Bits Bucket And Craigslist Finds For January 12, 2007
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a very good explanation why commodities are falling (especially oil and copper)
“breaking ranks” freight and commodities
plus
even rate hikes seems to be bullish……..
http://www.immobilienblasen.blogspot.com/
Any of you prognosticators want to speculate on why the Baltic Dry keeps rising to record levels even as the underlying commodities they would be hauling fall like a rock? It’s really hard for speculators to move the dry index directly (they’d have to actually charter the ships). The yards are churning out new ships like it’s WWII again, and I haven’t heard of that many new mines opening, so it seems like the commodity prices are driven by demand (but shipping is saying the complete opposite).
Bluto,
Very interesting comment. I am the furthest thing from an expert, but it seems that the data indicates the opposite inference, no? As you point out, the building of new ships is very difficult to manipulate so would that continued building not be a better indicator of true demand, and the drop in commodity prices is a result of manipulation through the various derivative markets. Thoughts?
It’s strange, one market is saying warning massive slowdown coming, while the other is saying nope, massive growth ahead. Ironically the slowdown is the derivative/futures that is driven by speculators, while the hot market is the one that’s paid by folks who will acctually recieve a ship load of some commodity in a few weeks.
I started following shipping when it was obvious that oil tanker charter rates were by far the most accurate indicator of what China’s economy was actually doing. Shipping has been a very, very good indicator (far better than copper) regarding the state of the world economy, so I’m pretty loath to bet against it now, even though everything else looks pretty dour. The perma bears hang here, so I thought I’d toss some fresh meat their way and ask why.
Here’s some context…
First chart is from 2003 and shows several years back (the left side was pretty normal movement.
http://www.slate.com/id/2090312/
It’s from an article that explains what this is and why it’s interesting.
http://www.slate.com/id/2090303/
The next chart is essentially what’s missing from the first chart, it shows the last five years.
http://www.naftemporiki.gr/markets/quotegraph.asp?id=.BADI&ctime=5Y&cperiodicity=W&cstyle=L
If the global economy is heading for a massive slowdown why are ships being chartered at similar rates to 2003 levels (when construction began taking off)?
The shipyards have been busy since 2003 and are booked till 2010, so it isn’t just supply restrictions.
Do you include the fact that the shipyards were artificially filled for 3 years due to the European double hull tanker rull being phased in so rapidly? Thus, there is a shortage of dry goods, container, and other vessels that is just now being remidied. The shipyards for large vessles have been booked a lot longer than 2003… I’ll try to find the date.
Tougher enviromental laws requiring the early replacement of vessels isn’t a forward looking economic indicator… but it is a counter indicator worth looking into. I’ll see if I cannot find out more from my friend in the industry.
Neil
“As you point out, the building of new ships is very difficult to manipulate so would that continued building not be a better indicator of true demand”
Substitute “houses” for “ships”, and you might have your answer. Sure, the capital expenditures are VERY different, but the concept is the same.
“The yards are churning out new ships like it’s WWII again”….
wouldn’t this be a “lagging indicator”? You order a ship only when you are “convinced” it will be fully utilized. Maximum orders occur at peak confidence (1st qtr 2006?). I don’t know how long it takes to build the ships you are referring to but I’d be willing to bet that ship building does peak at economic peaks (if not a little later) due to the capital commitment involved and the need for high confidence to make such a commitment.
actually there are various shipping dayrate derivatives contracts that companies can enter into. The thing is that the market is so small and over the counter that for the most part its only ship owners trying to hedge against falling dayrates who use them. Institutional money hasn’t really entered the market, although with the speed it seems to be exiting commodities, perhaps the asset allocaters will be looking for the next “uncorrelated” market.
Thanks, Jag. My thoughts exactly. If the Baltic is indeed at all time highs and they are splashing ships “like it’s WWII again,” that makes me very nervous.
Sell euphoria, buy panic and despair, as they say.
You always have to factor in these market movements the stupid hedge funds. The unnatural movement on the upside was mostly due to overspeculation by hedge funds. I can bet you, that NOW these stupid, no, these very very very very stupid hedge to recoup their losses on the long side are now massively betting on the downside by shorting. It’s not just the weather or the expected economic slowdown.
That’s my point, it’s almost impossible for the hedge funds to directly buy the BDI. They can do the derivatives but that’s a really tiny market and they can’t buy the underlying well (short of owning a ship). There are not hedge funds and the price of chartering a ship continues to zip upward. Where there are hedge funds the prices zip downward. What if the global economy hasn’t begun to slowing down (and hasn’t even reached it’s inflection point yet)?
The speculative hedge funds are the problem and the derivative markets. They distort and amplify everything. It’s a classical case of the “tail waging the dog.”
IMO you can’t game the shipping rates. Commodites traded in NY are subject to manipulation (short-term), and plain old price swings from big hedgies moving hot money. No one believes that global oil demand is affected by a mild winter in the northeast US. That is just short-term trading noise, but this is an excellent buy-the-dip opportunity in PMs and oil. I would avoid copper though I like zinc, lead, etc.
Zinc and lead yes. Not enough mines around.
And nickel too.
They way things are going in Washington, maybe they’re troop ships.
David Lereah’s mother swims after troopships, they say.
Doom’s old friend BW Economics Editor Peter Coy has dipped into another blog, Southern Maryland Housing Bubble News, and posted a rousing attack on MLS Days-on-Market (DoM) fiddles. It’s great to see the MSM losing patience with deceptive REIC numbers.
“New Listing! (Sort Of): Agents are pulling houses off the market and then presenting them as new offerings”, by Peter Coy, BusinessWeek, January 22, 2007 (posted Jan 12th).
http://tinyurl.com/ycg7yf
(unfortunately, S. Maryland’s post will be ruined for some by an offensive cartoon, be warned)
http://tinyurl.com/y4g7wo
That was not something i wanted to see first thing in the morning…you warned.
So what exactly was the point of that?
That was the source for Peter Coy’s article. It would have been a bit clearer if I’d had some text after the blockquote in the original post, or just been more explicit in the own-reply. Sorry about that. I’ve commented over at S. Maryland recommending he take down the offensive cartoon.
I ddin’t notice the cartoon.
Update. Blogger has erased the irrelevant material (and discussion thereof, good move). Now we can focus on his excellent exposure of a DoM fiddle.
The cartoon was only intended to poke sarcastic fun of yet more manipulation found recently. I had no idea that it would be interpreted in a manner other than I had intended, and If anyone was offended by it I sincerely apologize. It has been removed.
Thanks, and once again congratulations on inspiring that article today by BW’s economics editor.
I ran across a real sleaze bag this past summer. They had the same house listed twice, one listing active, the other on hold. Over the course of months they would deactivate one listing and within seconds activate the other so that the DOM for either was only a fraction of the time the house had actually been listed. It was so obvious as they were doing it over and over. This industry needs policing as they clearly can’t do it them selves.
This happened with the house behind me. In July 2005, it was listed with one agency, but that only lasted for one month. New agency in August ‘05.
House just wouldn’t sell, so it was pulled off the market in late September. A lousy exterior paint job was applied. Interior painting and home staging were also done. In mid-October, it was put back on the market as new listing.
It finally sold in March ‘06. Total time on market: 8 months. But the real estate stats probably didn’t reflect that reality.
Oh, PUH-LEASE! My neighborhood is riddled with houses that have been for sale for well over a year. They get listed, relisted and listed over again more often than I change my shorts, for crying out loud.
Buyers must, absolutely must, do their homework. The entire industry is tilted in the seller’s favor. Caveat Emptor.
I’d think that in a market that has been so skewed as this one, days on market wouldn’t matter much to buyers who are waiting for prices to fall. In a normal market, yes, DOM can be hiding some useful bad information about a property, but in the current market, most of the time I’d think it just represents overpricing and stickiness.
“Buyers must, absolutely must, do their homework. The entire industry is tilted in the seller’s favor.”
Let me correct that statement for you:
“The entire industry is tilted in the REALTOR’s favor.”
After 107 days a home was delisted without a sale here in the san fernando vly.Just checked zip rtly and same home with new pictures is now re listed with 0 dom.This home in next door to my parents and the guy is crazy if he thinks he can get 540k for 1100 sq ft home with no air conditioning.
In the SFV? Do they even MAKE houses without a/c there, or is it broken?
On the Westside, few houses have a/c, but a hot day here is 80 degrees. Wow, the stupidity astounds me.
I lived in a couple of houses in the SFV without A/C. Good to have a pool or lots of mature trees. You’d be surprised how bearable it was.
Housing market pain not revealed by stats
Home sellers are crying but the data doesn’t seem to reflect their woes.
http://tinyurl.com/ylsykd
This is an interesting article on why the “official stats” may seem to be a bit of a disconnect from widespread anecdotal reports.
For example:
Expectations also come into play. “What sellers are most complaining about is expected price,” said chief economist for the Mortgage Bankers Association, Doug Duncan.
People, he explains, hear that a neighbor’s home sold for $500,000. They think that their house is better so it’s worth more. They price it at $550,000.
But the house’s objective value is really only $500,000. Since the seller has priced it too high, it sits for months. In today’s market, the house may not sell, even after a price reduction to $500,000, partially because the house is now slightly stigmatized because it has sat on the market so long. To the seller, the market just stinks.
Also a very interesting quote from Jonathan Miller in that article about OFHEO including refi’s in their statistics. As he says, that means we have statistics based on appraisal prices as well as actual sales prices.
I don’t know how that would work out in aggregate, but my gut feel is that this would tend to skew the OFHEO stats to the upside at or shortly after a peak.
From the article:
“With a refi, the price recorded is an appraised value rather than an actual market price and could have been higher (or lower) than what the property would have brought if had it been sold.”
This seems like it’s adding to the problem with RE. A property is worth what it’s worth….period. An “appraised price” and a “market price” should be the same…..what someone would pay for it…NOW….and loan accordingly.
To me it’s common sense; what am I missing?
should be the same
“Should” is the operative word here.
Even ignoring appraisal fraud, that would require a level of predictive ability from appraisers that would reap them rich rewards in places like Manhattan. Ain’t gonna happen.
So, the (honest) appraisal is going to be based on past performance with at best a fairly simple trend extrapolation. If sales dry up in a post-peak market, but prices remain high, appraisals in this market are likely to be overly optimistic and they will be used IMHO as the basis for refi’s more often than falling appraisals might in another market.
This will skew the OFHEO statistics upwards. Yes, the stats will reflect gross activity, but they won’t reflect genuine transactions.
Guy in “a lot of debt” (Dallas area of course - where else) offering to let people tattoo anything on him for money. Heaven forbid he might actually work to pay the debt off.
http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&Item=190070814413&Category=47103
il pay to tattoo “imaschmuck” on his forehead
hey tx chick any thoughts on where the price of oil is going?
north-south???
FB logo from housingbubblecasualty.com tyhe new scarlet letters.
Good idea! I like it!
Oil? I’d guess further south but I’ve been shorting it since election day (stated here at the time).
I’m stupid enough to follow oil but smart enough to know I am incapable of trading the stuff. I know that oil is worth about $48 but what I know doesn’t make the market.
I’m with you. Oil doesn’t have anyplace to “go” in a physical sense. The production/refining system is full and demand dropping just a little leaves tankers sitting full offshore. Housing is also going to drive prices down for anything considered a commodity (except gold, I hope). Look at copper and then consider where copper would be if the Chicomms weren’t stupidly buying twice what they need.
Me, I’m gonna get me a few medical equipment leaseback deals.
You could also accumulate and hoard nickel 5 cents. The mint has introduced stiff measures to limit the export of 5 cents nickels because their metal content is higher than the nominal value. Very funny! They can’t even hide inflation in a simple thing as a nickle 5 cents. I wouldn’t be surprised that it’s a far better investment than a Florida condo.
O.K., 5 years down the road the guy turns into a sexual predator, (live via breaking news) after a high speed chase across town, the police in subduing him, rip his shirt and there for all America to see is his tattoo:
National Association of Realtors
” Never a better time to buy a house”
This tattoo story reminds me of a parable about a guy who was running out of room on his body for tattoos. I recall that a his last one was to be a byzantine Christ.
Before you have to resort to burying a St. Joseph’s statue to sell your house, you better check the NY Post for your “2007 Real Estate Horoscope”. For example — “AQUARIUS: Jan. 20-Feb. 18: Late April through early May is charmed - make your moves (buy, sell, or firm up renovation plans) then. Don’t delay, or you’ll get stuck with broken promises when Venus turns retrograde from July 27 through Sept. 8. Friends offer support all year. Take ’em up on it”.
http://tinyurl.com/vpgcx
Thanks. I’m an Aquarius. Guess I should wait a little longer
“PISCES: Feb. 19-March 19: Your career is taking off, and you’re ready for some new digs that show the world what you’ve accomplished. See if renting month-to-month, with an option to buy, is a possibility. Your relationship status might change in ’07, and more than one move could transpire. Avoid renovations and contractors in September and December.”
Uncanny how accurate these are:
Your career is taking off — I’m retired
See if renting month-to-month, with an option to buy, is a possibility — I own free and clear.
Your relationship status might change in ’07 — Nope, no way.
Avoid renovations — Renovate? WHY?
Amazing!
CANCER: June 21-July 22: Brace yourself for a year of heavy demands on your schedule, causing you to rethink your commute. By September, you’re seriously considering working from home — and that might be the best solution. You’re at your peak in late September through early October — make your moves then.
These ARE funny, aren’t they?
–Brace yourself for a year of heavy demands on your schedule, causing you to rethink your commute.
I’m only 10 minutes from work…surface streets. Have even ridden my bike to work. No commute problems here.
–By September, you’re seriously considering working from home
I already work from home from time to time. What a schmuck. Obviously, these are for entertainment purposes only, and for people who are looking for something to base their plans on. I wonder who this Shelley Ackerman person is anyway.
BayQT~
LIBRA: Sept. 23-Oct. 22: You thought you’d never leave a particular area but, by year’s end, an irresistible option will appear before you. While the required adaptation will be scary, it’s also exhilarating. Enjoy the ride. Siblings and neighbors are lucky for you and offer charmed advice. Pay attention to them.
What’s truly pathetic is this situation is already ringing true in my concious. Horoscopes and birthcharts are sorta funny. Your mind apparently can find ways to adapt what they say to your particular situation quite readily.
Oh wait, this thing’s crap. My neighbors and my siblings … they stink. If I ever listened to them, I’d be in trouble.
Hey I’m pisces and I like it. Funny though, I am *still* wanting to rent from a FB on a month-to-month condo. Plus my career seems to be taking off, and I would like for my relationship status to change. Let’s hope the horoscope is right.
“SAGITTARIUS: Nov. 23-Dec. 21: The Jupiter/Pluto combo in your sign through most of ’07 brings an energetic run of luck that you’ve never experienced before. Use the Midas touch wisely and strike while the iron is hot: A spectacular offering that appears in late March or early April will not last forever. The right home is key when career demands multiply in September.”
Woo-hoo! A house for me in the Spring…and a career boom on the Fall! Can’t wait.
December 2006 Statistics for Washington - Baltimore Area.
Sample:
Washington, DC (just the District of Columbia, no suburbs) all housing units:
* Median Price: $388k
* Median Sales Price YoY: -2.9%
* Average Sales Price YoY: -13.0%
* Total Units Sold YoY: -15%
* Average Days on Market YoY: 92%
* Active Listings YoY: 36%
http://tinyurl.com/vnm62
Bubble Meter Blog
“Hosuing Predictor” predicts prices in 2007 will drop in Alexandria and Arlington:
In Arlington, which is a suburb of Washington D.C., the median price reached $359,000 before buyers put the brakes on the market, causing the prices to fall. Arlington is forecast by Housing Predictor to fall 5.7% in 2007 on the heels of one of the greatest appreciating markets it has ever known.
In Alexandria the average price for a single family home is now $730,000 as the market is fed by many who commute to Washington, D.C. Alexandria’s housing market came to a near standstill but is beginning to see the light of day and will fall 7.2% more on average in 2007, according to Housing Predictor’s projections.
http://www.housingpredictor.com/virginia.html
While I wouldn’t disagree with their findings for Alexandria or Arlington from watching the market around here - it would be nice to get at least some idea about their methodology. I checked out their site and could not find anything about how they arrive at their numbers. I’m not asking for them to unlock their Enigma machine for me - but it would be helpful to have some idea what they’re basing their predictions on.
I agree. But at least they’re in the right direction! They claim to be the fastest growing RE site. One would hop that to sustain such growth, they’ll have to give us better explanations.
WTF? The mean price in Arlington peaked at $622,687 (median was $ 549,450) in Nov 2005 (I only have stats for every 4th month). Where the hell did they get a median of $359,000?
Ask Sold
Aug-05 541,217 535,447
Nov-05 622,687 605,561
Feb-06 553,442 535,655
May-06 613,335 594,418
Aug-06 513,792 488,760
Sep-06 563,381 530,307
Oct-06 555,819 520,047
Nov-06 593,946 561,899
Dec-06 587,141 552,266
Maybe you’re just looking at SFRs? A lot of condos in Arlington these days (although a lot of the new ones seem priced waaaaay over $350k).
Actually, that number looked kinda low to me, too.
Nope, these include condos. I got the numbers from here http://tinyurl.com/7gfba.
Even without looking at those reports, you can tell that their numbers are suspect. First off, they have Alexandria at $730k and Arlington at $359k. They are across the street from each other! There’s no way (condos included) that there should be almost a 2x price difference between Arlington and Alexandria.
I keep 4-month running average of median prices (since month-to-month variance is too great to be significant) for Loudoun county VA. Median prices are now 11.0% off the peak of Sep ‘05. From $491k down to $437k.
However it is flattening - the last 4 months have all been within 428-440 range; 440 being the latest (December). I think we’re definitely seeing a pause in price reductions in this area, driven in part by the recently-reduced inventory - still high but not meteoric like it was.
I’ve been doing the same thing for Loudoun, and only until recently have I been tracking from month-to-month. Because I’m was only grabbing every 3rd month, I might have missed the peak, but I’ve got a decline of 11% (from $621,320 to $551,743; peak = 8/2005).
BUT, that’s the average asking price, not the average sold price. If we compare the peak average sold price to December’s average sold price, the decline is a more dramatic 16.8% drop ($618,542 to $514,787; peak = 8/2005).
Even more telling is the difference between the asking price and the selling price. In August 2005, the selling price was 99% of the asking price. In contrast, in Dec 2006, the price the average house sold for was 93% of the listing price.
remember, this is the housing off-season. wait til spring.
were off 10-15% from may 05 peak
in DC area -those stats are BS
Succintly put, flat. All you have to do is look out the window, for God’s sake. The only thing moving in my neighborhood are cream puff, turn-key houses on the nicest blocks - they are selling, at a discount to summer ‘05. Everything else for sale, the garbage, the crack houses, are sitting there, month after month after month. Lies, damn lies and statistics otherwise.
flat retail sales report (is the heloc drying up?)
http://biz.yahoo.com/ap/070112/wall_street.html?.v=2
?
The increase was better than the 0.7 percent advance that economists had forecast and provided evidence that consumer spending was ending the year on a firmer footing than initially thought.
they’ll be buying pickup trucks w lower gas !
From the Weiss investment newsletter this morning, talking about the rise of new subprime lenders in 2000-2001 and current meltodown:
New subprime lenders set up shop. Mortgage standards — which had been tightening — started to ease again. And when home values really started surging in 2002, all memory of the previous carnage seemed to fade away. Lenders fell all over themselves to help homeowners take advantage of their newfound wealth via cash-out refinancings, home equity loans, and more.
Before long, lending standards were completely thrown out the window. I wrote about many of the abuses as far back as April 2005 in a Safe Money Report article titled “How to Wade Through the Mortgage and Real Estate Cesspool.”
Then, this past July, I told you about a bunch of mortgage practices that were setting the stage for a major blow up. I explained that “stated” income mortgages, onerous fee structures, inflated appraisals, and other exotic mortgages were all conspiring to stick borrowers with sharply rising payments.
Now, it’s all hitting the fan. The 15th and 16th largest U.S. subprime lenders are collapsing. Mortgage Lenders Network is shutting down its wholesale lending operations and furloughing 80% of its workers. Ownit Mortgage Solutions just filed for bankruptcy.
And the companies still doing business? Many of their stocks are freefalling:
Fieldstone Investment (FICC) dropped 23% in a single day in November, and it’s lost about three-fourths of its value in a year.
Fremont General (FMT) has fallen almost 39% since last January.
Stocks like HomeBanc (HMB) and NovaStar Financial (NFI) are trading at their lowest levels in years.
Things aren’t as bad as they were in 1998 … yet. But if the steady selling in mortgage bonds turns into panic selling, it could get there — fast!
What This Means for the
Housing Market … and You
The recent action in the subprime industry just underscores what I’ve been saying for a long time: The housing bust will stretch its tentacles into many related markets.
A lot of people — both homeowners and investors — are going to get hurt. And it has not yet run its course.
Indeed, the nasty fallout in the subprime lending industry could even exacerbate the housing downturn. After all, one force that prolonged the housing bubble was the rash of ridiculously easy lending. Now that subprime lenders are starting to go belly up, the ones left standing are tightening their guidelines.
That’s going to make it harder for home buyers and marginal borrowers to qualify for loans. This could weigh on the real estate market as we close in on the key spring home shopping season.
You can see why I think it’s too darn early to pile back into housing and lending shares. Wall Street has been talking itself hoarse that the “bottom is in” for these stocks. But if the subprime meltdown spreads, bottom fishers could get filleted.
Meanwhile, if you’re in the housing market, don’t ignore these developments:
If you’re trying to sell, you don’t want to screw around. You have to get your price down to a level that will attract buyers, even if it bruises your ego a bit.
If you’re in the market to buy a home, the ball’s in your court. Don’t be ashamed to make low-ball bids, ask sellers to pay your closing costs, or make even the smallest home repairs.
And take note — easy mortgage money will be drying up. Later in the year, buyers will probably need more cash reserves, a larger down payment, and fully documented income, especially if they have low credit scores.
…offering to let people tattoo anything on him for money…
If he has a large forehead…. thehousingbubbleblog.com
Wouldn’t a large forehead imply a large brain?
Could be a bubblehead, difficult to mesure the brainvalue.
Touche.
It could also imply a very thick skull.
You can shave him, and wrap that around the whole head. Many times perhaps.
Check out the mortgage fraud info from Fannie Mae:
http://www.efanniemae.com/utility/legal/pdf/fraudupdate1206.pdf
It gives a whole new meaning to the old song “Georgia”….LOL
That is a very interesting report. SE and Midwest account for 71%.
Hey, anything on this list that might fit Mini-Trump Casey?:
Types of Misrepresentation Findings Definitions:
• Credit = The borrower’s identity and/or credit history was/weremisrepresented.
• SSN = There is a significant discrepancy in the SSN(s) used to qualify the borrower(s).
• Liabilities = The borrower’s liabilities were misrepresented.
• Value = The property value was inflated and there was non-property-related misrepresentation in the loan transaction.
• Property = A specific material fact about the property and/or the comparable sales was misrepresented.
• Assets = The borrower’s funds information was inflated or fabricated.
• Income = The borrower’s income/employment information was inflated or fabricated.
• Occupancy = The borrower’s intent to occupy the subject property was materially misrepresented.
• Predatory = The loan was in violation of one or more Fannie Mae predatory rules and there was misrepresentation in other areas of the loan transaction.
“SSN = There is a significant discrepancy in the SSN(s) used to qualify the borrower(s)”
So what would be an “insignificant” discrepancy? 1 number off? Too bad that doesn’t work for Powerball.
I think the reason you see such a large amount of fraud listed for the South East and Midwest is that those are regions where it is still possible to write conforming loans within the Fannie Mae limits. Try doing that in California!
Sigalarm — good point.
That’s what I thought too. I had a preconceived notion the midwest would be lower. I didn’t see the the distribution of the number of loans around the US in that report.
Matt Moroney, executive director of Metropolitan Builders Association of Greater Milwaukee, blamed the media for squelching more deals in an already difficult year.
“There was a lot of fear out there for a long time because of all that talk about the housing bubble and whether it was a myth or reality,” Moroney said. “There wasn’t a bubble, and we came to a soft landing. Yes, it’s slower than we’d like, but I don’t see home values depreciating around here.”
“Right now, it’s slow. Real slow,” said Mark Elstad, vice president of Tankless H20.com LLC, a West Allis water heater company that works with builders. “It started before the fall elections, and I thought it would be temporary. People are not spending, and I don’t really know why.”
http://tinyurl.com/y5tx4d
and another article from our milwaukee paper:
“We had this frozen market, as buyers sat on the sidelines,” Maddente said. “You were showing more houses, working harder to get a deal. And the deals were hard to keep together.”
Deals soured over what Dan Buttery, president of Argus Investments Inc. in Milwaukee, called “the logjam effect.”
He explained: “You get a qualified buyer. They love the home. They make an offer - but it’s contingent on the sale of their home. Six months go by and their home is still unsold. So the deal goes bad. This was something I saw a lot in ‘06.”
http://tinyurl.com/yhfgt6
Okay, I’d like to get a tankless water heater. If it’s really slow among the installers of such things, would I be able to get a deal? Or should I just wait a few months and then negotiate a reduced price?
Tankless heaters are still expensive, it will be a few years before these come down to an affordable price.
Thanks, Still. I’ll hold onto my checkbook. My existing water heater still has some life left in it.
Bank of England makes a surprise rate increase to 5.25%, due to inflationary pressures. The long bonds are selling off. So much for the Fed easing…
Uh Duh that news was yesterday!
Yes, but bonds still selling off today!
http://www.bloomberg.com/markets/rates/index.html
Long bonds are still selling off today (possibly due to controlled-burn intervention?)…
http://www.bloomberg.com/markets/rates/
Nice expression. “Controlled burn” upon reentry on earth ? You mean it won’t explode like the space shuttle upon reentry in earth’s atmosphere. They have sufficient thermic shields to protect the paper from burning instantly. Hope them luck but with the quantity of bonds in circulation it’s going to be tough. Mind you. As long as crazy Japan holds interest rates at ZERO percent, everything in possible. It’s crazy, crazy, crazy universe out there!
I had a friend give me a great visual on this bubble.
He states, ” visualize a horse with a cowboy on his back and a noose around his neck.” This is your FB.
There is another guy coaxing the horse to run. The horse being the lenders.
The horse refuses to budge and the coaxer is the regulators. After petting the horse and whispering in its ear, nothing.
Finally the regulator pulls his gun and shoots the horse in the head.
The end result is the same, nice or ugly.
Nice one!
Kal-Lee-Forn-Nee-Ah:
http://wallstreetexaminer.com/blogs/winter/?p=314
have been tracking Countrywide Financial’s REOs In California. Thought I check this just one a month, but decided to do so now for today’s blog post. On Dec. 27th CFC had 360 REOs in California. Just 16 days later they now have 483.
http://www.countrywide.com/purchase/f_reo.asp
my oh my…”Monty…show us what’s behind door #2″
This in this morning from Sacramento Ca;….
Construction on the 53-story Towers project at Third Street and Capitol Mall in downtown Sacramento has come to a halt after a pile driving company, a former contractor and the buildings’ architect filed liens against developer John Saca. City officials, concerned about having a hole at the gateway to Capitol Mall, say they support Saca and his quest to get more money from CalPERS to continue construction.
No real surprise here. Certainly makes me glad I’m not a member of CalPERS. Interesting that CalPERS has a new guy in charge of real estate investments. Anyone want to bet he is taking a strong look about the $100 million dollar investment in this project? Something about taking an early loss and stopping the bleeding.
this project is barely any % of calpers and no retiree is going to feel any effect from it. calpers has a hundred plus million dollars and have been selling real estate lately.
Yeah really,
In my view that project was more about ego than what is best for Sacramento. Oh well CalPERS can just increase contributions from its members to cover the loss. Oh by the way when CalPers increases its contributions from members, most governmental entities who operate as an enterprise i.e. water districts just raise the water rates thats all.
Thanks for the update.
Anyone that follows this Blog (and is disgusted by what they see) should take notice that Ron Paul has announced his bid for president.
I am sure that the crooks from Golman Sachs are scared to death. Ron Paul is alone, alone, alone, alone. All the bunch either Republicans or Democrats, eat in the hand of theirs masters at Golman Sachs. You really think that poor Ron has a chance ? NO. I won’t change a thing.
February 2002
PAUL: You said that Enron provides encouragement that the force of market discipline can be counted on over time to foster a much greater transparency. That’s exactly what the market does with money.
In 1979 and 1980 we saw sudden and rapid devaluations of fiat currencies around the world. That was the market forcing transparency on us.
Do you see any corollary between the way the Fed runs the monetary system and the way Enron operated?
GREENSPAN: Enron tried to imply that their earnings were much greater than they really were. They tried to obscure the extent of the debt they had. We’re not doing anything like that. I hope your analogy is inappropriate.
PAUL: I guess we’ll all keep hoping.
July 2004
PAUL: In yesterday’s testimony you said inflation in the long run is a monetary issue, but various factors affect inflation in the short run. I contend that it’s a monetary issue anytime. Yet our temptation here and with central banks is to focus on the government’s measure of CPI. Once you increase the money supply and thereby lower interest rates you’re going to lead investors and others into making mistakes, even if consumer prices remain stable.
During the slowdown in 2000 and 2001 you inflated aggressively by lowering interest rates to the unprecedented level of 1 percent. But what has it accomplished? Manufacturing hasn’t recovered, savings hasn’t recovered, the housing bubble continues, the current account deficit continues to grow as our foreign debt grows, and consumer and government debt are both rising.
Since fiat money has never survived for long periods of time, is it possible that we’re at the beginning of the end of the fiat system that replaced Bretton Woods 33 years ago?
Perhaps, as you said, we may have to address overall monetary policy, both domestically and internationally, in order to restore real growth.
GREENSPAN: Once you go off a commodity standard and turn to a fiat standard, it is very difficult to create what the gold standard did. Yet we have tried to do just that. I’m pleased that we are not getting the long term inflationary effects of fiat money. I am surprised by that fact, but as best I can judge, it is a fact.
Maybe he’s just running so he gets media coverage to spread his message. Far lefty Dennit Kucinich does the same thing.
Dr. Paul is very bright and the top dog among libertarians. He is plain-spoken and realistic. I agree that the purpose of his candidacy, which I’ve not yet read about elsewhere, will be to “spread the word” about the big-spending government represented by both major parties. Shrewd move, IMO.
Three observations from beautiful Alexandria, Va. this morning:
1) Heard a radio ad for a mortgage company that offered solutions for home improvement loans based on the “future value” of the improved property — they warned against using HELOC for home improvement, because if your renovation costs go higher than your HELOC celing, then you wouldn’t be able to get another loan or an increase based on an unfinished renovation. Couldn’t find any web info on them, however.
2) Heard a new ad from a home contractor that specializes in razing old homes and building new ones on the lot — I’ll bet it’s a company that used to do spec houses themselves, and now would rather have the acutal home/land owner bear the risk. I think it was something like ANV Construction or ANV remodeling. (not NV Homes, though)
3) At an interesection in town this morning, I noticed a new black BMW 645 coupe — and, whatever you think about folks speding the $80k (or more, I’ll bet) for a car like that - it’s a sharp, handsome looking vehicle. I was looking at it admiringly as the light went green for it, and it promptly took the corner too tightly and ran over the curb — and then proceeded up the street where the driver clumsily tried to parallel park it. I watched him try about three times before my light went green, and I drove by him, noting him still trying to inexepertly angle his ride into the space. I wonder what kind of loan he has on his house/condo (or, hell, both for that matter).
There’s a sobering article today in Bankrate, for those of moderate means and house values who think the mortgage interest deduction is worth beans, compared to taking the standard deduction. Doesn’t appear to apply to Californians, though!
Before the boom, a vast majority of homeowners derived zero benefit from the MID.
Here’s a craiglist link where they’re advertising no payment, no taxes and no HOA for 4 years:
http://bellingham.craigslist.org/rfs/260899748.html
“Virtual Real Estate Ownership with Absolutely Effortless Ownership™ ”
“$9,648 CASH BACK paid directly to the buyer within 7 to 14 days after funding. (This incentive will be fully disclosed to the lender)”
“Does a potential of making a 500% return or greater on your investment sound good? Because this is what we, Group 1, are offering! We are a power broker with a lot of large developers …”
That posting didn’t last long. Withdrawn. Interesting that the bright light of a blog can cause a listing like that to be pulled.
Chip,
Interesting that the very same post is now up again, but on the following day (I found the first on one Jan 11th, this one is from today):
http://bellingham.craigslist.org/rfs/261435197.html
http://www.dailypress.com/business/local/dp-27333sy0jan12,0,587404.story?coll=dp-widget-news&track=mostemailedlink
“NEWPORT NEWS — Ferguson Enterprises reduced its work force by about 30 employees at its Newport News headquarters and branches over the last week as the housing slowdown hit Ferguson parent company Wolseley Plc.”
Member of Fed’s Board of Governors is coming to Tucson next Thursday:
http://www.azstarnet.com/business/164208
Question- when a house on zip realty shows NA for last sale price, is this the current homeowner’s doing? I always wonder if they are trying to hide the fact that it’s a flip
Bubble action from Scotland..
http://news.scotsman.com/scotland.cfm?id=58832007
£1m houses becoming ten a penny in Scotland
MILLION-POUND homes are now commonplace throughout Scotland, according to a leading estate agency which has experienced a doubling of seven-figure properties in 12 months.
Knight Frank said it had sold 54 homes worth more than £1 million in the current financial year and expects to double the previous year’s tally of 32.
Meanwhile, new figures have revealed a continued growth in demand for houses in and around Edinburgh. The number of homes sold by the Edinburgh Solicitors Property Centre (ESCP) last year climbed by 14.1 per cent to 19,728 - despite the total number coming on to the market remaining roughly the same.
The ESPC’s latest figures show demand continued to outstrip supply in the capital in 2006, making it harder for first-time buyers to get on to the property ladder.
John Coleman, head of residential sales for Knight Frank Scotland, forecast a 5 to 8 per cent per cent increase in volume this year, with the luxury end showing the biggest rises.
“We are seeing increasing numbers of professionals like doctors, lawyers and accountants now joining people like stockbrokers and fund managers in buying homes of over £1 million,” he said.
He added: “One of the main reasons we are seeing such a rise in £1 million-plus homes is the pressure on the limited number of top-quality homes available. There is a shortage of supply.
I am going to Vegas next month to gamble. The casinos here only fleece me. My returning friends all broke even or made money. IT REALLY IS DIFFERENT IN VEGAS. Should I buy my new big flatscreen television now on my credit card , or wait to purchase with my winnings? If I wait there may be none left! Now do I play the loose vegas slots , or the Vegas housing s-lots. A quick flip and I couldhit the jackpot and get a hummer too! and pay off all my debts. Which has the potential for greater return? I will ask the trusted local REAL ESTATE PROFFESSIONAL ,as I am not familiar with that market. Things are finally looking up for me, santa is coming early this year for me.
From the WSJ today:
http://online.wsj.com/article/SB116856920483874717.html?mod=hps_us_at_glance_most_pop
The nation’s banks and savings institutions are facing a severe deposit crunch.
Total deposits as a percentage of assets on hand at the end of September at the country’s more than 8,700 insured banks and thrifts reached the lowest level since the Federal Deposit Insurance Corp. was established in 1933. At the same time, the banking industry’s net interest margin — the difference between the average rate banks earned on their interest-bearing investments and the rate they paid to fund those investments — dropped to a 17-year low in the third quarter of 2006.
Not pretty.
Hmmm… 1933. Geez, what was going on then???
Every now and again, I think they may raise rates just to get people to throw their money back at the banks.
18% was pretty attractive in the 80’s.
From the Phoenix Craigslist this morning. At least somebody has a sense of humor…
http://hous-261592172@craigslist.org
Sorry, wrong link
http://phoenix.craigslist.org/apa/261592172.html
That’s odd — this listing has been withdrawn, too, like the one before Talon’s posts.
Too bad—it was an obviously satirical listing of a house for sale. Pics were of a stucco box that looked as if it had housed a meth lab, and one of its listed features was “extra F-150 parts in the back yard.” Tag line was “if you’re only playing with half a deck, this place will make you feel like you hold a full house.”
In a stare down between Sam Zell and EOP bondholders Zell blinked. No mention of what, if any, impact this might have on potential rival buyout proposals:
UPDATE: Bondholders Agree To Revised Equity Office Offer
10:41 AM EST January 12, 2007
By Marine Cole
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)–Equity Office Properties Trust’s (EOP) bondholders agreed to return their bonds to the real estate investment trust, after the company sweetened its buyback offer a second time.
This is seen as a win for bondholders who succeeded in obtaining make-whole levels - meaning noteholders will receive at least their money plus discounted future interest payments - for two of the three longer-dated bonds the company was trying to buy on the cheap.
The markets she quotes as bubbleproof are the exact opposite.
Kendra
I just heard for the first time on L.A. radio a commercial for a law firm, that described negam mortgages and invited persons who felt the terms were not adequately disclosed to them at the time they got the loan, to call them for representation.
So here is my favorite Montgomery County Puzzler of the week. Buy a house that is rented at a rate that couldn’t cover the mortgage. Seriously, the house is on sale for $675,000, and is rented until June, 2008 for $2600 per month. I should note that although the rent might sound high, it probably is not a bad deal for the neighborhood if you have teenage kids given that this is pretty much everybody’s favorite public high school in the county.
That’s “only” 250x rent. There are plenty worse out there - lots of cities are priced at > 300x rent.