Bits Bucket And Craigslist Finds For February 21, 2007
Please post off-topic ideas, links and Craigslist finds here.
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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Northern Virginia Association of Realtors (NVAR) released their #’s for January yesterday - they changed the way the numbers are done, such that you cannot compare prices with historic numbers over the last few years. Perhaps a desparate attempt to hide price declines? There had been a growing discrepancy between NVAR numbers and MRIS numbers recently, even though NVAR was supposed to be based on MRIS - NVAR numbers had been flat but MRIS numbers down about 12% off-peak, for my area at least.
If they keep hiding the data then what will be come of the truth when the rest of the country is report negative numbers. I smell a trouble brewing.
I smell a trend…wonder how many other RE associations /companies out there are hiding and/or spinning data (NYC is hiding and spinning at the same time) - Anyone else notice a difference in the way their locale’s data are reported?
CAR recently changed their “affordability” criterion, which conveniently made the “percent of CA buyers who can afford the median-priced home” jump from maybe single digits to over 20%.
“the “percent of CA buyers who can afford the median-priced home” jump from maybe single digits to over 20%.”
In San Diego I bet the single digits were negative affordability.
I remember when they did that. I think they assumed 10% down instead of 20% and IO loan instead of 30 year regular loan (or something along those lines…correct me if I’m remembering wrong). The affordability numbers were quickly approaching 0 (the last number for OC before they changed the rule was 6%).
There is also the bit about 85% of the median (since first-time buyers presumably don’t purchase median-priced homes). Never mind that the actual percentage of first-time buyers with a $100K household income and an available downpayment of $47,871 is vanishingly small. CAR claims that 24 percent of them could afford to buy a home in 2006Q3.
“Housing affordability at 24 percent for first-time buyers in California
…
The minimum household income first-time buyers needed to purchase a home at $478,710 in California in the third quarter of 2006 was $98,890, based on an adjustable interest rate of 6.58 percent and assuming a 10 percent down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $3,300 for the third quarter of 2006.”
Here is the link that documents CAR’s statistical lie:
http://www.car.org/index.php?id=MzY3OTE=
I’m off 10-12% in 22151 fromm may 05 peak
lots of deadwood is gone- higher price homes sitting
What a bunch of amateurs. “Gee our market is crashing… I have an idea, let’s add MORE uncertainty to the market by not reporting numbers that people believe!”
Boy, that’ll make the buyers arrive in droves.
Packman - Can you clarify the problem you believe you are seeing. I don’t see the discrepancy. For example, both NVAR and MRIS are reporting $523k and $455k as the avg. and med. price for NoVA for January. Maybe the problem is that you are looking at NVAR’s “market reports” which include price data on a YTD basis (which is rather useless). Instead use only the “market summaries” from NVAR, which include price data for a specific month. The limitation of the “market summaries” is that the data isn’t provided by county - only in aggregate for NoVA and “greater NoVA”. I have found it much easier to skip the NVAR reports all together and go straight to the source - MRIS. Also, both the MRIS and NVAR numbers have been out for about 11 days now. They weren’t just released yesterday.
Indeed I’ve been using the Market Reports and not the Market Summaries, since the Reports gave the area-by-area breakdown. Problem is that the NVAR area in the MRIS reports don’t include Loudoun County, which has been down about 12%. Fairfax and Arlington areas are apparently flat, though those aren’t as bubbly as Loudoun (Loudoun was the single fastest-growing county in the country in 2005). NVAR used to include Loudoun in their reports, though not the summary.
Also NVAR only shows data going back 1 year for the median price, even in the summary. Before this last report, they only included average price in the summary, which of course is relatively meaningless.
in the Netherlands the realtor association has done this several times too over the last 5 years; the only goal seems to be presenting a smoothly appreciating housing market. Numbers that don’t fit in with this picture are spinned with statistical tricks or they disappear altogether.
“Perhaps a desparate attempt to hide price declines?”
Maybe they are just trying to help the next generation of realtors show that ‘real estate always goes up.’
Telling it like it is—is anybody in the Media listening—from Inman News.
I’m a one-person operation and my area’s top producer for the last 17 years. I have not seen anything like this in terms of shear spinning of our collective wheels on Long Island.
What I love is how most Realtors or the board will tell you everything is OK or “normalizing.” Normalizing?
My income is not normalizing and hasn’t for over a year now. When I do a market analysis for a seller and pull an average of four out of 35 homes sold, this is not normal. Average days on market has tripled. One out of four homes sells in the first six-month listing period. What is that? Call it whatever you want: bubble or trouble. I do a live Webcast every Monday night to give my perspective on my market without the sugarcoating that comes from my board or the NAR.
There are some bright spots but when you drop 41 percent in sales from November to December there is only one place to go after that — I hope up! I
More Realtor fuzzy math
“Normalizing” = If I look at the horizon long enough I won’t feel so seasick.
David Lereah’s Condo Investment Goes Bust
http://tinyurl.com/25anlb
David Lereah Watch
Bwhahahahaha
Not only was Lereah drinking the kool aid, but tens of thousands of his followers. Many realtors were buying multiple properties. This might have something to do with why they are so hesitant to push for massive price cuts.
“This might have something to do with why they are so hesitant to push for massive price cuts.”
Been thinking that myself Bear.
I worked right beside that building. That is to funny. Now I know the market is going down.
276 for alexandria- is it a conversion?
if so we need to lop off another 5% immediately
It is new construction.
Yes it was. I saw them built it and then laughed when people bought the condo’s
wow in spring 05 you could see it cracking - this guy does drink the coolaid
how about FL ??
I guess kool aid tastes great going down, not so good coming back up.
LOL - good one.
” I guess kool aid tastes great going down, not so good coming back up.”
Especially when it comes squirting out your nose ,in sudden shock…
“wow that stings..”
At least he didn’t miss out on the boom…
Love it. Great post. Mr. “Anti-bubble reports” Lereah is getting his due. Not only is the assessed value dropping, but recent actual comparable sales are lower than his purchase price.
The latest sale for a like model was for $259k. Here it is:
http://realestate.alexandriava.gov/detail.php?accountno=50704220
That’s $17k or 7% less than he paid. Chances are, most of the “equity” from his downpayment is wiped out. And this is just the beginning of the burst.
It couldn’t happen to a nicer guy…
I still think that when it is all said and done, the NAR compensates their shill for all of his RE losses. In other words, Lereah does not really have any personal risk in it. He gets all of the gains, but suffers no losses.
Dunno — if DL’s constituents (realtors in the trenches) decide that the NAR’s message that “real estate always goes up” contributed to massive job losses in their ranks, they may not be so eager to reward him…
To be fair - Alexandria deserves some credit for dropping assessments - I was happy to see mine drop 20K (in Old Town) after 5 years of relentless (except when I appealed one year and knocked 60K off) increases. 2007 assessments just came out a week ago.
It is ironic that Lerah bought at the top there — and rather gratifying that my folks sold their Arlington investment condo at almost exactly that time.
As an aside - what’s up with that condo website. I guess they were really going after the single woman website. That development is nice in a very utilitarian way — and pretty safe and decently located — but it’s a pretty dull area. I guess you would spend 100k+ more for one of those hip (and metro accessible) condos in Arlington. They are overbuilt in Arlington - but at least that area is kind of fun (although it’s losing some of its former funky charm as it gain the whole foods/barnes+noble/cheesecake factory/resto-hardware yuppie-industrial complex).
On the local news last night in the Tampa Bay area of Florida, a story on the proposal to eliminate property taxes for residents completely, replaced by a 2-3 cent hike in state sales tax. This could be good for residents. I like the idea of being able to buy a cheap concrete block shack for cash and own it outright. On the other hand, it could be bad for second home and commercial real estate markets. Also retailers and tourism related businesses and just about any business that charges sales tax would be affected. It’s like Save Our Homes on steroids. I’d like to hear Mike Fink weigh in on this one.
I bet every business that sits on one of Florida’s borders is licking their chops over this assinine idea. New York City kept getting killed by people hopping on the PATH and heading to Jersey to buy clothes. Finally they got smart and eliminated tax on clothing for any item under $119.99. Boom, business picked up for the NYC merchants almost immediately.
Now, Florida wants to do the reverse. They want to kill their merchants on the border. Anything people can cross into another state to buy, they will. Too bad Miami. You will have a heck of a drive to escape this tax nightmare.
Prediction: This will never happen.
Yeah, they brought up that border thing in the story. It would benefit Georgia and Alabama. But, at the same time, it would also send a lot of the illegal population to those states and I’m sure that’s part of the idea.
I like it, actually. It will hurt me short term since I am renting right now, but it could be of great benefit to the state in the long run, in terms of weeding out the overgrowth.
As to your prediction, I think it has a very good likelihood of happening, because it is politically motivated and the residents will vote for it, like they voted for Save Our Homes. The mood among the populace is ugly, since the Florida Legislature can’t seem to do anything about insurance rates. I’m sure they figure that if residents don’t have to pay property tax, they will be more likely to live with the insurance rates. It saves some political ass. Those asses are awfully red right now.
go for it, Sunshine State! Replace property and income taxes with consumption taxes. Then you’ll need more consumers. oh don’t worry i’m sure they’ll all come from Wisconsin and Vermont. It’s worked wonders for California in the last 30 years.
No state income tax in Florida.
Not yet, but soon.
The vast majority of California tax revenue comes from income tax on those who make more than $200k per year. This is well documented and is one of the reasons for the extreme instability of revenue income for the State since people in this category tend to have a lot of flexibility in how and when they realize compensation.
New York has the majority of it’s citizens right on the border of it’s state, so the costs of cross juristictional tax avoidance are far lower than Florida (where some are on the border but most are several hours from the border). I predict tax compliance would be higher. The decision will mostly come down to a fight between Disney et al and the home owners. I predict Disney will win, because the benefits are more concentrated.
Pandering to the retiree’s and trying to hault the migration out of the State ??
IIRC, Washington state (sales tax no state income tax) border counties with Oregon (no sales tax) have a lower sales tax.
I’d like to see property taxes eliminated for the elderly. It doesn’t seem right that after a person has their house paid off, they still don’t really own it.
That would Be a GOOD and a BAD idea, Good for senoirs on fixed/low income , but why should someone rich get off paying real estate taxes? Maybe at $30,000/yr you pay 1/2 of your property taxes, at $50,000/yr then you pay full taxes on the property.
What they REALLY should do is eliminate or freeze or the homeownwer or pay 1/2 of their property taxes when you have your parent move into your 2 family home or MIL apartment.
My parents kept my grandmother in her own apartment for 10 years yet the property taxes went from $5,000 to $8,000 a year and she was only getting $800 in SS….my parents saved the state of CT easily a Half a million dollars, by not putting her right into a nursing home.
Loss of rental income easily $500+ a month from market rates…plus raising taxes, why did my parents have to struggle financially this badly, just to keep grandma out of a nursing home.
I think tying it into whatever fixed income the person has would be reasonable. My parents have had their house paid off for years. My dad also took early retirement (late 50s). They are now in their early-mid 60s. The income he gets via his pension is more than I’ll EVER see as a regular income. No reason for him not to pay tax increases. Hey, that’s the price of owning and getting killer appreciation for the past several years.
aNYCdj;…interesting comments but, IMO, just is not fair to tax someones real estate wich is “Local” based on their income….I believe we should get away from “ANY” owner occupied real estate tax and use a broader tax such as sales tax to generate the required revenue….
why? They still use services.
in fact, many times they use MORE services. (people with kids and the elderly use the most)
my comment was to Lou’s statement not to aNYCdj
Am I the only one that is sick of the boo-hooing for old people? Old people can rattle on about saving for the future and being responsible for one’s self and then they cry “fixed income”. Is it not enough that they have that AARP monster getting them freebies left and right? They vote in every f—ing program that will benefit them and now people are suggesting that they should pay no taxes at all? These people weren’t supposed to be saving so they could hand off all of their money to their snotty kids and live off the government. They were supposed to be saving to pay their own way in their retirement years. Enough with the “fixed income” cry. I guess everybody’s a victim.
Bravo!!! I have been saying the same thing as well. These people had 50 yrs to save for this, if you did not, that is bad planning and now you pay the price. Why should geezers get any discounts? They have all the money! This is not the depression anymore, those people are dead. We need to stop with this nonsense, they voted for the thieves that are our current crop of politicians. I am in my early forties, what do I get to look forward to? I get 15% of my earnings stolen w/no return on it, inflation stealing everything else I can save, and for what. To be able to rub my hands over a garbage fire, or get sexually assaulted by a convict in a govt run nursing home when I geezify. Cmon is this fair????
These are all good points, IMHO the problem is the way the inflation figures are calculated. Any SS payments adjusted for inflation do not come close to the real estate tax increases. I believe that California’s property tax is pretty close to equitable. I realize this is not a popular belief, but California’s taxes as a percentage of value are low! The dilemma that California has is that there is no economic incentive for the elderly to sell their Santa Barbara 5 bedroom house and move to a smaller abode when they would get shafted with higher property taxes. Not many elderly choose to leave the area where their friends, family and synagogue are located. Current laws make it easier for an established home owner to stay than to leave.
The idea of the elderly not having to pay property taxes because of their age is as discriminitory as deciding that African Americans, or homosexuals, or married people, or any other predjudice doesn’t have to because of their status. It is flat out morally wrong, and constitutionally illegal.
IMO (as a Georgist) property taxes should be booked against the property until disposal. But the marginal rate should only start at the median price for an area . . . and be based solely against the SITE VALUE not the improvements. Taxing capital improvements @ 1-3% each & every year is just insane tax policy. This is the general Georgist prescription.
What about Social Security, bus discounts, Medic-Alert jewelry, Gold Bond powder, pants all the way up to your armpits, and all those other senior perks? Oh, if you ask me, old folks have it pretty sweet.
And yet so many people don’t get the Homer Simpson reference. D’ohhhh!
Why? They use up the local resources just as much as every one else. And who cares if their children are grown up and they don’t want to pay for the public school system. I don’t really want to pay for their medication either but not much choice about that one.
“Old people don’t need companionship. They need to be isolated and studied so it can be determined what nutrients they have that might be extracted for our personal use. ”
Homer Simpson
Don’t forget the costs associated with extracting their Buick Park Avenue from the front window of the local business when they mistook the accelerator pedal for the brake.
Property taxes are used primarily for schools and streets and local police/fire departments. The vast majority of property taxes goes to pay for schools. Therefore, the elderly don’t use these resources “just as much as every one else.”
There are millions of elderly people who are living in their paid-off homes and have no intention of moving. They don’t consider these dwellings houses, they consider them HOMES. This is a big difference that unfortunately too many people have forgotten.
Because of the rampant fraud they are literally being priced out of their long paid-off homes. Saying “boo hoo, they have equity, just sell” is morally wrong. They are being kicked out of their own properties, places they’ve lived for decades, not because of any sound economic reason but because thousands of a**hole flippers, crooked appraisers and fraudulent loan brokers jacked up the “value” of the neighborhood.
“I believe we should get away from “ANY” owner occupied real estate tax and use a broader tax such as sales tax to generate the required revenue….”
I agree. I think that once you buy something and it’s paid for it should remain yours. As long as property taxes are applied, it’s not really yours.
No they used the school resources when THEY had children. I understand the sharing of social costs, and my point is thus: I pay my taxes and some portion of this goes to support the infrastructure, and the social net in this country. Just because I do not need Medicare to pay for my medications dosen’t mean that I want to opt out of my obligation to pay into the social net. In FACT I have no children and My tax dollars go to pay for the education of those who do, yet I am not complaining or trying to get out of my obligation to pay. No matter how you attempt to fund public services someone will complain. This discussion here is really associated with the waning years of “the greatest generation” What happens when the “boomers” large cohort group retires? as it stands now I get taxed for the current retiree benifits, the future benifits of the “boomers” and my neighbors childs education. OK that is the cost of living in a society and I get that. Perhaps the current tax system could be more equatable this I agree on. What I do not agree with is that just because, you don’t want to/think you should not have to, pay one specific element within the costs associated with living in a society you can change the rules to benifit yourself at the expense of others as it suits you thru your jouney of life.
I am sure that it seemed like a fine system at the time, we got here somehow, and I know that it was established by those who came before me.
I agree 100% with you, Lou.
A person’s primary residence should not be taxed. Either we believe in private property rights, or we don’t.
Personally, I’d favor some kind of “resident” tax or (and this won’t be popular) tax new, incoming residents, as it’s often population growth which causes expenditures to rise.
It’s comical reading these suggestions for a “fair” or “optimal” tax. There is no such thing; all taxes are just men with guns taking from those who are weaker. A fair tax would be no tax.
One of the problems with subsidizing the elderly’s property taxes is that it allows them to “overconsume” property.
In my neighborhood of 30 homes or so there are four or five with one, elderly person, in three bedroom houses. For years young families have had trouble finding housing….isn’t this subsidy hurting them?
Besides, in many cases, many elderly would be better off in apartments financially and otherwise. Isolating them from making prudent financial decisions may not be doing them a favor.
The lost taxes are only part of the issue (a minor one). The bigger problem is the distortion it causes in markets. Contrary to popular belief there is nothing in the Constitution about a right to live where you want (at a price subsidized by other tax payers). I’m all for helping the elderly poor but giving someone like my mother-in-law, who’s pretty well off, a break on her taxes while she resides in a house far bigger than her needs is, all things considered, foolish.
Why stop @ Elderly JAG ? ….Lets get all the single twenty somethings out of the SUV’s because its to big for them….
jag,
As Lou pointed out above, these homes BELONG to these people. It is not up to you to decide who should live where. If they have paid for their houses (paid for the land and improvements), it is THEIR private property to do with as they wish.
Taxes for infrastructure should be levied in other ways, NOT as a tax on ***private*** property.
Let me see if I have your facts straight: a home is “***private***” property, hence shouldn’t be subject to taxation, yet when some merchant tries to sell me HIS private property (say, a quart of 10W40 oil) in exchange for MY money, it’s perfectly OK for all that to be subject to taxation.
Your sentiment denies the validity of ALL taxation. How then will be run government if private property isn’t subject to tax?
I think that you’re just covering for the equity rich and just want to stop paying your fair share (or the fair share of your parents, whose expensive property you stand to inherit).
That’s no good. In in Fairfax, County, VA seniors with limited income get RE tax breaks - not fair - just more gov. busybodying. So you have some working Joe / Jane or someone like my parents who are retired (but not rich) subsidizing someone who does not need (no longer working) to live in a high cost area but wants to. Drives the cost up for everyone. Additionally there are cases of low income seniors in $1 million plus houses paying viturally very little tax on it. Let them get a reverse mortage. My parents live in a 1950s 3/2 house on a quarter acre lot. Because they were responsible to provide enough for their old age, they subsidize some joker in a million house. And like us all finance subsized housing.
Talking about total illeteracy in regards to economics. This move will kill the local economy that is made up of small businesses barely able to make it as it is. The corporate operations will do fine as they will be able to delegate the costs in more crafty ways than the small business owner. Good going …
This could be good for residents
Also retailers and tourism related businesses and just about any business that charges sales tax would be affected
People without jobs have a tendency to pay very little in sales tax.
As 2007 will be a very historic period in housing, I thought we might all dress for the occasion………..
http://zapatopi.net/afdb/
ammo belt will be more appropriate
Woo-Hoo!! I’ve got BOTH!! I’m accessorized!
The mortgage bomb
“There is only one problem with Gretchen Morgenson’s excellent article in Sunday’s New York Times exploring whether troubles in the subprime lending industry will spread further into the opaque territory of high finance. No hyperlink is provided for the equally excellent paper by Joseph R. Mason and Joshua Rosner that marshals the most complete set of reasons I’ve yet seen for why we should be increasingly worried: “How Resilient Are Mortgage Backed Securities to Collateralized Debt Obligation Market Disruptions?”…”
Links, of course, provided in the blog entry above.
How about pasting the article here so we don’t have to log in to the blog ?
So, I’m thinking there is a momentum play here on the terrible news from the erstwhile REIT yesterday. Looks like additional tightening in the sub prime sector.
I’m thinking I’ll short some competitors this morning. That worked well when NEW went down the drain
We’ve shorted some reits here a few weeks back as mentioned here. They’re the only shorts that are working. F***ing irritating market. I’m getting a lot of housework done
reit valuations are truely bizzare
Zell sells
Mortgage REITs such as NEW have taken a hit. Equity REITs such as Simon, EOP, etc are overdue for a correction but so far have held their post Blackstone/EOP valuations.
SGP is breaking down. Look at the chart.
I’m not a chart reader but I did look at the chart for Simon (SPG) and see that has trended down the last several days. Maybe the valuation correction has already started.
Some of this activity may be due to the Simon/Farallon deal to buy Mills. That deal became firm on Friday. Acquiring companies’ stock often goes down on M&A news.
Just an FYI - Mills was developing the infamous Block 37 in Chicago. Block 37 is a black hole for developers. An entire city block, in the Loop, every single transit line in the city comes within 1 block; 2 different subway lines actually touch the lot. Right next to the Daley Center and the Picasso sculpture everyone knows from The Blues Brothers and/or a hundred other movies. Right next to the famous Marshall Fields store (now named Macy’s). The city tore the whole block down in 1989 with grand plans for redevelopment. So far every single developer that has touched the place has been sucked into that black hole. Mills is the latest casualty. Will Simon suffer the same fate?
I guess my thinking is that with Novastar obviously dropping off drastically that bsome of the close competitors will trail it down as with NEW.
The one I’m targeting is Fremont, since they have had there own bad news and I expect more.
..also check Novastar today…another subprimes’ rocket to the moon just had a flame out..
http://finance.yahoo.com/q?s=nfi&x=0&y=0
Wow, it may become another “Onwit”
“So, I’m thinking there is a momentum play here on the terrible news from the erstwhile REIT yesterday.”
I think it is more than a momentum play; many Mortgage REITs have deteriorating fundamentals. While not a surprise to this blog it was a surprise to plenty of folks on Wall Street. There is a lot of evidence that the market is slow to process earnings surprises, both good and bad. NEW likely has farther to fall before the price reflects how poor its prospects are.
Equity REITs are also ripe for a fall but for totally different reasons. The fundamentals are relatively healthy but valuations are out of whack. The with shorting based purely on valuation is there is no way to tell (at least for me) whether the correction comes this morning or next year.
BTW, both of these sectors are extremely sensitive to interest rates, more so than the market as a whole. If the inflation data continues to be troubling both sectors could take an interest-rate driven hit as well.
The (problem) with shorting based purely on valuation is there is no way to tell (at least for me) whether the correction comes this morning or next year.
whether the correction comes this morning or next year
How about Jan, 2008 PUTS??? Gives you into the downdraft now or later
A landscape designer from California, whom I met at a gardening blog recently, told me that nearly all of their “high end” clientele in Marin County are porn actors/actresses — some in gay porn (all gay men are much greedier than the general population for some reason), but mostly bi-sexual porn the designers said — some “retired” and some still — er, “active”. The landscape designers featured many of their Marin County designs at their company’s official web site as well as at the blog. While the homes and grounds would have been attractive had I not known what types of people occupied them — the fact that they’ve been lived in by diseased porn actors diminished any potential appeal of the properties. Personally, you couldn’t pay me enough to walk into venereal diseased properties like those — even with a hazmat suit! At least I know now why people out there are so vulgar as to charge millions even for one-bedroom one bath homes.
I thought Californians were supposed to be the most open-minded people in the country. Not only do you fear gays and porn, you are stuck in 1985. Newsflash - you can’t get AIDS from a toilet seat.
Calm down Auntie, you’re going to be just fine.
Can I have a link to the company’s site? I’d like to see it.
Hey Auntie -
Why don’t you go back to church.. Why would any of us care that you don’t like porn stars?
Jeez Mrs. Kravitz, get away from the window.
“While the homes and grounds would have been attractive had I not known what types of people occupied them — the fact that they’ve been lived in by diseased porn actors diminished any potential appeal of the properties.”
Limit your house search to former churches to make sure they are “clean”…..wait a sec…..they are full of nasty sinners! I guess your only hope is waiting for NASA to sell a “clean room”.
You are one weird duck…..
Welcome to the blog Auntie……
I bet more gay sex goes on in the average church than in the average house.
Not to mention GOP limos . . . .
I repossessed a fancy car from a musician (I won’t say who) at a recording studio in the San Rafael, CA area back in the mid eighties. The girls back in our shop who were responsible for the inventory of the car’s contents found a stack of gay magazines, leather and chain restraints, leopard bikini underwear, and a massively huge dildo. The musician in question was a rather smallish fellow too.
Prince?? LOL
Slap that stuff on E-bay and let the bidding begin.
This part of the thread has me very interested! I’m a huge Prince fan and that was exactly who I thought of upon reading rms’s response. Now I look at Auntie Christina’s post and I think to myself, “Prince has a song called Annie Christian.” Annie Christian = Anti Christ. Hmmmm.
Back more on topic, the original post by Auntie is pretty screwed up. (I deleted a bunch of text that was here that I used to justify why what she wrote was screwed up but realized that her text spoke just fine for itself)
p.s. rms…was it Prince?
Auntie,
That has to be the funniest post I’ve seen in a while. there are so many classic lines in there, it’s hard to believe you’re serious.
One part I don’t understand,
If all gay men are greedier than the general population, than why are such a high percentage of priests gay? Seems that priesthood isn’t very lucrative.
I agree with others, don’t buy any of those old nasty homes. But you should also avoid all places where dirtiness can occur.
let’s see here, that would include:
Your parent’s bedrooms (how do you think they got you?)
my house (I think every room except the boiler room)
every house on my block (there have been kids in every house here)
every house in Marin except new construction
every house/condo in San Francisco itself INCLUDING new construction
most streets (you never know)
the supermarket (what’s been done to that poor fruit?)
Movie Theatres
Airplanes
Any home improvement stores (filled with lesbians)
Any decorating store (filled with greedy gay men)
The morgue/any cemetary (what can you say?)
Your job (lots of dirtiness there, at least where I work)
The mall
Basically everywhere except your house.
actually, you should even stay away from your own little dirty bed. then again, perhaps it’s not dirty, which is why you’re “auntie” christina and not “mommy” christina?
One part I don’t understand,
If all gay men are greedier than the general population, than why are such a high percentage of priests gay? Seems that priesthood isn’t very lucrative.
If you happen to be gay and catholic, the only way you can get out of getting married and having children is to become a priest. I guess there’s another option as well - be disowned by your family and catholic friends, and get kicked out of church to boot.
The not-so-religous ones choose option 2, the rest go with #1.
As it turns out, I have a gay cousin that’s currently in the priesthood. He quickly became the favorite child (his parents have no idea he’s gay). Sad, really, the things kids will do for the love of a parent.
Oh, I agree with you completely:
but this flies in the face of saying that “all gay men are the greedier than the general population”
Sacrificing your entire LIFE, your entire ability to have a sexual relationship, your entire ability to have material goods, in order to please your family and please your society hardly seems “greedy” to me. (as “auntie” claims)
Only catholics/religious people have the audacity to purposefully steer a group into a profession, then be surprised about it. when my gay uncle “came out” my grandmother had him put into an insane asylum until he became a priest. Other gay people from that era got the message, and became priests.
Easy there…. Not all Catholics think that way. I’m Catholic and I’d welcome any gay person into my church. What your uncle went through is horrific.
True.
my apologies to all. religion in itself is a powerful weapon. some wield the weapon for good, others do not.
If you happen to be gay and catholic, the only way you can get out of getting married and having children is to become a priest.
Catholics don’t have single or childfree people? Damn good thing I’m not Catholic then, as I consider marriage and reproduction to be essentially life-ending occurrences.
“One part I don’t understand:
If all gay men are greedier than the general population, than why are such a high percentage of priests gay? Seems that priesthood isn’t very lucrative.”
To quote an old song: It’s “where the boys are!”
Funny DOC……
Personally, you couldn’t pay me enough to walk into venereal diseased properties like those — even with a hazmat suit!
I would walk into an STD property if someone paid me. If they provided the hazmat suit and cash money in the amount of - well, I guess it would depend on how much time I had to spend in the venereal diseased property. So the fee is negotiable. And travel expenses of course, additional. But I would definitely do it for cash money.
Wait, how does a property get venereal diseased anyway? Does the CDC have statistics on this?
hmmmm….
I will tell people something that they might not know . In the loan business the gay clients had a very low foreclosure rate and were a excellent mortgage risk (at least when I was in the business prior to this recent cycle ). Further, gay people were the best at filling out loan applications as well as providing data needed to approve a loan . I don’t know if I should of posted this information or not but I just thought I would post it.
I’m not surprised at all. In the “pocket neighborhood” I used to live in a gay neighbor was considered the very best kind of neighbor. They were quiet and had well kept yards. In fact the neighborhood adjacent to ours, Azalea Park was actively encouraging gays to buy there in an effort to improve the neighborhood. It was even on the national news.
Gay people have a lot more money to spend on houses and other fine things because they don’t have children. Simple as that. A gay couple is the epitome of Double Income, No Kids.
In Los Angeles, since lots of gay people are in show biz, they make rather large salaries. Gay couples bringing in $350-500K per year is pretty common. When you’ve got that kinda scratch it’s pretty easy to keep your mortgage paid, eh?
As a veteran of many clinical trials (staff), I’d walk in there for moola in a second. The worst thing you have to fear is bad track lighting and shag carpet.
STDs are called STDs for a reason - they are transmitted via sex. You have more to fear from resistant strains of Pneumonia and Staph then even resistant strains of Syphilis.
OK gwynster, thanks for the info.
Now I’ll have to amend my punchlist for building inspector -
phillygal’s note to Inspector -
Please check dwelling for:
1. Mold
2. Radon
3. Termites
4.
ClapAuntie Christina, aka anti-Christ???
Maybe her gigs didn’t pay enough to fund a house in Marin, so she is still in Chatsworth.
Bitter, party of one!
Yes, all the mommas and poppas in California, Florida and New York are not really greedy.
It must just be the gay men!
Sheesh!
Auntie Christina , a few points:
1) Don’t ever visit The Valley in LA. The “pollution” there may just kill someone with your sensitivities.
2) Gay people make perfectly good homeowners, and since they (most of the time) will not have the expenses associated with being parents they have more money to spend.
3) Just because a porn performer lives in a house doesn’t mean the filming occurs there.
4) If you are worried about entering a house where a person with a disease once lived…well…you have a lot of worrying ahead of you in life.
Neat trick. Disguising a hate-filled homophobic rant as having something to do with the housing bubble. That’s it. It’s all the gay porn stars who got us in this mess!
(On the other hand that does bring to mind some interesting mental pics of Greenspan doing low budget films. Shiver.)
On a personal note, I would buy a home from a gay guy or couple anytime. They do a hell of a lot more to improve property values with actual tasteful decor than the average church going hate monger with a tortured dead guy hanging all over their walls showing how “pious” they are. The more I see the less faithful (but more religious) I think they are.
I’m a realtor from Ohio. I only do referrals now and only to agents I know are honest and will not railroad people. I got out mainly because of greedy, dishonest , pushy realtors who are out to make a buck regardless of how it hurts the buyer or seller. We are going to be retiring within a year and I’ve been looking at houses in Florida. I know all the signs of what the market is doing. I can see the numbers, check the appraisals and watch as houses sit on the market for months at overinflated prices. Of the realtors I’ve contacted (I told them I was a realtor), I cannot believe the lies and outright dishonest facts and figures they are giving me, like I’m too stupid to read between the lines. Some of them are absolutely out of their minds if they think the average person cannot see what is happening everywhere. How can you hide the MLS with double and triple the number of listings from a year ago and an absolute sea of for sale signs on every street. Things are not great if practically every MLS listing says seller to pay closing costs, price reduced, seller motivated, agent bonus paid, and every other incentive in the world, plus the same houses have been sitting on the MLS for 6 months and a year. They can relist with a new MLS, but anyone who is looking in an area will recognize the same houses as they pop up over and over, especially if they have interior shots. Get smart realtors and represent your buyers and sellers like you are supposed to according to the law. You are a fiscal agent, not an advertising and PR person.
Disgusted in Ohio!
Hey Disgusted, save your money and don’t even THINK of buying when and if you come here. It’s to the point now where you can grab a landlord by the hoo-hah and bargain him down on rent.
Just don’t unpack too many things. It’s possible your landlord might end up in BK or foreclosure, and you’ll have to move on. However, within two years you’ll have a solid place of your own for a lot less.
In addition to researching MLS, I’d be researching taxes and insurance. And in Ohio they pay a helluva lot less for car insurance than here, so keep that in mind, too.
Thank you Ghostwriter for confirming what I have been feeling about the REIC during this recent real estate cycle . I don’t think I have ever seen the cheerleading get this bad on the part of the real estate industry .I know there are good realtors (such as yourself) out there and I’m sure that a number of realtors are not pleased with what many realtors are doing to try to keep the party going . I am just really glad that I was retired and had nothing to do with this last 5 year real estate cycle .
maybe a double post
lbo madness / refinancing within month….
office madness / details on the eop/blackstone manhattan sale
plus some funny stuff “signs of a market top” from kass and a little cramer and fed bashing.
http://immobilienblasen.blogspot.com/
NFI and non sequiturs:
http://wallstreetexaminer.com/blogs/winter/?p=450
The passage below leads me to wonder whether the controlled subprime burn is going to morph into an uncontrolled crown fire. I don’t see where price support can come from (outside of massive stealth intervention) with so many subprime lenders either shuttering operations or drastically tightening their qualification standards to price GFs out of the market?
‘About the only take away to pass on is that they have tightened lending standards enough to eliminate about 25% of the borrowers they would have enabled before. They also indicated they are raising rates 35-60 basis points, and are getting “better appraisals”. The last to me suggest that many lenders are no longer buying the flat housing price nonsense. One analyst did have the moxie to ask how debtors coming up on rate resets could refi if the whole industry was tightening up, and raising rates. The answer: if the loan is “bad” NFI won’t offer anything. If the guy was “making an effort” (whatever that means, see below), NFI might offer a little break on the new loan. The obvious non sequitur is how do debtors with existing 90% or even 85% LTVs get qualified when their property prices come in 7-10% lower on these “better” appraisals?’
Richard Syron was asking Congress recently to unleash the GSEs so that the can help stabilize the MBS market. Since F&F still aren’t current on their financials, that could be a source of your massive stealth intervention.
stabilize = hand the bag over to US taxpayers who had no role in creating the mess.
This sounds like the lending industry’s version of check kiting:
“Loans can be recast - restructured into a different rate or payment plan - or homeowners may arrange forbearance. In the latter case, buyers may be allowed to take out another loan to catch up on their mortgage payments, thereby stalling foreclosure.”
http://en.wikipedia.org/wiki/Check_kiting
Stucco;…..This is exactly what is starting to happen here….I spent the extended weekend R/V ing with a close friend who is probably one of the top 10 brokers in the state or at least in northern Cali….sells 70-80 homes per year…Has 22 in escrow right now….Anyway, he told me that 1/2 of the transaction he has right now are in some degree of default…And, in alomost every case, it was refi, cash out, to keep up with the Jones’s that buried them….
maybe a double post
lbo madness / refinancing within month
commercial property madness / details on the eop/blackstone manhattan sale
plus some funny stuff from kass and a little bit cramer and fed bashing.
http://immobilienblasen.blogspot.com/
Though the newly acquired Midtown properties are all considered prime buildings, Equity Office was not known for its strong management. ………
I know people that work at Equity Residential. Sam Zell treats employees very well and maintains a great work environment. Additionally, the employees and tenants at the buildings they own and manage are treated well and with respect.
I guess in this day an age of squeezing every last penny of profit out of everything, that can be considered a lack of “strong management.”
Anyway, with must of the country having a glut in office space, I don’t see why any tenant is going to put up with higher rents AND stricter landlords. Manhatten is the exception, of course, which is why it is a big deal that Blackstone was forced to sell that chunk of Manhatten buildings so soon.
Personally, I think Blackstone is nuts. I owned a decent amount of Freescale stock before the buyout offer. If I remember correctly, it was trading in the $17-18 range before the Blackstone buyout offer was made. I got my check in the mail 3 months ago for $40 a share. I did not waste any time cashing that check!
http://biz.yahoo.com/ap/070221/economy.html?.v=6
Inflation higher than expected, what a suprise…….not
What a day in the market. Precious metals rocketing, BOJ hikes interest rate but yen still slides, subprime implosion continues…what a day.
I’ve been doing a lot of thinking about how this bubble bust will affect other industries and markets. For example, will sales at BMW and Lexus go down and sales at Ford and Chevy go up now that people can’t use their homes as ATM machines anymore?
My investor side is always looking for value in markets that day traders don’t pay much attention to (to me, day traders are too unpredictable, introduce too much volatility, and mostly just don’t make any sense). I bought a bunch of Ford stock right last year right around when this bubble burst and sold it around the end of the year for a 20% gain. Since I sold it the stock is up another 10-15% (Doh!). This just makes me wonder if the big institutional investors are doing their homework and getting in on the companies that are going to do better with this bubble bursting. So, what companies do you think are going to be better off?
For autos, I think that any company that sells more affordable cars will have a good shot; the ones that are able to execute best will be winners.
For retail, I think companies that concentrated on their core areas and didn’t chase the sprawl everywhere it went, dropping a massive big box store every 10 miles. I know Walmart just posted huge profits, but how long can that last when most of the newest stores are in areas that are going to be half empty soon? They can cut half their workforce, but the carrying costs of the stores don’t change.
Anyone else?
Pretty negative commentary on Novastar (Subprime) on Bloomberg just now 7:30 AM Pacific…
HERB GREENBERG
NovaStar’s high-wire act
Commentary: Investors learn hard lesson about the meaning of risk
By Herb Greenberg, MarketWatch
Last Update: 12:27 AM ET Feb 21, 2007
SAN DIEGO (MarketWatch) — If investors learn nothing else from the debacle now known as NovaStar Financial, it should be that no matter how the financial markets have changed, no matter how smart people may think they are, no matter how much it may feel that this time is really different, one basic rule of investing stands: The higher the reward, the higher the risk.
That hit home in the hardest way Tuesday after NovaStar (NFI :
Last: 11.20-6.36-36.22% 10:28am 02/21/2007) , with its 30% dividend yield, reported fourth-quarter results that left investors stunned as the REIT’s shares plunged 33% in aftermarket trading to $11.81. That’s lower than they were when I first started raising red flags over the subprime mortgage lender in December 2002.
http://tinyurl.com/2fyv8f
http://www.bloomberg.com/apps/news?pid=20601087&sid=aMzX2JO41kAQ&refer=home
A good hypothesis.
the problem with Ford (and GM) is that they still may go bankrupt. Some of Ford’s and GMs rise is due to the fact that people see them getting out of their mess (specifically, unloading their pensions to the PBGC) and decreasing their costs.
both firms seem to be doing a better job at making what customers like. Mercury has a better lineup, as does Ford. GM also is making headway
but reliability still plagues both companies (at least compared to the Japanese… Americans have actually narrowed the gap with the Japanese and have become better than the Europeans, but the reliabiltiy issue is still in most consumer’s minds), and also there is the issue of the “legacy costs” of both which add up to $1500 per vehicle.
also, GM possibly taking over Chrysler may have negative affect on GM, and I still feel that GM is already too diversified. (they need to drop a line or two of cars)
Thus, still an element of risk.
Other options along your line of thinking:
Honda and Toyota. Strong companies, well run. Known for delivering AFFORDABLE but RELIABLE. when people are strapped for cash, but not destitute, they choose these two marks. That said, both are near their 52 week highs because they’re doing so well, so much of this is likely already “priced in”
too bad one can’t buy Hyundai (as far as I know, i think it’s only on Korea exchange or something)
Other thoughts:
1) supermarket chains. As people have less income, they eat out less and cook more
2) fast food chains. same reason
3) costco. people often buy in bulk in a downturn. it’s better run than sam’s too
4) walmart. hate to say it, but the walmart monster might do very well, as people have to abandon their misgivings about shopping at walmart to save a few bucks. it is the cheapest thing out there often.
Always the standby options as well:
1) Gold/Silver. As a hedge moreso than anything. Also as a “flight to saftey”
2) Oil. example: Canadian Oil Trusts which have taken a beating due to new tax laws that MIGHT take effect in 4 years. Many lost 20-30% of their value since October. They now have up to a 15%/year dividend depending on the stock. that said, oil has been bid way up of late, partially by speculators (yes I know, peak oil, but the current price of oil has a lot to do with speculation as well). thus the dividend could be offset by the fall in oil prices.
3) Treasuries. Safe. not much return obviously
4) blue chips, things like Proctor and Gamble. People always need soap and toilet paper. P&G has been around forever. And blue chips have been ignored although P&G is high in price right now.
part of the problem, there is money sloshing around EVERYWHERE. It is hard to find a “not so expensive” company/commodity/investment vehicle.
The trick now is to find something that is “not as overly valued as other things” AND that “other people will pile into”
sucks.
(not investment advice, do your homework, I own gold, silver, 2 canadian oil trusts, index funds, international funds, t bills, don’t own a car company blah blah blah)
On the flip side, ultra luxury may also do REALLY well. not the low end stuff like BMW and Lexus, but the high end stuff, like Lambroghini and Bentley.
In many market crashes, the luxury retailers hold out strong. I’m not sure if this will be the case this time.
the ones that get HAMMERED are the mid luxury which is favored by the high income low wealth populace who get slaughtered in a downturn, whereas the high luxury products are favored by the truly affluent who are affected but not as much.
things to think about
P&G? Good grief. Look at the valuation and look at their debt - tens of billions. Not me.
JNJ all the way!
Good point. (although I did state “P&G is high in price”)
my post wasn’t meant to say “invest in this company” it was meant as “here are some areas to think about”.
And also, JNJ isn’t without blemish.
It is also currently near its 52 week high as well (so pricey), and is currently under Justice Dept investigation for bribery in 2 foreign countries and it’s chairman of it’s medical division (it’s biggest aspect) resigned last week.
which is why one must ALWAYS do one’s own full research. too much to post about for each company.
Again, the biggest problem, is that EVERYTHING is overvalued. too much money sloshing around.
remember, this isn’t really a Real Estate Bubble. It’s a credit bubble (worldwide). one of the permutations of that is the RE bubble, but it extends far beyond RE.
remember, this isn’t really a Real Estate Bubble. It’s a credit bubble (worldwide).
YUP…..And it effects EVERY asset class….
I agree the real estate bubble is just a piece of the credit bubble. I am not just focusing on the real estate part , but trying to put all the pieces of the credit bubble together to see a clear picture. The realestate bubble is a sizeable piece , but they always say it is the straw that broke the camels back.
Just pull out your playbook from the late ’70s. What did well then will do well now. Nothing ever really changes.
Ha! My playbook from the late 70s was to eat, sleep, and poop. I probably cried a lot too
Thanks for making me feel young!
(to me, day traders are too unpredictable, introduce too much volatility, and mostly just don’t make any sense)
yup , pretty much my wife’s description of me.
“Investors who planned to sell homes got caught as the housing market cooled and they couldn’t find buyers. Home prices are so high, last year’s median was $744,000, that it’s near impossible to rent a house at a price that will cover the mortgage and the property taxes. A three-bedroom, two-bath home might fetch $2,000 a month in rent, not enough for a mortgage payment that tops $4,000.”
Here on Long Island people are starting to ask rents that cover their entire mortgage! $3-4500 a month for a rental in a REGULAR neighborhood.. (not waterfront etc.)
The NEW thing in rentals besides no smoking/no pets is PARKING FOR ONE CAR ONLY! Yes, rent our tiny crappy apartment in part of our house for 1500-1800 (or more) a month but you can ONLY BRING ONE CAR! Please show me these single people who can afford this.
I’ve lost out on apartments because i life with my boyfriend and as a a result, we have two cars!
-liz
Same thing in CA regarding asking WAAAAY too much in rents.
With no barriers to entry, why would someone pay a LL $3K if they could go out and get a neg-am and “own” the property instead?
Unfortunately, I’m seeing idiots go for it, as they believe “everybody wants to live here” and these are just the new prices people have to pay, either in rents or mortgage pmts.
Sigh…
wonder how this guy’s doing:
http://www.webspawner.com/users/womfm/index.html
This is hilarious.
http://bigpicture.typepad.com/photos/uncategorized/janhousing.jpg
All of that stuff is still fresh in my memory. I’ve actually stopped being annoyed with Lereah and am more recently annoyed at the worthless reporters from supposedly respectable publications who absolutely will not stop quoting the man. It’s like they’re paid to quote him (yes)…
Ghostwriter, a little coda to your FL post - something amazing has happened to my ZipRealty search this morning!
Looked last night at my Los Angeles westside/san fernando valley search (2+ beds, SFRs) and it was at around 1920 properties. This morning, I look and now there’s almost 2400! Somehow, in the dead of night, over 400 ‘new’ properties were listed on the MLS
…but..wait a minute…now there’s about 150 new townhouses (in a search that only includes SFRs) and many older properties now have double, triple and even quadruple listings.
In fact, after searching more closely, I’d hazard a guess that almost none of the ‘new’ listings are acutally new, they’re all rehashes of old ones and many, many townhouses that have no business being in a Single Family Residence search.
Anyone else noticing a crazy amount of new listings anywhere else? Or is this just unique to LA/my search?
Yep, in 93552 it jumped from 126 to 183 overnight. I’m wondering if it’s a glitch or if they’ve just been holding back the tide just so they can say that it didn’t just directly following the superbowl.
http://money.cnn.com/2007/02/20/magazines/moneymag/homes_buy_orwait.moneymag/index.htm?postversion=2007022111
did you guys see this? You CAN offer up to 10% less than asking. However, you don’t want to get greedy! Can you f-ing believe this horsecrap????? But the sellers can slap 20-30% increases A YEAR for the past 3-4 years but a buyer offering a lower than 10% offer is F-ING GREEDY!
When will this b.s. end for christs sakes?????????????
It will end when every single would-be buyer starts offering 20-30% less on houses and just walks when/if the answer is “no”.
The way housing inflated the past 10 years, 30% off is WAY generous.
Am off now on vacation for three weeks. Don’t know how well I’ll handle being away from the blog. Cheers.
where to?
bring your camera. I’m sure you’ll find overbuilding.
We just got back from Puerto Vallarta.
Overbuilding everywhere. But “all the Rich Americans and South Americans want to own in PV”. The local magazine there had a huge spread on why PV values will continue to double ESPECIALLY because American Home Values are dropping.
(Puerto vallarta RE has doubled in 3 years per the magazine, and they were forecasting another double in the next 5 years)
Enjoy your vacation! You’ll be missed!
Buttonwood
Before the fall
Feb 15th 2007
From The Economist print edition
An uneasy calm has settled over financial markets
IT IS a scene familiar to all Western lovers. The cavalry is riding through a mountain pass. One officer turns to a comrade. “I don’t like it,” he says nervously. “It’s too quiet.” The next second, an arrow hits him in the chest.
The financial markets are in a similar state of nervous anticipation. Things have been going extremely well. According to David Rosenberg of Merrill Lynch, the American stockmarket has sustained its longest run since 1954 without a day’s decline of 2%. The interest-rate spread offered by high-yield, or junk, bonds over Treasury bonds is thinner than ever. Volatility is low. A market “correction”, aimed straight at the chest, seems overdue.
http://economist.com/finance/displaystory.cfm?story_id=8717290
Subprime mortgages scare Wall Street
Published Wed, 21 Feb 2007 12:00:00 GMT
Up to $200 billion in loans at risk of default this year
Tom Kelly
Inman News
While some of the nation’s leading economists are optimistic for an improved housing outlook during the second half of 2007, Wall Street’s capital markets researchers — the money guys — are concerned hundreds of thousands of home loan borrowers could be in default before the summer months arrive.
Chris Flanagan, managing director and head of global research for JP Morgan Securities, said approximately 35 percent of all subprime mortgage borrowers could have a difficult time meeting their loan obligations when their adjustable-rate mortgages hit their first adjustment period.
“These are consumers who were getting into 100 percent loans when home prices were softening,” Flanagan said. “The more troubling characteristic were the lenders willing to reach to make those mortgages available.”
Flanagan’s research revealed that 10 percent to 15 percent of all new loans originated in the fourth quarter of 2005 and all of 2006 were subprime loans — mortgages that typically carry higher interest rates due to greater borrower risk. And, if capital market players like JP Morgan find mortgage securities no longer attractive, the result could be higher mortgage interest rates.
The amount of money at stake could be $200 billion, with as many as 500,000 to 1 million consumers in potential jeopardy. Many of the loans were “stated income” or low-documentation loans, which involved a relatively low-interest-rate first mortgage and a simultaneous, or “silent second,” mortgage, which together equaled the entire value of the property. In the mortgage business, this is known as a 100 percent loan-to-value-ratio loan.
http://www.upstatehouse.com/rss-display.php?id=inmannews62258
Wells Fargo cuts 320 subprime mortgage jobs
Wed Feb 21, 2007 11:24AM EST
NEW YORK, Feb 21 (Reuters) - Wells Fargo & Co. (WFC.N: Quote, Profile, Research) said on Wednesday it is cutting 320 subprime mortgage jobs in two operations centers because it is tightening its lending standards to home buyers with poor credit histories.
About 250 jobs are being eliminated in Fort Mill, South Carolina, and 70 in Concord, California, according to a memo from Lynn Greenwood, a senior vice president of communications for the No. 5 U.S. bank’s home and consumer finance group. Wells Fargo is the largest U.S. subprime mortgage lender,
“As a result of changing market conditions — such as moderating house price appreciation — effective Feb. 16 we tightened our credit policy for a portion of our nonprime lending business,” Greenwood wrote. “This decision directly impacts our nonprime loan volume, which in turn impacts staffing levels in the areas devoted to managing these loans.”
The cuts are the latest retrenchment in the subprime sector. Defaults are rising as flatter or falling home prices make it harder to refinance adjustable-rate mortgages whose rates reset higher.
San Francisco-based Wells Fargo said it will give consideration for affected workers who want to stay on.
Wells Fargo originated $66.8 billion of subprime mortgages from January to September 2006, compared with $40.3 billion by HSBC Holdings Plc’s (HSBA.L: Quote, Profile, Research) (HBC.N: Quote, Profile, Research) HSBC Finance and $39.4 billion by New Century Financial Corp. (NEW.N: Quote, Profile, Research), according to National Mortgage News.
Wells Fargo said its totals include “co-issued” loans where investors such as investment banks assume all credit risk. The home mortgage unit is based in Des Moines, Iowa, and has more than 10,000 mortgage specialists, Wells Fargo said.
http://www.reuters.com/article/bankingfinancial-SP/idUSN2128605620070221
from the Charlotte, NC Craigslist.
Something smells fishy here.
http://charlotte.craigslist.org/rfs/282513908.html
Definitely looks like fraud to me.
Looks like Asia has a bubble of their own going on !
http://www.sirchartsalot.com/article.php?id=53
I am rapidly coming to the conclusion that the world needs to raise interest rates back to where they were in the mid 1990s or early to get rid of all this bubble stuff. There is just way too much $$$ chasing not enough assets. Sure, low interest rates are good for businesses that put it to legitimate use, but it invites way, way too much speculation.
The Chinese stock market has tripled in the last 2 years. 3x ! The scary thing about that is Asia is the buyer of our MBSes. If they crash, so do we.