Bits Bucket And Craigslist Finds For November 14, 2006
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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ok, which one of you jokers bought a DR Horton nome ? revenue up was a surprise
http://finance.yahoo.com/q?s=DHI
I bought a DH Horton nome. He’s out in the front yard next to the little bridge. Cute little fellow.
I bought a Travelocity nome. SOB keeps booking me in Ramada’s.
Maybe the knomes bought the Horton homes?
I bought a dozen DR Horton donuts.. mmmm jelly filled.
Wow, a bunch of FC’s………. F’ing Comedians.
Imploder works as yard nome.
It’s “gnome,” you morons.
We gnow.
“It’s “gnome,” you morons.”
Wouldn’t that be “morogns”?
Mine is wading in my Koi pond.
Half the fun of Ben’s blog is the quick wit of the posters. A nice shot of humor is a lot cheaper than a shot of Knob Hill.
Is Knob Hill next to the Creek?
Prob’ly. Only bought it once, and probably got the name wrong. Great stuff.
Is any familiar with New Jersey politics? I heard that Corzine wants to reorganize school districts at the county level. Thus screwing everyone who paid a peremium to live in towns with good schools. Is this polictically possible?
We’ve been talking about this change for the past month. Opposition to consolidation is likely to be very strong, however the politicos have that covered. The proposed 20% tax cut will only be offered to municipalities that consolidate.
Want lower property taxes? Consolidate municipal services and schools.
I think we’re going to be amazed at how many people change their outlook because of this dangling carrot.
http://njrereport.com
New Jersey Real Estate Report
jb
Only problem is that eventually your taxes will creep back up over the years.
Heck, I was 100 feet away from an extra $150K in Westchester Co. If they did this…I would have gone for it in NY. But sold last year.
move south
But not to Florida.
The red states already have much larger school districts, and much more equitable school financing at lower rates.
Ironic, eh?
My state is so blue that in my congressional district the Repubs didn’t even run a candidate. It was between the Dem and the Green candidate. We’ve had county based school districts since, well forever as far as I know.
Some things are great mysteries. Why does the USA have counties when it has no counts? Why is there a San Francisco County when it’s the same as San Francisco City?
This is sometimes one of the things to watch out for if you’re in an area that’s booming and outgrowing schools. You might pay top dollar to live in a good school district, but make sure you’re in the geographic middle of that district. Fringe areas can be prone to being reallocated in future redistricting/rebalancing moves, and the good-district premium you paid will evaporate.
It’s potentially a political nightmare for the pols pushing it (hence why it’s best to push that right after an election so voters have years to forget they hate you), but if they can make it so that they affect only the fringes and not too many people at once, they get it through.
New Jersey’s approach is an interesting way to approach it to make much bigger redistricting changes, since you can usually be “safe” by being within a town limit. Yikes!
Oh yeah, will that 20% lower tax be for good? Or if everyone goes along, where do they make up the shortfall?
“Oh yeah, will that 20% lower tax be for good? Or if everyone goes along, where do they make up the shortfall?”
by reduced head count because of efficiency.
“Oh yeah, will that 20% lower tax be for good? Or if everyone goes along, where do they make up the shortfall?”
I thought it was out of Corzine’s deep pockets.
dnc is for equality- especially if you pay for someone esles “equality”
what’s wrong with equality? Do you want to live in a 3rd world country, where 5% live in gated communities and the rest in slums? what makes you think you’ll be in the top strata?
You do not have a right to someone else’s money.
Exactly. And exactly why I do not trust anyone who votes Democrat.
the republicans are so much better with our tax money. are democrats so how sheltered from paying taxes when they raise them?
And you think the bush admin has been fiscally responsible?
If so, check out what Walker, who runs the GAO, has to say. It ain’t pretty.
Democrat, Republican, what’s the difference. Both parties think they have a right to take all your money, they just argue over what to spend it on.
“You do not have a right to someone else’s money.”
But the govt. has a right to a portion of your pittance of a salary. Deal with it.
I’m with chicote (no surprise there). John Law — I think many would agree that the Republicans “used to be” so much better with our tax money. But that was long ago. Now they both spend more than they take in, just for different things.
Took my very old aunt to a Vietnamese nail shop today, to get her toenails cut. Now, I surmise that those folks have figured out quite well how to minimize their taxes. Look how many immigrants ruch to open/pwn business that deal big-time in cash. They’re no dummies — oppressive taxes and/or incompetent government might have driven them from their homes (obviously something was wrong), and they don’t intend to fall victim to the same problem twice.
My beef — how can we give a nickel in foreign aid when we have to borrow the money to do it?
Democrat, Republican, what’s the difference. Both parties think they have a right to take all your money, they just argue over what to spend it on.
At least the Democrats don’t care where you put your johnson.
“At least the Democrats don’t care where you put your johnson.”
LOL — good one.
Republicans: Care where you put your Johnson.
Democrats: Care where you put your Benjamin.
–Dr Horton takes 199.2 mil write-off! 142 mil in land and 57.2 in options.
–Quarterly EPS down 50% YOY from 1.77 to 0.88.
–Sales in NE, SE, CA, and W shrinking; sales in SW and South Central still growing
MarketWatch Details: http://tinyurl.com/yj7o7m
“Dr Horton takes 199.2 mil write-off! 142 mil in land and 57.2 in options.”
Looks like another up-day for the home builders.
“Dr Horton takes 199.2 mil write-off! 142 mil in land and 57.2 in options.”
Looks like another up-day for the home builder.
–Technical Olympic (TOA) has 80 mil Q3 loss
–203 mil in friggin write-downs!
MarketWatch Details: http://tinyurl.com/yj8695
Note: From Barrons article b/4 Q3 industry write-downs totalled 300 mil; TOA and DHI combine = 400 mil in Q3; HOV expects 300 mil in Q3 write-down; 700 mil write-downs from 3 builders in one quarter; industry wide write-downs are rising fast!
Luckily for DHI shareholders, the omniscient stock market already had priced in the $200m write-off and the 50% drop in quarterly EPS. I expect the stock price to be higher by the end of the day.
Good call. DHI beat lowered expectations. Keep in mind, however, the stock is trading at 40 pct below its 52 wk high and at a slight book-value premium. In addition, the company performed better than competitors, will probably gain market share, and has solid brand equity. However, the outlook is bleak; as a result, dhi’s share price will adjust in line w/book value.
D.H Horton has a massive building project going on in Camarillo, Ca. just off the 101 Freeway. I drive past it several times a week. They look like $400,000 to $700,000 homes. There must be several hundred homes being built. All 500 yards away from the 101 Freeway which is an ever growing horror story during rush hours. That should clog the busiest freeway in the world even more once they are completed.
Sadly, the properties are built on (what was) really productive agricultural land. In Ventura, ca. there are even more MASSIVE property development projects in various stages of completion. All built on (what was) incredibly fertile agricultural land.
Someone once said that eventually, from Los Angeles to SF, there will be no land for agricultural use. Just 400 + miles of ticky-tack suburban track homes and WalMarts. How fortunate we have Mexico just a few hundred miles south of LA to supply us with produce. On the other hand, let us hope any of these areas north of the Mexican border don’t suffer a natural or man made disaster where everyone with a car will rush to escape via the only real route out. The 101.
The world has gone nuts.
I don’t worship farmers and neither should you. What do you propose, to prohibit someone from selling their own land to a developer? It’s called freedom, get used to it. Plus, food can be grown more cheaply elsewhere.
You should worship farmers. Food is money. Everything else that passes for money was invented by parasites to allow them (you) to live at the expense of farmers.
“It’s all just accounting. That is all a monetary system is…accounting. Same as Barter but Barter is more complex and harder to accomplish.
Paying a typical sports star 1 million dollars does not seem odd. Paying a typical sports star 6000 short tons of grain seems absurd.
Currently 1 ounce of gold can be exchanged for about 4 Short tons of Grain. Do you know how much work a Farmer does to produce that amount? More than a typical office worker in two weeks but a typical office worker obtains enough money from employment in 2 weeks to purchase 4 Short tons of grain.
Money is a tool that allows the exchange of energy to be eaiser to accomplish and account for. It allows taking more power than you give to be eaiser to accomplish and account for.
You Farmer are on the Land owned by the LORD of the land and will pay tribute to the LORD of 1 Gold coin a year…
Where do I get this GOLD coin?
You can take one short ton of grain to the grainery of the LORD and there you will be given a GOLD coin for it and then you can give the gold coin to the servant of the LORD…
What if I refuse?
Then the LORD will drive you from the Land that the LORD is the LORD of…
There you go - an abundant supply of free food to power your wildest hopes and dreams…Lies and delusions…
Well what is done with all that Food the tillers of the LORD’s land give the LORD as Tribute?
It powers the Absolute capitalist Hierarchial food powered make work enterprise…
The city state…Or Civilization…
The thing you popped into existance within and are currently in.”
Hypertiger
“food can be grown more cheaply elsewhere”
Yes, and electronics/car/textiles can be manufactured more cheaply elsewhere, services can be supplied more cheaply elsewhere…
Soon, we won’t have to work at all. 24-hours a day to spend on our fat, worthless, lazy a$$es, waiting for the rest of the world to supply us with what we need.
Ain’t America great?!!
“Soon, we won’t have to work at all. 24-hours a day to spend on our fat, worthless, lazy a$$es, waiting for the rest of the world to supply us with what we need.”
Imploder had no idea you’ve been watching imploder so closely!
you guys still answer mark’s trolls?
Mark
So we shouldn’t worship farmers? Who should we worship? The developers who squeeze as many crappy little houses on that once fertile farm land so the new residents can buy more foreign made cars to pollute the air and jam up the freeways and keep our manufacturing base going by buying more fridges, computers, micro-waves and large tv’s? Oh, that’s right! There made in other countries!
Freedom comes with a price tag, my friend. That price tag is to retain the fabric of a law abiding society and make sure greedy people don’t exploit and end up taking all the cake because they are “free” to do so. Usually because they have a lot of money and can buy “freedom” to do as they wish.
Yes, the farmers SHOULD be allowed to sell their land BUT the various city councils should make sure it’s in the interests of the majority (it’s called democracy). The should also ensure the developers are responsible. That is, that they don’t cram as many tacky boxes (called homes) per acre as they can so that the person next door can reach out of his window and touch the walls of his neighbor. As we know by recent news, a number of these “developers” are far from responsible and many will be doing to the “perp” walk at some point in the footsteps of those others who were allowed “freedom” like Kenneth Lay and Skilling and Fastow and a multitude of others. I think the latest responsible developer was the CEO of KB homes who cooked the books to steal more money via his options.
California is a desert. So is Nevada. So is Arizona. Deserts have limited water resources. That means, that “freedom” has allowed greed and averice to supercede common sense. Or maybe you think we should follow the “freedom” which Kenneth Lay and Jeff Skilling had or allow ugly, fat poster boys for greed like the Exxon CEO to run the country.
As several posters have commented, why don’t we just sit on our fat lazy ass’s and import everything from food to cars, to computers, toys, clothing? At least we will keep the medical profession and drug companies profitable by not doing anything but eat that imported food we keep in that foreign made fridge and watch those foreign made t.v’s as we relax on the foreign made furniture dressed in our foreign made clothes. Hey! We can simply keep on re-financing our crappy houses up the gazoo forever because we are “free” to do so or, at some point, because we have used “freedom” so badly, all those things mentioned above will come back and bite us on the ass.
I agree Mike. I drove through there a few months ago and it was sad to see, as I sat there stuck in traffic. As they say, they aren’t making any more land, BUT there is even less of that land that is ideally suited in soil and climate to making sure our nation is able to feed itself. The Oxnard Plain is an amazingly fertile area, and seeing hastily built houses built over more and more of it in the name of a speculative housing bubble is even more sad.
You might find this interesting as well.
http://www.farmland.org/resources/fote/states/map_california.asp
Sure, some produce can be bought and imported cheaply from other countries, but at what cost in the long run. I also know farmers indirectly who have sold out to major RE developers. It’s hard to ignore an offer for several million dollars and never needing to work again. The path we’re heading down makes me wonder.
Am I the only one who noticed that the majority of the land mass of California is “Federal and Indian” property? I’ll bet the Indian proportion of that is not a lot.
Now, I can see why, for national defense purposes, we need to have pretty large military reservations, so guns, tanks and big, fast jets can practice and be tested and do their thing. And I like national parks as much as the next guy. But look at how much land is involved! Something’s wrong with that, IMO.
Quality of life? With a $400,000 entry fee, California is priced for perfection. Somehow I think this lesson in home prices will be highly documented and easily Googled and maybe never again will happen. Do we forget that earlier bubbles were just as logical to the last of GFs before the unraveling, like they are now?
This made me want to ralph. Talk about bad timing. This guy should stick to killing people instead of their money:
The wellness fight’s home front
Dr. Kenneth Cooper’s McKinney development aims to furnish the best health insurance of all
09:13 PM CST on Monday, November 13, 2006
By KEN STEPHENS / Special Contributor to The Dallas Morning News
MELANIE BURFORD/DMN
Dr. Kenneth Cooper and his son, Dr. Tyler Cooper, are building Cooper Life, a McKinney residential community that’s focused on fitness and preventive health measures.
McKINNEY – The statistics cascade from the lips of Dr. Kenneth Cooper: Americans spent more on health care than any other country, a staggering $2.04 trillion, or 16 percent of the gross domestic product, in 2005.
Yet life expectancy in the United States is only 24th in the world, at 77.8 years. Ninety percent of American health care dollars are spent by 30 percent of the population, the elderly.
Too much, too late, says Dr. Cooper. Too much on desperate measures that prolong dying rather than a healthy life.Dr. Cooper, the father of aerobics, believes it’s best to spend money up front on disease prevention and wellness programs and live longer, live better and, he believes, ultimately spend less on health care.
Dr. Cooper, 75, has been preaching that message all his professional life, and now he and his son, Tyler, 35, and some business partners are building a community around the message: Cooper Life, a 57-acre, 700-home development at McKinney’s Craig Ranch. The first home in Cooper Life will be completed next October.
Cooper Life, north of State Highway 121 at Alma, will be almost a theme park for healthy living. Fitness Town, you could call it, a community with walking and biking trails leading to the newly opened Cooper Aerobics Center. The 75,000-square-foot aerobics facility includes high-tech exercise machines, a gymnasium, a spa, an Olympic-size swimming pool, studios for spin and Pilates classes, and a room just for kids where even the video games require that they exercise.
There are other communities around the United States linked to spas or health clubs. But what will set Cooper Life apart is its link to wellness programs and health care.
Thirty years in the making
Cooper Life has been an idea in Kenneth Cooper’s mind for 30 years.
It started to become more than that a couple of years ago, during a dinner involving Dr. Cooper, son Tyler and developer David Craig. The younger Cooper left that dinner with an assignment to put together a concept for a housing development built around healthy living and all the services it would offer.
The younger Cooper thought back to his days working as a physician in clinics in Virginia, Massachusetts and South Carolina, dealing with people who were overweight and had diabetes, high blood pressure or high cholesterol.
“Why don’t you eat right? Why don’t you exercise? Why can’t you control stress?” Tyler Cooper asks. “The answer invariably was ‘I don’t have time. It’s inconvenient. I’m busy with work, busy with my kids.’ The excuses pile up and pile up.
“The thinking was, why don’t we build a community where you get rid of all those inconveniences for people that inhibit them from focusing on things that are important, such as diet, exercise, spending time with family and staying on top of your medical care?”
It won’t come cheap
It won’t be for everybody. Houses will start at $400,000, and then there’s a $2,000 monthly fee that covers everything from security to lawn care, a family membership at the aerobics center, a personal trainer, a dietitian, a couple of annual physicals and other extras.
In addition to the aerobics center, a Tournament Players Club golf course, the Ballfields at Craig Ranch, former Olympic sprint gold medalist Michael Johnson’s soon-to-be-built track and field complex and a Cooper Sports Medicine Center all will be within walking distance.
Those who live in Cooper Life won’t be able to say they’re too busy to get in their daily exercise. Have to take the car to the shop? The concierge service at Cooper Life will pick it up, deliver it to the shop and bring it back. On the run and have to fix dinner for the family? Cooper Life will deliver healthy meals to your door.
Somewhere in your house, probably on a kitchen wall, there will be a touch screen where you can enter your ID, your workout for the day and what you had to eat. Everything will go into Dr. Cooper’s research database.
For an additional fee, Cooper Life homeowners can have a doctor on call 24 hours a day, seven days a week, to make house calls.
Dr. Benjamin D. Levine, a cardiologist at UT Southwestern Medical Center and Presbyterian Hospital of Dallas, calls the Cooper Life concept “a very intriguing idea.”
The benefits of lifelong regular exercise are undisputed, he says. As little as 60-90 minutes of exercise a week can reduce the risk of death caused by cardiovascular disease “quite dramatically,” he says. Exercise also helps reduce cholesterol, blood glucose and blood pressure.
The reasons people don’t exercise are myriad. Some don’t have time. Some don’t know how. Some can’t get motivated to exercise alone. Some don’t want to do it in groups. A community that provides easy access to environmentally friendly exercise opportunities could overcome that for some people, Dr. Levine says.
“The idea of creating a healthy-living community sounds like a wonderful idea,” he says. “But if it’s just for the rich who can take care of themselves anyway, it’s not necessarily the best for everybody in the population.”
Tyler Cooper acknowledged that Cooper Life won’t be affordable for everybody.
“What we do here sounds expensive and is expensive,” he says, adding that he hopes the research gathered from the project will entice companies to offer subsidies for their employees.
Eager would-be buyer
Joe Mendelson, a patient of Dr. Cooper’s for 37 years, can’t wait to buy a home in Cooper Life.
“It’s me. It’s the way I’ve always lived,” says Mr. Mendelson, who once lived in Dallas but now has his primary residence in Santa Barbara, Calif., and coaches cross-country at Holy Cross College in Indiana. “I’m not a newcomer to exercise and that kind of living.”
Mr. Mendelson first saw the plans for Cooper Life two or three years ago. He knew then he wanted a part-time residence there. Like the Coopers, he’s a believer in preventive medicine, spending money on health care up front rather than after falling into ill health.
“Some people don’t want to exercise. They want the easy life and for the stock market to always go up,” Mr. Mendelson says. “But that’s not the way life is. You have to work for health.”
Mr. Mendelson expects to sit down with the designers of Cooper Life in the next few weeks to pick out his home and site.
Housing options at Cooper Life will range from single-family cottages and town homes to brownstones and a mid-rise condominium building. Outside common areas will include exercise and stretching areas, nature trails, jogging paths, gardens, parks and a winding stream. There will be a mixed-use pedestrian plaza with retail, cafe dining, loft residences and a small grocery store emphasizing healthful food.
Dr. Cooper believes that the test of time will prove that residents of Cooper Life will take better care of themselves and ultimately live longer and healthier lives and spend less for health care.
“Health insurance is disease insurance,” Dr. Cooper says. “Life insurance is death insurance. What you get here … is the best health and life insurance you can buy.”
E-mail ken.stephens@sbcglobal.net
COOPER AEROBICS CENTER
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Is Dr. Kevorkian on staff?
“Why don’t you eat right? Why don’t you exercise? Why can’t you control stress?” Tyler Cooper asks. “The answer invariably was ‘I don’t have time. I’m too busy working to pay my $400,000.00 I/O mortgage and the $2000.00 monthly fee you strapped on my back Dr. Kervorkian.
hee, hee! I did go out and built myself a $10,000 gym — a concept2 rower, Hoist V3 and LifeFitness 9xi. It was worth every penny– I went from 240 lbs down to 177 lbs. I tell people that my weight is like housing prices: 240,220,200,180… but at 170, I’ll stop. My only issue was with my 9xi since the company has redesigned parts because they wore out too quickly… other than that, life has been good!
Eat right, don’t smoke, get plenty of exercise, watch your weight, and die anyway.
But live in Dr. Cooper’s neighborhood so HE can get more of your money, instead of the traditional health industry getting it.
“No one ever went broke underestimating the intelligence of the American people”
-H.L. Mencken
I take a 20 minute walk on my break like almost everyone here where I work and I eat right. I lost 40 pounds over a year’s time and kept it off, so far for 2 years. Always have to watch what I eat though. I also have a health plan through my employer. Why bother with the regimen of a living environment like this? Besides, I do not have this kind of money.
“Besides, I do not have this kind of money.”
you seem very thrifty so eventually, you will be rich! the most important thing is building up respect for your body and treat it like a king or queen! it looks like you’re doing that!
I stopped going out to eat and thus, instead of running up $600 a month in “going out to eat” bills, I’m now under $100!
IMO, if you keep yourself healthy, then you don’t need that kind of “intensive care” environment.
I would tell you about the miracle plan I discovered on my tour of the Jack Daniels distillery, but you’d just laugh and say it’s bullsh*t.
Any who are seriously interested, though, pleas write off-blog.
No way they sell 700 homes at those prices in that area with a $2,000/mo HOA.
Funny that the HOA fees include yard work which many consider moderate exercise.
I read somewhere that 2% of the US work-force is checking (mainly denying) health-insurance claims. That part of the money doesn’t make us any healthier….
shoot. I’m 47 and have been working out regularly since 17. Sometime before age 23 I bought “Life Extension” by Durk Pearson and Sandy Shaw. I wanted to stay youthful as long as possible. In those days everyone my age thought we’d live forever anyway. I don’t need to pay $400,000 for peer pressure to work out! I pay $480 per month rent and work out anyway. Health is my number 1. Work is my number 2. Those people who put anything else above health have only themselves to blame. They cannot blame having kids. They could have waited until their 30s to start families and save money instead. Then work no more than 40 hours per week and spend one hour per day working out. Make time!
north Texas…hmmm…a great place to drop dead of heatstroke in mid summer while on your prescribed jog between your overpriced house and the aerobics room.
I just heard on NPR that the big 3 US automakers will be meeting with the prez to discuss help with healthcare and tariffs. They insist it’s not a bailout. Ford has been running ads on the MSN homepage telling us how they have been offering “options” to their employees. I think the options are either take the buyout or risk layoff. These are telling of the state of the economy. I think retail numbers are out shortly. Should be another interesting day.
Detroit had opportunity after opportunity to go head to head with competition. Instead, they chose to sell their souls to the neo-con cabal and remain fully dependent on foriegn oil and market gargantuan behemoths to the idiotic mcmansion public who think “they need” the room or “capability.
These same gargantuans are rotting away on dealer lots and in the front yards of McMansions, soon to be owned by FoMoCoCredit and GMAC.
“Instead, they chose to sell their souls to the neo-con cabal ”
I didn’t know that John and Suzie McEquitywithdrawal were part of the neo-con conspiracy. I thought Detroit was building big ugly vehicles because management lacks initiative and creativity, unions have bloated contracts, and the McEquitywithdrawal’s are attracted to blinged-out Escalades and Hummers.
I suppose you thought wrong Louie.
At least Lou was thinking.
You deny we’ve not had leadership on environmental/economic/national security issues relating to the use of fossil fuels?
You guys must be quite young as we’ve been without leadership on this issue for at least 20 years.
The last “leadership” I recall was a guy in the White House telling us to turn down our thermostats, wear heavier sweaters, and don’t burn any Christmas lights. Oh, and turn your car’s engine off while waiting in the gas line.
Tell me what prior “leadership” I have forgotten.
Oh… Yeah. I remember that guy. The last leader who actually had an energy policy instead of talking about one? Isn’t he the same guy who cut oil consumption by 50%? Are you sure you’re talking about the guy who actually made Detroit build more efficient vehicles? Or were you talking about the guy who instituted efficiency standards for appliances resulting in a 20% reduction in household energy consumption?
Help me out…. What was “that guys” name?
I can’t remember his name but I know it wasn’t Slick Willie.
Agreed we’ve had no leadership on energy policy and related economic structure. Try finding on a search engine “serious transportation policy” or engaging in a fruitful discussion of the issue.
But I still can’t figure out what guy you’re talking about.
“Help me out…. What was “that guys” name?”
It was President Carter.
“I can’t remember his name but I know it wasn’t Slick Willie.”
Of course it wasn’t, Jimmy Carter was a good boy and only “lusted in his heart”
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Don’t spoil his liberal fantasy conspiracy theories.
How bout that election?
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Don’t worry. We just need Pelosi on TV for a little while longer and she will single-handedly set back your socialist/liberal cause another 100 years.
And the nutty neo-cons advance it? Nice logic you got there Gekko.
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I can’t wait for Americans to get to know Nancy Pelosi and her San Francisco left-wing values. I hope she’s on television A LOT.
We can’t wait for you to see a psychiatrist. Seek help young man.
Detroit is just doing the exact same garbage they did back in the ’70s, and it was no more the neo-cons fault then than it is now. It’s just a mature industry run by a bunch of stagnant, old-timers who are cozy with the status quo. Detroit is just an example of unionized executives.
There are plenty of political blogs for you guys to do this on. This is a housing blog….
Thanks Ben….
Agreed, thanks Ben. But a discussion of the housing bubble and implications for energy and transport policy is a serious issue that has been touched upon from time to time by contributors to this blog, often with appreciable insight.
“There are plenty of political blogs for you guys to do this on. This is a housing blog…. ”
Now Ben, people are giving away cars with their homes so this stuff is relavent.
Can you imagine what would happen if homebuilders started to build energy efficient homes, something like a “Prius House?”
Or, the homebuilders will follow Ford and GM and continue to use cheap labor and globalization politics to sell you a house for $$$$ while building it for $$.
If Bob Toll started building these “Prius Houses,” he could advertise: “the house without energy Toll’s.”
In general, housing is a dinosaur and needs to follow Toyota’s lead instead of relying on tax breaks, cheap labor, etc… to make money!
“I can’t wait for Americans to get to know Nancy Pelosi and her San Francisco left-wing values. I hope she’s on television A LOT.”
better than the foley-hastert values.
Can you imagine what would happen if homebuilders started to build energy efficient homes, something like a “Prius House?”
They already do make Prius homes. They are called 3 BR/2BA 1500 sf single car garage ranches without central air and small windows.
i don’t why the unions keep getting blamed for the us automakers problem. look at it this way, the labor cost difference between a union built cars and a non-union built cars can easily be tucked into the price of the car (i think the last figure was about 1500USD) and consumer will still buy the better car. one major breakdown of those gm/ford/crysler cars after the bumper-to-bumper warranty will wipe out that saving wall street keep on insisting. in fact, toyota cars of comparable features are a couple of thousand more (out-the door) than the gm/ford/chrysler version. btw, dealers are all crooks regardless of the car manufacturer.
actually they sold what folks wanted and they’re buying suv/guzzlers again
if gas goes to 190 /gal it’s pickups for everyone
Take a look @ the analysis ratings for Ford & GM NOBODY rates it a buy, / strong buy Hold or (gasp) SELL! The companies are TOAST, When the always never see no evil analysis throw in the towel, things are really grim. Even the F’HB are rated better than this (some are still sporting buy ratings) mind 3rdQ earnings fell -72% at CTX What gives. The auto companies made their own mess, with their union contracts (the jobs bank program, …) and now we are expected to bail them out ?
With “their union contracts?” Execs at GM and Ford have been working to become more competitive for years with no success. Union contracts, pension plans & healthcare will sink these institutions sooner than later. Maybe Miss Pelosi and her gang will be able to offer some help? Good luck! Be careful what you wish for. We are so hosed…
Management has written off any inclination to expand production in North America decades ago. Our bankruptcy laws are written in such a manner to allow corporations to default on debt and other contractual obligations while continuing to stay in business. They want to go bankrupt so they can clean up the balance sheet (pensions, retiree healthcare, debt, etc…) and keep expanding in India and China. It’s all part of the game (remember United Airlines, Continental, etc..?). If you want to know the future of GM and Ford then look where they are actually investing in new plant and equipment…India and China.
Conclusion: maybe you should consider buying some of that beaten down Ford stock afterall…
This is the general trend in European corporate restructuring as well, particularly automotive industry companies, but not only.
Future sales market growth is led by India and China, and US and European multinationals have been accelerating the pace in gearing up for it in these last two or three years.
And in Russia.
Home Depot Net Income Falls First Time in Three Years
net income fell 3.1 percent, the first decline since 2003 as the housing market cooled. The company lowered its earnings forecast.
Sales at stores open at least a year fell 5.1 percent. …….
please make sure you see the chart from 2002 (beginning of the 13 b$ buyback)…..
http://www.immobilienblasen.blogspot.com/
Home Depot: inventory at end of Q3 was up 13.9%
whoof !
seasonal adjusted or no hurricane effect
I am not a stock guy…How is Lowe’s doing as compared to Home Depo….??
low since 2002 up 50%
hd down 20%
I posed this elsewhere, but this is a better spot. Local tv ran an ad the other day offering a Home Depot credit card that allows no payment until 2008 on purchases over $125. This matches a local Centex ad I recently saw that advertises loans with nothing down and no payments until 2008 on some local SFHs starting at 500K. Seems like a match made in heavan.
Not sure if anyone else has posted this or wants to acknowledge it, but:
http://tinyurl.com/ybj5a2
Trump Hawaii Condos Sell Out for $700M
By BRIAN CHARLTON
The Associated Press
Friday, November 10, 2006; 9:36 PM
HONOLULU — Celebrities and investors forked over $700 million in just a few hours to buy up more than 460 suites in Donald Trump’s luxury hotel-condominium project in Waikiki.
Sales contracts were signed and deposits put down Thursday for 464 hotel suites at the Trump International Hotel and Tower Waikiki Beach Walk, developers said. The sellout forced the cancellation of a planned second day of sales.
…. Good ol’ Comb-Over-Boy is defying the downturn with his “sanctioned” investments. Vomit.
I posted crazy condo sales results for months, and then followed the deals as most blew up. Generally, the correction has moved east to west, so Hawaii may be the last market to fold. Also, when I read ‘celebrities’ with condo pre-construction sales, it makes me skeptical.
Who was it who said “a celerity and their money are soon parted.”?
Celebrity Divorce Lawyers Association originated said quote.
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Exactly. I wonder how many of those “sales” are simply deposits down by flippers who will walk away when things get ugly.
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Remember George Clooney’s Vegas Condo project?
Exactly, Ben. I’d be willing to wager that those “contracts” are going to see more cancellations than closings.
Hopefully, someone will be able to keep track of the cancellation rate and post it here, periodically.
I was sort of hoping it was for-real purchase by celebrities — I think they deserve the inevitable result.
For all we know, the contracts were part of a Trump marketing scheme… I once read that much of his wealth was an illusion and he uses that to actually make money.
“I once read that much of his wealth was an illusion and he uses that to actually make money.”
LOL. Kind of like the whole US economy you mean?
On an earlier thread, the comment was made about someone making 10.00 an hour, not having the right to own a house.
I do not what that person does, but I can tell you that in many parts of the country, $10.00 is still considered (by the employers) to be a “good” wage.
After it is 3.00 to 4.00 higher than minimum.
This whole credit bubble/ housing thing simply creates more tension between the social/ wage classes in the U.S. It almost looks like ’somebody’ is TRYING to start a class war of the kind that got Marie Antionette. But, if that is the case, it should be born in mind that in America(at least for the time being) the so-called lower classes, have and use firearms in far greater numbers than the so-called ruling classes. It could turn out very badly for the ruling elites. Destroying the middle class in order to fulfill some long awaited “destiny” that only the ruling class can aspire too, is not going to happen without broken eggs and lost lives.
I fear for my country.
I don’t belive that a man making $10.00 should have to rent forever, and should be able to afford to buy a small, modest house. I also believe that in order to own a big,shiny new house he’ll need to earn a lot more money.
Making the change, and pulling one-self up used to be the American Way or Dream. It is becoming harder and harder in our time. This is not good for anybody, least of all our country.
But, I could be completely wrong.
EXCELLENT post ThunderEater…. As another poster here put it so eloquently, “If you don’t have a middlclass, you’re gonna need all the firearms you can get to keep the desperate from coming over the walls of your castle”.
Yeah, the middle class is the only REAL buffer that works between the Rich & the Poor. The rich need to stop demonizing the middle class, and realize that it is the dream of becoming “middle class” that stops the revolution in it’s tracks.
Pull up the ladders, and Voila, unrest results.
Then all the gates and guards in the world will do no good.
(Esp, since the Guards & servants are usually underpaid members of the lower class)
Strangely enough, the wealthy elite coined the term “class warfare”. And that is exactly what they declared on the middleclass back in the early 1980’s.
But I want a revolution, so to hell with the middle-class and their worship of the government and taxation. I hope the housing bust makes them lose everything.
What class are these guys a member of?
feepness,
If that’s real, that is one freaky invention. Scary…
Which is why I’ve recently bought stock in Smith & Wesson and Ruger. They’ve done well incidentally.
It can be done…You should add razor wire, claymores, pits with sharp spears and maybe a 50 cal. machine gun…That should discourage the hordes.
Oh…An always aim at the guys that are giving orders!
But you need something better then a McMansion to live in. Fake stucco, foam insulation and wallboard is not going to stop incoming rounds.
Actually, firearms are irrelevant if you have a castle these days. The lumpenmasses don’t have the know-how to breach the walls anymore. Moreover, modern riot control devices, like that affectionately known as “gorilla snot” along with CS, purgatives, and other incapacitators, make it impossible to assault police or entrenched forces. BTW, gorilla snot is a substance which effectively makes everything in the area of effect frictionless. You can’t stand, sit up or crawl. You can’t hang on to anything. Good luck with any coordinated action under those circumstances!
I thought every highschool kid was taught how to make a trebuchet. Or at the least a potato cannon. Where has algebra gone?
Yup you are completely wrong on the “lower classes have and use firearms in far greater numbers than the so-called ruling classes. It could turn out very badly for the ruling elites”
There are plenty of poor and middle class people with guns but very few join cults or militias to overthrow the gov. Those that do find that it ends very badly for them ala Waco texas.
This is very true, but all it takes is one large group to oppose the gov’t (with guns), then the legitimacy of the state collapses, and opposition becomes more widespread. Then the party begins.
the market will rule- feelings and thinking will never change that- pols will offer to, but only fools will belive them
the market will rule- feelings and thinking will never change that- pols will offer to, but only fools will believe them
“But, if that is the case, it should be born in mind that in America(at least for the time being) the so-called lower classes, have and use firearms in far greater numbers than the so-called ruling classes. It could turn out very badly for the ruling elites. Destroying the middle class in order to fulfill some long awaited “destiny” that only the ruling class can aspire too, is not going to happen without broken eggs and lost lives.”
Nope - the ruling class has the military and police at their disposal. Any Americans fooling enough to get uppity will quickly find themselves demonized as ‘terrorists.’
You didn’t actually believe the Patriot Act/Detainment Center/Homeland Security Police State was for terrorists/illegal aliens did you?
However, please don’t forget that the working / lower class is the one that defends the castle. If they decide they are no longer on board with the government, then there will be no one to defend the ruling class.
you guys probably need to read about feudalism to understand why the elites are acting the way they are and where we are heading into. i just hope our government (meaning us) will wake up and do something about it.
Thunder — good post. $10/hr is about $20K a year. At that level, most if it is net of FIT. For a small family, even if the spouse does not work, that would support the purchase of a $50-60K house, which should be do-able. Small and modest, to be sure, but on a $5K semi-rural lot, at $50/sq.ft., the basic-construction price that should soon be prevalent in the most affordable areas, that would buy a 1,000 s.f. house with a roof that does not leak and a lot of pride of ownership. Ya got to start somewhere and there are a lot of humble Americans who would be proud to own such a home.
$10 per hour at 40 hours per week, 52 weeks per year = $20,800 per year. Allowing for the purchase of a house at 3x gross annual salary (a bit on the risky side), this person can afford a $62,400 house.
So OK, I’m willing to modify my earlier statement. Someone earning $10 per hour has no business taking on a mortgage larger than $60,000. This is hardly a revolutionary statement. Most banks agreed with me until a few years ago.
From our Milwaukee Paper:
“The four-county region’s existing-home market is suffering a double whammy of rising supply and waning demand. They cited Metro Multiple Listing Service’s report of 1,548 resales last month, the slowest October in three years, as 3,186 new listings hit the market.
Sellers reigned during the market’s 2001-’05 boom; now it’s payback time for buyers, real estate agents say. In this year’s first 10 months, metro Milwaukee sales - which include the four-county area - are down 4.8% and “for sale” offerings are up 16.1%, MLS figures show. That count includes one-, two- and condo-unit properties in Milwaukee, Waukesha, Washington and Ozaukee counties.”
http://tinyurl.com/szp54
You people are hysterical. We are so far from the conditions of revolutionary france. They didn’t cut the heads off of their rulers because they wanted cheaper schools and health insurance. I’m a liberal, and I want a huge middle class, and I’m also feeling the squeeze of rising health care, food prices, and a stagnant wage. But nobody is going to start killing people.
Not yet.
I agree with you.
What I fear is that the persistent war on the middle class will move us that much closer to to killing.
The middle class is detonating itself, with excessive use of credit, low savings rate, and addiction to reality TV. I can’t tell you how many of my friends and neighbors have “flamed out” because they had too expensive a house, no emergency fund, and then got divorced. How is that the fault of the upper class?
I’m on your side. There has been a continuous inflation of the idea of what should constitute a middle-class life-style. Must have a brand-new multi-bedroom house on in a very nice neighborhood but also near your job? Not likely if Everyone in America is supposedly middle class.
This is true. If you look at what was considered a nice middle class home in 1960 and compare it with now, you will notice that the size of the house has grown, while the family size has shrunk. Why do you think there are so many 1200 square foot ramblers? That used to be the regular house size.
but that kind of lifestyle they wanted is not middle class, by official govt definition. upper middle is something like a household income of 90k or something. yes 90k. they wanted the lifestyle of the *rich and famous*. guess where do you get those ideas.
Valid point knockwurst but keep an eye the neo-con nuts. They’re hiding, scheming, enraged and disillusioned. Watch the conservative splinter groups pop up all over the place ala BranchDavidians, McVeigh groups.
The end for them will be far worse than the election.
How do you know the neocons didn’t welcome a Democratic majority so that by ‘08 the Dems can be scapegoated for what is likely to happen in the next couple years: disastrous Iraq pullout, housing collapse, recession, tax hike, etc.?
not enough time!
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Yes, the government should confiscate all of the wealth in the country and redistribute it equally. Equality of outcome over equality of opportunity - it’s the liberal way.
Now Gekko. You sound enraged and disillusioned too. But let not your heart be broken, there is hope for your cause….. somewhere in the hills of North Dakota. LMAO.
You guys are scaring me…Im heading out to the bunker with a couple extra bags of quickcrete for some fortification…
WTF??? It’s early here in lovely LA but I’m starting to wonder if some on this blog have a drinking problem. Captain, let me guess, you woke up and realized your over 40 and no one wants or needs your services?
Captain, I hope you’re getting a good price on all the tinfoil you must be buying.
“Captain, let me guess, you woke up and realized your over 40 and no one wants or needs your services?”
Yeah, as Mark Foley said, maybe it’s time to turn over a new page.
cue sound effect
rimshot
The conservative way is much better. Deregulate everything to the point that the super-rich can freely steal from everyone else with impunity.
Cases in point:
1) Absence of regulatory oversight in the lending industry gives rise to the new predatory lending, where subprime borrowers are inappropriately targeted with no-doc and Option ARM loans. Conveniently, there is a new BK law on the books to put the screws on the FBs when they can’t make their payment resets.
2) Hedge funds (just wait until the SHTF on the bursting of the hedge fund bubble, then you will see what lives under these rocks)
3) Options backdating (Karatz may signal the tide is changing here; this issue could be a great opportunity for the Democrats to make political hay!)
GS, I agree with your point, but underlyng everything, isn’t there the assumption that government will bail everyone out? After all, Greenspan bailed out LTCM so why won’t Bernanke bail out the hedge funds when that bubble bursts?
I remember reading on this blog several months ago the story of a woman whose house went into foreclosure. Her comment was (I believe): we tried to keep up with all our bills but just couldn’t. Shouldn’t the government help us pay our bills?
Moral hazard is part of our problem…
“Moral hazard is part of our problem…”
Only if you believe that somebody is in over their head because of their own shortcomings.
IMO, many of these “problems” are directly attributed to human failure and these include pollution, primarily, environmental destruction, etc…
Falling behind on bills is not a moral failure because it happens to the best of us.
LTCM was bailed out by private parties at a command meeting of the NY Federal Reserve. No unsecured federal moneys were used in the bailout.
The Hedge Funds are currently issuing/writing $3.25 Trillion dollars in derivatives every single day! This will go caput.
Oh no, not you too GS…
GetStucco,
The anti-regulatory thing falls more on the scale of libertarian than conservative. I am not expecting the current Congress to do much in the way of regulation or oversight, are you? It seems to me they’d rather keep the good times moving with Fannie. Lending standards are out of control, no question. But I didn’t hear it raised as an issue in this last political race.
Richard Baker, a Republican from LA, proposed a bill to strengthen oversight of Fannie. Co-Sponsors were Reps. Oxley and Shays. No democrats signed onto the bill.
the GSE is a socialist concept
I’d prefer LP
free markets and free minds
Laissez faire economics is a fairy tale, sort of akin to goldilocks or the princesses that my daughter will be dressed up as when we go to Disneyland next week.
I don’t think there has been a society in which it has actually existed. Politicians always hype the changes that they will make upon getting elected, but most often they come up empty on both sides of the aisle. Usually they just sell out to the local contributors and pass laws that only benefit those that gave money. Ask yourself why a politicain would spend millions of dollars to get elected to a position that only pays a couple hundred thousand (which is what any decent attorney already makes). It is to steal as much money as you can as fast as you can. Right now as we speak, the Big Three are on capitol hill trying to figure out how to stay in business, not for our benefit, but for the stock options and bonuses (for their own offspring). Menawhile the proletariat are arguing about which party is “better” for our country. What a load of crock.
About the only place where you are going to find people offering truth and trying to look out for one another is on blogs like this one. Otherwise, it is everyman for himself. Who can I screw and how much will you pay me to do it. That is the current mantra in our contry, and with everyone, be they politicians, CEO’s, most trial and criminal defense attorneys, tv/radio political hacks, etc. So when that is the standard being set by our leaders, its no wonder that most of the citizens act like fools and disrespect each other.
I don’t know if there will be a revolution or not, but I can tell you that at 39 years old, I make less money than I did at 25. When service jobs are being outsourced and manufacturing industries transplanted from here to third world countries, you have to at least ask the question of how long before people get pissed off (rightly or wrongly) with their diminished earnings and lifestyle. For every “winner” in China or India making $1 to $5 per day, there is another “loser” over here that no longer has a job.
“I am not expecting the current Congress to do much in the way of regulation or oversight, are you? It seems to me they’d rather keep the good times moving with Fannie.”
Arwen –
The answer is easy. Look at how much Fannie Mae contributes to Congressional campaign coffers, not to mention everywhere else. The old metaphor about money and manure takes on a new meaning in the case of Fannie’s manure.
Gekko — please keep that stuff where it belongs over on the Freeper boards.
Amen to that.
that is not a good idea either. i would prefer just to limit the wealth and power of the elites. they are a minority any which way you look at it.
I regret digressing further into politics, particularly relative to our host’s request, but the vast majority of federal tax revenues comes from the middle class. They will never kill the sheep they want to fleece.
U.S. Producer Prices Fall 1.6% Last Month; Core Rate Down 0.9%
Nov. 14 (Bloomberg) — Prices paid to U.S. producers fell 1.6 percent in October, matching the biggest monthly decline on record, as energy costs and motor vehicle prices dropped, suggesting inflation pressures are abating.
The decrease followed a 1.3 percent drop in September, the first back-to-back decline since July 2004, according to a report today from the Labor Department in Washington. Excluding food and energy, the so-called core rate fell 0.9 percent last month, the biggest decline since 1993, after rising 0.6 percent.
hb’s up big as morts may go under 6.25 real soon- buy now before the recession !
seems that Paulson’s rumoured bailout plan for all the FB’s with ARMS is right on track!
I cannot imagine the look on the faces of mahy FBs who run to their nearest lending office, in hope of salvation and a new, low-interest fixed-rate mortgage:
“Gee, folks, it appears that you owe a lot more on your house than it is worth. Whoa. [pause] We have some fairly accommodative appraisers on board, but even they can’t pull this one up enough to get you the money you need. I’m really sorry. Oh, man. Gosh, this is awful. [pause; sincere look at the weakest of the two] Look, I know this is not good news, but if you guys find that there’s no way out, I know someone outside [my institution] who might be able to get you out of your home. Bummer, I know. But here, take my card and if there’s anything we can do about that, gimme a call…”
Do you think an Iraq pullout would cause consumer confidence to jump, and housing and spending and credit mania to jump?
A pull out in Iraq at this point will be a destabilizing event in southwest Asia. At least they will be fighting each other!!
I think the effects on the oil price would outweigh any temporary jump in consumer confidence.
The prospect of the US not having to issue as much debt to cover war costs might move the bond market enough to lower mortgage rates. That would take some pressure off of prices and ARM resets and could soften the housing crash.
I have my doubts that consumer confidence would be much effected. People are living their own economic lives regardless of what happens in Iraq.
Middle east instability isn’t a very good thing, but as long as it doesn’t involve Iran and Saudi Arabia, I bet oil supply won’t have catistrophic enough an event to really hurt us badly.
VaBeyatch — This is not meant to be facetious. Your question is roughly analogous to asking someone in 1930 about the likely effect of the U.S. landing a man on the moon. It is in one instance disconnected from reality — neither party will withdraw, or cause to be withdrawn, our forces, nor the majority of them, from territorial Iraq in the next 12 months. In the second instance, consumer confidence has been so buoyed by home-equity withdrawal, a dying “resource,” that the restriction of credit that will be forced upon lenders by the evaporation of sales and corresponding decline in prices/values will asphyxiate spending on housing. “Wane,” actually, is the accurate word, but “die” is what you need to see/hear in a situation like this, to get the message across to the masses. IMO.
I agree, hypotheticals are a waste of time. Housing prices are falling. That is a concrete fact. This is causing the money (credit) expansion to slow. It is very likely to reverse as mortgages reset, defaults rise and home equity loans subside. These are trends that are beginning to take shape. I think we are in for a recession next year. I can’t think of any stimulus that is strong enough to offset the negatives. Unless of course the Chinese go gaw gaw for “Made in the USA” Chevys and Fords. Maybe they will decide to start buying them instead of GSE paper and Treasuries…
From MarketWatch: “The producer price index fell a sharp 1.6%, which matches a record low set in October 2001, the Labor Department reported Tuesday. The core PPI, which excludes food and energy costs, fell 0.9%, the biggest drop since August 1993.”
In addition, economist Ian Shepherdson said, “the housing crunch is now hurting … sales of building materials were down at a 10.6% annualized rate in the three months to Oct.”
Link: http://tinyurl.com/y3bvec
I remember a few times over the last year in which we debated the property tax shortfalls that would occur as the housing bubble burst. Some juristictions were cutting the tax rate as the bubble inflated and will now be in the unenviable politically suicidal position of raising the prop tax rate in the middle of a housing bust led recession. Either that or they will have to fire teachers and firefighters and stop providing reduced rate school lunches for poor children. Lets all pat ourselves on the back for predicting this exact situation 12 months ago. The mass media is finally catching up
http://www.washingtonpost.com/wp-dyn/content/article/2006/11/13/AR2006111301242.html
Northern VA — gotta challenge you on that one.
“Some juristictions were cutting the tax rate as the bubble inflated…” — which you apparently consider to be bad because they may have to raise the rate later, correct?
I propose that, had they not cut the rate (millage), the local-government minions would have created vital needs on which the windfall must be spent, and that there would be no cookies in the jar at the end of the day. By lowering the millage rate, then raising it again when taxable valuations decline, the elected officials should be able to demonstrate to the average long-term homeowner that his/her property tax is not higher than in some past year. That is a relatively great taxpayer victory, these days.
IMO, you are fortunate if this is the worst news to befall your taxing district. Here in Florida, the politicians had a field day spending all of the windfall, particularly on recurring expenses like more employees. Guess what’s next on the agenda, when taxable valuations decline?
http://realtytimes.com/rtmcrcond/California~San_Diego~lisablanchard
-Here’s an agent that doesn’t let reality interfere with her statements:
“The median price for all homes in North San Diego County - single-family detached and single-family attached - declined from $557,500 in September 2006 to $545,000 in October 2006. Detached homes in North County declined 1.71 percent from $620,000 to $609,375 from September to October.
However, the Detached home sales OUTSIDE North County declined 3 percent in the same period, indicating that the North County housing market is showing stronger signs of continuing viability than elsewhere in the county.”
-And she might want to update her preditions every now and then:
“My prediction -The next few months will be telling as to the direction the market will take us. I’m predicting that interest rates will continue to decline and be at their lowest point by year end, possibly as low as 5.8%.”
-It’s not “next few months” anymore, but 1.5 months. And I’ll eat my hat if interest rates are 5.8% by December.
Anyone that haven’t read them yet, should read her reasons “why the “Housing Bubble” is bogus”…
Wow, she must have gone to college. I wonder what she majored in? Satistics? Nice spin, but I really don’t understand how anyone can predict the housing market at this time.
My comments:
1) Oil crash in mid 80’s: I kept looking in the paper wondering how low it could go. It ended up at $6.60 per barrel of Brent. $9.00 per barrel for West Texas Intermediate and a little more for S. Louisiana Sweet. This was from $40.00 or so on the spot market for W Texas Int. and S. Louisiana Sweet. Brent? I don’t remember.
2) Stock Market dump: >25% blow off of SP500 values in a few months. Dotcoms went into the trash >50%.
3) Housing slump in Louisiana, Texas, Oklahoma, etc. that partially resulted from the oil crash: >25% when you could sell them. Many people just left the keys on the kitchen counter and walked away. Those houses were sold at auction.
All we need right now is a recession. That is entirely possible.
Question: What would happen? I look at the current situation and I see problems that are long term if the current economy keeps going along. If it doesn’t … Well, see my comments above.
Roidy
watch things in Iran heat up to the boiling pint in the next 6 months. IAEA inspectors found plutonium at an Iranian waste dump. What’s that whining sound? IDF and USAF bomber engines warming up and the sound of gas prices skyrocketing.
That will give you your recession.
There is something about her vacuous, giddy stare that is just, um, so convincing. She just knows … um, something. And her adroit use of statistics. Wow!! I’m guessing in a few years they will say “It doesn’t take a realtor” instead of “It doesn’t take a rocket scientist.” These folks are like a combination of econometricians and alchemists.
Funny, this house is for rent AND for sale (I guess the owners are going to ride out the bad times?):
http://sandiego.craigslist.org/apa/232088164.html
Rent: $4250 per month.
http://www.realtor.com/Prop/1070809693
For sale for $1375k-$1475k
Let’s check the ratio:
30y 6.33% Mortgage on $1425k = $8848/month
1% property tax = $1188/month
Total expenses (*) = $10036/month
Price to own = 2.36x rent…..
(*) No maintenance or insurance….
I see quite a few houses in this area (CA Central Coast) that are simultaneously for rent and for sale. Sometimes this is stated in the ad, and sometimes it is not. Occasionally, the rent is slightly below market, with the explicit expectation of keeping the place tidy for showings. More often, the price is quite a bit ABOVE market; this situation is most often associated with properties purchased within the past 1-2 years, but occasionally with properties that have been owned for a while.
Robert Kiyosaki is now positioning himself as the advocate for the little guy in his latest promotional article titled Staying Safe from Financial Predators in Yahoo Finance. I think it is ironic since I consider him to be a financial charlatan who has done well for himself in bookstores and on the seminar circuit.
He sounds off on a lot of things including excessive executive compensation, which I’m against too, but he basically implies that Jack Welch is a crook. I’ll assume he did some research we showed that Jack Welch made $1B in compensation over his career but he didn’t mention that some of his retirement benefits were scaled back after details were released in Welch’s divorce settlement. But Kiyosaki blames Welch for the decline in GE’s market capitalization after the dot.com implosion.
Kiyosaki has no clue of cause and effect. GE’s stock corrected to a more sustainable level along with all other sound stocks, while a lot of dot.coms went under. Welch was CEO from April 1981 until September 2001. I Looked up monthly historical adjusted stock prices in Yahoo, and calculated that GE’s stock price rose 4,779% vs. the S&P’s 698%. Maybe Welch was overpaid, but he was one of the few who were actually worth it nonetheless.
I have never owned GE although I recommended it to my parents, and I have never bought any of Kiyosaki’s books. I read enough about him at John T Reed’s web site.
The real question is whether Welch was/is so uniquely talented that he deserved that level of compensation. Would someone else have done as well if put into that same situation? Would Welch have done as well, even if he received a “mere” $200M in compensation? I for one bet he would have. I also think that there are others who would have accomplished the same amount if not more. The market for executives is not efficient, and thus I think it’s even more bubbly than residential real estate.
Well said, ABQ George!!!
Kiyosaki trying to protect the little guy from financial predators is like Mark Foley serving on that committee to protect kids from abuse. RK is a financial predator, and too clever by half as well. But it hasn’t stopped him from selling a bunch of books.
http://www.mortgagenewsdaily.com/11142006_NAR_Candidates.asp
Let’s see, they spent $40M on the “Now’s a good time to buy/sell” campain, and now this?
“Last week the National Association of Realtors released the news that RPAC, its political action committee, was the number one contributor to federal candidates in the most recent election cycle.”
“In all races RPAC supported Republican candidates by a margin of 46 to 8 in House races and 9 to 3 in the Senate”
“NAR strove to put the best face on the election outcome in which the candidates it supported financially did not fare well. “Some NAR supporters in the House and Senate lost their re-election bids Tuesday,” the Realtor.org sit said, “but REALTORS are confident of moving forward on many of their top national legislative issues in the new Washington political environment, thanks to the wide appear of their issues.”"
You can’t beat the optimism at NAR.
As a dues-paying member (it’s required!) of the NAR, this article makes me shaking mad. Believe me, I have formally complained to their front office on many occasions about NAR’s political spending in general and support of specific candidates in particular, and it’s always fallen on deaf ears. But if they must spend realtor’s dues, how short-sighted is it to continue to overwhelmingly back Republicans? Anyone who could read could have seen a Democratic sweep a comin’ this time around.
To sum up: paying dues to the NAR is about as gratifying as giving your monthly check to the Teamsters. As a longtime realtor, I wholeheartedly support the NAR bashing on this blog.
Should it be a surprise that NAR financed the pototo heads that lost?
I find this a very convincing overview:
http://www.financialsense.com/editorials/weiss/2006/1113.html
“Soft Landing or Recession?”
His conclusion: The Fed is buying paper, ink and more printing presses. They’ll be working 24/7 soon.
Somebody forgot about the the reputation building requirement which new Fed chairmen are supposed to fulfill, not to mention the plan to target inflation. No wonder Dallas’ Fisher is dropping hints that the crew is on the verge of mutiny.
We knew it was going to happen, and it’s not surprising it’s in San Diego we see it first:
http://www.signonsandiego.com/news/business/20061114-9999-1b14housing.html
5-year Y-o-Y comparisons!
“For all the concern about declining prices, recent San Diego County home sellers are still making huge profits, nearly doubling their investment in little more than five years, according to a study by an Orange County research firm that tracks real estate transactions.”
Excellent catch, OB_Tom! I saw that article in the dead-tree version of the paper last night and nearly vomited. It seems the UT is bending over backwards to find FBs who are capable of reading a newspaper. I guess it is hard to sell the 10 lbs. of weekend add space when nobody is buying houses anymore?
‘The desire to move up to a bigger, higher-priced home naturally leads to sellers hoping to get top dollar for their properties. But in the current market, when inventories are large, buyers regularly are bidding down the prices and sellers aren’t pocketing as much as they expected.
“Most sellers are making money, but they’re crying that they aren’t making as much,” said Joe Scala, a Bay Park broker who has been selling real estate for 20 years.
He tries to soothe their jangled nerves by making an analogy with wins in Las Vegas.
“If you’re up $2,000 in the casino and you walk away with $1,500, you’ve ‘lost’ $500,” he said. “But, wait a second, what did you walk in with?”
The truth is, he said, that most people who bought five years ago or earlier have doubled their money.’
Is it a sign of housing market health when what used to be viewed as a rock-solid conservative means of building household wealth now seems as risky as plunking your paycheck down on the craps table in Vegas?
in vermont this guy’s property taxes have risen about $1,000 dollars and he’s struggling to hold on?
http://news.yahoo.com/s/ap/20061113/ap_on_re_us/vermont_tax_rebellion
Ben Bangs, you not only live in the arguably most socialist state in America, but your avowed-socialist senator just got re-elected. How many more clues do you need? Suck it up, buddy. Pay the taxes or move to a state that is more free of property (or whatever) taxes. How difficult is that to comprehend?
Vermont is not by any stretch of the imagination “socialist”. Property taxes are low compared to Connecticut,that state that just reelected the faux repub Lieberman. Since it has almost no corporate tax base, mainly small business and farmers, and tourism, trying to meet education costs is a burden. Suggest you take a trip to Vermont and meet some real Yankees.
314,000 Need Cash? Get 35K Back @ Closing!
http://merced.craigslist.org/rfs/234885387.html
$224,000 got Equity? This Deal Does! Get $45K Cash Back! http://merced.craigslist.org/rfs/234947566.htm
Both these “deals” have the same contact number. Seems like a “Flipper in Trouble”.
$260,000 Short Sale Opportunity!
Home purchased for $337,500 in October 2005