Bits Bucket And Craigslist Finds For March 5, 2007
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More homeowners are no longer able to afford their payments, which typically rise sharply two years into the loan. In 2006, lenders filed 19,487 foreclosure notices against Massachusetts homeowners, surpassing the record high of 17,000 filings in 1991, during the state’s severe recession.
http://www.boston.com/business/personalfinance/articles/2007/03/05/overdue_mortgages_linked_to_risky_loans/
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Here in Florida, our airwaves (TV) are being spammed by Mitt Romney’s commercials, pushing him as a candidate for President. Part of his schtick is that as a “Republican governor, he turned a Democratice state around”. I’ll bet Deval Patrick gets the blame for the mortgage situation, when it actually happened on Romney’s watch. Where was Romney when the citizens of Mass were signing up for toxic mortgages?. I hope Deval doesn’t let him get away with his boasts.
Give da brutha’ a break, ya know what I be sayin’?
Uh, Deval Patrick was on the board of directors of Ameriquest I believe…..the one who paid $325 million for “falsified home values and borrower incomes and used other high pressure and unfair tactics that trapped consumers into burdensome debt.”
Wouldn’t Deval have some explaining to do? Working for an abusive lender? And he did what to stop it? And he went to work for an abusive lender, why? Did he not do ANY due diligence? Besides, Deval himself has some $6 million in mortgage debt….which I imagine is going to shortly be a problem for him.
Romney’s ads are a joke. Nice guy but he didn’t do much here because the legislature is 98% Democrat. Can’t do anything without them on board (but to veto a bill…which is often overridden by the legislature).
Neither Deval nor Romney have anything to due with the mortgage debacle. Individuals made individual decisions on the amount they’d spend for a property and they type of financing they chose. How ANY politicians are “responsible” for individuals making poorly considered MAJOR LIFETIME FINANCIAL decisions is beyond me.
The next time there’s a natural disaster should we hold politicians to blame for the lack of life insurance victims took out on themselves?
At some point people have to be accountable for themselves. If we aren’t going to hold them to account, when they are making the biggest decisions in their financial lives (with the easiest, cheapest, most widely accessible data available for research in HISTORY, online) WHEN ARE WE GOING TO HOLD PEOPLE ACCOUNTIBLE?
‘How ANY politicians are “responsible” for individuals making poorly
considered MAJOR LIFETIME FINANCIAL decisions is beyond me.’
You’d have to be pretty blind to miss the strong encouragement for bad household financial decisions made from the top in recent years…
http://www.whitehouse.gov/news/releases/2003/12/20031216-9.html
Add to that turning a blind eye to nationwide subprime boiler room operations.
P.S. I don’t actually hold W accountable for the American Dream Downpayment Act because he is not an economist. The blame should go to his top economic advisors at the time…
“P.S. I don’t actually hold W accountable for the American Dream Downpayment Act because he is not an economist.”
Correct. He’s an alcoholic RETARD who is actually as stupid as he sounds. And so is anyone who supports this dunce.
–
“Correct. He’s an alcoholic RETARD who is actually as stupid as he sounds. And so is anyone who supports this dunce.”
OK, what does it say about American People?
Any generation that was raised on buying pet rocks and every fad that was being followed by others has been bred to buy stocks, homes, whatever, that others are rushing into. That generation — Baby Doomers — is in power and W is one of them.
What would you expect from Doomers in power? The problem is very deep and wide. It is not just housing or subprime mortgages.
Jas
you can conclude that majority are stupid. but not all are stupid.
Accountability is a two way street. When mortgage companies and brokers who are licensed by the states they operate in are allowed to rob people blind through fraud and deception, the public needs protection. If you go to a barber shop to get a haircut, and they have a license to cut hair and they butcher your hair they should lose their license. I guess my point is that there has to be some trust from the public for honest dealings with state licensed practitioners along with caveat emptor.
unemployment was over 10% in 91- remember lobster got down to under $4 a pound- where are the lobster futures trading ????
I remember when lobster was at that price..When I was living in Alaska near Ketchikan, I had a friend from Boston that was shipping them out live and made a very good profit on them that Summer…
I just had my first Lobster tail in several yeas out to dinner last night….$45. with a salad….I counted the bites…About 5 bucks a bite…ouch…
I live on the coast of Maine and can get lobster anytime for 4$-6$ a pound right off the boat. I have several lobstermen fiends. I love lobster but only eat it about once a year in the summer. When you can get it easy, you don’t for some reason.
Yeah, I know what you mean. I complained for years that I couldn’t get fresh lobster. Then I moved down the street from a great place that will even kill them for me and, since I have no mortgage and rent is cheap, I can easily afford it. I only eat it about once every summer …
business week cover story ” what the market is telling us” and business week isn´t……….
with the quote of the day
“He goes so far as to suggest that the Standard & Poor’s 500-stock index itself, if it could be packaged into a single entity, would be a screaming LBO candidate”
msci usa 1991-2007 vs msci japan 1981-2007
http://immobilienblasen.blogspot.com/
the guy jason trennert with the quote of the day is not a comedian….. was my first thought
here is his forecast for 2007
Jason Trennert, who maps strategy for Wall Street research firm Strategas Research Partners, likes the wild-rally scenario.
http://tinyurl.com/3bcnvo
Fear of losing money in stocks, he says, has kept many U.S. investors too cautious since 2002, when the current market upturn began. But the natural progression of a bull market, he says, is “fear giving way to greed.”
It’s easy to argue that that already has happened in many foreign markets. Could it be the U.S.’ turn?
“I think the higher-octane stuff, the riskier assets are going to be the best performers” in 2007, Trennert says, mentioning biotechnology and software as two potential standout sectors. (Both lagged in 2006.)
May I suggest Gamblers Annonymous for those on Ben’s Blog who still think the stock market is an “investment” tool. The opinions make me feel like I am at the crap table in Vegas listening to the schemes and guesses about which way the market is heading and what stock to play. Sounds like some poeple are addicted to the action. At least in Vegas the drinks are free and the hostesses
look good.
Everything about our society is angled at gambling nowadays…
When I was a kid in California, there were racetracks and grimy poker rooms in Gardena that in the days before we made 23 year old losers, poker heroes, they were just the detrious of society, outcasts, with a gambling addiction, which meant they sought constant “action”, puttting in 40 hour workweeks in casinos for no pay. LOSERS.
Present day California:
I am surrounded by gambling, everywhere I go. Never was it so evident, as when my wife and I were on a roadtrip around the 4 Corners area of the Southwest, driving through Utah and as Utah has no gambling, we missed the myriad of indian casinos that plague every other state of the union.
One of the 1st backlashes we’ll see in the new coming era of responsibility, is how utterly wrong widespread gambling was.
Yeah, you can borrow from the government at 19-20 times earnings, which is what 5% is, to buy the SPX at 15-16x.I wouldn’t say the stock market is a screaming buy, but at 1375 in the SPX your risk is pretty low.
I’m dumping my puts at the open.
I think there needs to be some other exogenous factor (like a lousy unemployment number on friday, lousier than what’s priced in by now, or tangible trouble in china) for us to go much lower from here.
Absolutely, and I think it’s coming. But not right now.
i have dumped 50% of my germany short positions. the mdax (midcap) slumped 10% in the past 5 days.
thanks to my lousy timing i went short way too early…but after the last week……
Too soon - New is imploding in the pre-market.
I’ve lost count of how many 20% intraday gains I’ve made buying premarket imploders.
However, I specialize in biotech imploders. Wouldn’t touch NEW.
How the Plunge Protection Team works:
“Gaming” the system may be easier than many people believe. Robert McHugh, Ph.D., has provided a description of how it works which seems consistent with the comments of Robert Heller.
McHugh lays it out like this: “The PPT decides markets need intervention, a decline needs to be stopped, or the risks associated with political events that could be perceived by markets as highly negative and cause a decline; need to be prevented by a rally already in flight. To get that rally, the PPT’s key component — the Fed — lends money to surrogates who will take that fresh electronically printed cash and buy markets through some large unknown buyer’s account. That buying comes out of the blue at a time when short interest is high. The unexpected rally strikes blood, and fear overcomes those who were betting the market would drop. These shorts need to cover, need to buy the very stocks they had agreed to sell (without owning them) at today’s prices in anticipation they could buy them in the future at much lower prices and pocket the difference. Seeing those stocks rally above their committed selling price, the shorts are forced to buy — and buy they do. Thus, those most pessimistic about the equity market end up buying equities like mad, fueling the rally that the PPT started. Bingo, a huge turnaround rally is well underway, and sidelines money from Hedge Funds, Mutual funds and individuals’ rushes in to join in the buying madness for several days and weeks as the rally gathers a life of its own.” (Robert McHugh, Ph.D., “The Plunge Protection Team Indicator”)
An excerpt from “Juicing the stock market; the secret maneuverings of the Plunge Protection Team”
By Mike Whitney
http://onlinejournal.com/artman/publish/article_1811.shtml
I’ll ask you again. If you know it’s there & happening, why not ride it and make a few bucks?
I don’t know…I guess they lost my phone number. They just don’t call me and tell me what they are going to do. As it is, I have profited by longterm shorts. Have to hold them when the PPT is working against you but ultimately they go down. They can do great damage in the short term but they lose ultimately.
PPT won’t make small investors money. Even if your 401k makes 10% on the S&P index (before adjusting for inflation), the money centers whip up carry trades and derivatives for 300% gains. The game is rigged against Joe Six pack.
Do “they” prop up the stock market on the backs of goldbugs? Because I notice that every day the market “should” expect to see a major plunge, it somehow manages to tread water, while gold takes a major plunge…
http://www.marketwatch.com/tools/marketsummary/
The gold price is going to suffer for a week, maybe 2.
Fools rushing out, trying to save the electronic blips on their computer screen that signify that they own a scintilla of korporate amerika~
One thing that has been getting hammered, is Platinum.
It’s a metal i’ve never liked, as it has no history of wealth, like gold and it’s primary use is in catyltic converters, (along with Paladium) in automobiles, a forseeable dead end product, in the not too distant future.
Japanese investors have always been ga ga about Platinum, perhaps the selloff, (much more extreme than the Gold selloff) is them?
IMO some hedge funds are under stress due to yen carry trade unwinding pressure; remember when nat gas tanked as Amaranth imploded? I wouldn’t be surprised to be a snap back rally in metals as the market continues to slide. Hedgies should be about done selling gold.
Who knows? But my guess is that they work against a higher gold price and against lower homebuilder prices on separate levels. But I have no evidence either way.
What’s this about gold being down? It was lower in December… a lot lower. And until it gets that low again I don’t think I’ll be buying more.
Just because NEW is down $25 and gold is down $25 doesn’t mean they’re down the same amount… when one starts at $666 and the other at $31. Seriously.
PETER BRIMELOW
Mysterious movement in gold market
Commentary: Who blocked price rise, and why?
By Peter Brimelow, MarketWatch
Last Update: 12:01 AM ET Mar 5, 2007
NEW YORK (MarketWatch) — Gold had a tough time in the past week, too.
No stock market enthusiasts will have any sympathy, but gold’s friends are aggrieved. A week ago gold bullion closed at a 2007 high, and early this past week made highs in several major currencies, a favored sign of bulls. But furious selling, starting rather strangely in the thin aftermarket after Tuesday’s close in New York, ultimately sent the metal reeling to a $39 per-ounce loss on the week.
Not all gold observers were caught. Pring.com’s Martin Pring, who places great faith in the predicative power of gold equities, was worrying in his Weekly InfoMovie Report about their nonconfirmation of the metal. And several old hands were suspicious about the ballooning “open interest” in gold on the New York Commodity Exchange. In essence, this is a measure of the size of the bet laid down by speculators in gold futures. Seeing it pass 2005’s record high without a new high in gold set off alarm bells. How big was the seller?
The Gartman Letter, which for a loudly self proclaimed non-membership in the gold fraternity spends a lot of time thinking about the metal and is actually quite a successful trader of it got the message on Thursday morning: “we find it disconcerting that spot gold has seemingly badly failed in the past two or three days to push upward through $685-690. Whoever, or whatever, the seller is at that level, it has been formidable indeed.”
http://www.marketwatch.com/news/story/mysterious-movement-gold-market/story.aspx?guid=%7B0233E1E3%2D809B%2D4E9A%2D819C%2DC976C1C09077%7D
Here we go again. Futures off 100+, another crappy trading day in the oriential markets. It’s going to be another rocker today. Hope you got short on Friday TX, I think you could make some money again today.
Also, WSJ published an article today about “the RE asset bubble” as if it were a “given”. Also, the comparisons to the tech bubble and the tulip bulb bubble…
It’s as if this was always there. People are starting to look at the RE bubble as “self-evident”; like, of course it was there, you would have had to be an idiot not to see it.
That’s one of the stages, right?
And now we’re having a ‘downtrend’-bubble…
I made good money in 1998 and 1999 during the “Asian Contagion’ selloff. When everyone was fleeing Asian stocks, I kept buying more in 1998 by merely dollar cost averaging, like an idiot, as most of you market timers would say. In 1999 my mutual fund went up 98%. True, a 50% drop needs a 100% gain to make up, but the sheople timers still do not get it that I bought more shares at lower prices as the NAV of my stock mutual fund went down. On the upturn I came out well ahead of the game.
Gold’s tumbling too. I’m going to have to buy another 3 ounces this month.
Yea that’s it keep buying as it goes lower - that will gaurantee that you will continue to lose money. Where do you store this gold? How much does that cost? Have you factored in all of the costs in buying and holding gold?
Buy CEF - closest thing to physical without the overhead. And exposure to silver as well. And its been around a long time doing what it is doing. Just be careful of the premium but it is on the low side right now. At 4% that is competitive to the spread you’d pay for American Eagles or Buffalos. Actually, not a bad time to buy CEF if you’re looking to increase PM exposure.
Do you want to buy some Silver Eagles? I would be happy to sell you some. I have proofs on eBay right now - see seller ID cbronco
Why anybody would add an unneccesary layer to owning precious metals is beyond me?
Just own them outright, stick them in your safe deposit box and relax.
Offhand, I can think of 1/2 a dozen cases, in the past 25 years, where firms offered to “store” your metal for you and eventually flew the coop, absconding with your gold.
We are headed for extraordinary times, be in control.
“Just own them outright, stick them in your safe deposit box and relax.”
Good luck on relaxing, because Uncle Sam (or should I say, Uncle Franklin?) set a very bad precedent back in 1933…
———————————————————————————
The Gold Confiscation Of April 5, 1933
From: President of the United States Franklin Delano Roosevelt
To: The United States Congress
Dated: 5 April, 1933
Presidential Executive Order 6102
Forbidding the Hoarding of Gold Coin, Gold Bullion and Gold Certificates By virtue of the authority vested in me by Section 5(b) of the Act of October 6, 1917, as amended by Section 2 of the Act of March 9, 1933, entitled
An Act to provide relief in the existing national emergency in banking, and for other purposes~’,…
http://www.the-privateer.com/1933-gold-confiscation.html
A few things to consider:
There was no “confiscation” @ the time. Gold was worth $20.67 per Troy Ounce and a $20.00 Gold Coin contained about $19.75 worth of gold, in content. People didn’t have a pot to piss in, as 99% of the banks went belly up, earlier in 1933 and cash just wasn’t around. Imagine a world w/o credit cards, at the time? From what i’ve read from contemporary accounts of the time, this edict meant little, as we’d had a continous run of Gold Coinage from 1795 to 1933, that was the way things were done.
Perhaps it was done in anticipation of our country going down the tubes, back in those dark days of ‘33. Raiding the cookie jar, in a fashion.
To give you an idea of how tied we were to the idea of gold being money, in the California Gold Rush era, many private mints were started, coining Gold Coins that were similar to existing Federal Coinage and after it was disclosed in a San Francisco newspaper in the 1850’s, that these private minters had struck $10.00 Gold coins that “only” had $9.25 worth of gold, in content, the public overdiscounted them, valuing them @ $8.00, which led to many of the gold coins being melted, many of them, ultra rarities, becasue of this, some fetching $100,000 to 500,000.
That’s the sort of fiscal responsibility we lived and breathed back then.
The only precious metal in circulation left to plunder, is the lowly Nickel, which has a composition of 75% Copper and 25% Nickel.
Each Nickel in your pocket or purse, has currently 7 Cents worth of Copper, @ market value. (melting down Nickels sounds like a toxic nightmare…)
Aladisane, I can’t figure out why you deny a gold confiscation? It is in the historical records along with the revaluation to $35 immediately after the gold was called in?
As an aside, I wrote to my senator in NH a few years back (Judd Gregg) because I was accumulating gold bullion and was upset about the confiscation issue.
The letter from his office was astounding to me in that it basically referenced two presidential orders/acts that allow for confiscation of ANY private holdings (it acknowledged the gold confiscation as well). The letter essentially told me to pack sand and informed me that the gov’t would do what ever it damn well pleased should the president ever declare a national emergency. So that’s the big hurdle for the gov’t to take any or all of your private belongings that you worked hard to accumulate, deciding that there is now a national emergency and the constitution is irrelevant.
That tells me that the gov’t actually doesn’t concern itself with the concept of private ownership. So those of us with these naive views that the constitution should stand for something other than existing as a feel good document, will have no standing once push comes to shove. The constitution has been rendered meaningless by a raft of Presidential orders and signing statements that were never debated in congress nor exposed for public comment.
That letter is the single most influential reason I’ve moved a substantial amount of wealth offshore and continue to so so.
My safe deposit box is Sequoia National Park.
Hidden away
Somewhere in 400 square miles of backcountry, offtrail.
As secure as Fort Knox.
Better hope nobody discovers it with a metal detector
Aladinsane:
Are you sure it’s still there? Sequoia National Park gets an awful lot of visitors every day, and most people are way too inconsiderate to actually stay on the trail.
I’ve always considered an old shoe to be one of the best hiding places, although I was only hiding contraband from mom.
Buying gold and burying it in the ground…..not THAT is an investment plan!
WAman, I’m ahead of the game on gold. I’ve been buying the shiny metal for several years a few ounces at a time. Ever hear of the phrase “safe deposit box?” You can look it up on Wickipedia and see what it means.
Funny thing is when gold was above $680 a couple weeks ago 3 colleagues of mine expressed an interest in buying it. Where where they when gold was $500 per ounce? I was buying and they thought it was a bad investment! Ha! Now it’s below $640 per ounce and they are probably going to tell me it’s a bad investment! I just laugh and keep buying.
Sure and how much do you rent that for a month?
Safe deposit boxes are free at my bank if you have an account there.
Boxes around here are $35-50 a year. Already have one for important docs, passport, etc. so no extra expense.
Don’t forget that the statist FDR sealed all safe deposit boxes until an IRS agent was there to open it. With the Patriot Act it could be done again in the name of combating money laundering.
Love that rumor.
Prove it isn’t a figment of somebody’s imagination to me, please.
Nowhere in FDR’s 1933 Executive Gold Order, is it stated.
All safe deposit boxes in banks or financial institutions have been sealed… and may only be opened in the presence of an agent of the I.R.S.”
- President F.D. Roosevelt, 1933
The full executive order:
Executive order: By virtue of the authority vested in me by Section 5(B) of The Act of Oct. 6, 1917, as amended by section 2 of the Act of March 9, 1933, in which Congress declared that a serious emergency exists, I as President, do declare that the national emergency still exists; That the continued private hoarding of gold and silver by subjects of the United States poses a grave threat to the peace, equal justice, and well-being of the United States; and that appropriate measures must be taken immediately to protect the interests of our people. ”Therefore, pursuant to the above authority, I hereby proclaim that such gold and silver holdings are prohibited, and that all such coin, bullion or other possessions of gold and silver be tendered within fourteen days to agents of the Government of the United States for compensation at the official price, in the legal tender of the Government. All safe deposit boxes in banks or financial institutions have been sealed, pending action in the due course of the law. All sales or purchases or movements of such gold and silver within the borders of the United States and its territories, and all foreign exchange transactions or movements of such metals across the border are hereby prohibited. ”Your possession of these proscribed metals and/or your maintenance of a safedeposit box to store them is known to the government from bank and insurance records. Therefore, be advised that your vault box must remain sealed, and may only be opened in the presence of an agent of the Internal Revenue Service. ”By lawful Order given this day, the President of the United States.”
Executive Order 6102 says nothing of the sort…
http://www.the-privateer.com/1933-gold-confiscation.html
Look up 131 - Executive Order 6260 on Hoarding and Exporting Gold.
August 28th, 1933
I apologize and when I went to the presidential project at UCSB - the above comments that I had heard for years turned out to be bunk.
Look up the law that put the kabosh to the 1933 law, the December 31st, 1974 edit, that made the ownership of gold in any form, be it a 400 Troy Ounce Bar, or a 1/20th oz China Gold Panda Coin, 100% legal for American Citizens.
Wouldn’t that supercede the 1933 exec order?
Of course the latest law supercedes the earlier one. But the point is that it can be changed again just as it was in 1933.
Hoz,
I bought and sold my 1st coin, at the tender age of 11, and have bought and sold more coins than you can shake a stick at, from Ancient Greek to current day, everything inbetween, a fascinating business that was good to me, financially and as I have a bent for history, a good fit there as well.
Many coin dealers are honest as the day is long, but the bad apples in the business tend to be slimy telemarketers, the ones that spend all that money on talk radio, persuading you to invest in gold…
What’s their catch?
You call up thinking you want to invest in gold and they play the 1933 gold “confiscation” gambit, (all pre 1933 gold coins were allowable to be held from 1933 to 1974) and switch you from buying Krugerrands @ today’s price of around $650, (the buy/sell spread today would be 630/650) into rare coins, many of which have shaky liquidity, collector driven, nothing more and will fare badly, when an economic crisis comes.
Paying $2500.00 for a 1901-S MS 64 $10.00 Liberty Gold Coin with $320.00 worth of gold, in content, is not where you want to be at this place and time.
Furthermore…
The Federal Trade Commission has stated that markups over 39% are egregious on collector coins. So guess who straddles in @ 37% markups, under the edict?
Slimy telemarketers…
Aladinsane - I have no dispute with you on gold! I have a couple of souvenir $2.5 gold pieces (I got one in change as a penny) and some bars. Since few if any of the gold coins were melted down in 1933 and were used to pay US debt in gold coinage at .9657 oz vs gold bullion at 1.000 oz, I would not own any of the 150 million gold coins minted in the US - I am not astute enough an investor to know numismatic value from bullion.
Gold is being sold to meet margin calls in the equity markets. Gold is 100% marginable - 1 day to cash / equities are 50% - 5days to cash.
Like many, I own gold @ much lower levels and i’m certainly not a seller, anytime in the foreseeable future, and Hoz is correct.
Gold is instant liquidity, what little is held in weak hands will be flushed out for buyers like me, to end up with it, @ around $600 an oz.
I blew out of my stock holdings today, and expect to have the moolah by early next week, to complete the plan.
It’s all going according to Hoyle~
Outta here…
A couple of days of skiing @ Sierra Summit beckons me away~
Got the call from my broker, my stock holdings are no more.
Tommorow is as good a day as any for the market to implode.
It will be Alan Greenspan’s 81st Birthday.
How is gold 100% marginable? Certainly physical cannot be margined, and even futures have equity requirements of about 10%.
GOLD = cash! 100% fungible. It is not a stock or US Tbond or Tbill.
The thing that will avert confiscation is the simple fact that gold is no longer currency. It does not even support currency.
There is simply not enough gold floating around to justify confiscation - pretty much at any price. The prior confiscation was intended to ease the final transition from commodity money to fiat money (they were fighting Gresham’s Law). This is no longer a problem, so the gold bugs will be let mostly alone, though I wouldn’t be suprised to see some especially considerate tax treatment on PM transactions…
Paul
dollar cost averaging into the SP500 in 2000 would have you about break even right now if you account for dividends
Dba, what about dollar cost averaging into the SP500 since 1990? That’s what I did. Ahead of the game.
what if it goes down by 50% or so like some people here think? what is your return then?
there is research out there that says you can invest for 6 months out of the year, keep the money in cash the rest of the time and make a lot more with less risk than by dollar cost averaging. there is also research that suggests that large caps will soon fizzle out and small caps will take over in the next decade
“what if it goes down by 50% or so like some people here think?”
You can “what if” away any gains in *any* asset class.
I was plenty short at the close Friday but am going to close out this morning. I think there’s a rally coming soon. If there isn’t, fine, I’m wrong.
Txchick:
I really liked the articles you posted over the weekend.
The part that really got my attention was when it discussed trading in a high volatility market: the idea that in high volatility you don’t have to worry about “missing out” because the market is just yo-yoing up and down again, so you likely have a chance to make your trade in teh near future if you “miss” your chance the first time.
Helped to settle me a bit.
thanks
HIC
Right. This sucker’s going down but not straight down. The bull is dead but you get vicious rallies in bear markets.
Remember 1360 S&P. Big support. Don’t discount that.
Chic posts some really good stuff….I usually archive it and retrive later….Just to much material to read along with my regular work day….Thanks for the good info Chic….
You mean a dead cat bounce?
Yeah. Here’s where chart reading, fibonnaci etc. helps you.
I’m selling my puts because I have a year making gain in them already and I am fairly confident I can get them back at a significant discount over the intermediate term.
But I’m a horse trader. You guys need to do what feels right to you.
fibonnaci ? So you obviously realize that fibonnaci is the same thing as an exponential to within a small error, so how do you find that helpful? tia
The yen carry trade is finally imploding. Expect some hedge funds to blow up this week. Risk is back!
“Yen shorts remained near record-highs prior to Thursday’s astounding JPY rally. A battery of margin calls on such positions is likely to trigger further liquidation of carry trades. This could only lead to further drops in other high-flying asset classes, as futures traders scramble to cover losses with their most profitable holdings. One only has to look to gold prices for proof, as they have “inexplicably” dropped over 6 percent despite a pronounced flight to safety throughout global markets.”
Daily FX Mar 5
new century facing a criminal investigation, just heard it on cnbc
i am shocked
this is getting ugly
except ny it’s different here……..
NEW is the first of many.
Too bad they can’t find a way to hold all these RE shills running around here in WPB responsible. The “priced out forever” talk was so darn pervasive, and also SO wrong… Seems like someone should be liable (we live in the US, somebody else is always at fault)..
New Century’s Fate May Depend on Funding From Securities Firms
By Bradley Keoun and Christine Harper
March 5 (Bloomberg) — The fate of New Century Financial Corp. may rest with securities firms including Morgan Stanley and UBS AG that once staked the U.S. mortgage company to more than $17 billion and bought its loans by the thousands.
http://bloomberg.com/apps/news?pid=20601087&sid=ah6wzMWHC5ig&refer=home
Down 57% in pre market so far…
Ha ha ha.
Oops. Make that 62%.
may be txchick can tell us if CFC puts is a good idea here….will not touch wellsfargo though.
I just don’t care enuf about that group to follow it. I keep saying this, the froth is in technology, REITS and utilities. Suprime lenders are so 2006, lol
That said, I dumped my 13 year old CFC stock a week ago last Friday. Wouldn’t buy it, that’s for sure but I like other things better for shorts.
“Suprime lenders are so 2006″
Since they are crashing in 2007, they must be “very 2007″…
Oh, how about Hanson Natural (HANS) up about 10,000 % in 2 years! They have received a notice of delisting from NASDAQ in Jan ‘07. If I could short this one ….
http://finance.yahoo.com/q/bc?t=my&s=HANS&l=on&z=m&q=l&c=hov
Oh come on TX if you liked CFC at $45 you have to love it at $33.
Hansen was one of those short-killers I talked about when making the comment that if you can’t short it (broker won’t let you) you don’t want to short it. There’s so many of them. That stun gun company, Nvidia, CROX, TTWO, damn, those are just the ones I can think of right this second.
HANS has not been up 10,000% in 2 years - that chart starts in 1996.
3.5 Bil market cap a year or two ago…..400 mil today….
Talking about NEW…..
Fun in Gainesville!
La Mancha Apartments went condo last year. They were some of the cheapest little apts in Gainesville, and rather close to campus. Very cheesy. They are located on SW 8th Avenue. I have been watching them on Foreclosure.com.
So far: Two in foreclosure.
Six in preforeclosure.
You can tell when they hit foreclosure.com because the Zestimate for the entire property has been steadily dropping. Hehehe.
They marketed the condos to the residents. Good one… You’ve got people who could only pony up $300/mo in rent on teaser ARMs Neg I/O what-have-you… $200K 100% mtg for $300/mo? Hahahahah!
The first foreclosures are probably the clever ones who first payment defaulted. Suckers. (The bank.)
I should also mention that there were condos built right on 13th street across from campus which have won a county beautification award and were offered preconstruction for $185-194K. So no way in hell those La Mancha units were worth $200K to begin with. Not in our market.
What’s “preforeclosure”? Is that like preconstruction, where you wait in line at 4am and put down a deposit in order to be foreclosed on? Or do you have to write some sort of blog about your jamba juice habit and your penchant for sweet deals while taking it in the pants?
Did you see the article over the weekend about how cool it is for everyone to ditch their Aerons and use big blue stability balls for office chairs now?
No thanks. But I did buy this video to look at this guy
Yummy!
http://www.amazon.com/Swiss-Ball-Abs/dp/B0001A0EPK
I was using a stability ball for a while as my computer chair. It was good for my back but I started having pains in my calves and ankles. I went back to a regular office chair.
We have Aerons at my new job. Real Herman Millers, not the $100 knockoffs you get at Office Depot. My ass is quite comfy.
I have one too. Dell bought it for me in 1998
I have an Aeron too. Actually, I have a whole room full of them. On the GSA schedule, they’re not much more than a standard, high-quality office chair.
Man, if there is one chair that is absolutely worth the price premium, it is the aeron. I used to work at a firm that had nothign but aerons — in the offices, the secretaries’ cubicles, the conference rooms, etc. Those really are the most comfortable chairs ever made.
I have been looking for a cheap used aeron for years but have yet to encounter one. The resale market on ebay is surprisingly strong, and I have yet to find one at one of those office furniture liquidators.
These are nice too and a little less expensive.
http://www.humanscale.com/products/freedom_index.cfm
I can’t believe La Mancha went condo! Those apts were such crap. I graduated in 95 and have only been back a handful of times since. La Mancha was one of the worst apt buildings in the early 90’s, I cant imagine 10 years of parties have helped their look. Who was buying those condo’s? Certainly not students? I was lucky enough that my student loan checks covered my pitiful rent, no way I could have bought a condo!
Actually, the worst apts by far are College Manor, but they’re not for sale.
I’m pretty sure the usual assortment of drunks, crooks, and ne’erdowells armed with liar loans bought those units.
From today’s Boston Globe:
Overdue mortgages linked to risky loans (Well duh!)
…but skyrocketing foreclosures will have no impact on Massachusetts economy or housing market; party on, dude.
An explosion in overdue mortgages tailored to home buyers with less-than-sterling credit has driven foreclosure filings to record highs in Massachusetts…
…Tammy Amado obtained two mortgages to buy her Dorchester two-family home in January 2005 from Fremont Investment & Loan, a subsidiary of California-based Fremont General Corp. and one of the largest subprime lenders in Massachusetts. Despite having a good job as an apartment manager, she fell behind on her payments. “I’m trying the best that I can,” said Amado, who found a second job last year as a tax specialist…
…A Jan. 6 letter from the company servicing her mortgage said the rate on her mortgage was scheduled to increase March 1 to 9.4 percent, pushing her payment up $755…
…Michael Fratantoni, chief economist for the Mortgage Bankers Association in Washington, said the foreclosure problem hasn’t reached a crisis and will not affect the national housing market or the economy.
http://tinyurl.com/2kqy3k
This is so typical of The Boston Globe and Kimberly Blanton. Get me all jazzed up that maybe they finally “get it” and then they trot out the REIC clown to make a ridiculously dismissive Baghdad Bob statement.
Massachusetts is totally hosed. BTW, I’ll have to have Tammy do my taxes next year. She sounds like a brilliant financial mind.
Boston Globe sucks Chobee Hoy’s tits.
Oh, and apt manager? Wasn’t that going the way of the dinosaur with 100% home ownership? Hahahaha. Bet she’s bitter about all those renters in better financial shape than she is.
NY Times has this article on the ostentatious wealth of the OC’s subprime mortgage brokers, now threatened:
http://www.nytimes.com/2007/03/05/business/05lender.html?ref=business
When the novels are written and movies are made about this era, there will be a debate about whether some were victims or victimizers. The borrowers — living beyond their means, or tricked by fast talking salesmen into mortgages they didn’t understand? The MBS holders and underwriters — victims of fraud, or chasing yield on the assumption that after the foreclosure rising housing prices would make them whole?
These guys, however, are guaranteed the black hats.
Just saw some hack from Loomis on CNBC. The Black Knight from MP:SFTHG would be jealous of the level of denial this guy has. “Fundementals are great, and yes I do normally drive my car looking out the back window.” Why is it so hard to accept that markets go up and markets go down (sometimes alot)? Didn’t the dot com thing happen less than 10 years ago? Why is that the anomaly? It has happened just about every decade since the market was formalized.
BTW, here in the great white north (MN), there were a ton of open houses this weekend despite the snow storm earlier in the week. Sucks to be a “spring bounce” seller when there is 2 feet of snow covering everything.
‘Tis merely a flesh wound!
“I am the RE Industry, I am invincible!!!!”
Note the link on Morningstar “How to cope with Financial Anxiety”
Pre Market -
NEW -60%
NFI -22%
FMT -32%
DRL - -11%
How long until / does anyone think the contagion will spread to CFC, WFC, WM, etc. and does anyone think that the balance sheets for FNM and FRE are any better? Does anyone think FNM and FRE will take hits?
LEND - -20%
Also per CNBC - no bids in the ABX market!
Now datz funny@!
What does that mean - no more subprime loans?
Mortgage Meltdown!
I love the smell of a mortgage meltdown in the morning!
From the NY Times, the sufferings of the OC’s formerly ostentatiously wealthy subprime brokers.
http://www.nytimes.com/2007/03/05/business/05lender.html?ref=business
“We made so much money you couldn’t believe it. And you didn’t have to do anything. You just had to show up.”
Well you know that could not last much longer and thats why the guys at the top sold their stock!
For some fun - go the NEW board at YHOO and read what all the current employees are saying. LMAO!
Good luck suckers. Think about all the people you screwed with those toxic mortgages!
How do you get to the NEW board?
Go to yahoo, choose the finance link, enter new for quote lookup and on the quote page is the message board link.
http://messages.finance.yahoo.com/mb/NEW
Thanks alot….
Great find! That’s komedy.
NEW on the verge of a BK filing and NOTHING in the OC Register?
“New Century is more likely to enter the death spiral we had feared, as filing delays, financial difficulties, likely restricted liquidity and regulatory/criminal investigations could conspire to limit its options outside of bankruptcy,” Merrill Lynch analysts wrote early Monday.
http://www.marketwatch.com/news/story/new-century-said-facing-bankruptcy/story.aspx?guid=%7BCC3F81FC%2D1BDE%2D4410%2D8B0D%2D0E4210E07C52%7D
It’s absolutely unfathomable to me that a company that was in the black by $2B and showing solid quarterly profits just 5 months ago is facing the possibily of bankruptcy. That’s got to be a record for speed of a relatively large company’s downfall.
Expect to see more of this.
From Jan 4
“The ranks of companies whose debt is rated below investment grade, known as junk, are swelling, a sign of increased borrowing and a growing appetite for risk by investors seeking high returns.
Back in 1980, the debt of slightly less than a third of U.S. industrial corporations tracked by Standard & Poor’s was rated junk. By the late 1980s, more than half were, and now 71 percent of the pie fits into that category, a record according to a new S&P report….”
Wall Street journal
http://tinyurl.com/3xpl9e
From Ebay, you can be the lucky bidder on this gem…Jesus conveys w/house. Description is entertaining; if you can follow the rambling comments.
http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=140082165645
Thanks.
That was really weird. I highly recommend that other Ben’s Bloggers click on the link. I want to e-mail the seller to try to figure out what her “terms” are supposed to mean, but I don’t feel like signing in. If somebody else is really bored and wants to ask her, let the rest of us know. I might bid a dollar, but I’m afraid she’s got some strange way of making me pay $1,000 just to bid.
The rambling about the apparitions, her bandaged finger, her mother’s kidney stone, God’s wrath (in the Q & A section), etc. had me crying in laughter.
Bear Stearns upgrades NEW on 3/1/07 at a price of $15 or so and now says it is only worth $8-9? WTF is going on here?
Someone’s sitting in a partner’s office getting their nutz whacked
Where is the due diligence? What did they do look at a chart and say oh my that’s a screaming buy?
Feh. They’ll cry and say that Reg FD has prevented them from doing “real” due diligence anymore (they can’t call the CFO who’s a golf buddy and get the real skinny). Heaven forbid they actually work the phones and find out what’s really going on.
You have just made one of the two major blunders. The first: never get into a land war in Asia. The second: never take stock advice from an investment bank.
Lehman Cuts Prime Mortgage Lenders on Spillover From Subprime
By Will Edwards
March 5 (Bloomberg) — Lehman Brothers Holdings Inc. reduced its investment rating on U.S. mortgage companies including Countrywide Financial Corp. because a surge in loan defaults is showing evidence of spreading beyond the riskiest credits and the Federal Reserve hasn’t cut borrowing rates.
Lehman analyst Bruce Harting cut his recommendation for the so-called prime lenders to “neutral” from “positive,” and dropped Countrywide, the biggest U.S. mortgage lender, to “equal weight” from “overweight.”
http://bloomberg.com/apps/news?pid=20601087&sid=avwc6MDN.sZo&refer=home
The first cut is the deepest…
Hmmmm…. CNBC says that the subprime meltdown may actually be starting to creep into prime! That couldn’t possibly be accurate! Could it?
liz&smudge
“That couldn’t possibly be accurate! Could it?”
Why not, the only difference was that sub-prime gave out $300,000 loans to people who made $30,000 a year while prime gave out $1,000,000 loans to people who made $100,000 a year, neither could afford the RE they were buying. And without the magic appreciation machine there is no more paper wealth being created in RE to bail them out.
Exactly.
More “fun” for the Prime Mortgage companies: (Bloomberg)
Lehman Cuts Prime Mortgage Lenders on Spillover From Subprime
Lehman Brothers Holdings Inc. reduced its investment rating on U.S. mortgage companies including Countrywide Financial Corp. because a surge in loan defaults is showing evidence of spreading beyond the riskiest credits and the Federal Reserve hasn’t cut borrowing rates.
Lehman analyst Bruce Harting cut his recommendation for the so-called prime lenders to “neutral” from “positive,” and dropped Countrywide, the biggest U.S. mortgage lender, to “equal weight” from “overweight.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=avwc6MDN.sZo&refer=home
Note AMD says they can’t meet revenue guidance.
Semiconductors. The new subprimes.
They really did not think that they could beat INTEL did they?
A recession is likely to hit this industry VERY hard.
You’ll laugh at this but I’m buying right now some networkers. CIEN, JDSU, FFIV. That’s one group that’s been beaten to death. JDSU is under 2 again on a presplit basis.
I meant AMAT, LAM, etc.
I’ll take a look at those, I got some cheap Tellabs earlier in the Fall.
Check out FDRY as well, tons of cash.
S&P filled the gap. Now we’ll get a better idea of the picture for the rest of the day.
A question for some of you experienced investors here. What happens if you short a stock, like NEW or LEND, and the company goes belly up and the shares go to 0? Do you still need to “buy” to cover your short, does it just evaporate from your account leaving you with the money, or what?
No. 2
and btw, for the brave, there was a very decent long side flip in NEW. I didn’t do it but you usually can make something buying these premarket panics and flipping about 20 minutes after the open.
Thanks.
Uh-oh! Could be a crackdown on sign twirlers in Arizona…
http://www.azstarnet.com/business/171953
Miraculous market turnaround…..again. Shorts routed….again. Housing can go to zero–which it might–but fractional reserve wizardry is a nearly perfected, fail safe, ace-in-the-hole. It really is different this time.
Shorts aren’t routed. Shorts made out like bandits last week. Told ya last week, support on S&P 1380 then 1360, option expiration on tap. Got to always keep an eye on those two factors, they run everything.
Shorts aren’t routed. Shorts made out like bandits last week. Told ya last week, support on S&P 1380 then 1360, option expiration on tap.
I know. I was speaking personally. Juggling too much of late. Losing my ass. It’s skinny enough already.
We’ll try a little S&P short here, stop over today’s high, cover ~1370-1368
I think you could have a winner there, txchick.
and we’ll cover at the close today and go long a half position in March index calls. Looking for a rally tomorrow.
I see the ISM services number came in well under expectations. Though that might add fuel to the bearish sentiments. Guess not. Not much data tomorrow outside Jan factory orders. Could rally tomorrow, but I’m ill and on the sidelines till Thursday. Fridays’ job numbers could be pivotal in swinging the pendulum.
I am too actually. Have a horrendous ear infection. Can barely hear anything.
Thanks PPT. Without your help there’d be a epidemic of this:
this:
DON\”T!!!!!!!!!!!!!!
Maybe the Fed will end up “pushing on a string” Prime loans will turn out to be not so “prime”. If you don’t have the income, you can’t borrow more! HELOC’s are coming to an end, the house ATM is about to close. The US consumer is 70% of the economy +/-.
http://www.bloomberg.com/apps/news?pid=20601103&sid=avwc6MDN.sZo&refer=news
I’ll pay a decent finder’s fee to anyone in Portland who can find me a Pearl District condo at 40-50% off
What’s up with your love affair with The Pearl? Do you live in Portland or do you just want to move there? I grew up in Portland and frankly there are a lot better neighborhoods in the city than the P-District.
I love those lofts and condos.
Maybe by october.
the credit crunch has cheated PDX out of the ‘normal’ bust phase, like Phoenix and Florida saw last year. Price collapse here will catch up with the leading bubble markets in 6 months.
USA Today has an article on the impact of the new lending guidelines on the sub-prime market, and the problems associated with ARM resets. There’s little in the article that will be news to regular readers of this blog, but for an MSM piece it gives a fair overview of the various facets of the unfolding disaster. Even Casey Serin gets a mention!
Homeowners stuck
http://www.bloomberg.com/apps/news?pid=20601109&sid=aVeikRh0nLsc&refer=home
Everybody still Bullish even on homebuilders.
http://biz.yahoo.com/ap/070305/subprime_lenders_fallout.html?.v=3
Fallout from sub prime lending, downward sprial
Question for you all:
How common is it for a bank who foreclosed on a property to sell it for less than the amount they foreclosed on?
It was routine in the 89-94 time period when the FDIC was liquidating. That’ll happen, just not yet.
It is happening right now in metro Phoenix in many instances. But those houses are not worth buying, even at prices many thousands below the amount of the defaulted loans. As the number of those lender-owned houses escalates dramatically, prices will inevitably drop much further.
Is the PPT losing its heft?
http://www.marketwatch.com/tools/marketsummary/
LOL. I’ll be long by the close. Feeling very dirty
DJIA = little engine that couldn’t?
THE GURU’S CORNER
Sentimentally speaking
Commentary: Stocks are headed for a fall
By Irwin Yamamoto, The Yamamoto Forecast
Last Update: 10:54 AM ET Feb 21, 2007
KAHULUI, Hawaii (YF) — Market wise, equities are in the midst of the second-longest rally since 1929. Yet there are some serious warning signs — especially sentiment
The odds are high that the current advance won’t be able to continue. Stocks remain stretched and trade above past market multiples. What goes up must come down.
On the economic front, we are overdue for a recession. The last one occurred in 2000 and 2001. Business expansions don’t last forever. The boom-and-bust pattern of an economic cycle has not been repealed.
An inverted yield curve almost always points to a deep business slowdown. The Fed publicly claims there’s a 40% chance of a recession. However, a model of the Federal Reserve Bank of New York is essentially forecasting an outright recession.
http://www.marketwatch.com/news/story/stocks-headed-fall/story.aspx?guid=%7BFC8B8B15%2D0C5E%2D4E16%2D9233%2D5597E825E19F%7D
meh. where was this dude two weeks ago
CNN Subprime lenders in “death spiral” down 25-20% for the day.
The only difference between a “prime” and subprime loan is the credit score.period.and with a NINA loan,(no income,no assets) you paid a half point premium,and could get $1m,100%, non owner occupant financing with no problem a year ago.”prime” is,and has been a sick joke for years.
the investment rate went negative, can someone elaborate?
What do you mean? What investment rate?
Ruth’s Chris To Replace New Century Fincl In S&P SmallCap
DOW JONES NEWSWIRES
March 5, 2007 5:28 p.m.
DOW JONES NEWSWIRES
Ruth’s Chris Steak House Inc. (RUTH), a New Orleans upscale steak house operator, will replace New Century Financial Corp. (NEW) in the S&P SmallCap 600 index March 7.
On Monday, the market capitalization of Irvine, Calif., mortgage real estate investment trust New Century fell to about $253 million, below the minimum of $300 million, S&P said.
That was quick. I guess the folks at S&P don’t believe that NEW’s market cap will go back above $300 million anytime soon.
I just made a reference to Ben’s Blog on mnot’s blog (http://www.mnot.net/blog/2005/03/05/house). There aren’t a ton of postings on the bubble topic there, which makes it really easy to see the progression of public opinion. I think we have officially passed the denial stage.
Fed governor says market discipline working well
By Krishna Guha in Washington
Published: March 5 2007 21:24 | Last updated: March 5 2007 21:24
Financial markets are “functioning well amid higher volatility” while “overall liquidity does not appear to be in short supply”, the Federal Reserve governor Kevin Warsh said on Monday.
Mr Warsh, who acts informally as a point of contact between the Washington-based Fed governors and Wall Street, said market discipine “appears to be effective, as investors are reviewing their positions”.
He added: “Solid fundamentals may help to ease any changes in liquidity should they occur.”
His comments suggest the Fed is confident that recent market turmoil will not have drastic consequences, and may even be beneficial in the long run by reminding investors of the need to pay an adequate price for risk.
http://www.ft.com/cms/s/f9f3fab8-cb47-11db-b436-000b5df10621.html
I would like to propose an analogy:
Yen carry trade to US stock market valuations is as subprime loans to US housing market valuations. Too bad the Yen carry trade and subprime lending have basically both died at the same time…
Commodities hit hard as risky assets shed
By Gillian Tett and Kevin Morrison in London and Richard Beales in New York
Published: March 5 2007 19:13 | Last updated: March 5 2007 19:13
The recent volatility in global financial markets hit the commodities sector hard on Monday, as hedge funds and other investors scurried to reduce their risky investments.
Nickel prices tumbled 5 per cent, while copper and zinc fell almost 3 per cent and gold prices traded at levels more than 7 per cent lower than before the start of last week’s market turmoil.
This decline in commodity prices is – like the other recent swing in equity markets – still relatively modest compared with the movements seen in market crises during recent decades.
However, the movements follow a period when markets have been extremely calm – meaning that investors are now being forced to reassess the low volatility strategies.
This repositioning is prompting some unusual price swings and heavy trading flows, particularly in sectors that have been the focus of risk-taking over the past year, such as credit derivatives, emerging markets and commodities.
“I don’t think anything has fundamentally changed for commodity markets. I think it is just a case of investors selling their holdings to pay for losses they may have incurred elsewhere,” said Kevin Norrish, commodities analyst at Barclays Capital.
An adviser to a London-based fund of hedge funds added: “The big theme of the moment is deleveraging and derisking.”
One sign of this process on Monday emerged in the foreign exchange markets, where investors have been reducing their use of the so-called “yen carry trade” – the practice of borrowing cheaply in yen to fund investments in higher-yielding currencies. This on Monday pushed the yen to a three-month high of Y115.16 against the dollar, while it also rose to a peak of Y150.84 against the euro, its highest level since late November.
Meanwhile, the cost of insuring against a rise in the yen against the dollar using derivatives has soared by 26 per cent since last Tuesday to its highest level since August. This could prompt even more unwinding of the carry trade in the coming days.
http://www.ft.com/cms/s/70ba98d8-cb4c-11db-b436-000b5df10621.html