Who Me, Protest?

Who Me, Protest?

The following is the result of looking for data to support and build my case in a recent real estate tax protest I have filed.

Before you open the link below, read the following short explanation below first.

The following is a look at one of the 20 Metropolitan components which make up the Case-Shiller SPCS20R Housing Price Index. The SPCS20R is a 20-city composite index comprised of 20 major metropolitan areas in the U.S.

The index reflects upon the overall movement of housing prices across the nation in these twenty areas.

A particular component of this index includes Chicago.

And because of its relative proximity to Wichita, KS, I decided to take a look at it more closely.

It is  listed in The Case-Shiller Index as:

(SPCSCHI:IND)

http://www.bloomberg.com/apps/quote?ticker=SPCSCHI:IND

Once at the website, note that the time, x-axis of the graph may be expanded to adjust the historical period of time of the index’s chart.

Try setting the chart to look at a three (3) year price chart.

Note when prices fell off drastically and then  made a gradual comeback.  Never the less, observe that  prices  are, once again …headed back downward. This is a continuing trend …so much so that, their  negative  retracement threatens to breach their previous low levels.  

As is, keep in mind that we are scheduled to conclude and finish the dispensation of QE-2 at the end of March or April.

In this approximate window of time, the conclusion of QE-2 is scheduled to coincide with  Congress’  vote to  raise the debt ceiling.

Hopefully, something new is brewding in Washington …something creative and fresh …something that is non-government dependent …something which promotes independence …a creative solution beyond the borders of Washington.

Keep one thing in mind though, the President and his administration are still on track to maintain our nation’s spending and deficits habits at their current swift, unimpeded pace …shamefully adding to the mountainous highth of an already exorbitantly record high level of here-to-fore unsurpassed debt …which also comes with a crippling debt service cost.

In other words, Washington is still as dependant on borrowed money as it ever was.

And as China moves to strengthen its currency to combat inflation, nothing  would work better for China than …if it were also to be the case that yields here in the U.S. would rise in step …along with President Hu’s Chinese plan.

Sovereignty? What’s that, an oxymoron …say, like …independence?

And rise they will.

This is exactly what will happen to yields. External pressures will result in producing higher rates as the Fed removes its “artificial” (vis. QE-2’s) support and intervening participation in the ancillary markets which have been impacted by QE-2.

Get high …grab a thigh? Eat a bite of pie! Sorry, but in this you can not have your cake and eat it too.

When QE-2 comes to an end, the Fed will exit the room and cease to buy its own Bills’, Notes’, Bonds as well as various other agency debt instruments.

As spending is, rates will rise. Obama’s back is up against the wall, and there is no way out …no more time to waste on the former liberal agenda and its flirtatous honeymoon with socialism.

Make no doubt about it, reality is setting in. The Fed is going to make its exit from the auction floors …and with current levels of spending …the political will of the left’s agenda will be felt in terms of most assuredly higher yields.

Munis are already wowing and sucking investors by offering 10 to 11 percent after tax effective yeilds.

What more could an investor want? Greater security and a sound and accountable rating firm …one that acually does its due diligence …that’s what?!

The fate of munis thus, may follow market yields to include still higher yields.

Wait for it …wait for it ….??? Stay away from it …don’t touch it ???

Munis are region sensitive …and yields differ on a case by case basis of course.

Not all regions of the U.S. has been affected by the scarcity of prudence and due diligence.

Wow! Think of it like, the U.S.’s version of Europe’s PIGS.

Regionally, some areas sucks more than others …which, in turn will affect how well these areas’ municipal bonds fare …or fail …as they may become threatened to fall into default …regardless of how well-heeled their ratings may have been.

That’s why real property appraisals are so far out of wack …it’s a money grubbing grab on a local level.

Let’s face it. Local municipalities …like their states are cash starved.

What was the last round of stimulus that went out to the states? 62 Billion?

How much  went out again and again in the form of extended unemployment benefits?

It all adds up …but produces very little hope for a productive change.

No goods and services exchange hands …just more …something for nothing.

Stimulus to promote and build a mindset of endless, and enduring  entitlement?

Fine kettle of fish! Nothing is nothing …anyway you cut the cake.

At the end of the day, nothing costs something. That’s for sure …especially in terms of the atmosphere of rates and yields …as well as the strength of the dollar …all of which impact inflation and the stability of the dollar.

Whether or not higher yields will attract greater number of participants back to the auction floors remains to be seen.

You can take one thing to the bank, though.

As certainty on the Hill seems to be gaining some measure of understanding as to what a good measure of substance …belief …faith …or confidence may mean to the future of the American will to recover, the will of the people is being addressed …howbeit ever so slowly …all heels dragging and kicking toward 2012.

I, for one …smell disingenuous pandoring though.

I can not help but wonder if the left isn’t trying to set the right up to fail in its newly found rhetoric of unity and holding hands.

I hope I am wrong on this one. Time will tell the tale of the defining spirit of cooperation in subsequent actions.

Actions do speak louder than words.

And thus, action is the key word of incentive which will be worthy of a vote come 2012.

There’s nothing like incentive to perk up the wil …good java not withstanding.

Incentive is still …as it always was …the best bang for the buck.

As it may be, any break from the last two year’s atmosphere of bickering and finger pointing will be a welcome change, but whether or not such a change is too late to reverse the damage produced over this time remains to be seen.

One thing to be sure of is …that the short term bills and notes outstanding are going to most certainly continue to march forward …as they come due in wave after wave …in tranche after tranche of bills …notes …all along with the longer termed bond auctions.

And each two months, these auctions’ tranches will needs must be redeemed, turned and or reset at invariably higher and higher yields ….which, at a higher maintenance costs will impact the budget on a grander scale.

And …unless the government can periodically concoct imaginative and creative, pseudo-mini-crisis …and thereby …beat monies out of equity markets …into its safe-haven harbor of treasury instruments …the Fed will have to adjust its spending habits in some way shape or form …or raise taxes.

These are somethings the Fed and other participants around the globe keep getting better at these days.

Wouldn’t it be refreshing to see the Fed promote incentives rather than punishments. Crisis and Tax management is not a creative way to serve the needs of the people.

It is though …a way to serve itself. So be alert and be aware.

So, be on guard and be watchful for more head fakes in regard to a government whose propensity is to serve itself rather than its people.

And be …especially watchful at, around and on the dates  leading up to the more noteable treasury auctions scheduled to go out.

Recall the line of the play/movie, “Little Shop of Horrors?”

”Feed me Seymour …feed me!!!”

So, be alert! The advent of the end of QE 2 indeed will only add to the need for  Congress to embark on some other greater means  to find some new source  of cash to feed its non-stop spending habits.

Its appetite for such is bound to lead to the need to fund its creative cravings for …fresh new medicare, medicaid, healthcare, postal, pension, union benefit backing bail-outs …not to forget to mention cash for clunkers, and any new bond backing programs for new states’-oriented stimulus programs not withstanding.

The government has its hands in so many things it has no business …it is a wonder why it has not been focused in minding the store.

After all, in the first two years of the Obama administration …much effort was made to enact stimulus  to save the state’s police and teachers …as we;; as stimulus to reward and empower the unemployed …and a hole host of many other programs which we have little to show for but a hole lot of debt.

Sort of reminds me of a certain man who was the object of a parable of the tallents. What good is money …if it is merely taken and buried in a big hole in the ground?

And so, I say that more QE will be the death of us all. No more thank you very much Hillary Clinton!

Much of the early calls and champions of stimulus was made in large part by Hillary. It just couldn’t be big enough …as if to say that size matters.

Unfortunately, here the case for more has neted less …save for a huge hole in the ground where this administration’s burried its hope and change.

The actual end of QE? I will believe my eyes when Timothy Geithner  demonstrates his intentions to get out of the QE business and when Congress also follows suit and gets out of the way of business.

In regards to funding the stimulus …isn’t about time that corporations and businesses are given their turn to flex their mighty muscles?

Why has the administration taken so long before making a conciliatory guesture to hold hands?

The government has been pursuing nothing but a whimpy agenda by a measure of compare to what would foster and empower the independence of the private sector and a private sector driven recovery.

Then why hasn’t it gotten out of the way of what actuall drive free market forces …those which produce a thriving, healthy economy?

With QE-2 ending, where  will that leave Timothy Geithner?

Higher rates and two GSEs with huge  ballance sheets …and the need to print bogus paper money; lots of it to support and add to the current build which is growing deficits ever the more …still larger and larger.

Why? Because, for the last two years, the nation has added …rather than reducing its need for cash.

And rather than acting responsibly to cut back spending, the Fed has moved against business and restricted such ….more prudent approaches to government’s forms of managing crisis.

All in all, in an invirronment like this, higher yields and rates of interest along with a ballance sheet which is too big to fail  is truly a combination which do not mix well.

But maybe, higher rates and printing don’t either …or do they?

Maybe this is the opportunity that Geithner has been waiting for all along.

Go figure.

This won’t be the first time where pretzel logic prevailed.

But know this, Geithner has so far indicated that he is committed to keeping rates low …working in harmony with the Ben Bernank.

Bad habits are tough to break, and printing money might be an unjust answer to higher rates.

In the absence of QE-2, how do you think they will pull this off …all in an atmosphere of uncertainty?

I mean, unemployment and a two year moratorium on the Bush Tax Provisions are merely the foder of politically devised, disingenuous pre-electioneering.

What will a nice State of the Union Address get you these days? A cup of coffee …or a big smoking hole in the ground?

By the way the president speech went …there’s no wonder why he might be proud of the fella which drill the miners out of their Chilean mine.

 Yet for all our debt woes, what ace in the hole could there be which is worthy of actual tangible hope? Corporate Tax Cuts?

Cum by ya my friend, cum by ya.

Sounds like more of the same …an agreement to disagree, but I hope not.

I just hope that the hole business of Corporate tax cuts will not wind up …like smoke and mirrors …to avoid taking serious responsibility for  fiscal ressponsibility.

I heard the president enter into social class bashing tonight once again.

One thing is for certain, Chinese or no Chinese; if Washington doesn’t stop spending soon,  we, most assuredly alone …will need to continue to borrow and print even more money …with or without QE-2 …with or without playing and pitting one social class against the other.

In failing to stand, lead and move forward, the unresolved stresses of a stagnant recovery threatens to persist and linger in an ever increasing continuance of bickering and contemptuous covetousness.

All of this spirit produces is still more lack of agreement and unison.

And without these bond together, the lack of confidence will come at a price paid by all classes …regardless …for the sake of a lack of strong leadership.

And without a well attended series of autions,  we can not print enough  money to successfully  maintain lower yields.

Such  irresponsibility threatens to sink this nation, at worst into  an abyss from which there will be no possibility of recovery.

Inflation will be certain to fight any recovery.

At best, we  have seen  that we are in  a deep rut  which threatens to  seriously diminsh and comprimise our national security interests and capabilities to sustain and maintain a steady stable recovery.

As such …without guarantees for a stable dollar, if …China is not  willing to show up at and participate in  one or any number of these Treasuries auctions …the bid will likely fall short of the ask and …as the spread widens …the result will be to produce much higher yields.

And this might alone might be the straw which forces the Fed  to take some drastic measures …namely endorsing spending cuts. That is what will occur when debt load or service costs loom so high that it makes painful incursions into the portions of the budget which is otherwise   reserved for discretionary items of the budget.

When that dries up …well, katy, bar the doors.

And that is what is happening …except, just like a frog …Americans do not realize that they are boiling in the pot already half cooked.

Where’s the salt and pepper? Time to serve?

Therefore, if spending cuts are not addressed adequately, the nation will unfortunately continue along in its current path of printing and spending.

This cycle is merely …fueling and feeding inflation.

The best thinking would be to take a path which best will allow the Fed to sell off its ballance sheet’s assets while reducing its spending at the same time.

Unfortunately, that may not fair well for the likes of the GSEs and the likes of those like AIG.

As is, AIG is not yet healthy to insure against continued current price erosion as well as any future failures. So, it is far from being able and ready to stand on its own.

On another note, Chinese President Hu Hintao just visited the U.S.

http://www.irishtimes.com/newspaper/world/2011/0124/1224288164795.html

I believe,  that significant spending cuts …must absolutely be among the mix of all things considered to build strength and confidence into the U.S. dollar.

We just can not afford to continue to delude ourselves into believing that we are entitled to big, ineficient, costly government …fueled and fed by borrowed money and deficits.

The Chinese will walk. It’s in their interests to do so.

By walking, the dollar will strengthen on its own by a measure of non-participation.

That’s a recipe for further stagnation in the housing sector.

One thing for certain is that Congress has not come up with one creative idea yet since all our debacles  manifested their  ugly heads …one right after another …post 2008.

Speaking of curtailing spending, check out the “End the Lame Duct Law” which House Representatives Lynn Jenkins and Mike Pompeo are co-sponsoring.

This piece of proposed legislation takes aim squarely at waste …on the spending side of the equation.

It is a rather promising way to “…just say no!” …to outgoing members of the House who have no regard for last minute spending for  their districts.

And while this bill would prevent this tendency to spend by outgoing members of Congress …The President has vowed …in his Stat of the Union Address to veto any bill which contains earmarks in them.

I say; “Bravo! Bravo on both accounts! Pass this piece of legislation and “…We the People …” will then, have two balanced guaranties which will fight spending.

Aside from this political stuff, that’s all I have for now.

Stand up …go and speak to your Congressional representative.

Let them know what you believe, and above all …request action now!

After all, they are going to request your vote in 2012, yes?

All the best …and go get’em!

Bill

P.S.: Here again are some links I recently found to support my personal real estate tax protest. You might be interested in protesting your own real taxes too …unless it is the case that you just simply enjoy paying more than your fair share.

You may get the necessary guidance and forms by visiting your local county’s website.

Altogether, the data from these links below  compliment the Chicago index’s 3-year chart’s downward trending price function  …howebeit on a more local basis.

This Chicago index  above is the one I refered to at the outset of my letter’s opening paragraph.

So ….pop some pop corn and que up the following Carol King song, “You’re So Far Away” http://www.youtube.com/watch?v=_CxN9LIPr6Q

…which I offer up for your respective county appraisors everywhere.

Get comfy and …and check out the following materials I found from from Wichita State University’s W. Frank Barton School of Business’s …Center for Real Estate.

Oh, and while your planning your own respective tax protest, good luck with your investments in municipal bonds.

FHFA (Federal Housing Finance Association)

http://www.fhfa.gov/

FHFA Home Price Indices

http://realestate.wichita.edu/draft/research/fhfa_cy_kansas.asp

 

 

 
     

 

Home Page:

http://realestate.wichita.edu/draft/research/HPI_methodology.asp

 http://realestate.wichita.edu/draft/research/Web/FHFA/HPI_FHFA.xls

Wichita Home Prices:

http://realestate.wichita.edu/draft/research/fhfa_cy_kansas.asp

Home Sales:

http://realestate.wichita.edu/draft/research/mls_totalh_all_sales.asp

2011 City by City Kansas Forecasts:

2011 Housing Forecast

http://realestate.wichita.edu/draft/research/creexclusives_Housingmarketforecast2011.asp

Wichita 2011 Forecast:

http://realestate.wichita.edu/draft/research/Web/Forecast/2011/2011forecast_14-15_newest.pdf

Deeds Recorded Sedgwick County

http://realestate.wichita.edu/draft/research/publicfilings_analysis_sgco_deeds.asp

Forecloseures Sedgwick County:

http://realestate.wichita.edu/draft/research/publicfilings_analysis_sgco_foreclosures.asp

Transactions

http://realestate.wichita.edu/draft/research/publicfilings_analysis_sgco_transactions_volume.asp

Foreclosures SG County

http://realestate.wichita.edu/draft/research/publicfilings_analysis_sgco_foreclosures.asp

Total Home Sales (New and Existing)

     
 

Total Homes

 

http://realestate.wichita.edu/draft/research/mls_totalh_all_sales.asp

 

 
     

 

 

Notice, these proceedings data was/has been temporarily halted, but make no mistake about this picture, the inventory of unsold housing is on the rise at a pace which threatens to set a new all-time record which would eclipse last years record figures.

And so, at a time when service costs are difficult to express as a  % of our nation’s budget …take a look at some information from the following sources and draw your own conclusions.

Federal Debt

http://www.federalbudget.com/

United States public debt

http://en.wikipedia.org/wiki/United_States_public_debt

Congressional Budget Office

http://en.wikipedia.org/wiki/Congressional_Budget_Office

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