Phoenix-area foreclosures

Yesterday the Arizona Republic had an interactive foreclosure map and document of data (PDF) which includes the monthly foreclosure statistics for the last eighteen months:

April 2007: 553
May 2007: 475
June 2007: 579
July 2007: 676
August 2007: 806
September 2007: 1,093
October 2007: 936
November 2007: 1,344
December 2007: 1,617
January 2008: 2,052
February 2008: 2,249
March 2008: 2,365
April 2008: 2,969
May 2008: 3,402
June 2008: 3,717
July 2008: 4,104
August 2008: 4,013
September 2008: 4,378
October 2008: 4,587

Total foreclosures per year:
2004: 4,444
2005: 1,370
2006: 1,070
2007: 9,920
2008: 33,836 through October

This is not good news for a state where construction and real estate provide a large share of the employment opportunities. It is good news for those who do not own homes and have been waiting to buy at lower prices--it looks like next year will offer significantly better prices than this year, but there are still a lot of delusional sellers out there asking way too much. (There's a two-bedroom, two-bathroom house on a half acre in a quiet neighborhood near us that looks very nice, but is probably worth about half of the $429,000 asking price, based on comparable sales and the current downward trend. Zillow says it's worth $277,000.)

See their summary article, which has links to the map and other documents.

Disorder breeds disorder

When Rudy Giuliani was mayor of New York City, he had a zero-tolerance policy on graffiti, litter, and broken windows, on the assumption that small crimes like vandalism create an environment conducive to more serious crimes.

Now, a study in the Netherlands published in Science provides support for this theory. In an alley used to park bicycles, the experimenters set up two conditions, one in which the walls of the alley were freshly painted and one in which they were tagged with graffiti. Flyers advertising a bicycle shop were attached to the handlebars of all parked bicycles. In the graffiti condition, 69% of bicyclists dumped the flyer on the ground as litter; in the clean condition, 33% littered. They performed several other similar experiments, and in each case the test subjects were more likely to engage in anti-social acts such as littering, trespassing, and stealing in the condition of disorder as opposed to in the condition of order.

(Via The Economist, where you can read more details of the experiments.)

Peter Schiff vs. Art Laffer, Tom Adkins, Mike Norman, Ben Stein, Charles Payne

Gee, who was completely full of crap?



I love the captions--Dow over 13,000 and Ben Stein is saying now's the time to buy... Merrill Lynch a buy at $76, Charles Payne says buy Bear Stearns... they were delusional idiots.

Schiff was right about everything except inflation and gold (at least so far--deflation looks like a bigger immediate risk than inflation). He was saying to buy gold at $830 in late 2007; it's at about the same point today, but if you had taken his advice you could have sold higher earlier this year, and at least you wouldn't have taken any real losses.

(Hat tip to Brett Vickers for the video.)

Phoenix-area foreclosures and preforeclosures

October set a new record of 8,503 notices of trustee's sales in Maricopa County, of which 900 were duplicates of previous notices. The number of pending foreclosures has dropped, as Bank of America cancelled numerous foreclosures after acquiring Countrywide. 3,516 foreclosures were cancelled in October, about double September's rate.

At the end of October, there were 27,874 pending foreclosures in Maricopa County. (Back in the summer of 2005, the total inventory of homes for sale was around 5,000. Today it's around 50,000 34,000, which obviously has the potential to go much higher.)

Trustee's sales hit 4,587 in October, up from 4,378 in September.

(Via azcentral.com.)

UPDATE (November 26, 2008): Updated the inventory number to October 21, 2008, which is down from a peak of over 50,000, but which has been climbing back up from a recent low of just under 26,000 at the beginning of August 2008.

Economic results by political party

Here's a nice set of graphs from the New York Times that shows various economic metrics by President and party majority in the Senate and House of Representatives.

For the budget surplus vs. deficit, there seems to be a benefit to having one party in the presidency and another party in control of Congress. In general, it looks like Republicans in the presidency and the Senate produce bad results...

(Via the Big Picture blog.)

City of Phoenix foolishness

The City of Phoenix's "notes" newsletter for October 2008 (PDF), which comes with the water bill, features a story on the front page about its Glenrosa Service Center receiving the city's first LEED Gold certification for its environmentally sound features, like being "build with wood from responsibly managed forests" and possessing "low energy and water use fixtures, non-toxic carpet and paint, energy-saving lighting sensors, native drought-resistant vegetation, dual-pane windows, an under-floor air distribution system and a heat-reflecting roof."

Page two features an announcement that "The APS Fiesta of Light will kick off the city's holiday activities this season with a long-time tradition--the APS Electric Light Parade." This parade of "illuminated floats, marching bands, performance units [?] and helium balloons" has a theme of "Preserving a Family Holiday Tradition." I wonder how many years of the Glenrosa Service Center's energy savings will be expended this year in preserving that tradition.

The financial crisis via charts and graphs

Colorado College political science professor David Hendrickson has put together a nice resource at his new "Cause for Depression" blog:

Think of it as a cartoon guide to the ongoing earthquake in the world of high finance. Through pictures, we will try to understand the dimensions of the current financial crisis--its origins and causes, its likely consequences, its potential remedies.

The "Labels" in Blogspot allow us to construct a chapter organization that the reader should approach as she would a book. By hitting on the topics under "Labels," the presentation will appear in an orderly fashion.

Blogspot is not made for blogbooks, though it is easily adaptable to that purpose. Ordering within each of the chapters depends on time of posting, so my time stamps are not necessarily indicative of the actual time the material was posted. I have altered them to allow for an orderly presentation. If it seems to matter, I will post the date of composition and updates in the entry. The initial foray of posts was made in mid-October 2008.

In seeking to understand the crisis, we need to begin with the credit mechanism. We are living through the bust of one of the greatest credit cycles of all financial history. In order get a handle on the seriousness of the bust, we must register the mania that fed the boom.

We’ll first look at some measures indicative of the financial turmoil. Then we examine general conditioning circumstances: the role of the housing boom and bust, the general growth of credit market debt, the explosion in derivatives, all of which are relevant in considering how much insolvency exists within the financial system. That question--are our financial institutions insolvent?--in turn is vital in assessing the wisdom of various bailouts and rescues, the opportunity costs associated with the government-mandated maintenance of the "FIRE" sector (Financials, Insurance, Real Estate), and how the global imbalances that have marked the last fifteen years are likely to change. I conclude with some lessons. The final entry is a collection of paper topics for interested students to consider.

Where possible, I’ve tried to indicate where readers can find updated sources of information for the material presented here. Given my harsh view of "derivatives," I'm obliged to say that this compendium is almost entirely derivative. I’m deeply indebted to my blogroll for ideas, inspiration, and many of the charts contained herein.

So, if you've read thus far, go now to "Financial Stress" in the "Labels" section.

(Via Financial Armageddon.)

The amount of public and non-public U.S. debt will inevitably come back down, one way or another. I just hope we don't end up as a third-world nation (or worse yet, multiple third world nations) in the process.

S&P's Enron moment

IM conversation between two Standard & Poore's employees, April 2007, as revealed in testimony before Congress today:

Shannon Mooney: i didn't really notice...but now that i think about it i kindof tune her out when she talks

Rahul Dilip Shah: well she just is too political...and she doesn't have anything of substance to say...but keeps thinking that she does.

Rahul Dilip Shah: (I'm done venting now) :)

Shannon Mooney: k go take a nap

Shannon Mooney: see you later

Rahul Dilip Shah: ok

Rahul Dilip Shah: btw - that deal is ridiculous

Shannon Mooney: i know right...model def does not capture half of the rish

Shannon Mooney: risk

Rahul Dilip Shah: we should not be rating it

Shannon Mooney: we rate every deal

Shannon Mooney: it could be structured by cows and we would rate it

Rahul Dilip Shah: but there's a lot of risk associated with it - I don't personally feel comfy signing off as a committee member.

(Via the Big Picture blog and The Epicurean Dealmaker. The latter has a pictorial illustration that I like, Mark Tansey's "The Innocent Eye Test"; the former has links to the transcript.)

The Economist's poll of economists

The Economist conducted a poll of 683 research associates of the National Bureau of Economic Research. 142 responded, of whom 46% self-identified as Democrats, 10% as Republicans, and 44% as neither.

80% of respondents, 71% of those who did not identify a political affiliation, and 46% of those who identified themselves as Republicans said that Obama has a better grasp of economics than McCain. (Only 23% of those who identified themselves as Republicans said that McCain had better understanding of economics.)

81% of respondents, 71% of the unaffiliated, and 31% of the Republicans said that Obama will pick a better team of economic advisors to run the country than McCain.

The full results can be found at The Economist's website.

Prosperity theology created foreclosure victims?

An article at Time magazine suggests that those following the "prosperity theology" of some Pentecostal ministers are more likely than average to have obtained mortgages they cannot afford, leading to foreclosure:

Has the so-called Prosperity gospel turned its followers into some of the most willing participants -- and hence, victims -- of the current financial crisis? That's what a scholar of the fast-growing brand of Pentecostal Christianity believes. While researching a book on black televangelism, says Jonathan Walton, a religion professor at the University of California at Riverside, he realized that Prosperity's central promise -- that God will "make a way" for poor people to enjoy the better things in life -- had developed an additional, dangerous expression during the subprime-lending boom. Walton says that this encouraged congregants who got dicey mortgages to believe "God caused the bank to ignore my credit score and blessed me with my first house." The results, he says, "were disastrous, because they pretty much turned parishioners into prey for greedy brokers."

Yet another case of religious trust being exploited to victimize those who have it.

(Via Dispatches from the Culture Wars.)

Bailout bill bonuses

The bailout bill has a few extra features:

* Sec. 105. Energy credit for geothermal heat pump systems.
* Sec. 111. Expansion and modification of advanced coal project investment credit.
* Sec. 113. Temporary increase in coal excise tax; funding of Black Lung Disability Trust Fund.
* Sec. 115. Tax credit for carbon dioxide sequestration.
* Sec. 205. Credit for new qualified plug-in electric drive motor vehicles.
* Sec. 405. Increase and extension of Oil Spill Liability Trust Fund tax.
* Sec. 309. Extension of economic development credit for American Samoa.
* Sec. 317. Seven-year cost recovery period for motorsports racing track facility.
* Sec. 501. $8,500 income threshold used to calculate refundable portion of child tax credit.
* Sec. 503 Exemption from excise tax for certain wooden arrows designed for use by children.

It also includes tax credits for solar and wind power, a requirement that health insurance companies cover mental health the same way they cover physical health (so look for some huge premium increases on your health insurance).

And during all the bailout bill discussion, Congress quietly authorized another $612 billion defense authorization bill.

(Via The Agitator.)

Google to close Arizona office

Google is closing its office in Tempe, Arizona on November 21. It's also closing offices in Denver and Dallas.

Alan Eustace, SVP of Engineering & Research, writes at Google's blog:

At Google, engineering is everything - no great engineers, no life enhancing products, no happy users. So we've spent a lot of time structuring our engineering operations to make the most of the exceptional talent that's available across America - developing local centers that give engineers the autonomy and opportunity to be truly innovative. These principles have served us well as we've grown, so when the model fails, it's doubly disappointing.

We opened our Phoenix office in 2006 and hoped that it would develop to support many of our internal engineering projects, the systems that make Google, well, Google. But we've found that despite everyone's best efforts, the projects our engineers have been working on in Arizona have been, and remain, highly fragmented. So after a lot of soul searching we have decided to incorporate work on these projects into teams elsewhere at Google. We will therefore be closing our Arizona office on November 21, 2008.

We'd like to thank everyone involved in this project for their energy and enthusiasm: our engineers; the engineering community in Arizona; Arizona State University; the city of Tempe; and the greater Phoenix area. We are now working with the Phoenix Googlers to transition them to other locations, or to identify other opportunities for them at Google.

I've been expecting to see Google start cutting back on expenses in various ways, as it seems to me that their model of business, with huge per-employee expenses, isn't sustainable for the long term. Apparently it's also the case that it's not cost-effective to put separate engineering centers in many locations--they probably need a critical mass of engineers and profitable projects that they didn't get here. This is probably good news for other high-tech companies and startups in Phoenix, as those Googlers who wish to stay in the Valley become available talent.

Comparing Obama's and McCain's economic advisors

McCain's economic advisors:

Doug Holtz-Eakin source
Holtz-Eakin is a formerly respected academic and government economist who has been reduced to making distortionary arguments to paper over the massive deficit black hole McCain's tax cuts would create.

Arthur Laffer source
Laffer is the originator of the Laffer curve, the fringe view that claims government revenue increases when tax rates are lowered. There is zero empirical evidence this is true at current tax rates. McCain has repeatedly said that he believes this foolishness, but Holtz-Eakin has said (also repeatedly) that McCain does not.

Phil Gramm source
Gramm is a lobbyist who was vice president of one of the investment houses most heavily implicated in the mortage industry scandal. As a senator he pushed for the banking deregulation that contributed to the current crisis. See more here.

Kevin Hassett source
Hassett has been widely ridiculed for writing the book Dow 36000: The New Strategy for Profiting from the Coming Rise in the Stock Market in 1999, predicting that the Dow would hit 36,000 within five years, if not sooner.

Donald Luskin source
Luskin has been repeatedly named the Stupidest Man Alive by Brad Delong. See here for an example. I can attest based on my own interaction with him a few years back that in addition to being not the sharpest tack in the box, he is also an extremely unpleasant person.

Nancy Pfotenhauer source
Pfotenhauer is a pure distilled product of Koch Industries, an oil company which funds much of the right wing message machine. See here for details.

Carly Fiorina source
Fiorina was spectacularly fired from her previous job as CEO of HP. According to the Times,

... Republicans say Ms. Fiorina is using the McCain campaign to rebuild her image after her explosive tenure at Hewlett-Packard. They also say it is hard to see why a woman widely criticized for mismanaging one of Silicon Valley’s legendary companies is advising and representing a candidate who acknowledged last year that he did not understand the economy as well as he should.

Regarding Fiorina, Jeffrey Sonnenfeld, the senior associate dean for executive programs at the Yale School of Management, says "What a blind spot this is in the McCain campaign to have elevated her stature and centrality in this way. You couldn’t pick a worse, non-imprisoned C.E.O. to be your standard-bearer.”

Obama's economic advisors:

Jason Furman (director of economy policy) source bio
Austan Goolsbee (senior economic policy advisor), University of Chicago tax policy expert source Wikipedia website
Karen Kornbluh (policy director) source bio Wikipedia
David Cutler, Harvard health policy expert source Wikipedia website
Jeff Liebman, Harvard welfare expert source Wikipedia website
Michael Froman, Citigroup executive source bio
Daniel Tarullo, Georgetown law professor source bio
David Romer, Berkeley macroeconomist source website
Christina Romer, Berkeley economic historian source website
Richard Thaler, University of Chicago behavioral finance expert source Wikipedia

Robert Rubin, former Treasury Secretary source Wikipedia bio
Larry Summers, former Treasury Secretary source Wikipedia bio
Alan Blinder, former Vice-chairman of the Federal Reserve source Wikipedia bio website
Jared Bernstein, Economic Policy Institute labor economist source bio
James Galbraith, University of Texas macroeconomist source Wikipedia website

Paul Volcker, Chairman of the Federal Reserve 1979-1987 source Wikipedia
Laura Tyson, Berkeley international economist, Bill Clinton economic adviser source Wikipedia
Robert Reich, Berkeley public policy professor, former Secretary of Labor source Wikipedia weblog
Peter Henry, Stanford international economist source website
Gene Sperling, former White House economic adviser source Wikipedia

My comment on the Laffer curve--Laffer's basic point is obviously correct, that there are points at which raising taxes further would cause revenues to decline and points where lowering taxes further would cause revenues to increase (most obviously at a 100% tax rate), but to the best of my knowledge he never did any empirical or mathematical work to show what the Laffer curve actually looks like and what factors play into it. If you don't know the shape of the curve or where we currently fall on it, you don't know without testing that raising taxes will reduce revenue or lowering taxes will increase revenue. Factcheck.org looks at the actual effects of some U.S. tax cuts in this regard.

I do think that we can speculate that reducing U.S. corporate taxes (currently the highest in the OECD with the exception of Japan) could increase corporate tax revenue, given Ireland's experience with just that happening. Multinational companies will do their best to book their profits in the countries with the lowest corporate tax rates, thus increasing the tax revenue in those countries. Of course, there are other factors, such as regulatory environment, cost of labor, risk of litigation, etc.

Largest corporate bankruptcies in U.S. history

At Trading Markets is a story about the largest corporate bankruptcies in U.S. history, with the recent Chapter 11 filing of Lehman Brothers Holdings Inc. at the top of the list.

At #9 on the list is my employer, Global Crossing Ltd., about which the article says:

Hurt by a sluggish demand and declining prices for bandwidth capacity, and burdened by a heavy debt load, telecom company Global Crossing Ltd. filed for Chapter 11 bankruptcy on January 28, 2002. At the time of filing, Global Crossing had $30 billion in assets and $12 billion in debts.

In December 2003, Singapore Technologies Telemedia acquired a 61.5% equity share in Global Crossing for $250 million, paving way for the troubled telecom company to exit Chapter 11. In addition, Singapore Technologies Telemedia agreed to purchase $200 million in senior secured notes that were meant to be distributed to former creditors. Global Crossing used the $200 million cash to pay off its creditors.

The company emerged from bankruptcy on December 9, 2003. By the time, Global Crossing exited bankruptcy, its debt was reduced to a mere $200 million from $11 billion at the end of 2001, including $1 billion of Asia Global Crossing debt. As of the most-recent quarter ended June 30, 2008, Global Crossing's total debt was $1.45 billion and for the past 52-weeks, the shares have been trading in the range of $14.54 - $24.75.

There's much more that could be said about that. For some of the other companies, the article reports on employee layoffs. Global Crossing went from a peak of nearly 15,000 employees down to just above 3,000, a process that was painful for both those who were laid off and those who remained and had to pick up the slack. The process was much-needed, however, and forced consolidation of acquired assets that had been operating in separate silos with separate management structures, eliminated many middle management positions, saw the departures of almost all senior management, and resulted in improved network performance and customer satisfaction ratings and subsequent growth in number of customers and customer traffic on the network. Global Crossing remained a tier 1 network provider through the bankruptcy, and is now #3 on Renesys' list of the top 25 Internet service providers by customer base.

HUD zero down payment mortgages

Craig Cantoni has pointed out the following January 19, 2004 press release from the U.S. Department of Housing and Urban Development:

BUSH ADMINISTRATION ANNOUNCES NEW HUD "ZERO DOWN PAYMENT" MORTGAGE
Initiative Aimed at Removing Major Barrier to Homeownership

LAS VEGAS - As part of President Bush's ongoing effort to help American families achieve the dream of homeownership, Federal Housing Commissioner John C. Weicher today announced that HUD is proposing to offer a "zero down payment" mortgage, the most significant initiative by the Federal Housing Administration in over a decade. This action would help remove the greatest barrier facing first-time homebuyers - the lack of funds for a down payment on a mortgage.

Speaking at the National Association of Home Builders' annual convention, Commissioner Weicher indicated that the proposal, part of HUD's Fiscal Year 2005 budget request, would eliminate the statutory requirement of a minimum three percent down payment for FHA-insured single-family mortgages for first-time homebuyers.

"Offering FHA mortgages with no down payment will unlock the door to homeownership for hundreds of thousands of American families, particularly minorities," said HUD's Acting Secretary Alphonso Jackson. "President Bush has pledged to create 5.5 million new minority homeowners this decade, and this historic initiative will help meet this goal."

Preliminary projections indicate that the new FHA mortgage product would generate about 150,000 homebuyers in the first year alone.

"This initiative would not only address a major hurdle to homeownership and allow many renters to afford their own home, it would help these families build wealth and become true stakeholders in their communities," said Commissioner Weicher. "In addition, it would help spur the production of new housing in this country."

For those that choose to participate in the Zero Down Payment program, HUD would charge a modestly higher insurance premium, which would be phased down over several years, and would also require families to undergo pre-purchase housing counseling.

So, how's that program working out?

If you're not in a position to be able to save funds for a downpayment, you're also not in a position to be able to have an emergency savings account for all of the unexpected expenses that arise with home ownership.

Government restriction on short sales may have unintended consequences

A lot of my investments are in S&P 500 index funds, which, until the recent dive by financial institutions, included financial stocks as its largest sector of investment (finance is now third after energy and IT). Over the past couple years, I've held shares in the Prudent Bear Fund (BEARX), a mutual fund that uses a strategy of shorting various stocks, purchasing put options, and investing in gold, as well as making some short-term trades of the exchange-traded funds ProShares UltraShort S&P 500 (SDS), which goes up when the S&P 500 goes down, and ProShares UltraShort Financial (SKF), which goes up when the Dow Jones U.S. Financials Index (DJUSFI) goes down.

I had been holding some shares of SKF for a couple weeks with a 30-day limit order to sell at $142, which would give me a nice profit. When it shot up Thursday, I upped my limit, and ended up selling some of my shares at over $150, and closing out my position. The market then reversed, and SKF dropped as low as $110, so I picked up a few more shares at around $117. Friday morning, SKF dropped to $87 and started to climb back up, when all of a sudden it stuck at $93 and no more trades went through. Trading was halted.

The SEC announced a "temporary emergency action" to ban short selling in 799 stocks of financial companies for the next ten business days (until the end of the day on October 2), which may be extended for up to another twenty business days (until the end of the day on October 31, bringing us right up to the election). The UK instituted a similar ban. Because of this ban, trading in SKF was temporarily halted. The SEC seems to be under the illusion that short sellers are responsible for the stocks of financial companies falling, rather than the fact that these companies have been engaging in risky behavior and are now loaded down with bad debt.

But a short time later today, trading in SKF resumed, after ProShares announced that they cannot accept orders to create new shares in the fund, since that would require taking new short positions in financial stocks, but those who hold existing positions are still permitted to trade them.

This effectively turns SKF into a closed-end fund, making SKF shares more scarce than they otherwise would be. When I saw that SKF was again trading, I bought more shares at $90, reasoning that the financial problems are far from fixed, the proposed government action is likely to be full of holes, and with normal routes to short selling closed, more of those who wish to hedge their bets against further drops in the financial sector will turn to other alternatives such as put options (though options markets are likely to be hurt by this ban as well, since the U.S., unlike the UK, didn't make an exception for options market makers) or shares in funds like SKF, the latter of which they will only be able to purchase from existing holders of the fund.

It's a serious mistake to think that short selling is something solely done by vultures trying to destroy companies at risk--it's a defensive measure against catastrophe for those who are mostly holding long-term investment positions.

An Associated Press story on the ban shows that the SEC is starting to recognize that it may cause some unintended problems:

But on Wall Street, professional short-sellers said they were being unfairly targeted by the SEC's prohibition. And some analysts warned of possible negative consequences, maintaining that banning short-selling could actually distort -- not stabilize -- edgy markets.

Indeed, hours after the new ban was announced, some of its details appeared to be a work in progress. The SEC said its staff was recommending exemptions from the ban for trades market professionals make to hedge their investments in stock options or futures.

"I don't think it's going to accomplish what they're after," said Jeff Tjornehoj, senior analyst at fund research firm Lipper Inc. Without short sellers, he said, investors will have a harder time gauging the true value of a stock.

"Most people want to be in a stock for the long run and want to see prices go up. Short sellers are useful for throwing water in their face and saying, `Oh yeah? Think about this,'" Tjornehoj said. As a result, restricting the practice could inflate the value of some stocks, opening the door for a big downward correction later.

"Without offering a flip-side to the price-discovery mechanism, I think there's a pressure built up in stock prices that only gets relieved in a great cataclysm," he said.

Disclosure: I presently hold no shares of BEARX or SDS, but do have a position in SKF. This post does not constitute investment advice.

UPDATE (September 20, 2008): Paul Krugman critiques leaked details of the bailout deal. If accurate, I agree with him that it's a bad deal and I expect to see SKF climb on Monday.

August's Notices of Trustee's Sales

As Jim pointed out here, Maricopa County saw another record month for pre-foreclosures - though AZ Central's count is different than mine. I can only tell you what I get from the recorder's office (which was 7286).

Candidate charitable contributions

USA Today reports that the Biden family has given $3,690 to charity over the last decade, an average of $369 per year, on "modest" income that has ranged from a low of $210,797 in 1999 to a high of over $320,000 in 2005. Last year, they gave $995 on income of $319,853 (0.3%), their highest giving rate of the decade.

A 2005 study of households with incomes from $200,000 to $500,000 per year shows average charitable giving of $40,746 per year.

John McCain has given $202,000 to charity in the last two years, about 25% of his income--but of course he is married to a very wealthy woman who earned more than $6 million in 2006. Last year he gave $105,467 (half of what he and his wife donated as a couple) on income of $405,409, which would be more impressive if it weren't just an even division of their reported expenses reported without the comparison figure of her income.

The Obamas gave $240,000 to charity last year on income of more than $4.2 million (5.7%). In 2000, they gave $2,350 to charity on income of $240,726 (1%).

Palin's tax data hasn't yet been released. There may be some tax problems lurking in her records.

John McCain's personal charitable giving appears quite generous, but it's somewhat less so considering his wife's much higher separate income and my suspicion that she effectively subsidized his charitable giving as the chief breadwinner and provider. The Obamas were very generous last year, but not so much in 2000. The Bidens, not at all generous. This seems to lend further support to the thesis that conservatives are more generous with their own money than liberals.

My feeling is that most professionals earning six-figure incomes should be able to give 5-10% of their gross income to charitable causes without much trouble. The average figures for those earning $200,000 to $500,000 strike me as just about right.

(UPDATE, 17 May 2021):  The Bidens' 2020 tax returns show much more generous charitable contributions:

The Bidens donated $30,704 to 10 charities last year. The largest gift was $10,000 to the Beau Biden Foundation, a nonprofit focused on child abuse that is named after the president's deceased son.

But that's on $607,336 in income, so it's just over 5%.  Kamala Harris and Doug Emhoff gave just under 1.6%:

Vice President Kamala Harris and her husband, Douglas Emhoff, also released their 2020 tax filings. They paid a rate of 36.7% on income of $1,695,225 and contributed $27,006 to charity.

 

Foreclosures hit a record high

CNN reports:

Foreclosures hit another record high in August: 304,000 homes were in default and 91,000 families lost their houses.

More than 770,000 homes have been repossessed by lenders since August 2007, when the credit crunch took hold.

The report from RealtyTrac, an online marketer of foreclosures properties, is the latest in string of bad news for housing.

Foreclosure filings of all kinds, including notices of defaults, notices of auctions and bank repossessions, grew 12% in August over July, and 27% compared with August 2007.

Arizona preforeclosures also set another record in August, according to the Arizona Republic:

...notice of trustee sales, in metropolitan Phoenix hit a new high of 7,271 in August, according to the real-estate-data firm Information Market. Foreclosures in the Valley have been hovering around 4,000 for each of the past few months but are bound to climb if more struggling homeowners don't get help.

So much for seeing July's drop as the start of a trend.

RIP Chester William Anderson

The Arizona Republic has published this obituary:

Chester William Anderson passed away at age 97 on August 19, 2008, following a brief illness. Beloved husband of the late Laurel R. Anderson, he is survived by three children : Kelly (Will) Momsen, Barbara Anderson and Bob (Jannie) Anderson. He was blessed with five grandchildren : Bill (Lara) Momsen, Kirsten (Rob) Carr, Rick Momsen, Laura (David) Meehan and David (Marnie) Momsen. He is further survived by six great-grandchildren. He was born in Burlington, Iowa, to Charles and Hulda Anderson on February 6, 1911 together with siblings Carl Anderson, John Robert Anderson and Mildred Anderson. He graduated from Iowa State University in 1934. After working at Standard Oil of Indiana and Ordnance Steel Foundry, he became Executive Vice-President of Associated Industries of the Quad Cities. After 7 years, his family moved to Milwaukee where he became the President of Management Resources Assoc. of Milwaukee, an organization dedicated to providing information to employers in the area of labor/management. He retired after 26 years and moved to Phoenix in 1980. During his illustrious career, he was Chairman of the Illinois Industrial Council, the Wisconsin Industrial Council and the National Industrial Council's Industrial Relations Group. He was a Founding Board Member of the Council on a Union-Free Environment (Washington DC) and a lifetime member of the Foundation for Economic Education. He was Chairman and Board Member for the Institute for Humane Studies (Arlington, Virginia) and a lifetime Member of the Mont Pelerin Society of Economists, an international society of top economic thinkers. Among his proudest accomplishments was the creation of the Milwaukee Forum, a discussion group of business and professional leaders and educators who met with nationally known speakers on a quarterly basis. In Phoenix, he created the Economics Discussion Group in 1982 which continues to meet to this day. Other than his devotion to family, his greatest love was liberty and promoting the concept through education. With this in mind, memorial gifts to the Institute for Humane Studies (3301 Fairfax Dr., Arlington, VA, 22201) are suggested in lieu of flowers. Memorial at Sunland Memorial Park September 7th at 2 PM.

I met Chet Anderson around 2001 when I joined his Economics Discussion Group, after learning of it at a reception for the Institute for Humane Studies. (I attended several IHS seminars and received IHS fellowships during grad school.) Chet was personally acquainted with many prominent figures in classical liberal and libertarian circles, including F.A. "Baldy" Harper (founder of IHS, on whose board Chet sat), Ludwig von Mises (Chet attended some of his lectures), Milton Friedman, Leonard Read (founder of the Foundation for Economic Education), and Ayn Rand (Chet once had lunch with her).

Chet always seemed positive and optimistic every time I spoke with him, and he remembered and asked about details of my life each time I met him, right up to the last meeting I saw him at a few months ago. His mind seemed clear and sharp even then, though I know he had a stroke in the weeks before he died and was unable to speak to a friend who visited him in the hospital.

At and after today's memorial service, many people spoke of Chet's optimism, his love for ideas and liberty, and his willingness to engage in courteous and patient discussion with anyone. He was an advocate for liberty and freedom who has done much to promote those ideas around the world, and I've gained much from my participation in the group he started 26 years ago.