The Blue State Bailout
Check out the chart of the day.
Picture worth a thousand words.
Posted in: Subprime crisis
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Categories: Subprime crisis
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I’ve screamed at the screen all day! Bail out my patoot! Congress will not accept the blame for the mess they rightly earned! This map just raised my blood pressure even higher! Arrrrghhhh!
I’m not one bit surprised. All they do is spend, spend, and spend. Oh and fly around in their leer jets!!!!! No wonder California is going bankrupt. Balanced budget? Hasta la vista baby!!!!
I live in Florida. The problem I see now at this point is that this foreclosure mess is in fact effecting everyone. Even those with good credit. I am in the real estate industry here and even those good payers are loosing jobs and loosing there homes because joe blow next door never paid his bills on time. Now the property values have plummited, people are moving out, stores are closing and henceforth the job loss is a staggering rate. This area of Florida also relied heavily on construction and those jobs are gone! Making those with good credit and paying bills on time even have to lose their homes. I have seen it happen and have personal friends it has happened to. I agree with the SUCK. IT. UP. philosophy for those who have not lived responsibly, but this is effecting good friends of mine at this point. Friends I no longer have contact with because they have to leave the area, most times even the state to look for work.
This discussion isnt helping my kids.
LOL
Interesting but not helpfull. A note, All three candidates are active members of the senate. As far as I know they have done nothing to bring down gas prices. NOTHING. So far they all seem the same to me.
The foreclosures are happening in areas of population growth. New York and Pennsylvania are hardly part of “Red Country,” but the Rust Belt isn’t in demand because of their economic troubles.
Not showing much damage in the Seattle/PDX area… and it don’t get much “bluer” than that.
I’ve recently learned that banks aren’t always stupid. When commercial bank lending analysis rejects an applicant as too risky, sometimes the government (Small Business Association)will step in and assume up to 80% of the potential risk in order to entice the bank to assume the remaining 20% risk, and therefore, accept more loan applications.
I am familiar with the recent hurt that banks have gone through regarding bad loans, but have we heard the full story regarding these government agencies which also assume large amounts of risk on behalf of lending banks?
#6 said:
I agree. The one state that surprises me is Maine. It is awash in red, but I don’t view that region as high growth.
I think Mich. and Maine might represent economic populations that have been hanging on by a thread in recent years.
Perhaps the negative trend of adjustable rate refinancing pushed them from a rosey hue into flat-out crimson.
South Carolina is hardly the Rust Belt, Rusty, and they look solid on this chart.
But, I do agree that this seems to be population driven. The counties with major cities seem to be more likely to have a higher delinquency rate. Look at that swath through Colorado. NM shows the Santa Fe/Alberquerque splotches. I’m not sure I understand the AZ pattern outside of Phoenix, unless it is following the Florida design that Michelle pointed out.
Certainly, it would be a stretch, based on these two maps, to determine some causal relationship with a political viewpoint.
When it comes to the political arena, I can’t tell a Republican from a Democrat. They’re all shifting form between human and pig when viewed through the farmhouse window.
C’mon the second map is a lie…e.g. Washington state does not have that many red regions but it becomes a blue one at the bottom. Secondly, Colorado has quite a few red areas but its not shown as a blue state in second map.
The blooger just wanted to somehow fuse the housing data into election data and didn’t hesitate to use lies. I am just sad that Michelle Malkin is referring to this piece of crap.
As someone said, theres more foreclosures where the population is higher. Its just that and nothing more.
I just heard on the news, in my area, the tax appraisals are going out. It will be interesting to see how the elected’ lower’ the tax base with this mess. Don’t hold your breath.
L
I’m not convinced that this is population-driven. Correlation does not necessarily prove causation. Take a look at another map that Bernanke presented. This one is for changes in non-owner-occupied housing (read: speculators). I don’t have any nifty software that will overlay the two, but the trends are markedly similar.
I’d say that this supports MM’s previous arguments that a lot (not all, so don’t pile on) of these foreclosures are because people were speculating in real estate. And I still see a red/blue relationship, but whatever.
I watched as house prices shot up and dumpy houses sold at ridiculous prices. People bought McMansions with interest only loans. Banks felt that their loans were safe because house values were bound to keep increasing, so no risk! Loan to poor qualifiers, illegals and those stretched beyond their means, afterall a foreclosure meant the bank had the downpayment and a house with an ever increasing value. After high tide, there’s always low tide. I’ve been through this before when I had a house, made improvements and had to sell because of a job relocation. My house was listed for less than what I payed for it and that was in 1992. During that time I watched as a sucessful restaurant owner took out a loan to expand his business and when the property values plumeted, he lost his business, which was packed every night, and his home, which was above the restaurant. He was paying his bills, but the bank wanted him to pay off the loan sooner than he could.
Doesn’t it seem like the colors designating conservative and liberal states are backwards? For some reason, I always associate the color red with liberals. Personally, I would prefer the colors used to designated liberal and conservative states be Pink and… Red/White/Blue.
I suspect this is population driven as well. I suspect a color coded population growth map would more or less match the one presented here.
That didn’t work. Try going to Bernanke’s presentation and clicking on Figure 6. For some reason, it won’t go straight to the map. Sorry for the confusion!
Oh — and here’s the red/blue map by county. Lot less correlation here, actually. I’m sticking with the “speculator” theory, with a sprinkling of “growth area” thrown in.
Ignore brad, he has a chip on his shoulder and does not know what he is talking about. Unless you want to count all of the states covered in red as “big cities” with large populations.
I live in rural Florida and we are laying off people for the first time in 97 years of business. Flippers were the problem here. Then there are the people who bought the $500,000 home when they could not afford it. Millions of them in SE Florida fell into that trap. Those of us who bought the 1,300 square foot home are trying to keep our jobs and pay our bills. The rest are looking for a hand-out.
Someone call 911 to get the waambulance on the way for tropicalwave12
This is the effect of a housing bubble. The houses were never worth that much in the first place. Come to grips with that fact. It is an unfortunate byproduct of rampant speculation and people living beyond their means. Same thing as the dot com bubble. Speculators just found a new vehicle for their addiction.
No one who makes a house payment will lose their house. If they got more house than they could afford, an interest only mortgage, or put nothing down on their house, their chickens! . . are comin home!. . .TOO ROOOST!
I’m sure that since they are your friends they did nothing like that.
And you don’t give any reasoning to why you are calling to ignore me on this subject? So typical of you.
I never denied that the problem owes a big part to greedy house flippers. My point above was that the second map in link is not scientific, not true (=lie) and me be borderline funny. Thats it.
Well, I didn’t say mortgage delinquencies were caused by large populations. I intended my words to mean that the red counties are around population centers, thus population driven.
The fact that the redness is around population centers (or in warm weather, low population areas in FL, AZ, and CA, etc.) doesn’t preclude speculation as a principal cause. It doesn’t prove it either, of course.
We need more data. Thanks for the link, Lan Astaslem.
(pausing to look at charts)
The maps from the presentation tell a far more complete story. One thing that popped out: if you lived in a county with high delinquency rates in 2004 and they remained high in 2007, then you were green in the map used for this post. Hmmm? Hardly an indicator of responsibility then.
In fact, the core politically red states of the midwest and south actually fit the above description. They were bad at paying off mortgages in 2004 and they remained just as bad in 2007. In this case, green isn’t good.
#11 brad sk said:
Well, maybe a little more. I’m interested in Maine and Michigan. They are woefully red, however they are not indicative of the high pop. growth experienced by their crimson sisters like Florida and California.
I think that some of these red areas might be indicative of the piss poor economic conditions that already existed, exasperated by negative trend adjustable refinancing that these areas couldn’t afford.
WHAT??? DUDE? It is effecting everyone I know, the good payors and the bad ones. Tnis problem goes beyond speculators. I don’t need your freakin’ wambulance moron. re-read my post… My mortgage, paid, my house, I bought at a good time, still worth less, I’m not going anywhere, so I don’t concern myself with it. But when those in the construction industry have all lost their jobs, yes, even those living within their means, because of the speculators and such then it is a larger problem. I have several associates in the same business as me where their shops are closing up and jobs are being lost… Unfortunate part of the “Housing bubble” yes. I am glad yyou sheilded yourself from housing by being a horses a$$ for a living.
Point taken.
Check out the map along the border with Mexico!
Better foreclosure maps here.
It could be that you are condemning someone for doing what you are practicing.
I see someone has addressed this already.
There is no science to this. Michelle did not suggest there was. I, for one, found it interesting (and she did as well). You want to throw a blanket over it and call people out as liars. I have a problem with that.
I live in Texas which has not suffered much from the mortgage crisis even though we have a very large “minority” population – the city I live in San Antonio is over 60% hispanic/latino – the industry that I work in! – The worst state is California – which is where 70% of our foreclosures come from. It’s due to overvalued properties and lots of speculation. Our economy is doing fairly well and the real estate market has actually appreciated.
The blogger at marginalizingmorons was trying to be provocative with the two maps. Lying? No. Tendentious? Yes. The latter could be said for MM’s “picture is worth a thousand words” comment, too. But, hey, that’s the world of opinion blogs.
Surely you’re aware that blue states pay more taxes than they receive in services and red states get more in services than they pay in taxes.
tropicalwave12, if you must know, the pay for horse’s a$$ is not great, but the job has great benefits, like making dim-witted real estate agents question the meaning of life.
You’re welcome.
I have also re-read your original post, as you instructed, and it is still a sniveling, whiny anecdote worthy of the waambulance reference.
I’m sorry your friends have lost their jobs, but fear not, if they can just SUCK.IT.UP until next year, they will be made U.S. citizens by the next Presidente with comprehensive immigration reform. Then they can come out of the shadows for good.
Clearly population driven. Sloppy stuff MM.
OHHH, I Get it, HUH, you thought… I mean… I guess you are *ass*uming I am a real estate agent. That I am not, in real estate I am. My post was merely written as a statement of fact that not only are the speculators and idiots not understanding the fine ways of managing $$ have driven even those well managed individuals into the ground. The friends have have discussed are hard working American Born, American Men with American Families. Mark Wilson, family man, 2 kids, lovely all American wife. Gary L.(witholding complete last name) all American Man, ownes a well drilling business, GONE, and house he has owned for 24 years, gone, why, the market has slowed and well drilling has Uh… dried up. Moved to Mississippi, hard to find work there too but he is making it. Shall I name other acceptable members of our society for you sir. How about my friend Jerome R. or Ronald C. Unintentional consequences of the housing boom. All unfortunate. SUCK IT UP I tell them. “Suck up what?” they ask.
Nope…I clearly gave my reasoning in my first post (#11) and as DougT said at 30, these are all opinion blogs!
It doesn’t look any worse than it always does.It’s an election year,it’s always going to be doom,but who ever gets elected is going to fix it,right?
thanks for the maps. We’re studying this issue in Econ 422 at the University of Washington. Perhaps the well-educated screw up more than they would like to admit?
What appalls me is that since Gramm=Leach-Briley of 1999, the formal repeal of the Glass-Steagal act, the regulation of non-bank lenders has not kept up as it has for banks..so it doesn’t surprise me that this kind of crisis has occurred…in addition to investor stupidity.
Right now the FED is taking up bad lender assets and giving those banks treasury securities in return if they bid (Term Auction Facility for bank lenders for example) for them and this is in addition to fact that the FED discount rate has now dropped to about 2% (the rate the FED charges member banks for a loan from the fed to cover liabilities)-it was over 6% a year ago has dropped rapidly since March 2008.
My professor of Economics says the FED discount rate hasn’t been this low since the Great Depression. He worked for the Fed as an economist in the late ’70s and early ’80s.
I heard a few years ago, from economists that housing was soon to level off or even drop. Some were warning people to “buy a house to live in, not invest.” I mentioned it a few times to friends who all thought it was funny. Looks like their warnings came true. Housing could only go up so far, like any other product on the market. That and the Community Reinvestment Act of 77, has ruined the housing market. Now to offset it, we taxpayers, once again, have to pay for governmental mistakes while Congress gets off scotfree.
So why would you want to be a blue state? It is postulated that some or all of this disparity comes from the fact that more of the defense and related industries, and most of these are located in welcoming red states.
Additionally, the results can be attributed to either benefit the most from federal spending
programs, or paying the lowest per capita federal taxes. Taxes are generally lower in red states, so maybe conservative leadership yields more than just philosophical advantages.
Then again, maybe it doesn’t pay to harass and chase Marine recruiters. Actions have consequences. LOL!