News Cut: March 19, 2008 Archive

Two real estate factoids to chew on this morning:

Teresa Boardman, Realtor and writer of the St. Paul Real Estate blog reports she's seeing huge drops in asking prices.

I am not making this up. I am seeing homes listed in the MLS that have been reduced in price by $100,000 dollars. in one case the home was listed for slightly more than $200,000, when it went on the market a year ago and is now listed for 108K. I am watching it now to see how many days it remains on the market. It is bank owned and some of the banks have figured out if they make the price low enough they can get multiple offers and get more than they ask for it.

Meanwhile, according to Dakota County, even if your house isn't worth a small fortune anymore, it'll still be taxed as if it is.

According to the Star Tribune:

Because so many protections are built into the system, the housing slump won't truly work its way into the household budget until next year. And it won't kick in big-time until the year after that, county assessor Bill Peterson told the county board in a briefing.

MPR's Public Insight Network has been asking people to contribute their stories about their personal connection to the war in Iraq, which as you may have overheard, started five years ago today.

Thomas P. Dunne of St. Paul did us one better; he sent a poignant recollection of his years in the military and, in particular, his role in sending others off to war.

I have served on and off since 1966 when I joined the Marine Corps. I did two tours in Vietnam as an infantryman. I was a staff sergeant when I got discharged in 1972. After a 12-year break in service I re-entered the military as a Minnesota National Guardsman, drilling once a month and going away for two weeks every summer. When Desert Storm began I was recalled to active duty, and served in the U.S. until it was over. I then transferred to the U.S. Army Reserve and was involved in Somalia (91-92), Haiti with the UN for 6 month in 1995 (90 miles from the U.S. with a benign, but ineptly corrupt leadership we couldn't fix in two years, or 42 years if you count the gunboat days in the '20s and 30s. What made us think six years later, we could repair a thoroughly corrupt, well-armed nation thousands of miles away among our enemies?), the Kurdish evacuation from Northern Iraq in 1996-97. My final active duty assignment (2006) was in the Horn of Africa.

In 2002, I became the command sergeant major of a Wisconsin Army Reserve battalion that sent most of its troops of to war after 9/11. It was difficult for me as a Vietnam vet to do this as I was very much aware what they were heading into; it would have been much easier to go than stay .

(More after the jump)

The Associated Press is carrying a story today that says Sen. Norm Coleman has "previewed" his message that he'll use against presumptive DFL nominee Al Franken.

"The reality is I'll run against somebody whose temperament has
been such, whose style has been such of being incredibly divisive
and incredibly angry," Coleman told reporters Wednesday. "How do
you expect to work with somebody when you have called every
Republican the most vile and negative thing that one can imagine?
Values, experience and temperament are issues."

In five minutes, Coleman used the word experience nine times and
temperament seven.

Here's the audio, which sounds very much like the "tone" theme Coleman used in his 2002 victory. When Coleman debated DFL candidate Walter Mondale on the eve of the election, he stressed "tone" over issues.

It worked. The "money quote" (the quote that made the TV news) was this exchange, as reported on Minnesota Public Radio at the time.

What you're doing is sticking with the right wing and pretending to change the tone. It's not the fluff of what kind of words, and, Norm, we know you we've seen you; we've seen you shift around. We know about all of this and now you're in this location and you have to take responsibility for the position you're taking," Mondale said.

"Again this is the tone that you don't want to see in Washington," Coleman replied. "This is the tone that's resulted in where we're at today. Where we don't have an energy bill, we don't even have a budget. We don't have a prescription drug bill. We don't have disaster assistance for northwest Minnesota because it's this tone."

Coleman's strategy in his first statewide campaign -- his 1998 run for governor -- emphasized a similar theme... that the nuts and bolts of issues were often secondary to feelings and optimism. Take his defense of the Xcel arena project.

The return of the NHL! That was about hope! It was about hockey, but it's also about a new arena that'll bring as many as 1.4 million people to the core downtown. And, by the way, without any St. Paul property-tax dollars and the help from the state in an interest-free loan. We're getting a business that's coming in and generating between $3 and $8 million a year in taxes. But it's not just about that, it's about hope!

In the last few months, many of the nation's wisest financial experts have created the impression that they have no clue what they're doing. Bear Stearns has crashed and burned in a hurry, led there by people who actually went to school to learn how financial markets work. The Fed tries a little of this and a little of that and in the end, it all appears to be a crapshoot.

And yet, we listen to what they have to say and watch their interviews on the CNBCs of the world (here's a sample of expertise on YouTube you don't want to miss.), figuring that they simply must know something we don't and until we learn it, we're doomed to wallow in the financial mess that they helped create in the first place.

Logic is often the first victim of an economic downturn.

Marktplace's Kai Ryssdal tried his best on Tuesday when speaking to Daniel Scotto of Whitehall Investment Advisors. Scotto made it clear that the Federal Reserve Board is trying to stabilize the markets, he thinks stock prices are still too high, and he thinks it's a seller's market. Got it. Easy. Stay out of the markets and head to the casino.

Then, speaking of market prices, he said, "risk is really being repriced in here," and, when Ryssdal asked what he meant, we got this:

Essentially it's the price of the premium over treasury yields that investors are demanding to place their money in stocks. Not to be too technical but in the reciprocal of the price earnings multiple. Essentially the sensitivity of the price earnings multiple and what that's showing is the price earnings multiple needs more E than P right now

Oh.

Perhaps consumer confidence has something to do with whether we can understand what the heck the experts are talking about.

The New York Times' David Leonhardt had a good idea this week:

I spent a good part of the last few days calling people on Wall Street and in the government to ask one question, "Can you try to explain this to me?" When they finished, I often had a highly sophisticated follow-up question: "Can you try again?"

That said, Leonhardt does a decent job of explaining what's going on and why.

Usually near the end of a presidential term, some news organization somewhere puts a collage together showing the difference in presidential appearance between the first days in office and the last. The difference is usually quite stark. I'm not sure that's the case with President Bush.

Above are 8 pictures, all taken in the first three months of each year between 2001 and 2008. Try to put them in the correct order. You can put your guesses in the comments section.

At some point on Thursday, I'll reveal the correct order in another collage.

Update: Here is the correct order. Left to right.

So the correct order is:

C-A-B-D-F-H-G-E