Soft Landing ‘No Longer In The Cards’
Some housing bubble news from Wall Street and Washington. “Goldman, Sachs & Co. said Wednesday that it has been added as a defendant in lawsuits regarding mortgage financier Fannie Mae’s accounting practices. The Wall Street powerhouse said the complaints allege that it violated laws, including U.S. securities laws, in arranging some Fannie Mae-sponsored bond deals.”
“The deals involved real-estate mortgage investment conduits, which are bonds collateralized with mortgage-backed securities. The other defendants include Fannie Mae and some of its past and present executives, accountants, and other financial-services firms.”
From Inman News. “The housing market downturn looks rougher than the soft landing housing analysts had been expecting. Although a soft landing is ‘no longer in the cards’ for housing, Nariman Behravesh, chief economist for Global Insight, said that the ‘good news is that other sectors are doing reasonably well and will continue’ to do so.”
“During the recent boom, inflation-adjusted housing prices rose to record levels, and the market is paying the price for that rapid ascent now, with ‘prices coming down off their own weight,’ Behravesh said.”
“Following an unsustainable boom in housing starts, sales and price appreciation in 2004 and 2005, ‘we need a period of below-trend performance to work off excess inventory and improve housing affordability,’ said National Association of Home Builders Chief Economist David Seiders. ‘Mortgage rates are dropping; builders and sellers are offering all sorts of incentives and upgrades, energy costs are retreating and the national economy is moving ahead, making it a very good time to buy a home.’”
From Bloomberg. “Service industries in the U.S. expanded at the slowest pace in more than three years in September as the housing slump deepened. Homeowners extracted a net $497 billion at an annual rate from home equity in the second quarter, down from $649.2 billion in the first three months of the year, according to figures from Federal Reserve researcher James Kennedy.”
“‘We’ve had a major bubble that’s bursting before our very eyes and it’s going to take a big toll on growth prospects going forward,’ said Stephen Roach, chief global economist at Morgan Stanley in New York.”
“‘The economy is slowing, but not at a great pace,’ economist Joel Naroff said. ‘The slowdown in housing has implications not just for construction, but also for finance, real estate; lots of ancillary places.’”
From MarketWatch. “Home and tower builder WCI Communities Inc.said it anticipates third-quarter new orders plunged 80% from a year earlier. WCI said it expects third-quarter earnings ’significantly below’ its prior forecast.”
“CEO Jerry Starkey in a statement said a $13 million write-off for options on land the company decided not to purchase was the biggest reason for the expected deficit. ‘With the current slowdown in demand, we believe we own sufficient land to support our operations through the foreseeable future,’ the CEO said. ‘We have concluded that it is more prudent at this juncture to apply our cash flow from operations primarily towards debt reduction and stock repurchases.’”
“WCI said higher traditional and tower defaults are also expected to hit profits, while about 80 traditional homes valued at roughly $48 million had been slated for delivery in the third quarter but failed to close.”
“‘We think the most worrisome aspects were the rising cancellations in the tower business and what appears to be a lack of net orders,’ BofA analyst Daniel Oppenheim said. ‘We estimate that cancellations in the tower business essentially offset new orders, resulting in essentially no net orders for the quarter in the tower business.’”
“JMP Securities analyst Alex Barron said the 80 percent lower orders imply that tower orders were down about 99 percent in the quarter to about five units. ‘These low order numbers are driven by a low level of demand for homes in Florida, increasing cancellations, and only one recently launched tower that converted to contract last quarter,’ Barron wrote in a client note.”
From USA Today. “Investors hurt by the sharp slide in home-builder stocks might now wish they’d kept a closer eye on what industry executives were doing with their own holdings.”
“CEOs of three of the top eight U.S. home builders sold large amounts of stock last year and avoided some of the financial pain since the shares peaked. There’s nothing wrong or illegal when a CEO sells company stock, says Todd Henderson, professor at the University of Chicago Law School. ‘There can be a ton of reasons why executives may be selling,’ he says.”
“Still, some say the timing of the selling in the industry gives reason for pause. ‘It’s always a question: Is the timing lucky or is there something more?’ says Jill Fisch, professor at Fordham Law School.”
That’s one damn scary compilation Ben.
jb
Don’t tell that to market, it’s still worried about inflation. The latest economic numbers today show the economy further slowing yet the market interprets this as meaning no more rate hikes so onto a new record high we go.
Who is right? Most of us on this board think the housing bust will take down the economy but Wall Street thinks otherwise. I guess we’ll know in about 6 months who’s right.
Am I the only one scared that the market has for some reason put the pedal to the metal in the last 2 days? Dow up +230 pts and counting in less than 48 hours…
No, you’re not the only that is “scared” by this.
Personally, it has the feel of that last rally in 1987… A quick run-up before the sucker punch.
Neil
This sucker punch will be in the nut sack!
Or it’s something more sinister….
http://financialsense.com/fsu/editorials/nystrom/2006/1002.html
i’m all for conspiracy theories.
Is it a conspiracy theory if other people came to the same independent conclusion? Remember Charles Hugh Smith’s article on Oct 2, ‘06:
This Week’s Theme: Trust/Confidence talked about this as well.
“that phony-baloney “Dow Jones Industrials record high.” Nice–but what about the 18% inflation since the 11,722 record was reached in 2000? Rather conveniently forgotten, isn’t it? Let’s face it: this DJ-30 “record” is as bogus as they come.”
http://www.oftwominds.com/blog.html
what ever it takes to keep the sheeple happy till after the elections
http://biz.yahoo.com/ap/061004/mortgage_applications.html?.v=3
not mentioned in this article but ARM applications also increased.
Lower interest rates, lower housing prices. Looks like its never been a better time to be a knife catcher
Talk about adding fuel to the fire.
Yes, Marketwatch is running this as one of their top stories, the implication being that housing demand is stabilizing. Almost half the applications were refi’s, I’m assuming FB’s trying to buy themselves more time.
Maybe some of the smarter sheeple are trying to re-fi their toxic mortages with 15- or 30-year fixed ones!
(But more likely, they’re pulling more $$$ out for another SUV.)
‘Mortgage rates are dropping; builders and sellers are offering all sorts of incentives and upgrades, energy costs are retreating and the national economy is moving ahead, making it a very good time to buy a home.’”
Yes!! This painful eight weeks of gut-wrenching housing slowdown is finally over. Time to go out and buy a house that will resume its perpetual escalation in value. Oh joy!!
Pure greed, that’s all this run up is.
I’d hate to be invested in a stock market run by altruism. When it is let me know, I’ll go 200% short.
It’s a good thing I’ve had a good year up to now because my index puts are in the major latrine
About a year ago there was speculation here on where the dumb housing money would go after the price increases end on houses… A few people thought it might go back into stocks… well, I’m guessing there’s quite a bit of dumb speculation going on, with the idiots who had any HELOC left over trying to switch out of housing and into something else to make a quick buck for retirement. This could the last hurrah…
Hey, let us dumb beta-chasers have a day or two, will ya?
More power to you all for trying to time the market. I gave up long ago in sheer frustration. It’s better for me this way.
Putting your HELOC money in the market? That’s awfully risky! You have to beat your HELOC interest before you see any gain.
What’s a typical HELOC rate? 8.25% these days? Since 1926 the average total return on the market has been about 10% . That’s the AVERAGE. Since we’re at all-time-highs now, what are the chances the AVERAGE return over the next ten years will be enough better than 8.25% to make it worthwhile to borrow HELOC to buy stocks?
I don’t see average Joe Sheeple doing this. If they take money out, they want to SPEND IT! On Plasma TVs, etc.
Something else is driving the market here–not money that would have gone into housing bubble.
“Am I the only one scared that the market has for some reason put the pedal to the metal in the last 2 days? Dow up +230 pts and counting in less than 48 hours… ”
Last month I, and others here, discussed the very real possibility that stocks could take off, at least initially, as housing tanks. we were summarily dismissed as trolls and/or stupid.
we were shown all this data about how September is the month of death for stocks, and that you can bet on it-it’s a sure deal. add in housing decline, and stocks are dead we were told. I was given all these theories about how the stock market can be reliably timed etc.
I don’t even in the least hate to say “I told you so”.
I believe in the Random Walk theory espoused by Burton Malkiel. We may all believe that stocks are due for a hammering (I know I do)… but that is longer term. In the short term anything can happen. the stock market is too much about psychology, and very little to do with fundamentals.
It doesn’t mean fundamentals are worthless (they’re not), but they really work best for longer term investing rather than short term speculating.
Thus I have kept my discipline and kept diversified… because I have no idea what the hell is going to happen short term. Oil may go up or down. Gold up or down. Silver up or down. Stocks up or down. International stuff up or down. cash may go up or down. who knows? So I own them all.
housing is toast though.
Don’t worry Inspector. I was on the blog last year, telling people that you need to be in equities. This continues to be a stealth bull market which has served as a nice annuity to those invested in diversified global portfolio.
Buy stocks until the market prices in significantly more rate hikes.
This is what I meant by “chasing beta” above.
So once you go down the path of random-walk, what is the best allocation that maximizes return for minimum risk?
So far, I’ve been working with an allocation that purports to be on the efficient frontier. In rough numbers, it returns 7% per year, with a standard deviation of about 7%. Active managers charge 1%/year for this service, it costs me about $100/year in trading.
By definition, the return is avg, but it is the best avg for the swing.
Would love to hear about other approaches.
“Buy stocks until the market prices in significantly more rate hikes.”
Buy stocks until the collapse of the hedge fund industry brings down the entire house of cards along with it, including the stocks you bought near the all-time high.
And how about bonds? The easiest trade is the contrarian one - the 10yr is proving this out. I told my financial advisor we were going into bonds 4 months ago - while he espoused “rates are going up” better not to go into FI. Well, we locked in some 5.5 1 and 2 yr CDs, and shifted to 10yrs. My experience is to go with fundamentals and diversification for the long term, and take the contrarian trade in the short-term. Maybe I’m just lucky - certainly don’t think I’m smarter.
dd
If you don’t like Iceland govt bonds (8% AAA) or Brazil govt bonds (12%+), you might feel safe enough in Australian govt bonds (5.3%).
tx azlender.
Am I the only one scared that all this stock price manipulation may eventually lead to a situation where the US is full of a home-grown version of the zombie companies which haunted Japan in the early 1990s downturn?
No!
Yes, you are. Now go back to reading about the JFK and 9/11 conspiracies.
Go back to trying to convince all the GFs to buy stocks at the all-time record high, and charging them through the nose for your dumb advice.
Thanks so much for these daily “from Wall Street and Washington” reports Ben.
Americans may be stupid enough to keep buying homes they can’t afford, but with reports like these, we just know somebody’s going to step in and stop the madness eventually.
I love this stuff.
A recession is coming to the US in 2007.
no WAY!
ALERT THE MEDIA!!
The stock market is a leading indicator, and it is currently indicating growth. How do you know the wealth effect of stock market gains will no let all the FBs substitute consumption out of stock market gains for consumption out of home equity gains? At least I am guessing this is part of the plan…
GS,
I don’t beleive for a second that it’s the FBs buying stock. The *real* money that’s been driving the housing/credit market is likely from institutions trying to find some fixed returns (and some $$ from those of us bubblesitters while we sit on the sidelines). I think some of this “behind the scenes” money is going into stocks. Questions is, are they trying to bait us?
says Todd Henderson, professor at the University of Chicago Law School. ‘There can be a ton of reasons why executives may be selling,’ he says.”
Another professor with an economics degree in BS! You really know why Robert Toll sold $100 million dollars of company stock last year. Don’t need a graduate school degree to figure that one out
Go to insidercow.com and try Countrywide CFC.
In the space of 4 days Sept 12-15 Stanford L Kurland sold $125 million.
True but the company was buying back stock so you see it all evens out.
Think they bought it? I think they bought it. Hey, is this thing still on? Godammi–
“…we believe we own sufficient land to support our operations through the foreseeable future,” the CEO said.
WCI’s CEO makes it sound like great foresight.
He is rather short-sighted spending all his cash on stock repurchases. BK highly probable.
How else can they unload their shares with no buyers?
Stock repurchases are an accounting gimmick that reduces the number of shares outstanding and increases earnings per share, net income / shares outstanding = EPS. Companies resort to stock repurchases when they can’t grow earnings in the normal course of business, particularly when a market is contracting.
Stock buybacks are the only way for WCI to make good on its earlier forecasted EPS outlook; otherwise, they would come in way below what the street expects and get hammered as a result. I tend to look at the entire housing market b/c it is a better predictor of future earnings potential for all participants.
I have not studied WCI’s financials but other HBs have been financing their buybacks with debt. That spigot may get turned off in a hurry if declining book values due to write-offs as well as declining sales bump them up against debt covenants.
As long as they can dump and get millions I really don’t think they give a damn.
Don’t worry… guys like this will pull off the big save (courtesy Foreclosures Forum)
Posted by Sam Heartland on October 03, 2006 at 13:42:19:
I am upside down in current house - Owe $255 and could likely sell for $215K (colorado). I Have to move for job but can’t sell house fast enough…would like to just walk away. Bank doesn’t want to short-sale. I have qualified to purchase a home in new city (Pittsburgh - location of job) without a contingency or bridge loan on my current house (I have great credit and make $150K per year although I have 100K). I’d like to close on the Pittsburgh house move and “walk-away” from the colorado house - IF I did this, what bad things might happen to come back to haunt me on the CO house? By the way, I live in ground zero for foreclosures in the US…the county I live in has the highest foreclosure rate in the US! 6 houses on my block have foreclosed in the last year!!!!
HELP!
Idiot. Won’t the BK laws essentially mean that he pays off his dues, given that he makes enough to cover them? Of course the bank doesn’t want to short sell - they know he is good for the money.
WTF?! This guy makes $150k/year and he wants to abscond to Pittsburgh without paying the $40k+commisions that he would owe after selling his current house! Scoundrel!
I’m not surprised at all that the bank won’t short-sell his place. To them, he’s an excellent candidate for paying this money back, certtainly with an income like that. And if he’s making $150k in Pittsburgh, he can live like a king… er, minus his agreed-to catch up payments to his previous mortgage lender.
Just like the greedy flipper boy Casey, this guy wants to ignore all the promises he made to pay people back what he borrowed. No sympathy AT ALL from me. I almost hope this guy stops paying the bank. Then they can foreclose and pursue him to the ends of the earth to get the residual plus fees, ruining his credit all along the way.
This guy, by the way, is EXACTLY who the new bankruptcy laws are meant for, not the sub-median income people (who are exempted from the most onerous payback provisions in that law).
He can’t file bankruptcy with that income. They’ll get a deficiency judgment against him. Whether they abstract it and pursue him is another matter.
I think he would be the “poster child” to persue to discourage too many others from doing this. Greedy fool. Take the 40k hit and consider it a lesson learned.
It’s early in the cycle. They will to stop a trend.
posted “He can’t file bankruptcy with that income.”
Really, he is not broke. He is just screwed. On the bright side he can buy his way out of his problem, which is no problem as my Dad would say.
With that income and if he is young he will recover and learn I hope.
This guy, by the way, is EXACTLY who the new bankruptcy laws
Would he have to declare BK? My guess is he can just walk away, depending on the loan terms.
The bagholder is whoever lent the guy money without sufficient cushion.
He’ll take a hit on his credit rating for a while, but BFD if he’s cleared 50-60K of obligation…
Nah, he’s one they’ll probably pursue, at least for awhile. He’s not some blue collar J6P with nothing but a pickup truck to his name.
Took me a sec to work out J6P, which is probably proof that I need more beer in my life.
What I meant above: If the bank forecloses, can they go after other assets? If not, then he’ll walk. Loan holder is holding the bag.
Where are the CO foreclosure experts? No bk, just foreclosure. He can have ton of $ and not pay for the property and the lender will foreclose. Question is what are the lender’s options if they foreclose? What’s the law in CO as far as recourse/non-recourse loans? The guy just wants to know worst-case scenario if he walks. A rational scumbag if you will.
He probably wouldn’t hesitate to spend $40K on a Lexus! Why shouldn’t he spend 40K on settling his debt? I don’t get it.
Sell the house in CO. Pay off the loan entirely. Go to Pitt. rent until the house you wanted to buy goes down 40K. Buy house, it’s a wash. A 150K guy doesn’t get that?
He’s probably in the real estate industry…
I have great credit and make $150K per year although I have 100K). I’d like to close on the Pittsburgh house move and “walk-away” from the colorado house - IF I did this, what bad things might happen to come back to haunt me on the CO house?
What could happen if you walk away from your house payment. How about your career suffers at least in my field: banking / brokerage.
You could not get a job at a bank / brokerage firm if you have bad credit. I don’t know if this is for all banks / brokerages, but the three I have worked for in the past 14 years all ran credit checks and criminal checks on me. I’m an executive as well making about the same type of $$$’s this guy was/is give or take.
You’re under water by 40k and you have $100k in the bank. Suck it up and bite the bullet. Pay your debts. Enough of this attitude, “It’s not my problem”
I really dislike that mentality.
I figure he has 40K in the bank and 50K in cc debt and makes 80K a year and figures his 20K in a 401K counts for the missing money.
I work in IT, and have been employed by banks in the past.
The SEC-mandated background check the banks run is roughly equivalent to that of Secret in the United States military. They visit the courthouse of every county in which you’ve ever lived and look through the records (this was in 2001, so I am told), and if there’s anything there you haven’t disclosed…POOF, you’re gone.
Bankruptcy and general poor credit are killers, as are failing to disclose any criminal legal entanglements in your background. I would imagine that in certain specialties (AIX, VIO, server clustering, Linux) they’re willing to overlook certain things but this is generally the rule.
Here’s a hotshot making a $150k with “great credit”, who’s gonna go into another house and he doesn’t even have the $40k cash to bring to the table to get his azz out of CO.
Reminds me of the 24YO doofus with the 6 houses on Foreclosure.com who thinks he’s entitled to the bank’s granting him the convenience of short sales for his $2.3mil note.
Heads I win-tales the mortgagor loses. Talk about arrogance.
Sorry, Charlie don’t think it’s gonna quite work out that way.
These people need a serious cumuppance.
Hell, I was in a worse situation in Dallas - I had to take $20k to closing after losing $10k renting it for a year! You will just have to eat it!! I am so thankful that we sold it and did not give it back to the bank. It will TRASH your credit and will cost you in the long run! Bite the bullet!! It’s tough, but you just have to do it! You’re not the only one out there - at least you are moving to a low cost area! I had to move to Los Angeles for a job!! Take your beating and move on!
40k is not that bad. just think at least 10 years your credit is toast. if he makes 150k a year and looks at 4k a year for that same 10 years its not that bad. he would pay more then that in taxes. then on the other hand try lotto !
OT - last famous statements from the past.
July 27, 1928
“The outlook of the world today is for the greatest era of commercial expansion in history. The rest of the world will become better customers.”
—Herbert Hoover, Speech at San Francisco
November, 1929
“Any lack of confidence in the economic future or the basic strength of business in the United States is foolish.”
—Herbert Hoover
January 21, 1930
“Definite signs that business and industry have turned the corner from the he temporary period of emergency that followed deflation of the speculative market were seen today by President Hoover. The President said the reports to the Cabinet showed that the tide of employment had changed in the right direction.”
—News dispatch from Washington
March 8, 1930
“President Hoover predicted today that the worst effect of the crash upon unemployment will have been passed during the next sixty days.”
—Washington dispatch
May 1, 1930
“While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty of the future of a people of the resources, intelligence and character of the people of the United States—that is, prosperity.”
—Herbert Hoover, Address at annual dinner of the Chamber of Commerce of the United States
October 2, 1930
“During the past year you have carried the credit system of the nation safely through a most difficult crisis. In this success you have demonstrated not alone the soundness of the credit system, but also the capacity of the bankers in emergency.”
—Herbert Hoover, Address before the annual convention of The American Bankers Association, Cleveland
October 20, 1930
“President Hoover today designated Robert P. Lamont, Secretary of Commerce, as chairman of the President’s special committee on unemployment.”
—Washington dispatch
October 21, 1930
“President Hoover has summoned Colonel Arthur Woods to help place 2,500,000 persons back to work this winter.”
—Washington dispatch
December 1930
“Economic depression cannot be cured by legislative action or executive pronouncement.”
—Herbert Hoover, Message to Congress
June 15, 1931
“I am able to propose an American plan to you. . . . We plan more leisure for men and women and better opportunities for its enjoyment. We plan not only to provide for all the new generation, but we shall, by scientific research and invention, lift the standard of living and security of diffusion of wealth, a decrease in poverty and a great reduction in crime. And this Plan Will be Carried Out if We Just Keep on Giving the American People a Chance.”
—Herbert Hoover, Address to Indiana Republican Editorial Association, Indianapolis
October 1931
“On September 8, I requested the governors of the Federal Reserve banks to endeavor to secure the co-operation of the bankers of their territory to make some advances on the security of the assets of closed banks or to take over some of these assets, in order that the receivers of those banks may pay some dividends to their depositors in advance of what would otherwise be the case pending liquidation. Such a measure will contribute to free many business activities and to relieve many families from hardship over the forthcoming winter, and in a measure reverse the process of deflation involved in the tying up of deposits.”
—Herbert Hoover
October 18, 1931
“The depression has been deepened by events from abroad which are beyond the control either of our citizens or our government.”
—Herbert Hoover, Radio address at Fortress Monroe, Virginia
Source: Edward Angly, Oh Yeah! Compiled from Newspapers and Public Records by Edward Angly (New York: Viking Press, 1931), 8–11, 14–17.
posted ” last famous statements from the past.”
Are you sure that was not GW?
lol…maybe Bush is following in HH foot steps.
The sentences and the words are WAY too long for that to be GW. The subject and verb agree, the sentences stay in the same tense…nope, not GW.
Herbert Hoover was probably one of the smartest Presidents we’ve ever had — and also one of the worst. Wilson was similar. About the only two truly genius presidents we’ve had who weren’t disasters were Abraham Lincoln and Theodore Roosevelt. I’d include James Garfield, but he got shot too soon to tell how his administration would have turned out.
Sometimes the problem with the smart ones is that they think they’re even smarter than they are, and that they can manage things that are beyond management. Hoover should have set aside trying to manage his way out of the Depression, and concentrated on relieving individual suffering. Mellon had it right — liquidate the malinvestments, take the short-term hit, and resume growth from the sustainable baseline.
You could add Jimmy Carter to the list, he was an actual nuclear engineer. But you mix that with “everyone in Washington is crooked, I’m not listening to anyone” attitude and you get a spectacularly ineffective presidency.
would you say the same for Clinton? He was a Rhodes scholar, after all…
“By saving more today, we can reduce the future burden of demographic change. However, as any economist will tell you, there is no such thing as a free lunch. Saving more requires that we consume less (to free up the needed resources) or work more (to increase the amount of output available to dedicate to such activities).”
Ben Bernanmke
Oct 4, 2006
http://tinyurl.com/r98ns
housin-Bear- You are comparing apples to oranges.
Rotten apples and rotten oranges.
we could use a man like herbert hoover again. the way glenn miller played. those were the dayyyyyyyyyyyyyyyyyys. stifle yourself, edith.
Bushwa! There is nothing wrong with the housing market, I read it on MSNBC!
“However, Mark Nash, author of “1001 Tips for Buying and Selling a Home” and a real estate broker in Chicago, cautions against using the proliferation of builder concessions to declare the start of a buyer’s market across all residential real estate market segments. “What the concessions are, are signs of excess inventory,” he says.”
““But buyers need to realize that while they have more clout, they are still not driving this bus,” says Nash.”
Once a bus heads over a cliff, is anyone really ‘driving’…?
Wait a minute, wait a minute.
I’m a potential buyer. I have a roof over my head. I don’t NEED to move. I’ve got money in the bank and a good job. I don’t NEED to move. However there are sellers out there who HAVE to sell - moving, dead, mortgage eating them alive - any number of reasons. Who is driving the bus in that situation Mr. Nash? Who is the one that HAS to blink before a deal is done, hmm?
idiot.
Bernanke Stirs Rally With Housing Mention
By Tony Crescenzi
RealMoney.com Contributor
10/4/2006 1:49 PM EDT
URL: http://www.thestreet.com/p/rmoney/tcrescenziblog/10313032.html
In the question-and-answer session that followed Fed Chairman Ben Bernanke’s speech before the Economic Club of Washington, the chairman supported the bull case on bonds by describing the housing market as in the midst of a “substantial correction.”
These words were enough to send both bond and stock prices higher, as the housing market’s weakness is at the heart of rate-cut expectations.
Never mind that the chairman offered factors that would continue to support the housing market, nor his comment that inflation is above levels consistent with price stability. With a weak payroll report ahead, the market will save those comments for a later time.
“The Fed is closely monitoring the substantial correction in the housing market” (wink, wink…)
October 21, 1930
“President Hoover has summoned Colonel Arthur Woods to help place 2,500,000 persons back to work this winter.”
Curious, if anyone knows this would appreciate it. What was the total population of the US at that time?
Around 105-110 million.
Approx. 130mm.
OK, I looked it up. 1930 census: 122.8 mm.
I think it is time to change the first ammendment on constitution. There should be moratorium on articles in a media about housing decline. On coming election “homeowners party” should elect it’s reesentatives to the House, so they could end the so called “free market” economy and rule on mandatory sale of their houses in mandatory prices to those bustard home buyers, who refuse to pay 2005 prices.
‘Federal Reserve Chairman Ben Bernanke said the U.S. economy is experiencing a ’substantial correction’ in the housing market and that the Fed is closely watching how it plays out. ‘The decline in housing “was one of the major drags causing the economy to slow now,’ Bernanke said.’
OTOH.
Copied from the Jersey Shore blog:
Disgruntled Goat said…
Kara has declared Chapter 11 as of Wed. October 4. I know this because until today, I worked there. The company is completely out of money. They did not even make payroll this week, no one received a paycheck this week. They have no intention of making good on the massive amount of money they owe to vendors & subs. They have no capability to finish the work they’ve started, either. Even if they did, there’s no one to physically do the work as most of the staff has been let go or quit…
I believe Kara is a McMansion builder.
Still rumor, trying to confirm.
But can’t Bernanke see that the stock market is stepping in to replace the lost wealth effect of home equity appreciation? It is all good, IMO.
Dow’s New Height Not as Giddy as the Last One
Good article from the LA Times.
http://tinyurl.com/g5jpu
Don’t know if this was posted already. From the OC Register.
Renters stretched thinnest
The gap with homeowners widens, with tenants devoting a bigger chunk of their paychecks to housing costs, new census data shows.
http://tinyurl.com/zpp9z
Go buy a house today and stop throwing away your money on rent if you are tired of getting stretched thin!
It’s autumn, and its going to be a long, cold winter. This is only beginning…
‘A close look at new federal guidelines for so-called exotic mortgages shows that interest-only loans are likely to see the largest impact, with originations of these loans likely to fall modestly, Bear Stearns said in a report.’
‘But so-called option-adjustable rate mortgage loans - which have generated much worry because the outstanding loan balances can grow over time - will likely to be less affected, Bear said.’
‘And borrowers who have both nontraditional mortgages with low or zero down-payments and less than perfect credit - in what is known as ‘risk layering’ - may have a harder time refinancing their loans under the new guidelines, Bear said.’
How can this article say a soft landing is no longer in the cards, when the previous one says prices will fall 4%??
Seiders said: “‘Mortgage rates are dropping; builders and sellers are offering all sorts of incentives and upgrades, energy costs are retreating and the national economy is moving ahead, making it a very good time to buy a home.’”
Except that prices are still to high. That overwhelms everything else.
always ask a RE bull
“how many are you buying ?”
Put yourself in his shoes; consider the source. What else is he suppose to say? Don’t buy? Ben’s blog is the information equalizer in the REIC misinformation war!
There is a very obvious answer for ANY would be buyer of property when being told, “This is the best time to buy a home,” or from the realtorwhores, “Prices are never going to go lower than they are now.” Here’s the answer: “Okay, if you are so sure this is the best time to buy or that prices will not fall, are you willing to put into the contract that SHOULD the price fall further than 3% from my original purchase price, you guarantee to buy the property back.” That should shut the b.s, carpet bagger sales people a*holes up.
“CEOs of three of the top eight U.S. home builders sold large amounts of stock last year and avoided some of the financial pain since the shares peaked. There’s nothing wrong or illegal when a CEO sells company stock, says Todd Henderson, professor at the University of Chicago Law School. ‘There can be a ton of reasons why executives may be selling,’ he says.”
There are tons of reasons why executives may be selling, but none of them are that the stock price is expected to keep appreciating for the foreseeable future.
“Goldman, Sachs & Co. said Wednesday that it has been added as a defendant in lawsuits regarding mortgage financier Fannie Mae’s accounting practices. The Wall Street powerhouse said the complaints allege that it violated laws, including U.S. securities laws, in arranging some Fannie Mae-sponsored bond deals.”
“The deals involved real-estate mortgage investment conduits, which are bonds collateralized with mortgage-backed securities. The other defendants include Fannie Mae and some of its past and present executives, accountants, and other financial-services firms.”
Damn good thing for Goldman and Fannie that they are both above the law.
Soft Landing ‘No Longer In The Cards’
YESSSSSSSSSSSSSSSSSSSSS!!!!!!!!!