September 2008 Archives

This is part two of my interview with Michael Shermer, author of The Mind of the Market.  (You can find part one here.) Today, Shermer tells us who he thinks will be the ultimate victims of the foreclosure crisis: the taxpayers.



Check in tomorrow to find out why Shermer thinks we're in this economic slump -- "Too much government intervention."

We want to hear from you.  Do you agree with Shermer? Share your thoughts below!

Let’s begin this week with the third part of my video interview with renowned skeptic, Libertarian and author of The Mind of the Market, Michael Shermer.  If you’re just tuning in you missed Shermer’s assessment of who the real victim’s are in the foreclosure crisis.

Today, Shermer says part of the reason why we’re in this economic slump is because of too much government regulation and intervention.

What do you think: should we have more or less government regulation over the markets? We’ll share your comments with Michael Shermer.

The SoCal Connected crew stopped to take a lunch break in Lake Elsinore, while filming Foreclosure Alley. There, they met Louie Trujillo, owner of Las Cuatro Milpas Restaurant. Trujillo explained how the Inland Empire’s foreclosure crisis is hurting his business.

For the past few years, the Inland Empire in Riverside County has been one of the fastest growing counties in the state, home to a major housing boom. But now the Inland Empire is pretty much the poster child for the foreclosure crisis. In the newer developments, house after house sits vacant, either up for auction, for sale by a bank or going for what’s called a “short sale” which is when the owner owes more than the house is worth.

SoCal Connected tracked down some surreal sights associated with the crisis for a segment called Foreclosure Alley--a company that specializes in removing whatever people leave behind in their foreclosed homes.  The process is called a “trashout” - a term the company came up with because it perfectly describes what happens.  Everything that’s left is dumped in a trailer and taken to the landfill. In the clip below, Arik Jensen and Gregory Fitch talk about the hardest part of their jobs.
 


Then there’s the guy who started a business to spray-paint dead lawns.  That’s right.  He paints brown lawns green. Take a look: 



I lent him a hand - all in a day's work for a field producer!
 

Over the next few weeks, Roz Lee, who you met in a SoCal Connected segment called Down But Not Out will be blogging about her search for work on SoCal Connected.

You can call me Roz. I am a thirty-two year-old, 80's-loving (because let's face it- those were the best times on Earth), movie-going, God-fearing, fun-loving, love-giving, single, professional, and happy mother of two. Originally from Asbury Park New Jersey. I've been a resident of sunny Southern Cali for 26 years now. Currently, I live with my domestic partner of 7 years (and the proud father of our children) in Monrovia, Ca.
 
I have worked all my adult life. I remember my first job. It was a blast. I was 17 years old, and I worked just blocks away from my alma mater, Hollywood High Performing Arts Magnet. (Go Sheiks!) Anyway, when I received my first paycheck, I remember exactly what I did with it: I bought an outfit, a ponytail extension (don't laugh), and a ticket for the first annual 92.3 The Beat Summer Jam--ya'll remember those? It was so much fun. I met and hung out with Tupac Shakur after the show with my friends. In hindsight, probably not so good an idea, but we were safe, respected, and had the best time of our lives. And I had made it all possible! Once I got a taste of making my own money, and being able to set the course for things I wanted to do, have, and experience, I decided that I LOVED to work. I had not been without a job since then...until now.
 
In March of 2007, almost a year after my mother's passing, I received notice that I was being laid off from my $70k+ a year job as a training manager for a major Insurance brokerage firm. It happens all the time, right? And I felt, too, that things would be okay. I mean, I received a great package. I had a couple of weeks, even, to channel my inspirations towards where I wanted to go from there. It felt like a very free time in my life, if that makes sense. I felt liberated, and inspired. I was powerful because I had the freedom of choice. I could choose to do anything I wanted to do! It's a great feeling for a time. Yet, here we are almost 2 years later, and I still have not held a solid position since. What's happening? What's going on?
 
Maybe my story sounds familiar to you. Perhaps you, too, are seeing changes in the organizational structure at your job, and are wondering what you are going to do if you should loose your job. Perhaps you are working and busting your tail everyday for a paycheck that still cannot seem to scratch the surface of all your financial needs. Whatever your story, at the center of it, mine is the same. Fortunately for me, there is such a thing as grace and mercy!
 
I have been in the process of actively seeking aid for my situation. I hope these blog postings will help keep you in the loop of my progress towards re-claiming my piece of middle class  America. I just want to work hard, make a contribution, live life, and take care of my family. We don't ask for much, do we? Journey with me, and let me hear your story, too. You never know what your words can inspire.

Related Materials

Down But Not Out - By Correspondent Judy Muller - A middle class mother of two struggles to keep her family from becoming homeless.

Whether it’s on TV, in print or online, there are two types of news stories: “hard news” and “features.” As someone who’s done both, what’s really rewarding is when you can combine them: tell great stories with great characters that also have a hard news urgency. That’s our goal at SoCal Connected.

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If you'd like to get involved with Mama Hill and her program, you can do so directly at Mama Hill's Help. Housing and community group ACORN provides a broad range of services, including frst-time home-buyer seminars in both English and Spanish. The Legal Aid Foundation of Los Angeles has an Eviction Defense Center that helps people with Section 8 housing, habitability issues, rent control, and 30-day notices. In addition to attorneys, they need volunteers to help elderly, disabled, or single parent tenants move, participate in presentations and help in educational seminars.

Watch the full episode:

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While working on our video, The House that Mama HIll Built, I was obsessively checking the blogs for news about the economic melt-down.  I came across the work of Michael Shermer renowned skeptic and proud defender of free market economics. He has a new book The Mind of the Market, that explains how human evolution shaped the modern economy, as well as why humans make irrational financial decisions. He seemed like a good person to consult, so I sat down to talk to him.

Today, Shermer says human beings are pro-capitalist when the markets are up and pro-socialist when the markets fall, he adds, "you can't have both at the same time."



Tomorrow, Michael Shermer will tell us who HE thinks the victims are in the sub-prime mortgage crisis.  If your first thought is senior citizens like Mama Hill, duped by predatory lenders -- think again.

We want to hear from you.  Don't let Michael Shermer have the last word; comment below and we'll share your thoughts with him.

In honor of Black History Month, the web-team wants you to watch our short video profiling a local hero fighting to keep her home.

Millicent Hill, better known as Mama Hill, runs an afterschool program in Watts for at-risk youth. Hill developed a “Safe Passage,” program to help transport children from different gang-affiliated neighborhoods to her home, where she helps them stay on top of their school work and out of gang life. Over one hundred children a month take part in, “Mama Hill’s Help Inc.”

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Every Thursday, SoCal Connected will be featuring your reactions, thoughts and commentary on the previous week’s show. We’re calling the segment "The Water Cooler" in homage to that gathering place in every workplace, office and school where people steal a few moments out from a busy day in order to discuss the most pressing question of our time - namely, what they watched on TV (or TiVo) last night.

(Or in the case of our virtual water cooler: Discuss what they watched on SoCal Connected!)

To get things started, we thought we would ask two questions we know have been on everyone's minds the last few months:

How is the economic downturn affecting you? Are you afraid of losing your home?

Use the comments below to share your thoughts and responses to those questions, and we’ll feature some of your comments on the Thursday, October 2^nd show. Please make sure to use leave us a valid email address so that we can verify your identity. Your comment WILL NOT air if we can't comment you, so leave SUNSTUD37 in chat where he belongs and use your real email; we promise to keep it a secret!

Ms. Zavala is an anchor/reporter for KCET’s weekly newsmagazine, SoCal Connected. She has been at KCET since 1987. For the past sixteen years Ms. Zavala was a vital part of the award-winning series, Life & Times, serving as an anchor, co-anchor and reporter. Life & Times won 25 L.A. Area Emmys and 30 Golden Mikes.

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Peter Viles is senior producer for Real Estate at LATimes.com. We asked him to join the conversation about the region's real estate market, and this the first of three entries Peter shared with us. Check back on Monday, September 29th, and Wednesday, October 1 for the next installments.

The free-fall in housing prices in the Inland Empire has created one of the most vibrant markets in America for a product no one wants to produce: foreclosed houses.

Roughly 2,500 previously foreclosed homes were sold in Riverside County in August, making up 65% of all home sales in the county, according to MDA DataQuick. But supply of foreclosed homes for sale appears to be rising -- banks seized roughly 3,400 foreclosed homes in the county in August, according to Foreclosure Radar.

Home prices in the county, and in neighboring San Bernardino County, are in a virtual free-fall, and the growing list of foreclosed houses for sale threatens to drive prices even lower.

In Lake Elsinore, for example, the median sales price for existing homes is down 47% over the past year; Prices in parts of Moreno Valley have fallen 52% in the past year. These price declines threaten to create a self-reinforcing cycle of decline, forcing more homeowners into
foreclosure and further flooding the market with foreclosed houses.

The result is that California's housing bubble -- which was particularly apparent in the Inland Empire -- is deflating at a rate that disproves the conventional wisdom that housing prices rarely fall as rapidly as they rise. Below is the median sales price for existing homes in
Riverside County:

August 2000  $162,000
August 2001  $185,000
August 2002  $215,000
August 2003  $260,000
August 2004  $334,000
August 2005  $388,000
August 2006  $420,000
August 2007  $394,000
August 2008  $247,000

Although the current price declines have been dramatic, and to many, unexpected, they could continue for some time. If prices in the county had risen in lock-step with inflation since 2000, the median sales price would be approximately $206,000 -- or 17% below current levels. That's a crude analysis though -- housing prices usually appreciate at a rate slightly faster than inflation. But it's a reminder that the current price collapse is not an unforeseen, or isolated, event -- it is the second half of a boom and bust cycle.

Thoughts? Do you think the market has bottomed-out?

You can e-mail Peter Viles at: peter.viles@latimes.com. Or, follow his real estate blog L.A. Land on Twitter at: http://twitter.com/LALandBlog

RELATED STORIES:

Foreclosure Alley - By Correspondent Lisa Ling - For the past few years, the Inland Empire has been one of the fastest growing counties in the state. But now the Inland Empire is pretty much the poster child for the foreclosure crisis.

Patt Morrison, columnist for the LA Times and radio host on KPCC, looks at one of California's favorite "blood sports" -- real estate -- and how hard times have affected it.

California's unemployment rate hit a 12-year high this year putting a lot of people out of work who didn't expect to lose their jobs - people who had never been without work before. This is Roslyn Lee's story.

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For the past few years, the Inland Empire in Riverside County has been one of the fastest growing counties in the state - home to a major housing boom.  But now the Inland Empire is pretty much the poster child for the foreclosure crisis.  In the newer developments, house after house sits vacant - either up for auction, for sale by a bank or going for what’s called a “short sale” which is when the owner owes more than the house is worth.

More