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November 5th, 2007 Categories: Mortgage and Loans, Pre Foreclosures, Real Estate News, Real Estate Trends, Sacramento Real Estate, Sacramento Sellers
Rooting Out the Rotten Tomatoes
By CLAIRE SUDDATH
So how much damage can a few rotten tomatoes really do? The tomato-linked salmonella outbreak announced by the Food and Drug Administration (FDA) on June 3 has claimed 228 victims in 23 states over 58 days (and counting). It has put 25 people in the hospital and may have had a role in hastening the death of a cancer patient. And then there’s the flurry of panic as many of the tomatoes that American consumers take for granted every day suddenly disappear — from McDonald’s hamburgers; from the salsa at Chipotle Mexican Grill; from Burger King, Taco Bell and Sonic; and from the grocery shelves at Kroger, Wal-Mart and Target. Didn’t we just go through this with bagged spinach? With peanut butter? With pet food?
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Because the FDA’s tomato-recall recommendation is so specific — including only three types, grown in certain regions during a certain time — and because many national chains pulled their tomato stock within days of the announcement, most of the infected samples have likely been removed. But the outbreak remains ongoing; its source has not yet been determined, and the government is investigating new cases every day. It may be a few more weeks before the delicious staple fruit is given the all-clear.
Taking tomatoes off shelves and menus may contain the outbreak, but it doesn’t explain it. On May 22, the New Mexico Health Department notified the Centers for Disease Control and Prevention that it knew of seven people recently infected with Salmonella Saintpaul, an unusual strand of the bacteria that accounted for only 400 of the 1.4 million cases of salmonella infection reported last year. And it was precisely because occurrences of the Saintpaul strand are so rare that the report caught the CDC’s attention. When Texas and a few other states reported cases of people being infected by bacteria with the same “genetic fingerprint,” a multistate search for Salmonella Saintpaul was launched. While the CDC tracked reported illnesses, the FDA interviewed victims to find out what they had eaten (and where). The common answer was tomatoes.
There have been 13 outbreaks of salmonella in tomatoes since 1990, which puts the fruit on the list of high-risk foods that are prone to infection. But unlike the bagged spinach from the 2006 E. Coli scare, the tomatoes don’t come with a traceable bar code. “When you’re dealing with tomatoes, it is much, much more complex,” explains Dr. David Acheson, the FDA’s associate commissioner for foods. The FDA’s great tomato hunt has an ever-expanding list of suspects. A salmonella victim can point to the supermarket (or restaurant) that sold the offending fruit, but that store probably sources its tomatoes from several suppliers, each of which uses several distributors — and distributors buy from any number of growers.
“Each set of questions just multiplies into a fan of information that has to be sorted through to understand where the links cross over,” says Acheson. Although the FDA has managed to rule out some regions — northern Florida is safe because its tomatoes weren’t ready for harvest at the time of the outbreak — it will be some time until the true source is found. “We’re not quite there yet,” says Acheson, “but we’re getting very close.” But Dr. Ian Williams, chief of the CDC’s OutbreakNet team, warns that the source may never be found due to the fruit’s short shelf life. “You don’t expect to find an infected tomato sitting on someone’s counter 10 days after the outbreak,” says Williams.
Still, the lag time between the initial outbreak and the government’s reaction is startling: the first Salmonella Saintpaul victim fell ill on April 16, but the FDA didn’t announce the tomato link until June 3. Williams says part of the problem identifying salmonella outbreaks is that a lot of victims don’t see the symptoms — diarrhea, fever, vomiting — as sufficiently severe to warrant a visit to the doctor, and so they go undiagnosed. “There may be a delay in reporting outbreaks because people do not have a stool specimen tested,” he says. Officials have not yet identified an infected tomato, and because of the fruit’s short shelf life, they probably never will.
The FDA unveiled a tomato-safety initiative in 2007 that sought to identify causes of salmonella infection, but Acheson admits that studying preventive techniques doesn’t help the FDA deal with outbreaks. The FDA has no plans to change the initiative in the face of the recent outbreak.
Even if the FDA can pinpoint the source of the outbreak, it’s hard for consumers to know where their tomatoes are grown. Certain imported foods are required to carry country-of-origin labels, but that doesn’t apply to domestic produce. “I’m not aware of any tomato outbreak that was not domestic,” says Acheson. There is no such thing as a mandatory state-of-origin label for food, and federal authorities have yet to create such a law. “Saying ‘product of the U.S.’ isn’t necessarily going to confer safety,” he says. So much for reassurance.
Vi ste jeben.
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[…] Russell Hutchinson wrote an interesting post today onHere’s a quick excerptMore good news in the mortgage world: Mortgage reform is coming!! … Schwarzenegger is losing the revenue cushion he used to plug budget deficits as home foreclosure rates increase at a faster pace than the rest of the country….Along with great local news, Nationally; Countrywide, the largest U. S. mortgage lender, offered to refinance or modify up to $16 billion of adjustable-rate mortgages t…And the low mortgage rates we have been enjoying could continue throughout 2008…. […]
Buy now to catch a falling knife! A recent Forbes article ( http://money.cnn.com/2007/11/06/real_estate/home_prices.fortune/?postversion=2007110711 ) estimates a further 26% fall for Sacramento. SacTown was one of the hottest of the hot markets, and so logically should become one of the coldest of the cool in 2008-9(10?). I believe that a further 26% is a conservative estimate. Look to the fundamentals:
* Rent on any particular home should be 1/100th to 1/120th of the total value (i.e. - $1500/month rent = $150,000-$180,000 home). That’s how the RE investors run the numbers.
* The medium home should be 2-4 times the medium family income of the area (North Highlands=2x, Granite Bay/Fab40’s=4x, *maybe* a lil more). So with Rocklin’s medium family income of approx $75,000 (est. from 2005 numbers + CPI), the medium house (think 3 beds, 2 baths, 1,700 sqft-ish) should be $225,000, $270,000 tops.
SacTown has a ways to fall yet. Want to get a “rule of thumb” number for a house? Check its comps from 2000-2002 (just as the latest price run-up built up steam). My own home shopping has focused on Rocklin, and my guess is that $130/sqft is a good rule of thumb to work with. Anything over that price will be worth less then you paid for it in 2010 (if not in dollar terms, then in real terms). And even at $130/sqft I’m of the opinion that you’ll be risking at least 10% if you buy in 2008-9. There has already been a bank owned property (ML# 70077271, search for it on http://metrolistmls.com/ ) that has gone pending on a 4 bed/ 3 bath / 1951sqft for less then $134/sqft and we aren’t even in 2008 yet!!
Look into what is happening already with Florida condos; some have been bid on (purchased?) at 50% of peak prices. Then look into the Japanese RE bust from early/mid-1990’s thru til now. That’s what is coming!
As is human nature, when the balance swings too far to one extreme, it invariably swings back past “normal” into the other extreme. If you time it perfectly, you could very well get a screaming bargain. But if you’re just looking for your home til retirement (as I am) then buy based on the fundamentals mentioned above and here ( http://drhousingbubble.blogspot.com/2007/08/3-methods-of-real-estate-valuation-for.html ) and you’ll have a hard time going too wrong.
Best of luck to all!
Campbeln
PS – Calculated Risk, Mish, Winter (Economic & Market) Watch, Sudden Debt, Maxed Out Mama, Patrick.net and Dr Housing Bubble are your friends! Visit them every day!