Daily Archives: March 7, 2009

Connecticut goes after the mackerel snappers

I’m not sure why, with a $2 billion deficit facing the state this year and a $7 billion projected for next, our legislature thinks it has the time to spare to attempt to strip the Catholic Church of the power to regulate its own affairs, but that’s what this bill will do, according to the Bovina Bloviator.  Reading the proposed statute, I’d say that that’s exactly what the Judiciary Committee intends.

In Connecticut, a state where rabid anti-Catholicism is a hoary old tradition, once the provenance of the right, later effortlessly assumed by the left, the Judiciary Committee of the Connecticut State Legislature has introduced a bill into the General Assembly that would, according to Fr. Greg Markey, the estimable pastor of St. Mary’s Parish in Norwalk, remove from bishops and pastors, “any administrative, financial and legal power over their parishes.”

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Here’s an interesting statistic

In prowling around through our MLS records for possible short sale candidates, I counted 2,378 single family homes sold in town from January 1, 2005 to date. Probably every one of those that was purchased with an 80% loan/value mortgage is under water right now and they’re all (almost all, anyway) worth less than their owners paid for them. Not every house was purchased with such a large mortgage, of course, both because lots of buyers had the proceeds from the sale of their existing home to put into the new purchase and others didn’t need to borrow that much to begin with. Lucky them. But that must still leave a large number of houses that, if they had to be sold today, would sell at a loss.

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The No Lead Act hits Martha’s Vineyard

Thanks to Congress’s passage of CPSIA, thrift stores have been forced to toss their entire inventory of used children’s items: clothes, toys, even books. Overlawyered.com reports on the effect that’s having on Martha’s Vineyard’s thrift shops but it’s a story being repeated across the country. Don’t you feel safer now? U.S. Congress: “Reach out and crush someone!”

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There goes the neighborhood!

There was some kind of conference held to discuss youth gangs the other day and Greenwich Time has the story. I’m sure gangs are a problem in, say, Norwalk and Stamford, both of which cities sent representatives to the meet, but I was amused to read that the group included “students from New Canaan”. New Canaan? Things must have really deteriorated since I last lived there because, when I did, the only “gang” activity I observed was groups of white boy teenagers cruising Elm street in Dad’s BMW with the windows down, baseball hats turned sideways and rap music blaring. Even I, old and frail as I was, felt I could handle any rough stuff those toughies could dish out – I’d just threaten to have their allowances taken away.

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Is the depression being over-hyped?

I hope so, and some of the news coverage seems a tad hysterical, even to this gloomy Gus. Take this article from the Times, for instance, which discusses the changing labor market. It starts off reasonably enough – it does seem likely, to me, that we’re not going to go back to the employment levels we once had in the auto industry, but then starts tossing out some propositions that I can see no evidence for.

Stop the presses! I had intended to insert a quote from the Times article as it appeared last night but it’s gone – edited out, and I’m impressed. The reporter had cited the drop in car sales from 17 million to 12 and gone on to speculate that that loss of market would in turn permanently eliminate jobs in tires, plastics and all the other components used in cars. The assumption, of course, was that people would never buy cars in large volume again, and I thought that was overwrought and unsupported by common sense or evidence. Apparently the editor did too, and now the article recites the drop in car sales and moves on. I’m leaving this post up, even though its original point is moot, because, if I’m willing to trash the Times when it does go off the deep end, I ought to acknowledge when an editor does her job well. I’m sure she’ll sleep well tonight, knowing that I approve.

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A gloomy view of housing prices through 2010

The New York Times looks at the short term prospects for the national housing market and comes up with discouraging news for sellers.

In Manhattan, for instance, sales of condominiums and co-operative apartments fell 52 percent in January, according to Miller Samuel, an appraisal firm.

The market has been hammered by layoffs on Wall Street, tighter lending standards and a glut of new buildings, said Jonathan J. Miller, chief executive of the firm.

“The leverage is being squeezed out of the economy.”

New York is not alone. Real estate sales have also slumped in cities like San Francisco and Seattle, which previously seemed impervious. California’s recent experience might offer one roadmap of how the housing slump will play out in other places. But the process will be painful and slow.

So April, when buying traditionally picks up, could be the cruelest month yet for the housing market.

“You are really looking at a very, very ugly outlook,” said Ivy Zelman, chief executive of Zelman & Associates, a housing research firm.

In recent months, many banks and mortgage companies have suspended foreclosures voluntarily or because of state moratoriums meant to encourage negotiations between delinquent borrowers and lenders. Experience, however, shows that these suspensions merely delay foreclosures, and that foreclosed homes soon flood the market.

Another big concern is that homeowners with solid credit records will fall behind on their mortgages in greater numbers as unemployment rises.

So for now, the American dream of homeownership is a dream deferred for many people. Growth in the number of households — defined as families or unrelated people living together — slowed last year, to 1.1 million, from an average of 1.4 million a year from 2000 to 2006, according to George Masnick, a researcher at the Joint Center for Housing Studies at Harvard University. Economists say the growth rate will likely fall further in 2009.

Many of the vacant homes are concentrated in far-flung suburbs in the Southwest and in Florida, which means that prices there may not return to their highs for many years. It also suggests that much of the country does not have as large an oversupply of homes.

Troubled housing markets do not rebound quickly. The first thing to turn up are sales of homes as banks and individuals acknowledge that prices are no longer what they were; some of that is already happening in California and Florida.

Home prices tend to lag sales by a couple of years. That is what happened in Massachusetts and California in the early 1990s.

How long will the current slump last?

A futures market for home prices provides one sobering forecast. Trading in contracts that track home prices in 25 metropolitan areas suggests that home prices will fall about 15 percent this year and hit bottom in 2010, according to Radar Logic, a firm that created the index on which the trading is based. The market is also predicting that the Los Angeles area is closer to the bottom than New York.

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