A Bit More on Foreclosures

I generally don't like AARP.  They operate more like an insurance company than anything else, and their commitment seems to be mostly to the richer old, who can take the tours and buy the products they offer.  As a very young woman, I decided that I'd never give them a sou when they accepted the increase in the retirement age for Social Security recipients.  But that was consistent with their attitude, as poor elderly aren't really their constituency.


But I will recommend this.  What surprised me was the extent of distress for population sectors that should be relatively stable.  But then I thought about it, and realized that the current distress in the over-50 crowd is the result of the stresses we've faced since we were young.  For instance, in 1989, 37% of the 55-64 age band households had mortgage debt.  In 2010, 53% were still carrying mortgage debt.  Thinking back, that's because most of us didn't buy houses in our 20s, but in our 30s, because housing prices had increased, especially after the early 1970s, while wages had decreased.  Our generation was always more stretched than our parents.


But that doesn't explain everything, as households in the 65-74 age band also have more mortgage debt.  This group may well have purchased in the period before the great inflation, which would mean that they'd be paying off at least some mortgage debt in very cheap dollars.  But if they bought second and third houses, at least some of that benefit was lost.


More thinking later.

A Few Notes on Foreclosure

But first, today's is J's second to last day of work.  After tomorrow, it's all over, and he can devote himself to taking care of me and the cats.  I will have instant HTML help when I need it.  I will eat fancy dinners.  I will be taken out more often.  Joy!  Joy!


But moving right along to foreclosures.  The numbers in California are falling.  One should hope so, given how many houses that have already been foreclosed.  However, my Sitemeter is up a bit on the Tenants & Foreclosure blog.  Now, it's too early to note a trend, and it's nothing like the substantial increase in traffic after the robo-signing scandal last year.  (My hits doubled in a month.)  In addition, the "cash-for-keys" page is the most popular, both as entry and exit page.  This always indicates homeowners, as they aren't interested in tenants' rights or "just cause" eviction.  What I suspect is happening is that the lenders seek to beat the new homeowner protections that will take effect in January, and are pushing through as many foreclosures as possible.  The number to watch is not the Notice of Default (the first step), but the Notice of Trustee Sale (the beginning of the end), as lenders will move to oust homeowners who've been "dual-tracked" and have emptied out their savings accounts, retirement accounts and the like, and are out of cash.  This may give tenants a bit of a reprieve, as investor-owned properties aren't covered under the new legislation.

Happy Birthday, A

Friend A helped me pick my eReader.  I haven't done anything as useful for her.

Poor Parks and Rec

California's Department of Parks and Recreation has been caught with a surplus.  A $54 million surplus.  Enough money to run the state park system here for more than two years.  They got caught when state auditors were looking into inappropriate-to-illegal vacation buyouts for management employees there.  But what's interesting is why Parks and Rec kept the money secret.  All you need to know is that more than half the money comes from registering all-terrain vehicles (ATVs).  These are the noisemakers that some small percentage of the population likes to take out to ecologically fragile areas and ride around on--over sand dunes, through deserts, and the like.  Many of the tree-huggers at Park and Rec would probably like to ban the things entirely, but they are forced to accommodate all Californians, even those who aren't going to see a bit of wildlife, as their pollution devices scare away everything for miles.


But they money rolled in.  And if they reported it, the all-terrain community would want either a fee reduction or more places for their form of recreation.  And you can imagine park rangers cringing at that one.  So some dozen years ago, someone decided that they'd just "forget" that they had the money.  So they didn't tell anyone.  And didn't tell anyone.  They conveniently didn't tell the State Controller or the Department of Finance, as those agencies probably aren't staffed by people who think ATVs are the Spawn of Satan.  After awhile, State Parks and Rec may have forgotten they had the money.  But now everyone knows about the $54 million.  And I wonder how long until the ATV community decides they want to ride around on the beach at Big Sur.

Happy Birthday, Max

I will send your card today.  Promise.

Leaving Sacramento I

I've noted several times that J is going to retire at the end of next week. And that we'll be returning to the Bay Area, our home of some 30 years. (J and I arrived in San Francisco within months of one another in 1972, although we didn't meet for some years after that.)  I suppose I've sent sufficient space on the horror that is the weather in Sacramento, and I need only note that it was 105 degrees last week.  The Valley climate is a crime against humanity, and it might be better for our electrical grid to move most people from the Valley to more acceptable climates within the state.


One of the things I'll have to do is relearn the proper weather vocabulary.  "It's only 92 degrees today" is not something you say in Oakland.  Ninety-two degrees is record heat territory there, and we engage in activities like lying on the sofa with a fan set to "high," all the while whining about the missing fog.  However, 40 degrees is really cold, involving mittens and down parkas.  I have often noted that temperatures in the central Bay Area range from 50 to 75 degrees all year round.  That's the range in which I want to live.  More important, though, is the description of weather events.  "Fog" is the marine layer that comes and goes each day--sometimes earlier, sometimes later, but always just waiting for you to decide to wear shorts.  In the Valley, "fog" is the ground fog that rises in the winter.  On the rare occasions when the marine layer makes it to Sacramento, it's called "overcast."  This distinguishes the marine layer from "clouds," which come with the possibility of rain.


The weather in the Bay Area makes it possible to engage in outdoor activities all year round.  You can go shopping, out to dinner, to an outdoor concert, without worrying about heatstroke.  True, you may need a jacket and a blanket at the concert, but you won't be stretched out on the grass, hoping that the shade will soon relocate to protect you from 102 degrees. In the Valley there are long stretches during the summer where you never see anyone out-of-doors.  They're hidden in their air-conditioned houses, praying for a 20 mph "Delta Breeze."  This is the leading edge of the marine layer, which brings cooler ocean air to the Valley at about 3 AM in the summer months.  (J gets up in the middle of the night, turns off the A/C, and opens all the windows to allow this to cool the house.)

So Much for Entrepeneurialism

Bloomberg reports on Bain Capital and how it makes money--loading up on debt, buying cheap and selling dear and, when the investments go south, stiffing creditors and workers.  Playing the tax code is not evidence of one's competence to run a country.

More Musings

I've been wondering why small business is so opposed to Obamacare.  In a rationally ordered world that makes no sense.  Anyone who has ever purchased health insurance for a small group has seen the limited number of options and the high cost of even basic plans.  I worked for a small nonprofit and I wept when I saw the health insurance bill.


Small businesses get huge subsidies if they provide insurance for their employees, so they can provide better plans at lower cost.  Then the reasons for this occurred to me.  First, some small businesses will figure out that they can put themselves at an advantage by providing employer-paid insurance, and there will be a potential "race to the top," as more and more businesses are forced to provide insurance to remain competitive.  And second, employees can remove themselves from a particular business without losing insurance, which gives them a great deal more power in negotiating wages and working conditions.  They can walk out and head off to the Exchange to buy a policy.

And yes, it is interesting that everyone now calls it Obamacare, whether they support or oppose the legislation.  Perhaps this is just another example of the expropriation of a negative by the forces in support of the policy.  Maurice Agulhon's Marianne into Battle: Republican Imagery and Symbolism in France, 17989-1880 details the transformation of Marianne, once a reactionary symbol, into a Republican symbol over the course of the 19th century.

Musings

I will have J fix my HTML later.  [He fixed it!]

J has now moved from humming to singing, usually along with something on the radio or the stereo, but sometimes just something in his head.  By next week he should be doing "The Ode to Joy" or the Hallelujah Chorus from Handel's Messiah.  We count down the days to his retirement.  (I, on the other hand, will not ruin the event by attempting to sing.)  And J would be appalled that I am presently listening to several versions of "Hallelujah," and not the Handel one.  So far, Rufus Wainwright has the best one.

The weather was mostly abominable last week--97 degrees was considered "not too bad"--but the fog rolled into San Francisco Bay and we're supposed to have tolerable weather for the next couple of days.  I am going to feed my poor plants, as they've suffered neglect and are becoming pale and wan.

I could write on the general stupidity out there, but there's so much of it that I can't get a handle on all of it.  We have David Brooks writing a paean to the Protestant Elite, as opposed to the Modern Meritorious Elite. The PE had his favorite virtues and didn't crash the world economy.  Uh, but weren't the PE in charge when we had the Great Depression?

Then there's the continuing cretinism of Arthur Laffer, who ruined my Sunday by arguing in my local newspaper that California should have a flat tax of 6%.  He notes that Governor Jerry Brown argued for same when he ran for President in the early '90s.  But, as I recall, Brown also argued that tenants should get to deduct a portion of their rent from their taxable income which, as a number of economists noted at the time, would mean that the federal government's coffers would be severely depleted.  And thus they pointed out so clearly the extent to which government at all levels depends on excess taxation of tenants.  (And in California it's worse than in other states, as those with higher incomes are much more likely to rent.)

Moving right along to the Romney campaign, we have confirmation, not so much of stupidity, but of the cluelessness of his supporters.  To wit:

I don’t think the common person is getting it. Nobody understands why Obama is hurting them. My college kid, the baby sitters, the nails ladies — everybody who’s got the right to vote — they don’t understand what’s going on. I just think if you’re lower income — one, you’re not as educated; two, they don’t understand how it works, they don’t understand how the systems work, they don’t understand the impact.

Oh, milady, we understand exactly how this system works.  And we understand the impact.  We're quite good at it, in fact.  In my younger years I was always interested in the election analysis published by the New York Times.  Over several election cycles I watched how people voted on the California propositions.  And with the exception of Proposition 22 (the Knight Initiative, banning gay marriage), I noted entirely consistent results:

1. People voted from left to right.  As they got richer, they voted more conservatively.
2. The most liberal were high school graduates and people with advanced degrees--around 70-30 on every issue.
   
3. The most conservative voters were those who had some post-high school education, but not a B.A., followed by those with a B.A., followed by the groups in (2) above.

What comes from this is that income and education are linked, but not entirely so, and that people are probably voting on the basis of interest.  Many of those with advanced degrees work for the government, which sops up legions of the overeducated.

And Obama did get this right (and so did Paul Krugman): 

When some people question why I would challenge his Bain record, the point I’ve made there in the past is, if you’re a head of a large private equity firm or hedge fund, your job is to make money. It’s not to create jobs. It’s not even to create a successful business – it’s to make sure that you’re maximizing returns for your investor. Now that’s appropriate. That’s part of the American way. That’s part of the system. But that doesn’t necessarily make you qualified to think about the economy as a whole, because as president, my job is to think about the workers. My job is to think about communities, where jobs have been outsourced.

We only wish that he had been thinking about these things, instead of how to please the denizens of Wall Street.