Forum Replies Created
-
AuthorPosts
-
bsrsharma
ParticipantCarnage at High End
This is from an Irvine blog:
http://www.redfin.com/stingray/do/printable-listing?listing-id=775175&rc=blg_irvine&utm_source=irvinehousingblog&utm_medium=blog&utm_nooverride=1New Asking Price: $1,950,000
Old Asking Price: $2,249,000
Purchase Price: $2,206,500
Purchase Date: 6/15/2006
Address: 19 Fresco, Irvine, CA 926031st Loan $1,544,232
2nd Mtg. $220,600
Down payment $441,668The seller may end up losing it all. And all this in a year. Pretty dramatic. One would think someone with half a million $ cash has a little more sense!
ParticipantLiving paycheck to paycheck gets harder
The calculus of living paycheck to paycheck in America is getting harder.
What used to last four days might last half that long now. Pay the gas bill, but skip breakfast. Eat less for lunch so the kids can have a healthy dinner.
Across the nation, Americans are increasingly unable to stretch their dollars to the next payday as they juggle higher rent, food and energy bills. It’s starting to affect middle-income working families as well as the poor, and has reached the point of affecting day-to-day calculations of merchants like Wal-Mart Stores Inc., 7-Eleven Inc. and Family Dollar Stores Inc.
Food pantries, which distribute foodstuffs to the needy, are reporting severe shortages and reduced government funding at the very time that they are seeing a surge of new people seeking their help.
While economists debate whether the country is headed for a recession, some say the financial stress is already the worst since the last downturn at the start of this decade.
From Family Dollar to Wal-Mart, merchants have adjusted their product mix and pricing accordingly. Sales data show a marked and more prolonged drop in spending in the days before shoppers get their paychecks, when they buy only the barest essentials before splurging around payday.
“It’s pretty pronounced,” said Kiley Rawlins, a spokeswoman at Family Dollar. “It seems like to us, customers are running out of food products, paper towels sooner in the month.”
Wal-Mart, the world’s largest retailer, said the imbalance in spending before and after payday in July was the biggest it has ever seen, though the drop-off wasn’t as steep in August.
And 7-Eleven says its grocery sales have jumped 12-13 percent over the past year, compared with only slight increases for non-necessities like gloves and toys. Shoppers can’t afford to load up at the supermarket and are going to the most convenient places to buy emergency food items like milk and eggs.
“It even costs more to get the basics like soap and laundry detergent,” said Michelle Grassia, who lives with her husband and three teenage children in the Bedford-Stuyvesant section of Brooklyn, N.Y.
Her husband’s check from his job at a grocery store used to last four days. “Now, it lasts only two,” she said.
To make up the difference, Grassia buys one gallon of milk a week instead of three. She sometimes skips breakfast and lunch to make sure there’s enough food for her children. She cooks with a hot plate because gas is too expensive. And she depends more than ever on the bags of free vegetables and powdered milk from a local food pantry.
Grassia’s story is neither new nor unique. With the fastest-rising food and energy prices since the 1980s, low-income consumers are stretching their budgets by eating cheap foods like peanut butter and pasta.
Industry analysts and some economists fear the strain will get worse as people are hit with higher home heating bills this winter and mortgage rates go up.
It’s bad enough already for 85-year-old Dominica Hoffman.
She gets $1,400 a month in pension and Social Security from her days in the garment industry. After paying $500 in rent on an apartment in Pennsauken, N.J., and shelling out money for food, gas and other expenses, she’s broke by the end of the month. She’s had to cut fruits and vegetables from her grocery order — and that’s even with financial help from her children.
“Everything is up,” she said.
Many consumers, particularly those making less than $30,000 a year, are cutting spending on nutritious food like milk and vegetables, and analysts fear they’re further skimping on basic medical care and other critical services.
Coupon-clipping just isn’t enough.
“The reality of hunger is right here,” said the Rev. Melony Samuels, director of The BedStuy Campaign against Hunger, a church-affiliated food pantry in Brooklyn.
The pantry scrambled to feed 5,000 new families over the past 12 months, up almost 70 percent from 3,000 the year before.
“I am shocked to see such numbers,” Samuels said, “and I am really concerned that this is just the beginning of what we are going to see.”
In the past three months, Samuels has seen more clients in higher-paying jobs — the $35,000 range — line up for food as the fallout of the subprime mortgage woes takes hold.
The Regional Food Bank of Northeastern New York, which covers 23 counties in New York State, cited a 30 percent rise in visitors in the first nine months of this year, compared with 2006.
Maureen Schnellmann, senior director of food and nutrition programs at the American Red Cross Food Pantry in Boston, reported a 30 percent increase from January through August over last year.
Until a few months ago, Dellria Seales, a home care assistant, was just getting by living with her daughter, a hairdresser, and two grandchildren in a one-bedroom apartment for $750 a month. But a knee injury in January forced her to quit her job, leaving her at the mercy of Samuels’ pantry because most of her daughter’s $1,200 a month income goes to rent, energy and food costs.
“I need it. Without it, we wouldn’t survive,” Seales said as she picked up carrots and bananas.
John Vogel, a professor at Dartmouth College’s Tuck School of Business, worries that the squeeze will lead to a less nutritious diet and inadequate medical or child care.
In the meantime, rising costs show no signs of abating.
Gas prices hit a record nationwide average of $3.23 per gallon in late May before receding a little, though prices are expected to soar again later this year. Food costs have increased 4.5 percent over the past 12 months, partly because of higher fuel costs. Egg prices were 44 percent higher, while milk was up 21.3 percent over the past 12 months to nearly $4 a gallon, according to the Bureau of Labor Statistics.
The average family of four is spending anywhere from $7 to $10 extra a week — $40 more a month — on groceries alone, compared to a year ago, according to retail consultant Burt Flickinger III.
And while overall wage growth is a solid 4.1 percent over the past 12 months, economists say the increases are mostly for the top earners.
Retailers started noticing the strain in late spring and early summer as they were monitoring the spending around the paycheck cycle.
Wal-Mart and Family Dollar key on the first week of the month, when government checks like Social Security and public assistance generally hit consumers’ mailboxes.
7-Eleven, whose customers are more diverse, looks at paycheck cycles in specific markets dominated by a major employer, such as General Motors in Detroit, to discern trends in shopping.
To economize, shoppers are going for less expensive food.
“They’re buying more peanut butter and pasta. And they’re going for hamburger meat,” Flickinger, the retail consultant, said. “They’re trying to outsmart the store by looking for deep discounts at the end of the month.”
He said the last time he saw this was 2000-2001, when the dot-com bubble burst and the economy went into a recession after massive layoffs.
For now, low-price retailers are readjusting their merchandising and pricing.
Wal-Mart is becoming more aggressive on discounting. It announced Thursday it is expanding price cuts to 15,000 items, ranging from Motts apple juice and Progresso soups to women’s fleece tops, heading into the holidays.
Family Dollar, whose food offerings were limited to candy and snacks until two years ago, has expanded its mix of groceries like fruit cups, cereal and such refrigerated items as milk and ice cream while cutting back on shoes. This summer the chain began accepting food stamps.
Food pantries are also getting creative. Samuels said her church, Full Gospel Tabernacle of Faith, just started offering free cooking classes to teach clients who are diabetic or have other health conditions how to prepare vegetables like squash. It’s also offering free exercise classes.
“We are trying to make them health conscious,” Samuels said. “It’s not right to give them just anything. Our mantra is eat well and live well.”
___
Associated Press Writers Geoff Mulvihill in Mount Laurel, N.J., and Terry Tang in Phoenix, Ariz., contributed to this report.
http://news.yahoo.com/s/ap/20071019/ap_on_bi_ge/stretching_paychecks
ParticipantLiving paycheck to paycheck gets harder
The calculus of living paycheck to paycheck in America is getting harder.
What used to last four days might last half that long now. Pay the gas bill, but skip breakfast. Eat less for lunch so the kids can have a healthy dinner.
Across the nation, Americans are increasingly unable to stretch their dollars to the next payday as they juggle higher rent, food and energy bills. It’s starting to affect middle-income working families as well as the poor, and has reached the point of affecting day-to-day calculations of merchants like Wal-Mart Stores Inc., 7-Eleven Inc. and Family Dollar Stores Inc.
Food pantries, which distribute foodstuffs to the needy, are reporting severe shortages and reduced government funding at the very time that they are seeing a surge of new people seeking their help.
While economists debate whether the country is headed for a recession, some say the financial stress is already the worst since the last downturn at the start of this decade.
From Family Dollar to Wal-Mart, merchants have adjusted their product mix and pricing accordingly. Sales data show a marked and more prolonged drop in spending in the days before shoppers get their paychecks, when they buy only the barest essentials before splurging around payday.
“It’s pretty pronounced,” said Kiley Rawlins, a spokeswoman at Family Dollar. “It seems like to us, customers are running out of food products, paper towels sooner in the month.”
Wal-Mart, the world’s largest retailer, said the imbalance in spending before and after payday in July was the biggest it has ever seen, though the drop-off wasn’t as steep in August.
And 7-Eleven says its grocery sales have jumped 12-13 percent over the past year, compared with only slight increases for non-necessities like gloves and toys. Shoppers can’t afford to load up at the supermarket and are going to the most convenient places to buy emergency food items like milk and eggs.
“It even costs more to get the basics like soap and laundry detergent,” said Michelle Grassia, who lives with her husband and three teenage children in the Bedford-Stuyvesant section of Brooklyn, N.Y.
Her husband’s check from his job at a grocery store used to last four days. “Now, it lasts only two,” she said.
To make up the difference, Grassia buys one gallon of milk a week instead of three. She sometimes skips breakfast and lunch to make sure there’s enough food for her children. She cooks with a hot plate because gas is too expensive. And she depends more than ever on the bags of free vegetables and powdered milk from a local food pantry.
Grassia’s story is neither new nor unique. With the fastest-rising food and energy prices since the 1980s, low-income consumers are stretching their budgets by eating cheap foods like peanut butter and pasta.
Industry analysts and some economists fear the strain will get worse as people are hit with higher home heating bills this winter and mortgage rates go up.
It’s bad enough already for 85-year-old Dominica Hoffman.
She gets $1,400 a month in pension and Social Security from her days in the garment industry. After paying $500 in rent on an apartment in Pennsauken, N.J., and shelling out money for food, gas and other expenses, she’s broke by the end of the month. She’s had to cut fruits and vegetables from her grocery order — and that’s even with financial help from her children.
“Everything is up,” she said.
Many consumers, particularly those making less than $30,000 a year, are cutting spending on nutritious food like milk and vegetables, and analysts fear they’re further skimping on basic medical care and other critical services.
Coupon-clipping just isn’t enough.
“The reality of hunger is right here,” said the Rev. Melony Samuels, director of The BedStuy Campaign against Hunger, a church-affiliated food pantry in Brooklyn.
The pantry scrambled to feed 5,000 new families over the past 12 months, up almost 70 percent from 3,000 the year before.
“I am shocked to see such numbers,” Samuels said, “and I am really concerned that this is just the beginning of what we are going to see.”
In the past three months, Samuels has seen more clients in higher-paying jobs — the $35,000 range — line up for food as the fallout of the subprime mortgage woes takes hold.
The Regional Food Bank of Northeastern New York, which covers 23 counties in New York State, cited a 30 percent rise in visitors in the first nine months of this year, compared with 2006.
Maureen Schnellmann, senior director of food and nutrition programs at the American Red Cross Food Pantry in Boston, reported a 30 percent increase from January through August over last year.
Until a few months ago, Dellria Seales, a home care assistant, was just getting by living with her daughter, a hairdresser, and two grandchildren in a one-bedroom apartment for $750 a month. But a knee injury in January forced her to quit her job, leaving her at the mercy of Samuels’ pantry because most of her daughter’s $1,200 a month income goes to rent, energy and food costs.
“I need it. Without it, we wouldn’t survive,” Seales said as she picked up carrots and bananas.
John Vogel, a professor at Dartmouth College’s Tuck School of Business, worries that the squeeze will lead to a less nutritious diet and inadequate medical or child care.
In the meantime, rising costs show no signs of abating.
Gas prices hit a record nationwide average of $3.23 per gallon in late May before receding a little, though prices are expected to soar again later this year. Food costs have increased 4.5 percent over the past 12 months, partly because of higher fuel costs. Egg prices were 44 percent higher, while milk was up 21.3 percent over the past 12 months to nearly $4 a gallon, according to the Bureau of Labor Statistics.
The average family of four is spending anywhere from $7 to $10 extra a week — $40 more a month — on groceries alone, compared to a year ago, according to retail consultant Burt Flickinger III.
And while overall wage growth is a solid 4.1 percent over the past 12 months, economists say the increases are mostly for the top earners.
Retailers started noticing the strain in late spring and early summer as they were monitoring the spending around the paycheck cycle.
Wal-Mart and Family Dollar key on the first week of the month, when government checks like Social Security and public assistance generally hit consumers’ mailboxes.
7-Eleven, whose customers are more diverse, looks at paycheck cycles in specific markets dominated by a major employer, such as General Motors in Detroit, to discern trends in shopping.
To economize, shoppers are going for less expensive food.
“They’re buying more peanut butter and pasta. And they’re going for hamburger meat,” Flickinger, the retail consultant, said. “They’re trying to outsmart the store by looking for deep discounts at the end of the month.”
He said the last time he saw this was 2000-2001, when the dot-com bubble burst and the economy went into a recession after massive layoffs.
For now, low-price retailers are readjusting their merchandising and pricing.
Wal-Mart is becoming more aggressive on discounting. It announced Thursday it is expanding price cuts to 15,000 items, ranging from Motts apple juice and Progresso soups to women’s fleece tops, heading into the holidays.
Family Dollar, whose food offerings were limited to candy and snacks until two years ago, has expanded its mix of groceries like fruit cups, cereal and such refrigerated items as milk and ice cream while cutting back on shoes. This summer the chain began accepting food stamps.
Food pantries are also getting creative. Samuels said her church, Full Gospel Tabernacle of Faith, just started offering free cooking classes to teach clients who are diabetic or have other health conditions how to prepare vegetables like squash. It’s also offering free exercise classes.
“We are trying to make them health conscious,” Samuels said. “It’s not right to give them just anything. Our mantra is eat well and live well.”
___
Associated Press Writers Geoff Mulvihill in Mount Laurel, N.J., and Terry Tang in Phoenix, Ariz., contributed to this report.
http://news.yahoo.com/s/ap/20071019/ap_on_bi_ge/stretching_paychecks
ParticipantSince US has the largest public and private debt denominated in US $, it helps when $ devalues and lowers effective debt burden. If $ goes down by 50%, all debts are reduced by half. FED is managing a well orchestrated debt reduction by devaluation. If that helps with balance of trade, profits for global corporations etc, that is an added bonus in getting political support. As long as inflation is kept reasonable, say about 6%, it may not be all bad. The important thing is keeping the drop orderly.
ParticipantSince US has the largest public and private debt denominated in US $, it helps when $ devalues and lowers effective debt burden. If $ goes down by 50%, all debts are reduced by half. FED is managing a well orchestrated debt reduction by devaluation. If that helps with balance of trade, profits for global corporations etc, that is an added bonus in getting political support. As long as inflation is kept reasonable, say about 6%, it may not be all bad. The important thing is keeping the drop orderly.
Participantthere is plenty of income to support 300K homes at least.
Considering the present (and future) inventories, what would be a typical profile of such a buyer? (In terms of employment, place of employment, source of $60K downpayment etc., ) Why would they not be owning a home already?
Participantthere is plenty of income to support 300K homes at least.
Considering the present (and future) inventories, what would be a typical profile of such a buyer? (In terms of employment, place of employment, source of $60K downpayment etc., ) Why would they not be owning a home already?
Participantsmaller, decent homes available for well under 300,000 in a few years?
How does "larger, decent homes available for well under 300,000 in a year” sound? I can almost assure you of that anywhere in IE. There is just not enough income support for $300K+ homes in the “new” (classical) mortgage regime.
Participantsmaller, decent homes available for well under 300,000 in a few years?
How does "larger, decent homes available for well under 300,000 in a year” sound? I can almost assure you of that anywhere in IE. There is just not enough income support for $300K+ homes in the “new” (classical) mortgage regime.
ParticipantIMF says dollar ‘overvalued’
Currency traders were given a green light to continue selling the US dollar on Wednesday, as the International Monetary Fund said the greenback “remains overvalued” and rejected claims the euro had risen too far.
Contradicting Rodrigo Rato, the outgoing IMF managing director, who last week said “right now the dollar is undervalued”, the fund’s staff conclude the dollar is still too high. The multilateral lender also forecast slower growth in 2008 at 4.75 per cent, compared with 5.2 per cent expected this year.
The IMF’s new stance on the dollar will counter the arguments to the contrary made by France and some other eurozone members at this weekend’s meetings of the Group of Seven leading economies and the IMF’s governing body. They have been urging a change in language to temper the fall in the dollar, which dropped by more than 4 per cent against the euro in September alone.
The IMF, however, has little sympathy for struggling eurozone exporters hit by the currency’s rise. It says that even after its recent rise, the euro “continues to trade in a range broadly consistent with medium-term fundamentals”.
Apart from the dollar, the IMF’s economists also think sterling is overvalued, while the Japanese yen and the Chinese renmimbi remain too cheap compared with other currencies.
In some of its strongest language to date, the fund’s officials call on China to let its currency appreciate. Repeating its demand for “greater flexibility” of China’s managed currency, the IMF added that such action was in China’s best interests.
“Further upward flexibility of the renminbi, along with measures to reform the exchange rate regime and boost consumption, would also contribute to a necessary rebalancing of demand and to an orderly unwinding of global imbalances,” the World Economic Outlook argued.
Even with slower growth forecast for the US and a weaker dollar, the IMF sees little improvement in the world’s huge trade imbalances, embodied in the US trade deficit and corresponding surpluses in Asia and in oil exporters.
The Fund thinks that the US current account deficit will remain close to 1.5 per cent of world output until 2012, raising the likelihood of a disorderly plunge in the dollar and protectionism growing over the next few years.
http://www.ft.com/cms/s/0/e87f070e-7c96-11dc-aee2-0000779fd2ac.html
ParticipantIMF says dollar ‘overvalued’
Currency traders were given a green light to continue selling the US dollar on Wednesday, as the International Monetary Fund said the greenback “remains overvalued” and rejected claims the euro had risen too far.
Contradicting Rodrigo Rato, the outgoing IMF managing director, who last week said “right now the dollar is undervalued”, the fund’s staff conclude the dollar is still too high. The multilateral lender also forecast slower growth in 2008 at 4.75 per cent, compared with 5.2 per cent expected this year.
The IMF’s new stance on the dollar will counter the arguments to the contrary made by France and some other eurozone members at this weekend’s meetings of the Group of Seven leading economies and the IMF’s governing body. They have been urging a change in language to temper the fall in the dollar, which dropped by more than 4 per cent against the euro in September alone.
The IMF, however, has little sympathy for struggling eurozone exporters hit by the currency’s rise. It says that even after its recent rise, the euro “continues to trade in a range broadly consistent with medium-term fundamentals”.
Apart from the dollar, the IMF’s economists also think sterling is overvalued, while the Japanese yen and the Chinese renmimbi remain too cheap compared with other currencies.
In some of its strongest language to date, the fund’s officials call on China to let its currency appreciate. Repeating its demand for “greater flexibility” of China’s managed currency, the IMF added that such action was in China’s best interests.
“Further upward flexibility of the renminbi, along with measures to reform the exchange rate regime and boost consumption, would also contribute to a necessary rebalancing of demand and to an orderly unwinding of global imbalances,” the World Economic Outlook argued.
Even with slower growth forecast for the US and a weaker dollar, the IMF sees little improvement in the world’s huge trade imbalances, embodied in the US trade deficit and corresponding surpluses in Asia and in oil exporters.
The Fund thinks that the US current account deficit will remain close to 1.5 per cent of world output until 2012, raising the likelihood of a disorderly plunge in the dollar and protectionism growing over the next few years.
http://www.ft.com/cms/s/0/e87f070e-7c96-11dc-aee2-0000779fd2ac.html
October 17, 2007 at 1:23 PM in reply to: Bought for $466k in ’06 – can’t sell for $350k in ’07 #89650ParticipantI have a feeling that now onwards, it may be difficult for most IE homes to cross the $300K barrier. This is due to the combination of excess inventory, difficulty of getting mortgages and not enough income support to justify a $300K+ home using traditional guidelines (like, 3X annual income). Anyone who can afford to buy now and is brave enough to buy now will probably buy a coastal area home for a good price. The demand for IE from those priced out from coastal areas was temporary and has no reason to exist, post burst. That basically sends demand to zero and prices will slowly glide towards $200K or below with some exceptional properties touching $300K.
October 17, 2007 at 1:23 PM in reply to: Bought for $466k in ’06 – can’t sell for $350k in ’07 #89659ParticipantI have a feeling that now onwards, it may be difficult for most IE homes to cross the $300K barrier. This is due to the combination of excess inventory, difficulty of getting mortgages and not enough income support to justify a $300K+ home using traditional guidelines (like, 3X annual income). Anyone who can afford to buy now and is brave enough to buy now will probably buy a coastal area home for a good price. The demand for IE from those priced out from coastal areas was temporary and has no reason to exist, post burst. That basically sends demand to zero and prices will slowly glide towards $200K or below with some exceptional properties touching $300K.
Participantesmith: they don’t have to pay money to US government. They have to just structure the transaction such that it looks like an investment in US. There are companies that specialize in that. Like for e.g. set up a REIT that buys the house etc.. La Jolla is also nearer to South America than Mediterranean. Many South Americans own property in Miami. San Diego is well suited to become a western equivalent.
-
AuthorPosts
