My Comment:
I wonder how this news is being received by Dick Cheney? The first post Saddam oil contract is awarded to the Chinese, and to a firm that is a rival to Dick's Halliburton.
Payback is a bitch.
- Rinx
Iraq, China Agree to Restore Saddam Hussein-Era Oil Deal
Associated Press
August 28, 2008 5:00 a.m.
SHANGHAI -- China and Iraq have signed a $3 billion deal revising an earlier agreement for China's biggest oil company to help develop the Ahdab oil field, according to a statement from the Iraqi Embassy in Beijing.
The deal, restoring a project canceled after the 2003 U.S.-led invasion of Iraq, was signed late Wednesday by Chinese officials and Iraqi Oil Minister Hussain al-Shahristani.
The revised terms of the deal increase the anticipated output from the billion-barrel field to 110,000 barrels per day from the originally planned 90,000 barrels per day, the statement said. The contract is to run for 20 years after production begins three years from now, it said.
Saddam Hussein's regime defied United Nations sanctions that limited direct foreign dealings with Iraq's oil industry and signed a deal in 1997 with the state-owned China National Petroleum Corp.
That contract, worth $1.2 billion at the time, gave a subsidiary of the Chinese company concessions to develop the field on a production-sharing basis for 22 years. The value for the renegotiated contract is $3 billion, the statement said.
The new agreement will be a service contract, under which China won't be a partner in profits and instead will be paid for its work. A spokesman for CNPC, Liu Weijiang, said Thursday that he couldn't provide any information on the deal.
Once the contract is signed, it will be the first Saddam Hussein-era oil deal to be honored by the new Iraqi government. A number of companies say they signed deals with Mr. Hussein's regime and demand that those be honored, or the countries involved be given priority on new agreements. But the Iraqi statement said that some technical services contracts with other big petroleum companies might be postponed.
The ministry has consistently denied giving any advantage to companies with which Mr. Hussein signed deals, instead insisting that oil and gas fields and exploration blocks will be offered up for bids. Iraq sits on more than 115 billion barrels of oil, but decades of wars, U.N. sanctions, violence and sabotage have battered its oil industry.
The Ahdab field is located in Shiite-dominated Wasit province, about 100 miles southeast of Baghdad. It has been the scene of sporadic attacks since the U.S.-led invasion in 2003.
As security improves, Iraq is trying to bring in foreign companies to help increase crude output from the current 2.5 million barrels a day to 3 million barrels a day by the end of 2008, and 4.5 million barrels a day by the end of 2013.
Thursday, August 28, 2008
Friday, August 15, 2008
Poland risks attack because of US missiles
My Comment:
Georgia, now this...anyone who doesn't think the cold war is back on - raise their hand. I wonder if Putin will shut off Nat Gas to Poland this winter? One think for certain, Putin plays for keeps.
- Rinx
By JIM HEINTZ, Associated Press Writer
MOSCOW – A top Russian general said Friday that Poland's agreement to accept a U.S. missile interceptor base exposes the ex-communist nation to attack, possibly by nuclear weapons, the Interfax news agency reported.
The statement by Gen. Anatoly Nogovitsyn is the strongest threat that Russia has issued against the plans to put missile defense elements in former Soviet satellite nations.
Poland and the United States on Thursday signed a deal for Poland to accept a missile interceptor base as part of a system the United States says is aimed at blocking attacks by rogue nations. Moscow, however, feels it is aimed at Russia's missile force.
"Poland, by deploying (the system) is exposing itself to a strike — 100 percent," Nogovitsyn, the deputy chief of staff, was quoted as saying.
He added, in clear reference to the agreement, that Russia's military doctrine sanctions the use of nuclear weapons "against the allies of countries having nuclear weapons if they in some way help them." Nogovitsyn that would include elements of strategic deterrence systems, he said, according to Interfax.
At a news conference earlier Friday, Nogovitsyn had reiterated Russia's frequently stated warning that placing missile-defense elements in Poland and the Czech Republic would bring an unspecified military response. But his subsequent reported statement substantially stepped up a war of words.
U.S. officials have said the timing of the deal was not meant to antagonize Russian leaders at a time when relations already are strained over the recent fighting between Russia and Georgia over the separatist Georgian region of South Ossetia. (Rinx...yeah right)
Russian forces went deep into Georgia in the fighting, raising wide concerns that Russia could be seeking to occupy parts of its small, pro-U.S. neighbor, which has vigorously lobbied to join NATO, or even to force its government to collapse.
Under the agreement that Warsaw and Washington reached Thursday, Poland will accept an American missile interceptor base.
"We have crossed the Rubicon," Polish Prime Minister Donald Tusk said, referring to U.S. consent to Poland's demands after more than 18 months of negotiations.
Washington says the planned system, which is not yet operational, is needed to protect the U.S. and Europe from possible attacks by missile-armed "rogue states" like Iran. The Kremlin, however, feels it is aimed at Russia's missile force and warns it will worsen tensions.
In an interview on Poland's news channel TVN24, Tusk said the United States agreed to help augment Poland's defenses with Patriot missiles in exchange for placing 10 missile defense interceptors in the Eastern European country.
He said the deal also includes a "mutual commitment" between the two nations to come to each other's assistance "in case of trouble."
That clause appeared to be a direct reference to Russia.
Poland has all along been guided by fears of a newly resurgent Russia, an anxiety that has intensified with Russia's offensive in Georgia. In past days, Polish leaders said that fighting justified Poland's demands that it get additional security guarantees from Washington in exchange for allowing the anti-missile base on its soil.
Georgia, now this...anyone who doesn't think the cold war is back on - raise their hand. I wonder if Putin will shut off Nat Gas to Poland this winter? One think for certain, Putin plays for keeps.
- Rinx
By JIM HEINTZ, Associated Press Writer
MOSCOW – A top Russian general said Friday that Poland's agreement to accept a U.S. missile interceptor base exposes the ex-communist nation to attack, possibly by nuclear weapons, the Interfax news agency reported.
The statement by Gen. Anatoly Nogovitsyn is the strongest threat that Russia has issued against the plans to put missile defense elements in former Soviet satellite nations.
Poland and the United States on Thursday signed a deal for Poland to accept a missile interceptor base as part of a system the United States says is aimed at blocking attacks by rogue nations. Moscow, however, feels it is aimed at Russia's missile force.
"Poland, by deploying (the system) is exposing itself to a strike — 100 percent," Nogovitsyn, the deputy chief of staff, was quoted as saying.
He added, in clear reference to the agreement, that Russia's military doctrine sanctions the use of nuclear weapons "against the allies of countries having nuclear weapons if they in some way help them." Nogovitsyn that would include elements of strategic deterrence systems, he said, according to Interfax.
At a news conference earlier Friday, Nogovitsyn had reiterated Russia's frequently stated warning that placing missile-defense elements in Poland and the Czech Republic would bring an unspecified military response. But his subsequent reported statement substantially stepped up a war of words.
U.S. officials have said the timing of the deal was not meant to antagonize Russian leaders at a time when relations already are strained over the recent fighting between Russia and Georgia over the separatist Georgian region of South Ossetia. (Rinx...yeah right)
Russian forces went deep into Georgia in the fighting, raising wide concerns that Russia could be seeking to occupy parts of its small, pro-U.S. neighbor, which has vigorously lobbied to join NATO, or even to force its government to collapse.
Under the agreement that Warsaw and Washington reached Thursday, Poland will accept an American missile interceptor base.
"We have crossed the Rubicon," Polish Prime Minister Donald Tusk said, referring to U.S. consent to Poland's demands after more than 18 months of negotiations.
Washington says the planned system, which is not yet operational, is needed to protect the U.S. and Europe from possible attacks by missile-armed "rogue states" like Iran. The Kremlin, however, feels it is aimed at Russia's missile force and warns it will worsen tensions.
In an interview on Poland's news channel TVN24, Tusk said the United States agreed to help augment Poland's defenses with Patriot missiles in exchange for placing 10 missile defense interceptors in the Eastern European country.
He said the deal also includes a "mutual commitment" between the two nations to come to each other's assistance "in case of trouble."
That clause appeared to be a direct reference to Russia.
Poland has all along been guided by fears of a newly resurgent Russia, an anxiety that has intensified with Russia's offensive in Georgia. In past days, Polish leaders said that fighting justified Poland's demands that it get additional security guarantees from Washington in exchange for allowing the anti-missile base on its soil.
Oil Seen Dropping Under $90 by Year End
My Comment:
I am a self confessed Oil bull , but always like to hear what folks sitting on the other end of my trades are thinking...to keep my enthusiasm (and asset allocation) in check.
Their call on price may be correct...who knows short term where the price of anything is headed.
What rankles my nose is their assertion the World is well supplied with oil - and will be so 30 years into the future. And this supply side growth will be the driver for low oil prices over the long term. Two comments, maybe three...
- A significant sustained drop in the price of oil will dramatically raise demand...wiping out any supply side growth
- Look who controls the price of oil. If oil drops, exporters (OPEC) will take oil off the market..they already are talking about a cutback in production with Oil at $115
- And look where new supply is coming from...Oil Sands & Deep Sea Oil (the recently discovered Tupi field off Brazil is 400Km offshore, resting 7Km beneath the ocean floor, in 3Km deep water...and resting under a 2Km dome of salt). These new sources of supply are important, but simply uneconomic at $50, 0r $75 for that matter.
- And, And....geesh
- Rinx
OIL AT $30-$50 A BARREL?
We don't know about you, but this wouldn't surprise us at all. Our Quant side flagged the move in crude oil prices on May 30. They were, as nearly always, right on the money. And now it's time for the data crunchers like us to get into action. It is our firm belief that crude oil represents a true bubble. The tests of a true bubble are that it should have little connection with fundamental data; that the bubble's very existence should create ample nonsensical stories as to why the bubble is for real, and that it will last and last. Crude oil meets the test quite handsomely.
As is clear, there is hardly any correlation between annual changes in demand and the price of oil. If demand increases and the price of oil increases, then we all sit there and draw up spurious correlations between the two. Fact is, there is virtually no consistent finding on "higher consumption leading to higher prices" theory.
Second, and perhaps even more damning is this statistic on the long-term demand and consumption-growth trends of crude oil. As is clear, the long-term demand growth has been in a fairly tight cluster. Through booms and busts. So what is so different now, one might ask? Nothing. The world pretty much continued consuming at the same/similar rate of growth the last five years, as it has for the previous 20.
OK, 27 basis points higher than the 20-year compounded annual growth rate! No, it was the supply, stupid: That's what the other comeback punch from the oil-at-$200 camp is: That's where the problem lies. This is an even bigger load of rubbish. The world is well supplied in oil. And it does not take a genius to figure out that no matter what, the world will definitely add to its reserves over the course of the next 10, 20 and 30 years.
The bull case for oil rested on insatiable supply from China and India, and dwindling reserves. Both are patently wrong. China and India, combined, simply can't make up for consumption slowdowns from the rest of the world, especially the U.S., Eurozone and Japan. And there is plenty of anecdotal evidence to suggest that even the Chinese demand is exaggerated because China has overbought for the Olympics. The world has fairly comfortable reserves. And there is frenetic discovery exploration in Russia, Brazil, India, Iran and elsewhere. So, it's a fairly easy case to make that the world will be awash in oil in a few years from now, relative to demand.>
Oil had been in a long bear market. It hadn't adjusted for inflation for a long while. And the rally was nothing but a huge catch-up rally, to adjust for years of nonperformance. These things happen in asset classes.
One of the best examples of this is the Chinese stock market. China grew massively, as an economy, between 1995 and 2005. Logically, the Chinese stock market (or whatever passed for it in those days), should have gone ballistic. It went nowhere. In fact, on a 10-year basis, the mainland China Shanghai Index was down. All this gross domestic product growth, all this massive investment in infrastructure, all amounted to nothing in terms of stock-market performance.
And then, in November-December 2005, China took off. And went up five times in just two years or so. And predictably, came the stories: China's GDP growth; China's massive consumption all things animate and inanimate; and China's mobile subscribers. All of that will keep driving up the Chinese stock market.
As always, logic was being fitted to suit the price. All the reasons for the boom in China had been existence for 10 years. But since the logic never fit the price, it was never used. The moment prices ran up, the logic was dusted out and presented to the world.
Fact was, as we had written in an earlier report, the Chinese bull market was nothing but the correction of a long-term aberration of high growth and poor stock-market returns. The market ran up just enough to temporarily correct the aberration…and that having been achieved, has promptly and dutifully halved, and then some.
It's the same with currencies. When the U.S. dollar goes down, people say "trade deficit." Never mind that the U.S. has always run a big trade deficit, and this hasn't prevented the dollar from going all over the place…being a weak currency and a strong currency, alternately, for the past several decades. And now, when the dollar has suddenly strengthened, people are blaming dovish statements from the European Central Bank, conveniently forgetting the trade deficit and interest-rate differential!
The short point is that currency and commodity movements are largely technical in nature. They have no value. Only price. And price, on its own, moves only on technical factors. Once the move happens, fundamental nonsense is drummed up to support the price.
It is our case. Nay, stand: Crude oil will tank (short-term bear-market rallies notwithstanding) to below $90 by this year end, and by our reckoning, should hit $50 in the next 12 months time. That's not such a reach, actually. Because that's precisely where it was in January 2007.
-- Devina Mehra -- Vishal Joshi -- Sabri Hazarika
I am a self confessed Oil bull , but always like to hear what folks sitting on the other end of my trades are thinking...to keep my enthusiasm (and asset allocation) in check.
Their call on price may be correct...who knows short term where the price of anything is headed.
What rankles my nose is their assertion the World is well supplied with oil - and will be so 30 years into the future. And this supply side growth will be the driver for low oil prices over the long term. Two comments, maybe three...
- A significant sustained drop in the price of oil will dramatically raise demand...wiping out any supply side growth
- Look who controls the price of oil. If oil drops, exporters (OPEC) will take oil off the market..they already are talking about a cutback in production with Oil at $115
- And look where new supply is coming from...Oil Sands & Deep Sea Oil (the recently discovered Tupi field off Brazil is 400Km offshore, resting 7Km beneath the ocean floor, in 3Km deep water...and resting under a 2Km dome of salt). These new sources of supply are important, but simply uneconomic at $50, 0r $75 for that matter.
- And, And....geesh
- Rinx
First Global also sees it falling to $50 within 12 months.
First GlobalOIL AT $30-$50 A BARREL?
We don't know about you, but this wouldn't surprise us at all. Our Quant side flagged the move in crude oil prices on May 30. They were, as nearly always, right on the money. And now it's time for the data crunchers like us to get into action. It is our firm belief that crude oil represents a true bubble. The tests of a true bubble are that it should have little connection with fundamental data; that the bubble's very existence should create ample nonsensical stories as to why the bubble is for real, and that it will last and last. Crude oil meets the test quite handsomely.
As is clear, there is hardly any correlation between annual changes in demand and the price of oil. If demand increases and the price of oil increases, then we all sit there and draw up spurious correlations between the two. Fact is, there is virtually no consistent finding on "higher consumption leading to higher prices" theory.
Second, and perhaps even more damning is this statistic on the long-term demand and consumption-growth trends of crude oil. As is clear, the long-term demand growth has been in a fairly tight cluster. Through booms and busts. So what is so different now, one might ask? Nothing. The world pretty much continued consuming at the same/similar rate of growth the last five years, as it has for the previous 20.
OK, 27 basis points higher than the 20-year compounded annual growth rate! No, it was the supply, stupid: That's what the other comeback punch from the oil-at-$200 camp is: That's where the problem lies. This is an even bigger load of rubbish. The world is well supplied in oil. And it does not take a genius to figure out that no matter what, the world will definitely add to its reserves over the course of the next 10, 20 and 30 years.
The bull case for oil rested on insatiable supply from China and India, and dwindling reserves. Both are patently wrong. China and India, combined, simply can't make up for consumption slowdowns from the rest of the world, especially the U.S., Eurozone and Japan. And there is plenty of anecdotal evidence to suggest that even the Chinese demand is exaggerated because China has overbought for the Olympics. The world has fairly comfortable reserves. And there is frenetic discovery exploration in Russia, Brazil, India, Iran and elsewhere. So, it's a fairly easy case to make that the world will be awash in oil in a few years from now, relative to demand.
Oil had been in a long bear market. It hadn't adjusted for inflation for a long while. And the rally was nothing but a huge catch-up rally, to adjust for years of nonperformance. These things happen in asset classes.
One of the best examples of this is the Chinese stock market. China grew massively, as an economy, between 1995 and 2005. Logically, the Chinese stock market (or whatever passed for it in those days), should have gone ballistic. It went nowhere. In fact, on a 10-year basis, the mainland China Shanghai Index was down. All this gross domestic product growth, all this massive investment in infrastructure, all amounted to nothing in terms of stock-market performance.
And then, in November-December 2005, China took off. And went up five times in just two years or so. And predictably, came the stories: China's GDP growth; China's massive consumption all things animate and inanimate; and China's mobile subscribers. All of that will keep driving up the Chinese stock market.
As always, logic was being fitted to suit the price. All the reasons for the boom in China had been existence for 10 years. But since the logic never fit the price, it was never used. The moment prices ran up, the logic was dusted out and presented to the world.
Fact was, as we had written in an earlier report, the Chinese bull market was nothing but the correction of a long-term aberration of high growth and poor stock-market returns. The market ran up just enough to temporarily correct the aberration…and that having been achieved, has promptly and dutifully halved, and then some.
It's the same with currencies. When the U.S. dollar goes down, people say "trade deficit." Never mind that the U.S. has always run a big trade deficit, and this hasn't prevented the dollar from going all over the place…being a weak currency and a strong currency, alternately, for the past several decades. And now, when the dollar has suddenly strengthened, people are blaming dovish statements from the European Central Bank, conveniently forgetting the trade deficit and interest-rate differential!
The short point is that currency and commodity movements are largely technical in nature. They have no value. Only price. And price, on its own, moves only on technical factors. Once the move happens, fundamental nonsense is drummed up to support the price.
It is our case. Nay, stand: Crude oil will tank (short-term bear-market rallies notwithstanding) to below $90 by this year end, and by our reckoning, should hit $50 in the next 12 months time. That's not such a reach, actually. Because that's precisely where it was in January 2007.
-- Devina Mehra -- Vishal Joshi -- Sabri Hazarika
Wednesday, August 13, 2008
Foreclosure fallout: Houses go for a $1
My Comment:
Anyone driven through Downtown Detroit lately? The new owner will lose their shirt and will soon regret that lousy $buck
-Rinx
DETROIT -- One dollar can get you a large soda at McDonald's, a used VHS movie at 7-Eleven or a house in Detroit.
The fact that a home on the city's east side was listed for $1 recently shows how depressed the real estate market has become in one of America's poorest big cities.
.....And it still took 19 days to find a buyer.
The sale price of the home may be an anomaly, but illustrates both the depths of the foreclosure crisis in Detroit and the rapid scuttling of vacant homes in some of the city's impoverished neighborhoods.
The home, at 8111 Traverse Street, a few blocks from Detroit City Airport, was the nicest house on the block when it sold for $65,000 in November 2006, said neighbor Carl Upshaw. But the home was foreclosed last summer, and it wasn't long until "the vultures closed in," Upshaw said. "The siding was the first to go. Then they took the fence. Then they broke in and took everything else."
The company hired to manage the home and sell it, the Bearing Group, boarded up the home only to find the boards stolen and used to board up another abandoned home nearby.
Scrappers tore out the copper plumbing, the furnace and the light fixtures, taking everything of value, including the kitchen sink.
"It about doesn't make sense to put the family out," Upshaw said. "Once people are gone, you're gonna lose the house in this neighborhood."
Tuesday, the home was wide open. Doors leading into the kitchen and the basement were missing, and the front windows had been smashed. Weeds grew chest-high, and charred remains marked a spot where the garage recently burned.
Put on the market in January for $1,100, the house had no lookers other than the squatters who sometimes stayed there at night. Facing $4,000 in back taxes and a large unpaid water bill, the bank that owned the property lowered the price to $1.
$1 sale to cost bank $10,000
While it's not unusual for $1 to be exchanged when property is transferred for legal reasons, listing a home in the Multiple Listing Service for $1 was surprising and unsettling to Kent Colpaert, the listing real estate agent for the property.
"I've never seen a home listed for $1," Colpaert said.
"But it's been hit hard: It's just a shell."
On Tuesday, Realtor.com listed one other single-family home, one duplex and one empty lot at $1 in Detroit.
Dollar property sales are the financial hangover from the foreclosure crisis, said Anthony Viola of Realty Corp. of America in Cleveland.
Lenders that made loans to unqualified buyers during the height of the subprime market now find themselves the owners of whole neighborhoods of vacant, deteriorating homes.
"
No one has much sympathy for these banks that made subprime loans," Viola said. "And in some cities like Cleveland, judges aren't letting them sit on the properties -- they're ordering them to tear them down or sell them."
So desperate was the bank owner of 8111 Traverse Street to unload the property that it agreed to pay $2,500 in sales commission and another $1,000 bonus for closing the $1 sale; the bank also will pay $500 of the buyer's closing costs. Throw in back taxes and a water bill, and unloading the house will cost the bank about $10,000.
"It doesn't make sense in some neighborhoods to keep paying costs and costs," Colpaert said. "It can make more financial sense to give it away."
Buyer calls it an investment
Colpaert declined to provide the name of the prospective purchaser, because the deal had not been through closing. The agent did say that the buyer agreed to pay the full list price of $1, and planned to pay cash.
The buyer, a local woman, considers the home to be an investment property and will not live there, Colpaert said, though exactly how soon the buyer can expect to recoup her four-quarter investment is questionable. Replacing the guts of the house will costs tens of thousands of dollars, and the owner will have trouble keeping scrappers from stealing the improvements as quickly as they're installed. Home demolition costs about $5,000, Colpaert said.
Meanwhile, the new owner will owe $3,900 in property taxes in 2009 on her dollar purchase unless she challenges the tax assessment.
While selling a home for the amount of change most people could find between their couch cushions is unusual, some abandoned homes in Detroit sell for $100; vacant lots can be purchased for $300.
"My 14-year-old son could buy a block of Detroit property," said Ann Laciura, senior servicing specialist for the Bearing Group.
Anyone driven through Downtown Detroit lately? The new owner will lose their shirt and will soon regret that lousy $buck
-Rinx
DETROIT -- One dollar can get you a large soda at McDonald's, a used VHS movie at 7-Eleven or a house in Detroit.
The fact that a home on the city's east side was listed for $1 recently shows how depressed the real estate market has become in one of America's poorest big cities.
.....And it still took 19 days to find a buyer.
The sale price of the home may be an anomaly, but illustrates both the depths of the foreclosure crisis in Detroit and the rapid scuttling of vacant homes in some of the city's impoverished neighborhoods.
The home, at 8111 Traverse Street, a few blocks from Detroit City Airport, was the nicest house on the block when it sold for $65,000 in November 2006, said neighbor Carl Upshaw. But the home was foreclosed last summer, and it wasn't long until "the vultures closed in," Upshaw said. "The siding was the first to go. Then they took the fence. Then they broke in and took everything else."
The company hired to manage the home and sell it, the Bearing Group, boarded up the home only to find the boards stolen and used to board up another abandoned home nearby.
Scrappers tore out the copper plumbing, the furnace and the light fixtures, taking everything of value, including the kitchen sink.
"It about doesn't make sense to put the family out," Upshaw said. "Once people are gone, you're gonna lose the house in this neighborhood."
Tuesday, the home was wide open. Doors leading into the kitchen and the basement were missing, and the front windows had been smashed. Weeds grew chest-high, and charred remains marked a spot where the garage recently burned.
Put on the market in January for $1,100, the house had no lookers other than the squatters who sometimes stayed there at night. Facing $4,000 in back taxes and a large unpaid water bill, the bank that owned the property lowered the price to $1.
$1 sale to cost bank $10,000
While it's not unusual for $1 to be exchanged when property is transferred for legal reasons, listing a home in the Multiple Listing Service for $1 was surprising and unsettling to Kent Colpaert, the listing real estate agent for the property.
"I've never seen a home listed for $1," Colpaert said.
"But it's been hit hard: It's just a shell."
On Tuesday, Realtor.com listed one other single-family home, one duplex and one empty lot at $1 in Detroit.
Dollar property sales are the financial hangover from the foreclosure crisis, said Anthony Viola of Realty Corp. of America in Cleveland.
Lenders that made loans to unqualified buyers during the height of the subprime market now find themselves the owners of whole neighborhoods of vacant, deteriorating homes.
"
No one has much sympathy for these banks that made subprime loans," Viola said. "And in some cities like Cleveland, judges aren't letting them sit on the properties -- they're ordering them to tear them down or sell them."
So desperate was the bank owner of 8111 Traverse Street to unload the property that it agreed to pay $2,500 in sales commission and another $1,000 bonus for closing the $1 sale; the bank also will pay $500 of the buyer's closing costs. Throw in back taxes and a water bill, and unloading the house will cost the bank about $10,000.
"It doesn't make sense in some neighborhoods to keep paying costs and costs," Colpaert said. "It can make more financial sense to give it away."
Buyer calls it an investment
Colpaert declined to provide the name of the prospective purchaser, because the deal had not been through closing. The agent did say that the buyer agreed to pay the full list price of $1, and planned to pay cash.
The buyer, a local woman, considers the home to be an investment property and will not live there, Colpaert said, though exactly how soon the buyer can expect to recoup her four-quarter investment is questionable. Replacing the guts of the house will costs tens of thousands of dollars, and the owner will have trouble keeping scrappers from stealing the improvements as quickly as they're installed. Home demolition costs about $5,000, Colpaert said.
Meanwhile, the new owner will owe $3,900 in property taxes in 2009 on her dollar purchase unless she challenges the tax assessment.
While selling a home for the amount of change most people could find between their couch cushions is unusual, some abandoned homes in Detroit sell for $100; vacant lots can be purchased for $300.
"My 14-year-old son could buy a block of Detroit property," said Ann Laciura, senior servicing specialist for the Bearing Group.
Sunday, August 10, 2008
Geopolitics of Georgia
Why the US Russia stand-off in Georgia?
Oh, perhaps the 1 million bpd oil pipeline running through Georgia connecting the rich Caspian Sea oil deposits to European and Israeli oil terminals.
This is the only route for Caspian Sea oil that does not pass through Russia or Iran.
US support of Georgia (one of 3 countries to send troops to help the US in Iraq) is a Russian bone of contention. Makes you wonder if the recent visit there by Condoleeza Rice had anything to do with Russia suddenly dumping $50B in Fannie Mae and Freddie Mac bonds.
Putin previously demonstrated he would use Natural Gas as a weapon (shutting gas off to Ukraine), is it any stretch to think he would use Russia's newly gained wealth in similar fashion?
- Rinx
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