets three in Portland area Posted by bsherman June 19, 2008 11:43AM

  More than 400 real estate industry players have been indicted since March -- including dozens over the last two days -- in a Justice Department crackdown on incidents of mortgage fraud that have contributed to the country's housing crisis.
  
  The FBI put the losses to homeowners and other borrowers who were victims in the schemes at over $1 billion.

  "Mortgage fraud and related securities fraud pose a significant threat to our economy, to the stability of our nation's housing market and to the peace of mind to millions of Americans," Deputy Attorney General Mark Filip said in a statement today.

  In the Portland area, prosecutors highlighted three cases of alleged mortgage fraud, saying the defendants put together 200 or more questionable mortgage deals during the boom years.

  A federal grand jury yesterday returned a 15-count indictment against Marty Folwick, of Portland. Folwick, 50, was charged with mail fraud, bank fraud and money laundering.

  On the same day, prosecutors charged Lee Howlett, 45, also of Portland, with conspiracy to commit wire fraud, aggravated identify theft and money laundering.

  And on May 27, prosecutors charged Jeremy Richardson, 31, of Ridgefield, Wash., with one count of wire fraud.
  

  The three cases have much in common. All three of the defendants allegedly engineered a series of fraudulent mortgage deals with the help of straw buyers. They allegedly falsified loan applications to induce lenders to approve mortgage loans. Prosecutors claim some used bogus appraisals to justify higher loan amounts then the house was actually selling for and would then pocket the difference between the house price and loan amount.

  Some also took kickbacks on each deal, prosecutors claim.

  Folwick worked for Lighthouse Financial Group, a Vancouver, Wash. mortgage broker. He also ran his own company, MG Financial.

  Prosecutors allege that Folwick took $180,000 in kickbacks for the five mortgage deals detailed in his indictment. Officials in the U.S. attorneys office in Portland are continuing to investigate Folwick and Lighthouse in the belief that he was involved in other questionable deals.

  In a 2007 civil lawsuit, a lender claimed Folwick was involved in as many as 70 fraudulent mortgage deals.

  Richardson alleged found his buyers on Craig's List. It is believed that Richardson did 100 or more mortgage deals. He allegedly used his clients' down payment money for various personal and business expenses.

  Howlett worked for a company called Taylor Made Realty. His wife, Lisa Howlett, owned a mortgage company called Taylor Made Mortgage. It surrendered its license to the state in January 2007.

  Since the beginning of March, 406 people have been arrested coast-to-coast in the sting dubbed "Operation Malicious Mortgage." Sixty people were arrested yesterday.

  In a separate sweep, two former Bear Stearns managers in New York were indicted today, becoming the first executives to face criminal charges related to the collapse of the subprime mortgage market.

  Nationwide, reports of mortgage fraud have soared over the past year as the subprime mortgage market collapsed and defaults and foreclosures soared.

  -- Jeff Manning and Gordon Oliver; jmanning@news.oregonian.com

  And some believe that Cali, and discussions of its market are irrelevant, but that just reveals an ignorance about the ties between there & here. Things are going horribly wrong everywhere, but CA and, by extension, Central Oregon, will be decimated for Many Years to come:
  State records biggest jump in unemployment

  Sam Zuckerman, Chronicle Staff Writer

  Saturday, June 21, 2008

  (06-20) 15:25 PDT SAN FRANCISCO -- California's unemployment rate rocketed up by 0.6 percentage points in May - the largest one-month increase since the state began keeping records in 1976 - as the fallout from high energy prices and the depressed housing market rippled through the state's economy.

  The state's jobless rate was a seasonally adjusted 6.8 percent, up from 6.2 percent in April, the California Employment Development Department reported Friday. That's the highest rate since November 2003, when California was recovering from recession.

  Meanwhile, the total number of jobs in the state outside the farm sector declined by 10,900 in May, the third month in a row that payrolls shrank. Construction accounted for most of those losses, shedding 9,600 jobs during the month.

  Economists cautioned that California's exploding unemployment rate may have been a statistical fluke that exaggerated the extent of the damage to the state's labor market.

  The labor force showed unusual growth during the month, possibly because of large numbers of graduates leaving school and looking for work, they said. That could have skewed the jobless rate because the new workers would have been classified as unemployed until they got hired.

  Still, there's little question that the job market has been contracting and that the state is on the edge of recession, if not actually in one, experts said.

  "Some of (the jump in unemployment) was not real, but a fair amount of it was real," said Nancy Sidhu, senior economist with the Los Angeles County Economic Development Corp. "I am in the camp of people who say we are not in a recession yet, but we might be headed into one."

  Payrolls in the state were down 49,600 in May from their level the year before, with the losses concentrated in construction, finance and manufacturing. That's a relatively small erosion of jobs compared with previous downturns.

  "We haven't seen job growth fall off a cliff," said Ryan Ratcliff, an economist with the UCLA Anderson Forecast, which issued a report this week concluding that California's economy is weak, but not in recession.

  In the Bay Area, which has been bolstered by technology and tourism, the job picture was brighter than in other areas of the state. But jobless rates rose throughout the region.

  In the San Francisco metropolitan area, which includes Marin and San Mateo counties, unemployment was 4.6 percent in May, up from 4.2 percent the month before. In the San Jose area, the rate rose to 5.6 percent from 5.2 percent. And in the Oakland area, including Contra Costa and Alameda counties, unemployment was 5.7 percent, up from 5.3 percent.

  "The Bay Area still is the best part of the California economy," said Howard Roth, principal economist for the California Finance Department. "But the bloom is off the rose."

  Berkeley resident Phil Catalfo, 57, has been looking for work as an editor for almost a year, armed with a resume that shows experience as a top manager at such publications as Yoga Journal and Acoustic Guitar magazine. He has applied for several dozen jobs, but gotten few responses. One position that looked promising ended up getting filled internally.

  "Companies I can tell are proceeding very cautiously," he said.

  When Catalfo was looking for work three years ago, he was swamped with freelance jobs. This time, assignments are trickling in slowly.

  "The air is definitely different," he said.

  May's big jump in California unemployment was expected after the release of data two weeks ago that showed the national jobless rate leapt to 5.5 percent, up half a percentage point from April. Besides California, 17 other states had jobless-rate increases of 0.6 percent or more for the month, including five that had increases of a full percentage point or more.

  Nationwide, only four states had jobless rates higher than California's, led by Michigan, where an ailing auto industry has pushed unemployment to 8.5 percent.

  After release of the May employment report, Gov. Arnold Schwarzenegger issued a statement calling on the Legislature to move forward on bond measures to fund infrastructure projects, putting more construction workers in jobs.

  "An economic slowdown caused in part by our housing crisis is clearly still affecting California," he said.

  So far, most of the job market's distress has stemmed directly from the housing crash. Construction and finance, which includes mortgage, real estate and title companies, together lost 123,000 jobs over the past 12 months. Sectors such as government, education, health and professional services grew substantially during the year.

  Now there are worries that the weakness is spreading as high food and gas prices put a crimp on consumer spending. Jobs in retail trade have been disappearing for four months and are more than 15,000 below their level of a year ago, according to Stephen Levy, director of the Center for Continuing Study of the California Economy in Palo Alto.

  "The job outlook ranges from flat to lower job levels a year from now, depending on the consumer," Levy wrote in an analysis.

  6.8%

  California's unemployment rate in May.

  6.2%

  California's unemployment rate in April.

  4.6%

  San Francisco metro area's jobless rate in May.

  4.2%

  San Francisco metro area's jobless rate in April.

  10,900

  Number of lost jobs statewide in May (excluding farms).

  9,600

  Number of lost construction jobs statewide in May.

  8.5%

  Michigan's rate of unemployment. Only four states had rates higher than California's.

  E-mail Sam Zuckerman at szuckerman@sfchronicle.com.

  
  My Watchword: Change. This country is going to be transformed by this "thing". The Great De-Leverging, Credit Crunch, Housing Debacle, whatever you wanna call it. It's a Seminal Event in the history of this country, maybe The Defining Event of Our Lives.
  
  Expect The Unexpected. What's been true for 100 years, is all of a sudden Not True Anymore.
  

  I wanted to end with a snippet of how hick-ass STUPID some of our local media really is:

  Bend Housing Market Second Highest in U.S.Jun 20, 2008
  DANIEL PEARSON CBN Editor

  A new study released by a national real estate analyst group finds that Bend’s housing market was the second most overvalued market in the U.S., behind only Atlantic City, New Jersey, out of 330 cities studied and that as a whole the Pacific Northwest is “precariously overvalued and likely to be the next shoe to drop."

  
  The housing valuation analysis, released by Massachusetts-based Global Insight, says the average home price in Bend runs about $290,500, which is overvalued by 49.5 percent, a slight decrease from first quarter 2007 when median home prices reached $319,900 and were overvalued by 65.7 percent, the study says.

  
  In other words, the study claims a house in Awbrey Butte appraised at $500,000 is really worth only $250,000.

  
  At least one local real estate observer says that is ridiculous.

  
  Bill Robie, director of government affairs for the Central Oregon Association of Realtors, said the results of the study, and others like it that are released from time to time, are misleading because the methodology leaves out huge chunks of information that need to be considered when determining market prices – land permit fees, system development charges, the time it takes to build and the price of the land where the house will be built, to name a few.

  
  “These kinds of statistics have come out before and they do not take into consideration the many local factors that contribute to Bend’s housing market prices,” Robie said.

  
  Global Insight’s approach to determining the value of homes in Bend, and in every metro area covered by the study, considered the price of the house, interest rates, household incomes, population densities and any historical premiums or discounts exhibited over time by the city.

  
  Global Insight examined those factors, accounting for 78 percent of all existing housing units in America and 93 percent of all related real estate value, to determine what housing prices should be, in this statistical sense, the study says.

  
  Only eight metro areas, including Bend, were considered overvalued during first quarter 2008, down from a peak of 53 in 2006. Incidentally, California, Michigan and Florida continue to post the most severe losses, accounting for 45 of the 50 worst-performing metro areas, said Jeannine Cataldi, head of real estate services for Global Insight.

  
  “The appearance of Northwestern states among the worst price performances vindicates our model performance, as we noted in previous reports that the Northwest seemed precariously overvalued,” Cataldi said.

  
  A local news story that came out a few months ago highlighting a similar report used a similar index, but the problem with those studies is that the index used is inappropriate, Robie said.

  
  “I don’t know the elements, or how they were put together, but I can’t imagine they apply directly to Central Oregon,” he said.

  
  In fact, the methodology used by Global Insight does not apply directly to the Central Oregon market, Cataldi said. Rather, the results are meant to provide more of a general look at existing housing by examining housing density, income and mortgages in these 330 metro areas, among other factors.

  
  “When you’re talking about the methodology of a study that looks at hundreds of metropolitan areas, getting into the specifics of each local area would take a long, long time,” Cataldi said. “Land-permit fees, the time it takes to build and other similar factors wouldn’t be taken into consideration because we are looking at existing home sales, not new construction.”

  
  Bend traditionally has a lot of second home buyers and wealthy retirees in the market who can afford more expensive homes, which drives up the median price as well, and those factors are not figured into broad real estate studies either, Robie said.

  
  And then there is the 800-pound gorilla in Bend’s real estate market – the city’s urban growth boundary, Robie said.

  
  “Because we constrained the supply of available land, local prices can be very high,” Robie said. “There is very little land left to build on, which is why the city has been looking at doing an urban growth boundary expansion. From our perspective, in order to have any shot of mitigating a land price increase, we need to increase the UGB.”

  
  For the past few months, the median price of homes for sale in Bend was above $300,000. It dipped down to $270,000 in April and then increased in May to $303,000, according to statistics released by the Central Oregon Association of Realtors.

  
  In Redmond, the median sale price of a home increased from $225,000 in April to $245,000 in May. Sales in Redmond remained flat for most of the year, hovering somewhere between 30 to 40 sales per month and peaking at 50 in April.

  
  In Crook County, median first quarter 2008 sale prices reached $207,000, up from $173,000 during the fourth quarter of 2007 and the number of sales declined from 45 to 20, respectively.

  
  In related news, another report released on June 5 by the Mortgage Bankers Association, a Washington D.C.-based organization representing the real estate finance industry through the promotion of fair and ethical lending practice, finds that Oregon had the nation's sixth lowest rate of delinquent loans and the sixth lowest foreclosure rate during first quarter 2008.

  
  Oregonians have about 635,000 outstanding mortgages, according to the report, and about 3 percent of those loans (19,000) are 30 days or more past due. Close to 6,000 Oregon loans, just less than 1 percent of all advances, are in some state of foreclosure.

  
  The rate of delinquent mortgages in Oregon reached its lowest point in 1982 at 6.2 percent, which remains the highest recorded rate in 29 years. During the dot-com and telecom implosion of 2000 through 2001, the delinquency rate reached 3.7 percent.

  
  State foreclosures were 2.2 percent in 1985, the highest on record, compared to 1.3 percent in 2002 just after the technology sector bust.

  
  People holding adjustable rate, subprime mortgages, which are typically awarded to individuals with low credit scores or negative credit histories, remain worse off today than other borrowers. The MBA report finds that of the 32,000 subprime adjustable rate mortgages outstanding in Oregon, about 14.5 percent of them are delinquent.

  I know. It almost gets lost in the obligatory Realtor-fueled insanity of Central Oregon Is Different (Completey Debunked Here), but the completely ass-backwards mathematics borders on the comical.
  

  Pamela "The Incredible Hulce" Andrews, a math lesson: When a $500K home is over-valued by 49.5%, it is NOT "really worth only $250,000". THAT would be 100% over-valued. A $500K overvalued by 49.5% is "really worth" about $334K.

  Bend is doomed if, for no other reason, than we have dumbf--ks like Hulce with their finger on The Button.
  
  And I'd appreciate it if you'd NOT bring up my litany of past errors. Thanks.
  

  I'll end it (again) with some Before & After:

  Before: A company with decades of ever-increasing profits. This one looks like a rocket ride to the moon! Can it be stopped by some puny housing bubble bursting? What about the future can you divine from this chart?
  Mystery company seems unstoppable!
  This blog started right there at Jan 2007. How bad could my timing be? AHH!
  
  Flash forward to today! Mystery Company is Ambac, an insurance company basically that pays when investments go South on investors. Hows it gone for the past year?
  ABK now. A small reduction in market value.
  
  Yeah, from the mid $90's just last year, Ambac has suffered a small haircut down to $2. This company had a market value of around $27 billion last year. Now it's a penny stock, worth almost as little as our humble CACB!
  
  Here's a little player in the mortgage market. Had a $44 billion market cap. Guess who?
  
  Yup, it's the old standby, Freddie Mac. They basically buy mortgages & then issue securities backed by said mortgages. Not going well now.
  Yeah, FRE wipes $647 million in shareholder value for each dollar its share prices drops, which has happened about 50X over the past year.
  
  Here's a little company you'd think really got it going on.
  
  
  I can tell you they have a paltry 4.45 billion shares outstanding, which gives them a market cap of around $245 billion at $55/sh. Not bad. So how's it going now?
  Yup, it's Bank of America, a little outfit with more bank branches than Bend has MILFy cougars. And that's a lot. That little dive at the end is loyal BAC shareholders having a decade of gains wiped clean. At $4.45 billion lost by BAC shareholders for each dollar cut from the shares... well, you can see it's starting to hurt a little.
  
  I say again: If you play Before & After honestly, you can see that sometimes the past means little about the future. Will Bend collapse completely? Probably. Will San Fran follow? Maybe. But one thing is sure: No one's going to hang a f--king stock chart out that tells you the future, and going off past cycles to predict this one is ridiculous.
  
  Will I change any minds on the San Fran issue? F--k no, I don't even care to. It's simply an example that points to the continuing delusional perception that there are places that are IMMUNE to the credit collapse gripping the World. San Fan is SURROUNDED by financial rot, and like a termite infestation, it will make it to San Fran ultimately.
  
  If you want to anchor on San Fran & rip me a new ass that's fine. But know that the past is probably The Worst Indicator of what's going to happen. San Fran As A Fortress is a bad idea to cling to. Was it in the past? Sure. So was Bend. We hung on longer before collapsing. Has that made the Bend collapse impossible? Look around.
  
  Anyone defending San Fran As Immune sounds like a Bend Realtor circa 2006. I can no more prove it will happen than I can hold up an 2007 Ambac chart & prove that they would not succumb. It's not provable, and I won't try.
  
  If you want to look out the side window, or worse the rear view mirror as a rationale that San Fran won't capitulate, I'm just telling you that you're not telling me anything I couldn't have lamely laid down myself. Saying San Fran will make it just fine is a lame way of framing something as a "prediction" that is really just an observation of the present.
  
  Again, anchoring on a bunch of peninsula-bound mega-fags is not the idea; It's questioning LONG HELD assumptions about EVERYTHING. Places like SF have ALWAYS bounced back, bigger & better than ever. So has Ambac. Until now. Reflexively thinking the past will reliably repeat is WRONG THIS TIME.
  
  It is F--KING DIFFERENT THIS TIME. All prior beliefs will be challenged. Don't think so? Look at the stock market. Participants CONTINUE to call the bottom EVERY F--KING DAY. Every day they FALL BACK on Past is Present.
  
  "This will be like the Asian Crisis. Yeah. Quick dip, then to the moon. Reliable as day follows night. Or even 1987. Maybe a harder drop that really hurts. For awhile. Then up, up & away. OK. Maybe... MAYBE it'll be a NASDAQ-style slump. But anyone who bought right at the bottom is doing OK. If you timed that one wrong, you might have to wait another 10-15 years for breakeven, but that even seems a slam dunk..."
  
  No. I just blink in disbelief at the market bulls wanting this thing to be over. They don't get it. 70% of the US lives in their own home, and wiping tens of thousands from ALL THOSE PEOPLE is unprecedented. Never even come close to happening before. Maybe The Great Depression.
  
  What's happening now is A Game Changer. Ain't like the past. Sell the f--king rallies. Sell the strong. Rent & Invest The Diff. De-Leverage.
  
  And just one more thing: This is about as close as you'll get to a verbalization of what Oregonians think of Cali-bangers, from "Paulina's charm":
  
  “I don’t think this country really changed until eight, nine years ago,” he said. “It started changing when Californians started coming. There’s different rules — the population is just changing.”
  
  In case you're wondering Cali-bangers, this means F--k You & Get The F--k Out. THAT is the "charm" of Paulina; They hate you f--kers, and are just ass-backwards enough to get away with a print quote like that in The Bulletin. The rest of us hate you too, but they'd never print something like that from a metro-banger Bendite sophisticate.
• June 15, 2008
• 8:26

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   » ‎ Bend Bubble 2

  Tags:    [edit]

  Wow! What a week in Real Estate! Bam! Boom! Zing! THAT IS EXCITEMENT!
  
  Ummm. No.
  
  Now that we're in the chronicling phase of this Bubble bursting thing, it is becoming clear that Watching The Biggest Credit & Asset Bubble Of All Time Blow Up is not all that exciting.
  
  And from this lackadaisical, lazy, crazy cold molasses unfolding of events flows one of the more insidious side-effects of this bubble implosion: People waiting FAR beyond when they should to take drastic action.
  
  We collectively are the frogs in the warm water, which is starting to go to a fizzy boil, with just little tiny bubble creeping up the side of the pot. And yet we remain, unmoved.
  
  Were we thrown onto a hot griddle, we'd have jumped right off. But no. We are slowly cooking.
  
  I don't know about you, but I know PLENTY of people who are in dire straits financially due to the local implosion, and they continue to slowly boil, unable or unwilling to mark down assets that the market has devalued long ago.
  
  But it happened so slowly, and continues to happen without shocks to the system, drama, or events of note... so they watch the water steaming around them. And remain unmoved to take action, or even admit the situation is getting desperate.
  
  I know several people who know full well they are in deteriorating financial shape, but they are like a deer in the headlights, frozen by inaction. They know at the "current pace" of things, that they will completely implode financially and lose everything, but they can't move.
  
  Like a game of musical chairs where everyone refuses to devalue their own chair by leaving it, all participants are myopically (selfishly) unwilling or unable to trade chairs with anyone, despite the distinct possibility they are about to lose their chair. Or chairs.
  
  Paradoxically, very few people want their chairs, but no one can get rid of them. And they are unable to see that the price they have put on thier chair is completely unreasonable.
  
  To wit, this Desert Skeeze piece of s--t has hit the $80/sf level. Here's the cheap ass kitchen:
  
  Skeezer Kitchen, $80/sf turd.
  
  Not too long ago, Skeeze hit the RIP board, by breaching the $100/sf barrier. This was not that long ago, and still remains FAR below comp's all over town. $80/sf is HALF of what most surrounding property is priced at, and well less than 1/3rd what most similar homes are asking.
  
  So there it is: Your musical chairs are worth half or less than what you paid, but like a frog in a slowly heating pot of water, you remain.
  
  This is why this thing will play out over a much longer period and be so much worse than anyone thinks: Economists theories of rational expectations will be put to the test. People are simply nesting on their bad situations, probably fully aware by now, that they are going to get worse. But they remain unmoved. Unfortunately, they will soon die. Financially, at least.
  
  And I know people who have piled it up substantially over the last 10 or more years, who were going to swing for the fences & get One Last Big Score in Bend's housing market & retire in their 40's. But now they are working furiously to make multiple mortgage payments. And clinging irrationally to the idea that although The Skeeze is running towards $50/sf, BUT their 4 vacant homes at $300/sf are DIFFERENT.
  
  Why? They've been told that everyday for 10 years. Bend is different. Bend is better. I am better. I deserve to get everything I want, after all it's happened that way my whole adult life.
  
  OK, the beginning of last weeks comments got some pretty stiff resistance to my idea that San Fran, and The Bay area are essentially doomed. Even worse is the concept that places like Detroit, Wichita, and Des Moines will DO BETTER over the long haul, than SF.
  
  Mark my words, there is PLENTY of precedent for such a thing happening. Houston had it's oil bubble, and it took 20+ years to recover. LA periodically blows up, and takes about a decade to recover. Tokyo is still in recovery mode 17 years after it's bubble burst.
  
  I cannot think of a single city more susceptible to the plague of this bubble implosion than San Fran. There have been a variety of factors contributing to this. There is no doubt that San Fran has a "real economy", and will not disappear from the globe. But so does Tokyo.
  
  People put forth the argument that I must not "get it" when it comes to San Fran. That San Fran is eternally "hot", and will forever remain an "it" place that people will want to be.
  
  Fine, I agree.
  
  But that doesn't mean a thing with respect to the extent of the credit implosion that will roil that area for the next 20 years.
  
  Look at New York City today. Great, vibrant city. Everyone wants to be there. This wasn't the case 25-30 years ago. Bankrupt, overrun with crime. NYC was a hell hole.
  
  Things change. And they've changed in far larger metro areas than San Fran.
  
  Mark my words: San Fran will probably be the largest metro area to suffer long term effects of this bubble. Vegas, Phoenix, Miami; they will all crash & burn, but they'll come back sooner. San Fran will crash and stay down.
  
  And just going back to my boiling frog analogy. If you're of middle age and ever had any sort of talk with your grandparents, you may have gotten the sense that they became imbued with literally life-changing behavior from dramatic economic events early in their lives; ie Depression Era Economics.
  
  They are frugal to a fault, they rarely buy new clothes, everything is jimmy-rigged, they patch instead of buy new. This is what's coming:
  Will youngest boomers go broke?

  They're raiding 401(k)s, falling behind on monthly payments and even going without medical care in efforts to keep afloat financially, the AARP warns.

  By MarketWatch

  The economic woes that are forcing homeowners into foreclosure, choking spending on nondiscretionary goods and driving up credit card bills may claim another group of victims in the coming years: broke baby boomers.

  Consumers 45 years and older are raiding or compromising their 401(k) accounts, shirking monthly payments and skipping regular medications and doctor visits at an alarming rate, according to senior advocacy group AARP.

  As many as 25% of Americans 45 to 64 said they are taking these steps to stay financially afloat, the AARP found in a recent study. That will put them at a decided disadvantage when retirement rolls around, particularly if they have subverted their health, and may lead to putting that retirement on hold.

  At the same time, Standard & Poor's reports that the average American household savings rate remains at 0%, making it "more difficult for older Americans to finance their retirement."

  • Talk back: Do you think boomers are in trouble?

  "This is a horrific scenario," said Tom Nelson, AARP's chief operating officer. "People are feeling this pinch in the short term . . . but the long-term consequences that are facing these individuals and our economy for years, if not decades, are frightening."

  The AARP survey included people 65 and older but found that those who were having the most difficulty adjusting to declining home values and higher prices for food and energy were 45 to 54, followed by those 55 to 64.

  The youngest boomers were having the most problems paying their mortgages or rents. They were also more apt to pull money out of their 401(k) accounts and other investments and change their lifestyles. About 76%, for example, said they are eating out less, and 71% said they are spending less on entertainment.

  It's likely, the study said, that the younger respondents are having a tougher time because they still have work and family obligations that place them more at risk during an economic slowdown.

  At the same time, many people 65 and older have fewer decisions to make because their spending already has been crimped by their fixed incomes, the study noted.

  Grim prospects If this economic downturn worsens or lingers, Nelson said, the future for the youngest baby boomers could be grim.

  Nelson painted this picture: A 45-year-old who postpones bill paying, cuts back on necessary medications and stops contributing to his 401(k) is undermining his credit rating, putting his health at risk and losing an economic base. Fast-forward 20 years, and those issues have only gotten worse. Tack on another 20 years, and the situation could be dire.
  

  Mark Iwry, a senior fellow at the Brookings Institution, said it's hard to catch up on missed 401(k) payments. Not only is the actual payment gone, so, too, is the match by an employer, as well as the growth of the tax-free money. "You've got to put in a larger amount just to replace what you took out earlier," Iwry said.

  Making matters worse, he said, people tend to assume they're going to die earlier than they actually do. Many don't plan financially to live until they're 90 because they don't think they'll ever get to be 90.

  Continued: Women outlive men

  According to the CIA World Fact Book, the average American will live to be at least 78 years old, with women outliving men by about six years.

  Meanwhile, the national Centers for Disease Control and Prevention projects that longer life spans and a generation bubble of aging baby boomers will combine to double the population of Americans 65 years and older during the next 25 years. By 2030, the CDC estimates, there will be 71 million older adults who will account for roughly 20% of the U.S. population.

  "People often underestimate their life expectancy," Iwry said. "But more than that, many never focus on or plan for 'longevity risk' -- the 50% chance that they'll outlive the average life expectancy, the 25% chance that they'll outlive it by a lot and the 15% chance that they'll outlive it by a lot more."

  "Many people don't plan probabilistically, but life is probabilistic," he added. "We're managing risks here."

  Major strains The S&P report, which calls Americans "dangerously unprepared for retirement," notes that the poor performance of asset markets in recent years is hitting the piggy banks of even those most primed for retirement. The S&P 500 Index, for example, is on track to have its worst decade performance since the Depression.

  Indeed, 50% of those surveyed by the AARP said the value of their 401(k) accounts and other investments had dropped over the past 12 months. One-quarter of retirees said their golden-years income had fallen in tandem with interest rates.

  "Retiring in a period like this strains assets in the best case, and this is far from the best case," said David Wyss, S&P's chief economist. "If older workers aren't adding to their wealth and if their asset values are falling, the prospects of a comfortable retirement are receding."

  At the same time, the prospects of retiring early, or even on time, are dimming. The AARP study found that one-fifth of those who said their stock portfolio is lighter are postponing plans to retire. About 32% of those people are at traditional retirement ages, 55 to 64.

  Wyss said he thinks more retirees will look for "bridge" jobs but that such jobs can be hard to find.

  Iwry encouraged people to delay retirement -- even by a year -- as a generally painless way to shore up long-term finances.
  

  "Retiring later is not all bad," he said. "People can improve their financial preparedness for retirement fairly dramatically by postponing retirement just a little."

  Iwry called the benefits a "three-fer": Each additional year of work adds another year of income, which can add to savings, lessen the number of years without a regular paycheck and generally boost monthly Social Security benefits.

  "Many people don't take this 'leveraging effect' into account," Iwry said. "A little deferral of retirement goes a long way financially."

  This article was reported and written by Jennifer Waters for MarketWatch.

  Published June 13, 2008

  This is the first time that I can remember in my adult life that there is not the prospect of ever greater future consumption by almost everyone. Kids with Wii's, PSP3, Nintendo's. And not just one; THEY HAVE ALL 3. Kids with f--king 2 cell phones. WTF?
  

  For the love of Christ, almost everyone I know has 2 or more homes. And they have 4 cars, although there are only 2 driving adults in the household. They have so many gadgets they can barely learn all the functionality of what they just got, before they buy another. Kids can't talk normally anymore. They send mindless disembodied text messages to other mindless zombies who don't give a f--k.
  

  The consumerist fueled nightmare we've known for over 25 years is ending. Whatever you want, whenever you want it (via debt) has turned us into monsters. It makes our kids into monsters. I see kids everyday who are unable to communicate with anyone, especially their parents, except in terms of what they want bought for them. And I see parents who are unable to do anything but oblige. Love via Best Buy.
  
  Again, Mark My Words: This is ending. The greatest financial collapse of all time may actually have some positive side-effects: Parents who start actually raising their kids. Kids who actually pull their heads out of their BFF asses.
  
  Get started today: Throw your kids Wii in the s--tter, stop buying cell phones every 2 months, disable text messaging, and stop fulfilling your life via retail (sorry Dunc).
  

  OK, on to the Dominant Economic Theme of the Next 10 Years: Worldwide Stagflation.

  It's pretty clear that firing up the US dollar printing presses has done the obvious, devalued our curreny to within spitting distance of the peso. So inflation will only punish us, right? No.
  
  EMERGING MARKETS REPORT Rising inflation poses threat to emerging markets China, India, Turkey hardest hit; Brazil, a top performer, fights back By Polya Lesova, MarketWatch
  
  Last update: 6:22 p.m. EDT June 12, 2008
  
  NEW YORK (MarketWatch) -- Inflation may present a rising threat for economies worldwide, but emerging markets have been particularly hard hit.
  
  China, India and South Africa are facing growing challenges, while only a handful of countries, such as Brazil, have been somewhat successful at containing surging prices. Fueled by skyrocketing food and energy prices, inflation is steadily rising around the world, threatening to undermine the big economic gains emerging markets have made in recent years.
  
  "This is a dangerous time for these central banks," said David Riedel, president of Riedel Research Group. "The bout of inflation at this stage of growth is very serious."
  
  In recent days, many central banks, including those in South Africa, Brazil, India, Russia, China and Vietnam, have tightened monetary policy in an attempt to control rising inflation.
  
  The South African Reserve Bank raised its key interest rate Thursday by 50 basis points to 12%, warning that the inflation outlook "remains bleak in an environment of sustained increases in international oil and food prices." South Africa is struggling with double-digit inflation.
  
  On Wednesday, India delivered an emergency rate increase, the first since March 2007, saying it was "urgent" to fight inflation. India's wholesale price index recently soared to its highest level in nearly four years.
  
  Earlier this week, Chinese shares fell sharply after the People's Bank of China raised banks' reserve requirement ratios for the fifth time this year.
  
  Elsewhere in Asia, Vietnam, which is struggling with 25% inflation, raised rates and adjusted its official exchange rate downward in an effort to thwart currency speculation on Tuesday. Vietnamese equities are the worst performers in global emerging markets this year. Investors have sold local shares on concerns about soaring inflation.
  
  Why is inflation rising?
  
  High inflation, and in some cases hyperinflation, battered emerging markets in Latin America, Eastern Europe and Asia in the 1990s. Since then, inflation has been steadily declining until a few months ago, when energy and food prices started breaking record, pushing inflation higher and higher in the developing world.
  
  Food makes up a much bigger part of the inflation basket, and disposable-income spending in emerging markets than it does in developed countries. For example, food accounts for more than 30% in Argentina, Malaysia, Russia, China, India and the Philippines.
  
  "This food issue comes up again and again and again," said Jack Dzierwa, global strategist and co-manager of the Global MegaTrends Fund Dzierwa believes that rising inflation is the biggest problem currently facing emerging markets, and that higher food prices are largely to blame for that rise.
  
  The other major contributor to inflation is the price of energy. The industrialization of fast-growing emerging markets requires tremendous amounts of energy resources, such as oil, natural gas and coal.
  
  Another cause of inflation "is that a period of relatively loose interest rates in the developed world has resulted in a weak U.S. dollar," said Nicholas Field, London-based fund manager for global emerging market equities at Schroder Investment Management.
  Weakness in the dollar has boosted the price of dollar-denominated commodities like oil.
  
  Most vulnerable to an inflation hit are major food and fuel importers, such as China and India, strategists said. China's consumer-price index, a key measure of inflation, hit 7.7% in May, down slightly from 8.5% in April, but still fairly high.
  
  "The three things that China needs to worry about this year are inflation, inflation and inflation," Riedel said. "It is such a concern for an economy during this phase of its growth. The markets are right to be selling off."
  
  The Shanghai Composite benchmark stock index has tumbled 44% this year, making it the second worst performer in the emerging markets universe after Vietnam, whose VN index has declined 60%. Indian equities have also sold off this year, with the Sensex index down 25%.
  
  Dzierwa said that there is some correlation between the performance of emerging markets and their inflation problems. For example, Brazil has been very aggressive in fighting inflation with interest-rate hikes, and the Bovespa stock index is among the best performers in the world with a year-to-date gain of 5%.
  
  "Markets like Brazil, which is less dependent on imported food and fuel," Riedel said. "In Brazil, the central bank is being praised for being proactive in raising rates."
  
  In Turkey, an oil importer, consumer prices rose 10.7% year-on-year in May and producer prices rose by 16.5% in the same period. Istanbul's IMKB-100 stock index is down 31%. Russia, which boasts rich energy resources, but is a food importer, is struggling with 15% inflation, the highest among the BRIC countries. Moscow's RTS index is up only 3% year-to-date.
  
  "Russia would have been a much better performer had it not been for this high level of inflation," Dzierwa said.
  
  South Africa, whose stock market is dominated by resource stocks, is the best-performing stock market. The All-Share index is up 7%. Among U.S.-listed South African stocks are Sasol, Gold Fields , AngloGold Ashanti, Harmony Gold Mining and DRDGold.
  
  One way for U.S. investors into the South African markets is via the iShares MSCI South Africa Index Fund.
  
  Policy responses
  
  "What we have is a period where inflation around the world was under control, and instead of coming down, it is now starting to go up in the majority of countries around the world, not just emerging [markets]," said Field of Schroder Investment Management. How serious of a problem inflation becomes depends on the response of central banks and governments, he said.
  
  Central banks in many emerging markets are not independent and tend to be subject to political pressure. In Argentina, for example, the government is widely believed to be manipulating inflation numbers. The official inflation rate is 9% while most private estimates put it at around 24%.
  
  Many countries adopt short-term measures -- such as price controls, subsidies, and export bans on foods - that instead of mitigating inflation only exacerbate it.
  
  In Egypt, where the government heavily subsidizes food and fuel, inflation surged to 20% in May. Rising food prices have stirred riots in the country in recent weeks.
  
  One way to fight inflation is to raise interest rates, though that tends to slow down growth, a dilemma that many central banks are facing. Another inflation-fighting tool is currency appreciation. Many emerging markets - including China and Russia - control their currencies and have shunned away from letting them appreciate in order to sustain export-driven growth.
  
  In the Middle East, Saudi Arabia, the U.A.E., Qatar, Oman and Bahrain all peg their currencies to the dollar, but despite rising inflationary pressures the countries have opted not to drop their pegs or revalue their currencies.
  
  Polya Lesova is a MarketWatch reporter based in New York.
  
  A lot of these economies rely on cheap currencies to drive exports, and they are quite used to a strong dollar regime to get 'er done. But the US is no longer going to be the importing consumerist-fueled nightmare it's been for the past 30-40 years, and these countries will have to adjust to this painful reality as much as we will.
  
  And I guess going back to the Consumerist Fueled Nightmare That Is This Country, I found this over on Dunc's blog. It's the story of someone who started a store that sells "nothing anyone truly needs". Sound like a town you know of?
  
  Downturn tough for Portland mom-and-pops Slumping sales are forcing a Northwest 23rd Avenue merchant to close her doors Thursday, June 12, 2008ERIN HOOVER BARNETT The Oregonian

  Stacey Korn arrives just before 10 a.m. to unlock her shop on Northwest 23rd Avenue. She hoists orange molded plastic benches from the back and places them outside under the windows. Then she sets up her sidewalk sign:

  "Shop 'Hello' -- nifty gifts for the whole family," it says. "Patronizing us is like flirting with a wealthy widow. You can't overdo it."

  Korn needs her sense of humor now more than ever. As the economy slumps, sales at her Hello Portland store at 525 N.W. 23rd Ave. are half what they were soon after opening in late 2005. Her family of four went from living almost entirely off the shop's income to barely getting by and deciding to close in September.

  "My friends at Irvington School don't know my kids qualify for free or reduced-price lunch," said Korn, 41.

  Her boom-to-bust story is about the kind of shop that falters in a downturn. Hello Portland sells lots of stuff people want -- from $45 hip handbags to $25 "I might barf" baby onesies -- but nothing anyone truly needs. More than that, it's a story of a small merchant's struggles, of the people left behind when a local store fails.

  "You hear people say, 'I love this. I can't live without this,' " Korn said. "And then they walk out the door."

  Korn gets by with her trademark pluck.

  She left a dysfunctional family at 16 to attend acting school in New York and then in Los Angeles. She turned to graphic design school and did secretarial work at advertising giant Ogilvy & Mather, learning computer skills thanks to client Microsoft.

  She found a creative niche designing saucy greeting cards for Paper Moon. "Desperate Career Girl," said one. "Sexual harassment: She could dish it out, but could she take it?"

  Her big break came when Reuters, the media and financial company, contracted with her in 2002 at $250 an hour to design Web sites. She was still nursing her second child, so her husband took a hotel room next door and paged Korn when Piper was hungry, handing the infant to Korn at a lower-floor restroom in Reuters' Manhattan building. Her bosses never knew she had a baby.

  After two years, Korn opened the Hello store on Martha's Vineyard. Richard Singer, the primary developer and landlord on Northwest 23rd, lured Korn and her shop to Portland in 2005, beating out Bridgeport Village.

  The shop -- opening at the height of Portland's housing market -- thrived. On Saturdays, the store pulled in about $2,000, helping pay the mortgage on their $550,000 Irvington home. Now the Saturday take is under $1,000, and midweek days are around $300. Last year, the family took home just $20,000. Scott Korn left the store to take a baking job late last year. Seven employees shrank to three.

  Korn thinks concerns about finding parking around 23rd are worsening the impact of the downturn. And many of those who do come in just play -- picking up Japanese vinyl toys despite signs saying not to.

  "It's like amusement," Korn said with a sigh. "So maybe it's my fault. Maybe my business plan is too amusing."

  Extra effort

  Sometimes she's direct. When a customer asked if she could buy the shop's melamine plates on the Internet, Korn told her, "Yeah, you could. But I'm here selling these so that I can feed my kids."

  Reinforcing that connection is crucial for mom-and-pop businesses, especially now.

  "Everyone is just kind of holding their breath to see what's going to happen," said Robyn Shanti, coordinator of the Sustainable Business Network, whose membership includes 360 locally owned Portland businesses. "People also realize if they don't patronize those businesses, they're not going to be around. And if they're not around, we'll lose the whole quality of life in our neighborhoods."

  Korn is doing what she can. She tries making customers comfortable, fading out alternative rock music and fading in her "Old people just walked in" mix of Billie Holiday and Glenn Miller when seniors step in.

  She puts a sale table outside on warm days. She uses cash to buy merchandise, avoiding additional debt. She rarely gives out even basic handle bags -- "Can you put this in the bag you have?" she asks -- saving 35 cents a pop. And she's gotten her kids involved, saving on child care.

  On a sunny spring weekend, Piper, 6, and a friend sat outside selling $1 buttons they made, quickly pulling in $58.

  Looking for work

  Sometimes stress gets the better of Korn. A week ago, she parked her car just over the line into the valet zone for the restaurant next door. The restaurant had it towed. The cost: $210. "What am I going to sell on Craigslist to pay that ticket?" she said, sobbing. (She sold her car-top storage container.)

  Kind comments help. Leslie Hildula comes for offbeat party favors and invitations. "It has this kind of inner-child enthusiasm for life," Hildula said of the shop.

  But as the Korn family prepares to take on a foster child in need of emergency placement, Korn must be pragmatic. She hopes to find a stable job in graphic design or another creative field.

  On Tuesday, Scott Korn arrived at the shop at 5 p.m. to pick up the children.

  "Bye, cutie," he said to his wife as he headed out, Piper and Skyler, 10, ahead of him.

  "Bye, sweetie," she said.

  Then he remembered to ask: Is she coming home to tuck in the kids before returning to clean the store? She let go of her cleaning crew.

  No, she told him. An employee's coming to help her scrub the floors.

  "It'll be a party," Korn said.

  Erin Hoover Barnett: 503-294-5011; ehbarnett@news.oregonian.com

  I'll say it again: I know MANY, MANY people in this town going through this EXACT same scenario. In fact, it's hard to think of anyone I know who isn't going through this, on some level.
  
  This Oregonian piece epitomizes Bend perfectly: A flood of immigrant noobs who thought they'd get here & run this s--thole in 6 months. So they started, sight unseen, reserach undone, a convenience store in NWX, an upscale cooking supply store in a space where the previous cooking supply store failed, a "quirky" kids clothing store because they've carved up the kids clothing market just a little bit better than the last guy, a restaurant where the previous 3 restaurants failed, a bookstore because you "do what you love and the money will follow", an art gallery where they supply an eclectic mix of blah, blah, blah and so on.
  
  

  Bend remains the all-time greatest equity-sink of all time, and will just become more so in the coming decades. Bend, like San Fran, is going down catastrophically, because both places are built on excessive consumerism. Without credit, both will die. Bend will undoubtedly die faster, but both will inexorably DIE. Without credit they wouldn't look anything like they do today.

  Nicholson describes a woman in As Good As It Gets, “I start with a man and take away all reason and accountability.”
  

  Bend is a woman. It is a town that lacks reason and has been held unaccountable for so long, it is unable to function otherwise. Where would we be without credit? Where would we be without a rampant influx of Cali-fueled 401K ploppers? How would they have gotten here without credit? What happens to this cycle now that the credit-fueled game of musical chairs is over?
  

  You're going to see many parts of California, Florida and other Bubble-fueled nightmares implode, but none are larger, or have credit as a more intrinsic part of their economy than The Bay area. The Bay is the issuers of the lottery tickets, and has played the game better than anywhere to positive effect. And there is substantial wealth there because of it.

  But the Game is over, and the largest participants will suffer the most. The United States will suffer on the largest macro sense. California will suffer the most on a statewide basis. And LA will suffer. But San Fran will suffer the most & literally be a city transformed by this event.
  
  But it will take a long time for that frog to boil.
• June 07, 2008
• 11:26

  Bend Oregon: Misery Reaches New Highs

   » ‎ Bend Bubble 2

  Tags:  Housing Bubble   [edit]

  Well now.
  
  On Friday we had yet another pang of SOBRIETY regarding the RE hangover. The misery index, jumped an astounding .5% on Friday, when unemployment exploded nationally, from 5% to 5.5%, FAR higher than anyone expected.
  
  So with inflation still at (an incredibly understated) 3.9%, we hit 9.4% on the misery index, an indicator wikipedia syas, "Some economists posit that the components of the Misery Index drive the crime rate to a degree. They have found that the Misery Index and the Crime Rate correlate strongly and that the Misery Index seems to lead the Crime Rate by a year or so."
  
  This may answer the question I've heard in some corners, "Is it just me, or is there a lot more crime stories on the local news recently"? Yes.
  
  If you go to miseryindex.us, and look at the index by month, you see that the current readings are the highest for G Dub's tenure, except for Sept 2005, when it had a quick spike to 9.8%. Clinton, after a rocky inheritable situation from G Dub's Dad, never really even came close.
  
  This is actually a very interesting graph, especially the monthly version. In a brief period in the mid 1950's, there was no inflation, and this reading was composed only of a very low unemployment rate of 3.5%, or so.
  
  Flash forward to the Ford/Carter years when things got especially terrible, and the index maxed out near 22%.
  
  I've heard some economists state that inflation is not really that bad, because it is accompanied by growth, and hence inflation is a sign of a robust economy.
  
  This is, of course, ridiculous.
  
  Inflation is just a measure of how fast a fixed quantity of money is losing value.
  
  If your paycheck increases 10%, and inflation increases 15%, you are worse off.
  
  These economists err on this idea, because many times inflation IS accompanied by similarly large growth rates. China is a great current day example. They have had very robust growth & inflation rates recently, and they are probably the most vital economy in the World.
  
  But inflation can also be accompanied by contraction, as can be easily seen by these misery index charts. The 1970's & early 80's are clear illustrations of this: Very high unemployment & very high devaluation of the currency.
  
  This is the Worst of All Worlds: Stagflation.
  
  And this is where I think Future Bend will differ from the Bend of Olde.
  
  Bend used to be chronically Undervalued, because of the extreme cyclicality of the local economy. This place boomed & busted, everyone knew it, and so people had to play a middle ground when making home purchases. You priced for the bottom of the cycle, cuz everyone knew it was coming.
  
  But then things began riding a Long Wave up, for about the past 3 decades. Bend went from chronically & deeply undervalued, to wildly overvalued. The Long Wave has finally crested, and we are going to again ride things back down, where Terribly Cyclical Bend reasserts itself.
  
  But at least when things were terrible employment-wise here, they were OK inflation-wise.
  
  Finding a job was hell, but homes were dirt cheap. Things "evened out". We had lots of one kind of misery, but almost none of the other. Poverty. With a View... and Cheap Houses.
  
  Now? Now, we are returning to Poverty. And we do have a View. But we also have almost rampant, out of control inflation. Our home prices are falling, true, but you DON'T pay the value of the house each month, you pay THE MORTGAGE. And if you've bought sometime from 2004-2008, you've essentially "locked in" an incredibly high inflation rate via your mortgage. And we have nationwide inflation exploding higher.
  
  Friday, oil prices spiked higher in the largest one-day price advance ever recorded, up almost $12/bbl.
  
  So we are notching FAR higher unemployment rates, 6.8% at last count. And home values are imploding, which is probably a far better indicator of a large number of independent contractor wages around here than anything. And national inflation is on the verge of a spiral higher.
  
  This all converges to give Bend probably one of the highest Misery Indexes in this country, by far.
  
  We don't make much money. We have a far higher unemployment rate than the nationwide averages. Our local economy is cyclical in the extreme. Our "locked in" inflation has eclipsed the entire country for the largest purchase item most people will make in their lives.
  
  The misery index for Bend continues to climb, and will push this area into the deepest economic depression ever witnessed.
  
  Now, I want to do some "reprints" of some blogs of interest. First Dunc:
  
  Saturday, June 7, 2008 Worm Ouroboros Sometimes, something is so glaringly obvious that you ignore it. It's right in your face, you know there is something wrong, but you're distracted by other wilder, crazier things.
  
  I've felt that we were building too many houses in Bend for several years; actually, I think I was saying that even before the actual bubble. My concern was that Bend didn't have an underlying industry, or economic base, to justify all the housing.
  
  I didn't think minimum wage tourism jobs could pay for them, and there were only so many amenity rich transplants we were likely to convince to move here. I'm not even sure I was all that conscious that it was a national problem, I just could see what was obvious here in Bend.
  
  I never felt that retired people were big spenders. The number of stores in Bend seems wildly excessive. It seemed that an awful lot of the newcomers were involved in real estate or building or support industries. More and more, it appeared to me that growth was the industry of Bend, and the industry of Bend was growth, a big Ouroboros Worm eating it's tail.
  
  I wasn't really very aware of the credit/liquidity problem until it burst. I don't remember too many people talking about it, or reading very many stories about it. In hindsight, that too was obvious. I'd heard plenty of troubling stories over the years about people borrowing money that I didn't think they could afford to pay back.
  
  But subprime and Alt loans and other guaranteed to make you 'house poor' schemes have been around for years. Was it the cause or the effect of too many houses? Whatever, it was the precipitating factor in bursting the bubble. The curtain was drawn back, and the wizard behind the screen was naked as a jaybird. I've begun to see the whole housing thing as a true pyramid scheme. At the top, the fewest and the biggest, and probably the ones who scammed most of the money, were the big financial firms; the Bear, Stearns, the Lehman's.
  
  Right underneath of them, a bit more numerous, were the big banks. Both of these found loopholes in the relaxed regulations to bundle problematic schemes into 'investments.' Next level under, more numerous, were the national builders, the national chains, and the big box developments. Again, I've felt too many commercial buildings were being built, especially locally. All done, in my opinion, in money borrowed from the future. A vast pool of liquidity that seemed 'free'; but will have to be paid. Just below them, the regional banks, builders, and mortgage companies; the wannabes and the followers.
  
  Under them, in much bigger numbers, a crazy number of local mortgage and banks and other financial services. And an even crazier number of local builders and construction firms. Working for them, a vast pool of real estate agents, and construction workers, and mortgage agents, and clerks working at stores supplying the bubble, and so on. And finally, in at the base, the home buyers themselves. Prime, alt-loans, and subprime.
  
  In most pyramid schemes, the top walks off with all the money. Whats unusual this time is that the problem first appeared at the top. The level of greed and graft and stupidity was so massive, that once we saw the wizard's big, red, hairy butt, we wanted our money back. After the collapse of Bear, Stearns, the government rushed to reassure us that they are buying the other financial services some fine pants. Don't worry, we'll take care of it!
  
  But, as usual in a pyramid scheme, the biggest number at the bottom are bearing most of the brunt. Do you see the part of the pyramid that hasn't really been talked about much? Except for a few high profile national builders, it seems to me that most of the developers and big builders, both regionally and locally, haven't really been punished yet.
  
  Even when a company seems to run into problems, someone else comes along and bails them out. Randy Sebastian is given another lease on life, albeit with his nuts firmly clamped. It has been commented in passing, that building just seems to keep going on, despite the glut of housing and the lending problems. Yesterday, the Wall Street Journal had an article that partly explained what's been going on:
  
  In "Real-Estate Woes of Banks Mount," Michael Corkery, Jonathan Karp and Damian Paletta of the Wall Street Journal: (Italics are mine, to highlight the role of the developers.) "Federal regulators warned Thursday that banking-industry turmoil would continue as financial institutions come to terms with piles of bad loans they made to finance the construction of homes and condominiums. "Until now, most of the damage to banks from the housing crisis has come from homeowners defaulting on their mortgages. But amid a dismal spring sales season for new homes, loans to home and condo builders are looking increasingly shaky..."
  "...banks that aren't diversified, or those with high exposures to residential construction and development, are of particular concern..." "Home builders are falling behind on loan payments, and the value of the land and housing developments that serve as loan collateral is plummeting." ""We believe this period of procrastination is nearly over," says Ivy Zelman, chief executive of Zelman & Associates.
  
  "The prospect of a new wave of losses worries federal regulators, given the large proportion of loans to housing developers held by many banks and thrifts. The problems are worse at small banks that can't easily absorb losses, and at banks with big exposure in states hit hard by the housing crisis..." 'Real-estate lenders had been hoping for a decent spring sales season for new homes, which would have helped builders stay current on their loans. But the selling season has been a bust.' "..."Finally the banks are capitulating and saying, 'Let's mark to market and flush this all out.' The market is going to get worse. We don't want to hold on to this stuff."
  
  For me, this is the final piece of the puzzle. It both explains why frenzied building continues by developers, and the response of the banks. It finally let me see the whole thing as the pyramid scheme I detailed above. It also appears to me that problems are starting to ricochet through the different levels -- the government steps in to try to firm up one problem, but it breaks out on another level and so on. Which mean, it probably can't be controlled.
  
  I'd thought most of the bad news would be put on the back burner during the spring and summer, and the accounting would take place in the fall. Now, I'm wondering if even locally, they'll be able to hold off taking the developers out of play. If you don't mind, I'd like to repeat one of the above quoted paragraphs, in Capital Letters and Italicized.
  
  "REAL-ESTATE LENDERS HAD BEEN HOPING FOR A DECENT SPRING SALES SEASON FOR NEW HOMES, WHICH WOULD HAVE HELPED BUILDERS STAY CURRENT ON THEIR LOANS. BUT THE SELLING SEASON HAS BEEN A BUST."
  
  That says it all. There is no way to "gracefully" unwind a Ponzi Scheme (ie Bubble). Our government powers that be, clear down to local City Councilors, media outlet editors, and housing associations will slowly but surely learn this.
  
  What I find baffling is that the markets seem unable to comprehend that we are in uncharted territory. Unemployment just exploded higher, catch EVERYONE by surprise. Well, almost everyone. I wasn't surprised by that, but I have been profoundly baffled as to why so few seem able to see through to the ultimate effects of this catastrophe. I still find this baffling.
  
  Usually the markets discount things to the befuddlement of almost everyone, then The Event comes to light. The markets are an almost mysteriously good discounter of the future. Not in this case. They seem like they are years behind. Again, baffling.
  
  Another Best Of Bends Blogs for the week was from Jesse Felders My Back Pages:
  Can we finally put an end to the "it's different here" mantra?Now that the news outlets have covered the latest National City Housing Valuation Analysis, I think it's time to clarify an important point of the study. Today's coverage of the study in the Bend Bulletin suggests its conclusion, that Bend is one of the most overvalued markets in the country, may be flawed:

  Dave Woodland, the vice president and regional manager of Signet Mortgage in Bend, urged caution in drawing too much from the national survey, which doesn’t capture the true income of the area, he said.
  
  “They look at Bend and say it’s overpriced based on reported compensation levels,” Woodland said. “The reason Bend is so popular is that it’s a great retirement area, and there are a base of individuals who are independently wealthy, self-employed or retired.”

  This is the most common rebuttal of the study that I've heard. However, those suggesting that the attractiveness of Bend is not factored in have not examined the study's methodology. Actually, for the purposes of estimating "fair value" the study gives Bend a premium on par with similar areas such as Missoula, Montana; Flagstaff, Arizona and Santa Fe, New Mexico. In fact, Bend's premium is greater than that attributed to Boulder, Colorado; Las Vegas, Nevada and Naples, Florida and equal to that of ultra-wealthy Honolulu, Hawaii and San Jose, California. Take a look; The methodology is there for everyone to see.
  
  I agree that Bend is a wonderful place to live but it is no better than these other areas. And it's far from the utopic wonderland the housing bulls would have us believe. So can we finally put an end to the "it's different here" mantra? For one, it's not valid. And two, it sounds way too much like the "it's different this time" mantra of the tech stock bulls of 2000.
  
  Again, just a great piece. Many people, including yours truly, do not read the fine print on voluminous reports like this, and the media gets a pass when they spout their obligatory bulls--t about Quality Of Life, and how that one factor will always justify any and all Bend home prices, no matter how high.
  
  Also note how he points out that CA & FL, yesteryears Marquee Centers of Overvaluation, have returned to some semblance of normalcy, while Bend remains wildly overvalued. THIS is further proof that Bend lags the trends of the country as a whole, significantly. Everyone else has bled off significant portions of their overvaluation. Not us.
  
  Good Job Jesse for spotting this one refuting point of fact that has eluded every media outlet in Bend.
  
  Here is just a very good piece from The NY Times:
  About 1 in 11 Mortgageholders Face Loan Problems By VIKAS BAJAJ and MICHAEL M. GRYNBAUM

  About 1 in 11 American mortgages were past due or in foreclosure at the end of March, according to a report released on Thursday, a figure that is rising fast as home prices fall and the job market weakens.

  The first three months of 2008 marked the worst quarter for American homeowners in nearly three decades, according to the report, issued by the Mortgage Bankers Association. The rate of new foreclosures and past-due payments surged to their highest level since 1979, when the group first started collecting the data.

  All told, about 8.8 percent of home loans were past due or in foreclosure, or about 4.8 million loans. That is up from 7.9 percent at the end of December. (About a third of American homeowners do not have mortgages.)

  Delinquency and foreclosure rates started rising from historically low levels in late 2006 and have picked up speed in nearly every quarter since. Analysts say at first past due mortgages represented mostly high-risk loans made to borrowers with blemished, or subprime, credit. Now, as the economy has weakened and home prices have fallen in many parts of the country, homeowners with better loans are also falling behind.

  Economists worry that a big loss of jobs in the coming months could drive default rates much higher. The Labor Department will release its report on the job market for May on Friday.

  “It’s not going to help the housing market out at all if you have a loss of jobs,” said John Lonski, chief economist at Moody’s Investors Service. “When employment’s contracting, that makes it all the more difficult to sell your home at an attractive price.”

  Though defaults are rising in many places, it is worst in areas where home prices soared in recent years or where the local economy is now struggling.

  California and Florida, for instance, accounted for nearly a third of all mortgages that were in foreclosure or 90 days delinquent. Home prices, construction and mortgage lending were particularly ebullient in those states earlier this decade. The housing industry accounted for a bigger portion of their economies during the boom.

  “The problems in California and Florida are extraordinary, and they are the main drivers of the national trend,” said Jay Brinkmann, vice president for research and economics at the Mortgage Bankers Association.

  Midwestern states like Michigan and Ohio, where home prices did not soar, are suffering mostly from the loss of manufacturing jobs and high-risk loans. Default rates in those states appear to have leveled off in the last few months, which may be an early hopeful sign.

  About 9.7 percent of loans in five Midwestern states were past due or in foreclosure in the first quarter, down from 10.5 in the fourth quarter.

  “This decade has been brutal on the industrial economies of the United States,” said Michael D. Youngblood, a mortgage analyst at Friedman, Billings, Ramsey. But “the rate of labor market deterioration in these depressed cities is significantly slowing.”

  Michigan, Indiana and Ohio are still among the five states with the highest default rates. The other two states in that list are Florida and Mississippi.

  Defaults are highest for adjustable-rate mortgages — loans that promised a low, fixed-interest rate for the first few years. But people who took out such mortgages are falling behind even before those loans reset to a higher adjustable rate. Analysts say that reflects the fact that those mortgages were popular among investors, buyers who made small or no down payments, and those who did not provide proof of their incomes.

  Falling home prices are also contributing greatly to foreclosures. Homeowners who owe more on their loan than their homes are worth are more likely to default if they encounter financial distress, said Robert Van Order, an adjunct finance professor at the University of Michigan.

  In past housing downturns like the one in the early 1990s, he said, housing prices did not fall nationwide and even in local markets they fell much more slowly. So far, home prices have fallen about 16 percent from their peak in the summer of 2006, according to the Standard & Poor’s/Case-Shiller index. Economists at Lehman Brothers expect the decline to bottom at 25 percent.

  “What that means now is people don’t have that equity cushion as they get into trouble,” said Mr. Van Order, who was once chief economist at Freddie Mac. “The incentive to beg, borrow and steal is not there.”

  By many measures the job market is not falling apart; the unemployment rate was 5 percent in April. But these are challenging times even for those who have not lost jobs with gas prices at $4 a gallon, economists said.

  “Wage increases are not keeping pace with inflation,” said Bernard Baumohl, managing director of the Economic Outlook Group. “That really puts a lot of pressure on households to make some very serious financial decisions.”

  The surge in defaults has been challenging for mortgage servicing companies, which find it hard to keep up with the growing backlog of loans awaiting foreclosure, analysts say.

  Some mortgage servicing firms appear to be holding off because lawmakers in Congress are talking about a plan to refinance up to $300 billion in loans using the Federal Housing Administration, Mr. Youngblood said. The discussions are “giving servicers hope of a better solution for many borrowers,” he said.

  In states like California and Florida where they have huge inventories of repossessed homes, some companies are starting to move a little faster by auctioning off properties, Mr. Youngblood and others say. In some markets like Las Vegas about half the homes sold in recent months had been in foreclosure.

  Dean Williams, chief executive of the auction firm Williams & Williams, said mortgage companies are most eager to hire his firm in markets that have a “rapidly and constantly increasing pile up” of homes.

  Note that since this piece was printed, unemployment is up to 5.5%. Have I mentioned that?
  
  Notice that Americans in trouble now looks to be near 11%. Virtually no one had trouble paying mortgages 2 years ago. Why?
  
  Because, as was mentioned by BEM in the comments, HELOC's were used as "income" for many years. And when home values are increasing, homes in some cases, sort of pay for themselves. HELOC it up every couple of years & you pretty much live for free in a house.
  
  Now it's The Dark Side of this Ponzi Scheme. It still seems incomprehensible how bad it can & will get in a place like Bend, where incomes are so overwhelmingly tied to an imploding industry that'll make the timber bust look positively glorious.
  
  Remember: See how bad it is nationwide? We are 18 months behind, and beta 5. Multiple whatever happens nationwide by 5 or a glimpse of Future Bend.
  
  And possibly the most gloomy post of the week was by Cheri Smith, a local Realtor with the appropriately named "Buy In Bend" blog:
  
  

  I have to admit I was disappointed to see that there was virtually no change in the number of home sales from April to May. And since I’m busy and not feeling very witty, I’ll leave it at that.

  
  Active Pending Sold May 2132 193 115 April 2003 201 102 March 2009 194 82 February 1867 116 62
  Wow. You can FEEL the despondent resignation in this womans tone.
  
  You can also catch some VERY "realistic" vibes from Realty Times entries:
  
  Fran McCormack: "Prices have turned sharply downwards. The average price of a single family residents is running around 475K. If you are an investor the Short Sale market is a place to pick up rental property or buildable land."
  
  Debbie Hood: "We are still in the midst of a downward market correction, with Sellers adjusting their expectations from 2005 home prices."
  
  Bev Sherrer: "Bend Oregon is a buyers market, interest rates are down and the inventory is up."
  
  How about that Bev Sherrer? That's her entire entry, no mincing words, she's just fed up, incapable of an entry more than a few clipped words.
  
  Go to Realty Times and you can get a taste for what it's like when an entire community of people are trying to talk themselves out of suicide.
  
  And what would a weekly blog entry be with a self-administered kick in my crotch?
  
  From Buster:
  
  My humble opinion, is that this blog is a collective representation of Bend in decline, of intellectual laziness, This blog is Bend. Add insult to injury 99% of the folks on this blog are self-defeating renter losers.
  
  You can't get more Bend than this group. You got the 'pussy' and his gorilla wife at the bike shop, this is what this blog is all about, middle age guys camping on their computer while their wives SELL in order to pay the bills. One day I went in to the Pussy's bike shop to find a part, as its near my house.
  
  The first word was "Can I HELP YOU", this women was a white version of Grace Jones, a real man-hater. I quickly did a 180, and announced that I had a senior moment. Bitch Slapping this group is like stepping on a newborn litter of critters, what's the f--king point?
  
  Bend is f--ked, I think all of us know, and it will be years before the toilet bowl flushes the detritus. The people on this blog 100% represent the new-bend, which is why they constantly call each other cali-Ho's, because they are. It will take years to flush the toilet. I have done a good job of educating during the past 1-1/2 years, I'm a contrarian, as duncan has said, what's the f--king point? This is what the bottom looks like.
  
  The "humble opinion" part was pretty damn funny.
  
  But aside from that, you just really have to wonder about the motivations for Good 'Ol Buster. He supposedly owns rental homes which encapsulate most of his wealth, but want RE to implode. Why? He hates everyone here, but asserts that he'll never leave.
  
  Plus he admits freely over & over that "Bend is f--ked", and yet he says he abandoned this blog because he has outlined, along with BEM, ways to "fix" Bend. I've also outlined what I thought would fix Bend, but that was a long time ago, and I think it's too late.
  
  Anther area where he & I seem to differ is the Ultimate Path that Bend will take. My own "humble opinion" is that local businesses are slowly but surely being crushed out of the Center. The center of Bend is being avidly turned into wildly overpriced commercial space, most of which is becoming vacant on Opening Day, even with signed tenants, who are defaulting on their leases.
  
  The standard Bend business cannot survive at these lease rates. That's it.
  
  So who does fill the space? Is it filled at all?
  
  I do think we'll hit some eye-popping vacancy rates here in the next few years, but I'm afraid that we'll remain on corporate radars as a place to plop down a franchise. Sonic has just plotzed out the latest soulless edifice to much fanfare.
  
  I visited Sonic this past week, and was left profoundly confused as to why ANYONE would line up to eat there. Not bad. Just wildly expensive & totally pedestrian food. I may never go again. Dandy's is FAR, FAR better. Greasy as hell. But way better.
  
  This is The Problem. Sonic comes in under a corporate spending umbrella, Dandy's goes out.
  
  Yarg.
  
  It's already happening. Look for A Wave of locally owned restaurants to go under in the next 1-2 years downtown. WAVES of them. Retailers too. Then, look to see what pops up in it's place. Might be 2-3 years to fill some spots, but some may fill quick. Is it local? Or is it some slimy ass slick bulls--t imported turd?
  
  I'm guessing there'll be more of the latter, and less of the former. THAT will drive people OUT, and they will go in search of The Next Bend.
  
  
• May 31, 2008
• 6:19

  Bend Oregon: Mass Exodus to CA and AZ

   » ‎ Bend Bubble 2

  Tags:  Most Overpriced Housing market in   [edit]

  Here's a comment I responded to Friday morning:
  
  IHateToBurstYourBubble said...

  
  “We’re still a growing area — we’re adding people and residents,” Williams said...
  
  That's not what I heard.

  May 30, 2008 6:07 AM

  Coincidentally, there is a piece in todays paper, "As gas prices cut into profits, region’s movers get creative", that peripherally mentions something that I heard this week from a very reliable source:
  
  

  Other customers say they can’t find jobs or afford housing, and so they are moving elsewhere.

  “We can’t keep trucks in, especially on the weekend,” she said.

  I heard that local truck renters have dramatically raised outbound prices, because Bend is experiencing a mass exodus like nothing these businesses have ever seen before.
  
  Their inbound, one-way truck count has gone to near zero, while outbound numbers are so overwhelming, they have had to raise prices several fold to recoup costs of getting trucks back to Bend.
  
  Again, a damn reliable source.
  
  What's the upshot of things like this?
  
  First and foremost is the edict to Think For Yourself. This place has "officially" 2-3X the construction base employment levels of Oregon overall. That is almost certainly low. "11.6% involved in construction"? Yeah, right. Try 25-40%.
  
  Anyone with half a brain knows that RE & RE-related industries practically overwhelm the Cent OR economy. Health care is the only thing that comes close. They talk about manufacturing being a big driver, but tell me how the mass layoffs at Brightwood are NOT RE related.
  
  I'd say maybe Les Schwab is RE-resistant... but they do own Juniper Ridge...
  
  Second, DO NOT believe statements like the following:
  
  "People are still moving to Central Oregon to enjoy our unique lifestyle, climate...."
  
  This is one of those HORRIBLY contrived statements, with some parts truth, and some parts bald-faced lies. Remember this:
  
  The buyers have come “from all over the country,” Breeze said. One is from England. About half are planning to use their units as primary homes. The other half are second-home buyers.
  
  Uh huh. Look at all the implied bulls--t in this statement. "International demand". "Such a flood of buyers that we have to hastily make up off-the-cuff estimates of what sort of buyers they are, whether super-affluent second home buyers, or just the local idle rich". "Breeze can barely contain the flood of buyers coming from every corner of the US"....
  

  In case you've been in a cave, The Plaza was taken off Breeze & husband Wurzel's hands by their lender.

  Here's more:
  

  Closer to home in Bend, some developers are dialing back, at least for the short term. DesertScape LLC President Craig Glazier said his group has shelved plans for a new mixed-use building on the lot next to the Deschutes Brewery on Bond Street, although it has already demolished the building that stood there before, partly because the group is preoccupied with its work on the new Red Rock shopping center around Redmond’s new Wal-Mart Supercenter, and partly in response to market conditions.

  “We’re not worried that things aren’t gonna move,” Glazier said. “It’s just that you can only do so much.”

  Hmmmm. Of course there is more hilarity:
  

  Local real estate agent Becky Breeze and her husband are building a 42-unit condominium project in the Old Mill District. Breeze already has sold most of her units. She said buyers know what they want and they don't balk at prices.

  "They want to live in a custom home," Breeze said. "And they don't want to sacrifice quality. They want to be close to walking trails and the mountains. They're really mobile and they have a lot of money," she said.

  Ah yes. Breeze's hallucinations still haunt the Old Mill to this day. So many rich, international, jet-setting billionaires coming here from Dubai & Tokyo that they've queued up in their Bentley's at her office with their trunks stuffed with cash.
  
  Of course, The Bulletin was more than happy to report these fantasies. And they do to this day.
  
  More praise heaped on Bend
  "Bend is a growing city filled with our kinds of readers," Weeden said. "A lot are active in the outdoors. They are working hard, playing hard, drinking good beer and listening to good music. There also is good nightlife, which is key."
  

  Then we find maybe not is all on the up & up:

  DVA, which worked with Bend writer Tim Neville and Outside's editorial staff on content for the article, contracts with the Bend Visitor & Convention Bureau to pro