Bits Bucket And Craigslist Finds For March 12, 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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sorry for the double post
Called the Realtor about the house for sale next door and she said that it is a Short sale priced @ 520,000, which is 100,000 less than price paid in 05 and it has been on the market for 30 days with no offers.
Where you at? TIA
Ventura
Krills,
Does the general feel up there match that substantial drop (and under let’s just say adverse conditions) you shared with us? I’ve seen median and average #’s dropping (LA Times showed a -14% and -6 % in the 93003 and 93004 zips) but wonder if the ‘on the ground’ feel/attitude is worse…seems like it based on your example above!
Yes it is getting much worse. My street alone has 2 houses that have had For Rent signs up for over 3 months and in the neighborhood here around East Ventura there are For Sale signs everywhere, and the homes that do sell are 15-20% below what they were 2005…Plus, so many people around here have refied or Heloc’d, that it looks like it will only get worse.
It’s wierd in WeHo (90048, my zip). We’ve had some properties go for 1.7 / 1.49 recently, but other ones sitting, sitting, sitting. There is an awesome 2 story for 1.69 that has been sitting for months, and now has the good old for rent sign next to the for sale.
What’s the difference? Only the staged homes are selling. Dumbasses are still fooled by staged homes. It makes sense right - if the house has $20k worth of furniture, it’s “worth” an extra $500k.
30 Days??????
Across flyoever land 30 days is just getting warmed up…..I’m tracking a few houses that haven’t received offers in 6 months. Then again, in CA, where sheeple bid up houses, without inspections, in hours…..30 days might seem like a lifetime.
Could Sir Greenspam be wrong?
http://www.bloomberg.com/apps/news?pid=20601103&sid=apUPkopzkcV8&refer=us
When has he been right?
Picked a good time to retire.
Schiff… Sorry if this has already been posted.
http://www.gold-eagle.com/editorials_05/schiff030907.html
It has, but it is still good to read again.
In other words, the housing bubble “game” is over. Just like the “dot.bomb” bubble was over. When the “dot.bomb” game ended, the new game was the housing bubble. Now that this is more or less officially over, what’s the new game? There is going to be one, that’s for sure. But what’s it going to be?
Will there be another bubble to inflate? Or can the bears finally take the stage?
Stem Cell Research
We’re out of the technology (dot.bomb), and housing bubble (house.atm), so now we need to move to entirely different field.
Stem Cell Research is the perfect guinea pig.
Biotech. Interesting.
I can’t see it happening in biotech. Products take 8-10 yrs to develop for most biotechs (aside from companies like Invitrogen which provide research tools). Besides, can we really afford to be spending billions of dollars on cancer drugs that do nothing more than extend lifespan by 6 months. I think we’ed be much beter off with a bubble in the alternate energy sector. Gov’t should kill NASAs budget and divert money to alternate energy projects to get it started.
One idea would be a massive project to fill up the Mojave desert with solar panels…
The space program is still useful, very much so, in this administration…
Got some bad news regarding the lies and distortions, you utter, on a daily basis?
Throwing out the “We are going back to the moon” or “We are going to Mars in 2020″ keeps the dogs off your back, for a day or 2.
Which is why I don’t understand why there’s no impeachment. What a spectacle for the masses! Not to mention, the Dems couldn’t BUY that kind of TV exposure.
Come on guys and gals the biotech is all being done overseas. We will be paying licensing fees to Korea, China, Japan, Germany et al. when significant discoveries are made.
Here’s a link to a rather amazing New Yorker article by Michael Specter, from last year:
http://www.michaelspecter.com/ny/2006/2006_03_13_bush.html
It tells in vivid detail, how the bush administration has done it’s best to replace scientists with christians, of dubious ability.
Money quote:
“The next morning, I went to the Boston University School of Public Health to talk with Gerald T. Keusch, who is the associate dean for global health. From 1998 to the end of 2003, he served at the N.I.H. as the director of the Fogarty Center, which concentrates on international health. In the two years after he took the job, Keusch had seven openings on his advisory board and he nominated seven people to fill them. “In each case, they cleared N.I.H. in three weeks and went to the Secretary of Health and Human Services to be formally appointed,” Keusch recalled. “Within another month, Donna Shalala had signed all seven letters. No questions. They were the people I wanted, and, as director, it was my responsibility to pick them.” When George Bush took office, the Fogarty board had four new openings. Normally, three appointments to the board of twelve went to public figures and the rest to experts in various fields of international public health. “I asked for Dikembe Mutombo”—the N.B.A. basketball star—”as my public figure,” Keusch said. “He has a foundation in Zaire and a real sense of the issues around H.I.V. I also wanted to appoint Torsten Wiesel”—a former president of Rockefeller University, who, in 1981, received the Nobel Prize in Medicine—”and Geeta Rao Gupta, who runs the International Center for Research on Women, and has worked extensively on issues involving abortion.” His other nominee was Jane Menken, a highly regarded demographer who is now at the University of Colorado. She specializes in fertility, and has often worked in Bangladesh, which until recently had one of the highest birth rates in the world. “For weeks, and then months, I heard nothing from the department about these appointments,” Keusch said. “I thought they would simply be routine. Finally, after eight months, I got a message saying they would accept Dikembe but were rejecting the three others. No explanation. No note. Nothing.” Keusch was incensed, and he insisted on meeting with the people at H.H.S. who handled the decisions.
“I was told that Torsten was rejected because he has signed open letters that were critical of the President,” Keusch went on. “Geeta was rejected because her organization is not opposed to abortion—which, we should not forget, is legal in the United States. And Jane Menken sat on the board of the Alan Guttmacher Institute”—which has always emphasized family planning and endorses the use of condoms. “That is literally what was said to me. Then I received a bunch of C.V.s in the mail. One of them was from a professor emeritus of economics at an obscure college in California that I had never heard of. His entire publication record consisted of pieces in the Christian Science Monitor and a Catholic monthly that took politically charged positions. That was typical of the calibre: there was nothing scientific, nothing peer-reviewed.” Keusch spent the next three years at war with the H.H.S. He had to nominate twenty-six people to find seven whom the department would accept. “The Administration simply made it impossible for me to do the job I was hired for. In the end, I left and they won.”
Read it and weep.
We’ve traded in knowhow for nothing.
Alt fuels. Lots of boondoggle possibilities in all the ethanol/biodiesel/wind turbine/battery research. Some might work out, most won’t.
The new bubble will be the GOLD bubble.
The new bubble will be the GOLD bubble.
Why?
The old bubble, real estate, was bubbly because anybody that could fog a mirror with their baited breath, could get a loan.
I just can’t see anybody that is holding gold, suddenly deciding to sell it to investors for zero down, instant delivery, on bad credit.
If it ever reaches that point, i’ll have to become an ex-goldbug.
Leveraged purchasing of commodities. Sounds odd, like a bear taking a stroll in Pamplona.
I’ve made this case over and over again at Ben’s M&M blog. However, iTulip’s Janszen probably does it better in a chapter of “America’s Bubble Economy: Profit When It Pops”.
I think we’re out of soap.
Vaseline is running low, too.
All of New Century’s lenders have or plan to halt financing
time for a new logo…
stock down 41% premarket
plus some hussman, fleck etc.
http://immobilienblasen.blogspot.com/
Correction, make that 56.07% ! NEW’s lenders have cut off funding
i apologize….
I would be suprised if any of the “Big Boys” on Wall Street would wanna eat that roadkill now.
Ketchup and Wine only get you so far.
Our local paper headlines are today that building permits have dropped 47% In Jan…and our area never even was much involved in the real e. bubble..upstate s.c..wow.
That’s good news for s.c. Means you won’t be getting as many halfback Floridians trying to escape the bubble.
Halliburton moving corporate headquarters to Dubai. On the face of it, makes sense, given the business they are in (oil field services, etc.). So long, Houston!
There’s also the tax avoidance issue. Politicians are gonna raise a big stink about this, at least until the KBR spinoff is completed.
Yep. Considering the amount of work that KBR does for the Pentagon, the national security implications DWARF those of the Dubai Ports World deal.
So much for running on the national security platform and waving the war flag. For God sakes what hypocrites they are.
The first thing that will happen is that KBR will have to go through a NID - National Interest Determination. That is a bear of a process that takes months and months.
I personally hope they decide to bar them from future work. Moving to Dubai is just foul
So much for the theory that ‘globalisation is wonderful; we get to outsource the grunt work and keep the high-end-high-salary jobs’.
There is such hatred for Halliburton among the Left that they were driven from the US. The politicians would attack them after ‘08 anyway. Any corp. that does a lot of int’l business should move to Dubai or Hong Kong, etc. Altria should have done it when they were Philip Morris and not paid any lawsuits.
Americans are cutting off their nose to spite their face, just like when gov’t officials harass foreign tourists who want to visit.
Big tall corporate building in Dubai? …easier target for the oppressed saudi’s then in the US, let’em move…maybe VP Dick will get a consultant office in the top floor.
Sorry - I call bull on this. I am a conservative kind of guy and I have been of the opinion (until this day) that Haliburton is a company that is doing a job - frequently one that they are the only ones who have the skill to complete.
But moving to Dubai? - bad form all around. I would predict this is going to be very bad for their business.
Oh, and they were no more driven from this country than anyone else. They percieve a financial gain by doing this so they are taking it. They are failing to understand the loss of good will and how much that will impact future contracts.
sigalarm,
LET THEM STARVE.
Halliburton clearly abused its position in the Iraq war and we have to pay for the abuse. By changing corporate headquarters location it may lose some of its US contracts, but reinvent itself as a middle east ally.
“…Cheney was Halliburton’s chief executive from 1995-2000 and the Bush administration has been accused of favoring the conglomerate with lucrative no-bid contracts in
Iraq.
Federal investigators last month alleged Halliburton was responsible for $2.7 billion of the $10 billion in contractor waste and overcharging in Iraq….”
Yahoo news
http://tinyurl.com/2b4k3g
Are you a foreign visitor to our country?
We now require a head shot and your right and left index fingerprints, upon entry.
Curiously, just 8 digits away from how we treat criminals.
No wonder our share of the lucrative world travel market has dropped from 9% to 6%, the past 6 years?
It is even worse now if you try to leave the country. Passport to sail over to Canada? A passport to go shopping in Reynosa? Possible fences to keep people out or to keep us in?
My thoughts exactly, Hoz…
Hated for Haliburton?…how about 3100 dead Americans and 600,000 Iraqi’s on Haliburton’s Blood Stained Hands. Nah, these are the goods guys.
Does any one else see this as the rats deserting the ship?
Many Americans cannot fathom that power is shifting away from them. It is a good business move for HAL, most likely, and they don’t care about the loss of good will from the US; they value the good will of others more.
Another sign the evil empire is coming to an end.
They’ve got good will from the US alright - 150,000 strong and growing should guarantee them all the protection (and opportunity) they need in their new home.
Mortgage news all over the place this AM.
WSJ front page, bold type on New Century. Among the amusing aspects of the article — brokers partying like it’s 1999 as the money rolls in. Someone should have told those guys there were robotically repeating the same behaviors of similar people in similar situations since the dawn of time. The Penn Square parties described in the book Funny Money and the druken revels of the “greed is good” 1980s in New York come to mind.
A massive article in a later section explains that a house is really just a place to live, not an investment, and you should not buy more than you need, or do remodeling for investment rather than living purposes, or live off cash our refinancing — although “it’s probably too late for many homeowners to hear this.” Actually, they could have heard the same thing in the early 1990s lol.
An editorial warns against throwing out the subprime baby with the bathwater through Sarbanes-Oxley type restrictions.\
And on the subway, I read over someone’s shoulder that the subprime meltdown is affecting internet ad revenues. http://www.nypost.com/seven/03122007/business/loan_rangers_business_holly_m__sanders.htm I guess we’ll be getting less “free money” spam and more porn span soon. This site, of course, can get by on ads for credit counseling and bankruptcy lawyers.
The sooner the dancing silhouette guys and girls go away, the better.
I couldnt agree more.
Me three! I LOATHE that ad!
I think the WSJ is trying to deflate the housing bubble all by themselves!
That paper is starting to read like the HBB every day. Not that I mind at all, just suprising how much news is ripping out these days. And how the MSM is really starting to cover this big time.
“And how the MSM is really starting to cover this big time.”
It’s over, folks. The housing bubble has finally popped, because the mass of people only believe it when the MSM touts it. The race to the bottom is on. RIP, housing bubble. Tombstone Territory.
“It’s over, folks. The housing bubble has finally popped”
You’d never know it based on what sounds to me like a drug induced dialect spoken by the deluded masses here in NY. I had a guy (you’re average putz) say to me last week, “my house has gone up on value 50k/yr over the last 4-5 years”. I said to him, “watch in go down in value 50k/yr over the next 6″. His canned response (typical) was “no, it won’t go down, it will just plateau and then keep going up”.
riiiiiiight….
Kane, it’s just going to take people a while to catch on. The more they hear it, the more they believe it. I had a post over the weekend about looking up my old property that I sold at the peak of the bubble. I nearly fainted when I saw what the county property appraiser had valued it. Totally unreal, but for the appraiser, a way of getting more tax revenue. So, the current owner might say “My house is worth X amount”, but the real worth is only what someone will pay for it.
Palmetto, The StupidTalk I hear is just about the wonders and benefits of RE. Co-mingled with the DumbDialect of RE is the feel good hopes pinned on planned buildouts of commercial interests in areas that have known only a devastated economy. Upstate NY has been a post-industrial wasteland since the late 70’s. Literally tens of thousands of jobs evaporated over the years. There are a few plans on the drawingboard that will buildout some light industrial sites that amount to maybe 1000 jobs yet the way everyone talks, you’d think every Dow30 company will be striking the match here. It’s sad in that everyone here views others as millionares a’la “the boomers are coming”.
Correction: The StupidTalk I hear is NOT just about the wonders and benefits of RE.
I don’t know, Kane, I heard something interesting about upstate NY, maybe it was even here on this board, about people quietly buying up small sections of farmland for a return to small, local farms. If the sh*t truly hits the fan, might not be a bad idea and upstate NY would be ahead of the curve. I know the area has been depressed for a very long time, but in tough times, a few acres of land in a place where the masses aren’t is not a bad idea.
What you heard is a bit conspiritorial-like and the source of the rumor is directly from the local REIC. There is so much worthless dirt here and it’s been traded like indian beads for years. The owners of the land are merely bagholders floating the tax base for the local govts. Dumb imports tend to get raped the worst. Without understanding the fundamentals of the market here, they grossly overpay for a postage stamp 5 acre lot, hang no trespassing signs all over the place, get raped on the taxes over the following 5 years and then the same lot shows up on the market soon after… Most the time at half the price they paid for it.
A massive article in a later section explains that a house is really just a place to live, not an investment, and you should not buy more than you need…
Well, duh.
…or do remodeling for investment rather than living purposes.
This is the one that always gets me. I still cannot believe that, after living in their home for 25 years or so, my parents are finally installing central air…but only because they think it’ll help the house sell better.
They are probably correct - most people would not even look at a house if it did not have central air. Unless of course it is Alaska.
It wouldn’t be on the top of my list. How hard is it to get through a few months of heat without central air? Please. Spoiled nation.
Wasn’t hard to get through it when I was a pup, but now in Florida, I must confess life would be miserable during the summer without central or some kind of AC. Of course, we could go nomadic like the Indians of old.
FL is vastly different than Philadelphia, PA. Were the house in FL - or in any mostly-warm-weather-climate, it’d be a no-brainer.
I guess you don’t live in the great Northwest.
Not sure if it was posted but in yesterday’s ny post business section there was an article on the housing bubble and how of course ny is not implicated in the mess
How sad for such a nice (NEW) company to undergo such a rapid race to oblivion. I love the anecdotes interlaced into the WSJ front page story:
‘Ruthie Hillery was struggling to make the $952 monthly mortgage payment for her three-bedroom home in Pittsburg, Calif., last summer when a mortgage broker called. The broker persuaded the 70-year-old Ms. Hillery to refinance into a “senior citizen’s” loan from New Century Financial Corp. that she thought would eliminate the need to make any payments for several years, according to her lawyer.
Instead, the $336,000 adjustable-rate loan started out with payments of $2,200 a month, more than double her income. In December, Ms. Hillery received notice that new Century intended to foreclose on the property. Then, earlier this month, after a formal demand by the lawyer, New Century agreed to refund all its fees and cancel the loan once Ms. Hillery gets refinancing elsewhere.’
Gee, if that telemarketing mortgage broker had called my mother, she would have given him (or her) an earful! And, yes, my mother is indeed a senior citizen.
“New Century agreed to refund all its fees and cancel the loan once Ms. Hillery gets refinancing elsewhere.’”
I doubt that with the credit history she will be able to refinance. A CYA from NEW
i have been watching house prices in the norhtern virginia area since last summer and am now for the first time starting to see zillow values much less than asking prices. i know zillow is not reliable but i figure its more reliable than an FB’s asking price.
i started noticing it the past couple weeks or so. also inventory is rising in fairfax county.
I’m in 22151 and all the low price stuff has turned over at 05 prices.
13% off peak
Zillow has caught up here
I have noticed the same thing. A few houses have dropped enough that the owner will only walk away with 150K for three years of owning.
Loudoun County foreclosures continue to rise, slowly. The REO listing email I get for VA seems to expand by a page per week now.
Been keeping track of Loudoun on Foreclosure.com:
10/21/2006 149
10/28/2006 153
11/4/2006 158
11/11/2006 179
11/18/2006 182
11/25/2006 196
12/2/2006 200
12/9/2006 205
12/16/2006 206
12/23/2006 216
12/30/2006 209
1/6/2007 216
1/13/2007 224
1/20/2007 227
1/27/2007 227
2/3/2007 229
2/10/2007 227
2/17/2007 234
2/24/2007 239
3/3/2007 245
3/10/2007 253
I’ve been tracking San Diego foreclosures since 7/3/06:
7/3/2006 415
8/1/2006 555
9/5/2006 619
10/2/2006 743
11/6/2006 1059
12/1/2006 1306
1/8/2007 1288
2/5/2007 1553
3/1/2007 1927
3/12/2007 2444
I also track CraigsList for RE ads with the words “reduced”, “motivated”, “short sale” and “foreclosure”. I’m pleased to say that it looks like the spring selling- (or should that be listing-) season has started.
what about the key word “f$%^ed” ?
As a side note - readers keep in mind that Loudoun as a county has the highest per-household income in the country!
And ALL that income is from stolen tax money from other parts of the US. They’re not called Beltway Bandits for nothing.
Loudoun is a bit out there to be beltway bandits. There are two huge corporate campuses here (Verizon, AOL) and just across the county border lies the Dulles coridor (Dornier, Airbus, BAE, Mobil Oil, EDS, Mars Candy).
Not really…
Like many in the San Francisco Bay Area, Loudon residents have benefitted from being Bubble Riders (first one; then another):
“That accumulation of suburban wealth, local economists said, is a side effect of the enormous flow of federal money into the region through contracts for defense and homeland security work in the five years since the Sept. 11, 2001, attacks, coming after the local technology boom of the 1990s. “When you put that together . . . you have a recipe for heightened prosperity,” said Anirban Basu, an economist at a Baltimore consulting firm.”
From:
“D.C. Suburbs Top List Of Richest Counties
Nationwide Data on Health Coverage Bleak”
By Amy Goldstein and Dan Keating
Washington Post Staff Writers
Wednesday, August 30, 2006; Page A01
http://www.washingtonpost.com/wp-dyn/content/article/2006/08/29/AR2006082901543.html
Sadly, a home came on the market this weekend in my area that I would very much consider at a reasonable price. I zillowed it and found that they have it priced at the upper end of the zillow range. They bought it in 1999 for $110,000. Asking double. Quick poll - how many people on here had their salary double from 1999 - 2007? (Ok, that’s a rhetorical survey.)
Anyway, I think zillow in my area is pretty reliable. But most folk list above its valuation.
zillow is VERY up to date in Portland (OR) area. Within a month of closing the recent sales have been showing up on zillow.
I mostly concur for the areas I track: NE and SE Portland
zillow updatres sales info but not the zestimate accordingly! I just sold in portland for 382k, the effect of the sale on the zestimate of the very same house: lowered from 452k to 449k! That’s right, zillow has recent sale of 382k with a zestimate of 449K on the very same house! And keep in mind there’s only been 1 other sale in the subdivision since last summer, so it’s not like there’s a boatload of other comps keeping the values up.
$1M+ teardowns in Northbrook IL ( a rather RICH burb in the Chicago area) are still sitting from last fall. ~ 5 $1M+ places sold in Jan and there are currently 60+ on the market. I have a hard time understanding why an executive type would want to live next to a plumber when for that that price he could be among peers in Lake Forest :o)
Because you can’t buy a McMansion in Lake Forest anymore for a $1,000,000. Northbrook is the closest to the lake an aspiring can get anymore….
So, what’s everyone’s Final Four?
Option one just reported no more loans higher than 90% CLTV
Does this mean everyone now has to put 10% down or are we talking subprime?
I just stumbled across three Option One loans which closed in the last 15 days. 100% LTV, 80/20 all with heavy cash back incentives from the builder. Homes in the $600-700K range. They will be worth $450K max in a couple of years. The homes were bought by investors from out of town. They used owner occupied financing but are already trying to rent them. They will get tired of the $3,000/mon negative cash flow about the time the market hits bottom. It is just amazing how many gullable people are out there when they get $50,000 cash back at close of escrow. They never stop to ask “Why would the builder give me this money to buy his house?”
AAPL
CSCO
SGP
XBD
ha ha
If the subject is the final four companies left after the housing collapse, I’ll give you AAPL and SGP, but I’ll take MO and XOM instead.
XOM is a truly odious company. They used to have their annual shareholder meetings across the street from my office. They were a circus.
If they are smart, they should join Halliburton in Dubai. An “excess profits tax” is something from Kafka or Marx.
can’t find XBD. What is it?
Broker dealer index.
Are we talking NCAA or last remaining mortgage lenders?
Florida, Georgetown,Ohio st,Kansas. Haven’t filled out a bracket yet so just tossing this out! Not into NCAA tournament bracketology this year as i do not think my workplace is doing a pool.
Kentucky,Michigan State, Louisville and Oregon
Oregon, Kansas, Texas, Texas, A&M
UCLA! UCLA!
What?
They can’t even beat Cal.
“LONDON (MarketWatch) — U.S. stock futures turned mixed Monday, as positive sentiment on the back of merger activity, such as Schering-Plough’s $14.4 billion purchase of an overseas rival, gave way to increased concerns over the subprime mortgage market after New Century Financial said access to credit was drying up.”
http://www.marketwatch.com/news/story/us-stock-futures-up-rebound/story.aspx?guid=%7B457D44B1%2D286D%2D4AD9%2D91DC%2DC18A43F95B2A%7D
Is the economy on drugs?
“It’s the lure of easy money, it’s got a very strong appeal” The drug the market is addicted to is easy money.
Interesting we had a Florida REIC analyst/pundit visit the Florida thread over the weekend. I don’t know how many people caught that. The guy is frequently quoted in newspaper articles on the Florida RE market that Ben posts. He’s usually more of a voice of reason, not one of the happy talkers. Although he had a bit of an ax to grind regarding the Florida tax issue (on behalf of his clients), I do have to give the guy kudos for telling it like it is in the press. And I think, if his clients followed his advice, he probably saved them a lot of pain.
NEW trading at 1.90 PM. NYC boy, you got another 30% at least on those puts. Congrats.
BTW, if 10% down payments are going to be the new thang, you can shut the lid on this “spring market.”
10%, you can probably shut the lid until next year at the earliest.
It is amazing, but 10%, I think we all agree, would be the end of the fun times.
Forget 20%, just the return of downpayments could be the end of it!
As a result of their credit situation, you would think subprime borrowers would have to put minimum 20 pct down.
If I were either short or had puts on NEW from more than a few days ago I’d get out of them now.
Let someone else have the last 10%, that 90% would be in my account as real money.
Yeah, I would too. I’m not into trying to squeeze the last $1 out of a $1 stock. Some of these guys wait years for that $1.
If you short something that goes to zero, you never have to pay capital gains tax on it.
No more trading for New Century -
http://www.thestreet.com/_yahoo/newsanalysis/banking/10343763.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA
(P.S. Sorry I’m not sure the exact syntax for posting abbreviated links - can someone help me out?)
I’d be amazed if it opens above a buck.
FYI packman, go to tinyurl.com if you wish to post a shorter link.
Thanks.
W/regards to opening price - there simply isn’t one. Trading has been halted, and I venture will never be restarted. For all intents and purposes - New Century’s stock price is now $0. Sorry shareholders.
I tried to short them a few weeks ago to no avail - shares not available for loan. Got in some though for CFC, and it’s working out well.
http://tinyurl.com/yw6ruo
The filing said Morgan Stanley withdrew its financing on Friday, just a day after the big New York firm kept New Century afloat with a $265 million package.
Wow. Didn’t see that. Turn out the lights.
Bonus round:
“The company’s filings said that several of its lenders were now demanding New Century and its subsidiaries repurchase all outstanding mortgage loans, and that its other lenders now have the right to make that demand. It said if each of them do, its total repayment obligations would be about $8.4 billion.”
So now one or more of the following are holding at least an $8.4 B bag:
“The company’s SEC filing could shake up the entire financial sector. It mentioned financing agreements with many top Wall Street firms, including Morgan Stanley (Charts), Citigroup (Charts), Barclays Bank (Charts), Bank of America (Charts), and Credit Suisse First Boston Mortgage Capital, a unit of Credit Suisse Group (Charts), as well as the mortgage arm of Goldman Sachs (Charts).”
Does that $10 B that HSBC set aside seem too much now? Perhaps they haven’t set aside enough cushion.
The Great Unwinding proceeds.
Man, just a few days ago (less than a week) there was all this yap about how Morgan Stanley was going to buy this steaming pile up.
Oh yeah - this is the “Yap Gap”, the spread between the big talk and the hard reality of the situaton.
“Yap Gap”
Priceless! Never heard that one before.
http://www.larouchepub.com/other/2007/3410caymans_hedges.html
London’s Cayman Islands: The Empire of the Hedge Funds
by Richard Freeman
On Feb. 27, the world’s hedge funds, through their manipulation and miscalculation of the yen carry-trade, led to a violent unwinding of that carry-trade, which triggered disintegration of the world financial structure. Stock exchanges fell, from the Dow Jones exchange in the United States, to China’s Shanghai composite index, to Brazil’s Bovespa index, shedding more than $1.5 trillion in paper losses. Secondary incidents contributed to setting off the downturn. But hedge funds had already bled the major international commercial banks and corporations into absolute bankruptcy, and had leveraged borrowed funds and derivatives into the biggest financial tumor ever. That, combined with their yen carry-trade role, amplified the effect of the secondary incidents, and is now driving the financial system further into systemic breakdown. (Continues)
The Washington Post ran an article on Sears as a Hedge Fund.
http://www.washingtonpost.com/wp-dyn/content/article/2007/03/10/AR2007031001299.html
Snippet
But, if Sears the Retailer is ailing, Sears the Hedge Fund has never been healthier. Hedge funds are massive unregulated investment pools typically open to only institutional investors and wealthy individuals. The company’s stock soared 45 percent in 2006, driven by high-risk trades that produced $101 million, or a third, of Sears Holding’s pretax income in the third quarter. These investments did not perform well in the fourth quarter, and the firm had to sell off properties to cover its losses, according to a Morgan Stanley report
Based on what I have read here I think Sears and Kmart are the Ford of retailing. The article goes on to tell how no money is being spent on maintaining the stores. Goodbye to more jobs.
It has been apparent for a while that the Sears acquisition was designed to attempt to create another Berkshire Hathaway - and - possibly Lampert is one of the 3% of the Hedge Fund traders that knows what he is doing.
send in the Marines!
Either this guy is crazy or the housing bubble is the least of our worries. I don’t know much about hedge funds but “disintigration of the world financial structure” sounds kinda’ bad to me.
Oh… EIR in Lyndon LaRouche’s rag. That explains it. The former absolutely applies.
Oh… EIR is Lyndon LaRouche’s rag. That explains it. The former absolutely applies.
Warning! Prepare to barf!
Subprime Lending’s Next Act
What the market will look like for borrowers after the shakeup—which players are likely to suffer and which are positioned to weather the storm
by Maya Roney
URL: http://tinyurl.com/2xywvm
I hope he bought NEW at $15 a share - loaded up on it!
Me too. Koren is an idiot as evidenced below:
And there may still be hope—bargain hunters are already snatching up battered mortgage stocks. On Mar. 7, shares of Fremont General surged over 25% on news that as many as six suitors were interested in buying its residential mortgage business. The same day, New Century and NovaStar saw significant stock increases (see BusinessWeek.com, 3/7/07, “A Bit of Relief for Housing Stocks”). “I’m not going to bet my retirement on it, but if I had any guts I’d buy [New Century and NovaStar's] stock right now,” says Koren.
I hope a bunch of hedge funds snap up subprime shares just before another slew of these toxic lenders go belly up. That would kill two birds with one stone.
Is it wrong that I find humor in this?
http://tinyurl.com/2ojmsp
Who relies on financials to buy stock anymore anyway? The same kind of speculators who went in and f@cked up the real estate market are doing it to the stock market. And hence, perception is reality.
HOME STRETCH
At a Mortgage Lender,
Rapid Rise, Faster Fall
Wall Street Fueled
Growth at New Century;
A Party-Hard Culture
By JAMES R. HAGERTY, RUTH SIMON, MICHAEL CORKERY and GREGORY ZUCKERMAN
March 12, 2007; Page A1
Too bad the NY Times beat them to the punch but they do give you some insight on NEW century’s boiler room like operations. NEW had little controls (cough) in place to manage independent mortgage brokers. As a result, even 90 year old grandmas were given toxic loans:
In 2004, a mortgage broker at the Seattle firm Washington Loan Network Inc. offered to refinance Gertrude Robertson’s mortgage into a New Century loan with lower monthly payments. The 89-year-old health aide agreed to take out a new $414,000 loan that carried a fixed rate for two years and then was set to adjust every six months.
Last year, Ms. Robertson found she couldn’t meet the payments, which had climbed to about $3,300 a month, leaving her without enough money to pay her other expenses. In October, she filed a lawsuit in King County Superior Court against New Century and the mortgage broker. The complaint alleges that Ms. Robertson’s income was never sufficient to meet the expected payments and that information in her application was falsified.
Early this year, another mortgage broker, California Loan Co., arranged for Ms. Robertson to refinance into a new mortgage with New Century that boosted her loan balance to $450,000 and cut her monthly payments slightly, to $3,129. “New Century didn’t know they had the [earlier] loan or even care,” says Melissa Huelsman, a lawyer representing Ms. Robertson.
The phone number for Washington Loan Network was disconnected. Washington state’s regulator says it is investigating the broker. Alex Torres, who described himself as the office manager for California Loan Co., which handled the second loan, declined to comment.
“I just wanted to be able to eat and sleep in my house and have a roof over my head,” says Ms. Robertson, who continues to work even though she will soon turn 90. “Every day at midnight when I go to sleep, I think maybe when I wake in the morning, they’ll tell me to get out.”
Who says we’re not in a Depression? People lost their houses right and left during the Depression. Isn’t that what’s happening now? OK, so we don’t have bread lines, soup kitchens (or do we?) and massive unemployment. YET.
Emphasis on “Yet”… like txchick…you’re too early
“…you’re too early”
James Bond walks into a bar and takes a seat next to an attractive woman. He gives her a quick glance, and then casually looks at his watch for a moment.
The woman notices this and asks, “Is your date running late?”
“No,” he replies, “Q has just given me this state-of-the-art watch. I was just testing it.”
The intrigued woman says, “A state-of-the-art watch, huh? “What’s so special about it?”
Bond explains, “It uses alpha waves to talk to me telepathically.”
The woman asks, “What’s it telling you now?”
“Well, it says you’re not wearing any panties….”
The woman giggles and replies, “Well it must be broken because I am wearing panties!”
Bond smirks, taps his watch and says, “Bloody thing’s an hour fast.”
LMAO!
Who says we’re not in a Depression? Our government.
Who says we are? Shadow Government Statistics:
http://www.shadowstats.com/cgi-bin/sgs/data
True GDP growth has been -1% for a while now. Real inflation is at 10%! Which (obviously) matches M3 growth nicely.
“ALERT: Flash Update subscription required Mar. 4, 2007
Recession Continues to Barrel Along / Market Disquiet Mounts As “Nesting Season” Nears / Deepening Recession Helps Trigger Greenspan Waffle and Market Wobble / When consensus economic forecasters start to talk of recession, usually a downturn has become a certainty, with economic activity already having contracted for at least six-months to a year. Wall Street economists, and Administration and Federal Reserve officials, typically are the last to talk of the politically unthinkable, for fear of negative reactions they might trigger in the financial markets. The game is afoot. More..”
“ALERT: Flash Update subscription required Mar. 11, 2007
Likely Reality in Troubled Economic Data: February Payrolls Contracted; January Trade Deficit Did Not Shrink / February M3 Annual Growth at 10.9% / Data-Quality Deterioration Deepens / With financial-market speculation moving back to a “recession or growth” focus, poor-quality reporting of heavily followed economic data does a disservice to the investing public. This is particularly true when Wall Street hypesters weave related stories that have little relationship to reality, but that happen to help sell certain financial products. The government would do well to delay its publication schedule by a full month for key economic data that usually suffer heavy revision. In the trade-off between quality and timeliness of reporting, little would be lost, since first estimates of the payroll and GDP data, for example, usually are worthless.”
This confuses me. Why does an 89-year-old woman need to refinance into a $400-some-odd-thousand loan? I seriously doubt she’s a recent homebuyer. What on earth would possess someone at this stage of their lives to get into a loan like that? Not saying she wasn’t duped somehow, but just wondering why she even considered this?!
The mortgage broker usually promises to lower granny’s monthly mortgage payment (bait) then at closing and hidden in the fine print reneges (switch).
I get that, but I’m baffled that she would have had a big mortgage to begin with. At 89, I would certainly hope my home would be paid off or at least the payments would be a cake-walk as I would have been in the house for years. (Just before he paid if off - early -my dad’s mortgage payment was ~$500/month on a home now worth ~$400,000.)
89 years old with a 30 year mortgage.
I wonder what the rates are on an insurance policy that pays off the mortgage in case of death?
At 89 years old, if anything, she should have been looking at Reverse Mortgage products….
And, as the “Depression” unfolds, the stupid neocon politicos are beating the drum to get rid of “entitlements”, meaning Social Security and Medicare, mainly. Newt and Fred Thompson leading the charge, as well as the GAO guy who goes on tour in a chauffered limousine to spread the word. Idiots don’t realize that “entitlements” grew out of the last Depression.
I’m sorry, but this word “entitlements” burns me up, because it’s just another neoCON way of “guilting” the American people, like the old saw about “jobs Americans won’t do”. That’s how it goes, first you have to degrade the people (like the Nazis did to the Jews) and then that justifies sending them to the ovens.
I really puke when I hear the word “entitlements”. What a load of hypocrisy. Sure, I’ll be more than happy to give up my “entitlements”, when Congress gives up their “entitlements”, like their health care and forever salaries and other perks, when we cut off the “entitlement” blackmail “aid” payments to other countries, when we stop giving “entitlement” contracts worth billions to defense contractors for failed projects, when we cut off the administration’s “entitlement” to make a failed war, when we cut off the FED’s “entitlement” to our money, when illegals give up their “entitlements” to health care and education for anchor babies at taxpayer expense, and on and on.
What other “entitlement” programs am I forgetting that ought to be eliminated?
Palmetto,
you nailed it. great post.
spike, great minds think alike!
Come on be truthful, you know they are not advocating getting rid of SS or Medicare. If you have a political beef just state your arguments don’t be disingenuous with the facts. Another point on your earlier comment we are no where near a depression. Also please don’t compare NAZI’s with conservative folks whom you don’t agree.
The real problem entitlement, is the false sense of entitlement many live by… The anti-golden rule, if you will.
The “how can I be overdrawn, if I still have checks” way of going through this game, called life.
No one has a right to your money, not even politicians. They should call “entitlements” what it really is: charity at gunpoint.
“Come on be truthful, you know they are not advocating getting rid of SS or Medicare.”
I didn’t hallucinate the 60 Minutes story two weekends ago with the IG of the GAO travelling the country advocating EXACTLY that. In his LIMO!
” Another point on your earlier comment we are no where near a depression.”
If it looks like a duck, walks like a duck and quacks like a duck, then it probably IS a duck.
“Also please don’t compare NAZI’s with conservative folks whom you don’t agree.”
I am a conservative who has severe arguments with neoCONS and yes, I find their tactics eerily similar to those of the Nazis. Degradation of populations through propaganda.
Neoconnunists.
A year ago, the nazi comparisons by liberals were easily shouted down and we shut up…
The weekend’s stunner, that vis a vis the patriot act, this administration has been looking with a fine tooth comb @ people’s lives, sounds kinda nazi-ish to me.
So when Clinton had IRS lookup folks and audit “politcal enemies” was that NAZI like? Come on, the folks in the administration are Americans just like you. You just don’t agree with them. They want to protect United States from the Islamist nuts as I am sure you do, they are just more aggressive then you are comfortable with. I think you were talking about the FBI and last time I checked agents are not hired because of their politics. Good law enforcement types are aggressive and sometimes they cross the line and when they do they get nailed. My simple point is that you can disagree without comparing them with people who murdered 6 million people.
Bill,
Just come out and say that the neo-con failure is someone elses fault and the whitehouse CrimeSyndicate is squeaky clean.
Go ahead….. we know you can do it.
Who is Bill? Anyway, if you talking to me I am not sure of your point. I disagree with administration on all sorts of issues however they are not the enemy. The folks who want to destroy western civilization as we know it are the ones reserved for my wrath.
The silly ideologue statements you make… Then you backpedal..
Classic……
Please cite any backpedaling. Otherwise, you risk becoming viewed as a troll.
BP, believe it or not, I do understand what you are saying. I might have been a bit harsh. Neocon, neoliberal, both are failed movements and both have used very nasty “smear and fear” tactics on their opponents. I don’t care for either.
I have more concern about the rise of fascism from within. I always like the Ben Franklin quote about those who would give up their freedoms in exchange for security deserve neither.
If the folks that want to destroy western civilization would only make it easier for us to know who they are by wearing a uniform, like our troops do, in the middle east, i’d really appreciate it.
Now the ideologue accuses those who call him out on his backpedalling a troll.
Nice work.
Just watch al jazeera or for that fact any arab tv and you will see them everyday.
Careful aladinsane…. theres wun uf dem dar terrists behind every tree…… LOOK OUT!!!
BP,
“Come on, the folks in the administration are Americans just like you.”
No, they’re not. I believe first, last and always in defending the Constitution. The current admin has nothing but contempt for the Constitution, and has actively sought to undermine the separation of powers,and blur the separation of church and state. The prez routinely ignores Congress and has issued more than 800 “executive orders” essentially nullifying acts of Congress, unprecedented in all the years of American nationhood. The prez took on oath to defend the Constitution…which he has singularly failed to do. So whatever agenda the admin is pursuing, it has nothing to do with Americans like me who are wholly loyal to the Constitution.
W’s quoted statement that the Constitution was “…nothing but a damned piece of paper,” was widely reported, and reliable sources claimed it to be accurate. Haven’t Googled it to double check, but that statement shocked even the insiders at the meeting.
Give’em hell, Palmetto!!!
I would personally shutter half the damn departments without hesitation.
“Come on be truthful, you know they are not advocating getting rid of SS or Medicare.”
We merely expose liars here. The trained-stupid is not our specialty. But we’ll gladly point you in the proper direction.
Regarding social security, the government said, “The American people are too stupid to save for their own retirement; therefore, we will do it for them, by taking 7% from each employee and 7% from employer. We will put this money in a trust fund.”
Ha! They have spent the “trust fund” money! It’s filled with nothing but IOUs. Thanks a lot, government, for doing my retirement saving for me.
The IOUs will be funded with future taxation, $2T over 20-odd years is $100B/yr. Pop the top marginal rate back up to 38% and/or cut the $600B/yr DOD by 16%, problem solved.
Good call Troy. An excess profits tax would do wonders at whittling down the deficit too. They make more than enough and most corporations have been undertaxed since 1980.
Or, how about “means testing” for Social Security and Medicare. If we stopped making payments to the top 15% who don’t need even need the money, the system would correct itself fairly quickly.
However, this is not politically acceptable (AARP)…
“Or, how about “means testing” for Social Security and Medicare.”
Better yet, lift the 90k/yr cap on contributions. I’ve never seen a more clear cut case of favoring the wealthy by way of the tax code than this one.
1. means testing
2. lift $90K cap
3. reduce DOD expenses by 20%
4. windfall tax
5. attempt to set aside 5% of revenues for “rainy day” expenses
The HBB’ers solve our SS problem in just a few short posts!
“Trust” fund. What a great name for it!
Well, “entitlement” is really a technical term meaning that the funds do not require appropriatiions. Most federal expenditures require an annual appropriation. If a government agency wants to buy stuff or hire people, the the money to do so is appropriated by an “appropriations bill” passed by congress and signed by the president. The authorizations for entitlements OTOH do not require additional laws to continue on uninterrupted. There is no annual appropriations bill for SS payments.
Thanks for the info. Is there a source for that technical definition? Looks like I might have to serve up a plate of crow for myself.
But I still think the term is being used as a sort of double entendre. I’m sure many people just like me don’t understand the technical definition.
No crow necessary, because you nailed it in real terms. The whole system is a complete crock, and the coming depression will expose it as such.
Well stated Palmetto.
Great post, palmetto!!!! Thank you!!!
When will savers be rewarded ?
this year
08
in the afterlife ?
Good God still works at 90! I hope she does it because she likes to and not because she has to.
She’s probably doing it because she wants to. Those who were not “at or over 55″ when President Bush said the words, describing those whose Social Security benefits should be preserved and whose should be cut, will probably have to.
Wait ’till she appears at the congressional predatory lending hearings.
internet is suddenly going crazy with subprime/foreclosure stories
on the creditboards.com forums, in the mortgage pro’s forum the brokers are predicting that NEW will go belly up this week
at http://www.freeadvice.com there is suddenly a rash of foreclosure/predatory lending posts. used to be 1 a week or so, suddenly it’s like a waterfall
will all these stories put a damper on the big spring bounce
the nar has been pushing?
at this rate i may be able to buy something in 18 months or so
Did you see the one where the kid bought a forclosure for $4000 on ebay and then was disappointed because it was such a sh!thole? Here’s the link to the thread. http://forum.freeadvice.com/showthread.php?t=356407
I’m havin’ a laugh. Are you havin’ a laugh?
Different Bloomberg story:
http://www.bloomberg.com/apps/news?pid=20601109&sid=ahwzaBwuNaII&refer=home
(Yawn…)
——————————————————————————
Foreclosures May Hit 1.5 Million in U.S. Housing Bust (Update1)
By Bob Ivry
March 12 (Bloomberg) — Hold on to your assets. The deepest housing decline in 16 years is about to get worse.
As many as 1.5 million more Americans may lose their homes, another 100,000 people in housing-related industries could be fired, and an estimated 100 additional subprime mortgage companies that lend money to people with bad or limited credit may go under, according to realtors, economists, analysts and a Federal Reserve governor. Financial stocks also could extend their declines over mortgage default worries.
The spring buying season, when more than half of all U.S. home sales are made, has been so disappointing that the National Association of Home Builders in Washington now expects purchases to fall for the sixth consecutive quarter after it predicted a gain just last month.
“The correction will last another year,” said Mark Zandi, chief economist for Moody’s Economy.com in West Chester, Pennsylvania.
March 12 (Bloomberg) — Hold on to your assets. The deepest housing decline in 16 years is about to get worse.
Am I the only one who misread that line as “Hold on to your as$es….”
Pun intended, obviously…
Well, all I can say is that homebuilders won’t be needed anymore…
http://countrywide-foreclosures.blogspot.com/
Wow CFC REO foreclosures up 15% in less than 2 months. Pretty steep acceleration. Wonder what the maximim velocity will be, considering the party has just started. I suggest these numbers only reflect the early arrivals.
Was skiing on the weekend, a weird mix of telemark skiers (oh how graceful~) and the annual gathering of Estonians, (dressed up yesterday, the women wearing flowing dresses and the men had suits on) @ Sierra Summit.
Along with the usual display of empty houses for sale, smack dab in the midddle of nowhere, on the drive up… the beginning of a promising wildflower season in California are showing, fields of yellow everywhere in the Sierra foothills~
aladinsane, sounds like a nice weekend. I was in Big Bear over Xmas and everything was on sale, by everything I mean about ten houses for sale on the 5 min trip from the slopes to our rented cabin, which was also, of course, for sale.
It was nice, 70 degrees, all sun, all the time.
If you didn’t get a little sunburnt, well… you just weren’t trying.
My love affair with Sierra Summit continues~
A picture perfect weekend, good snow (well, til noon) and perhaps 400 folks on the mountain. never waited more than a few people, in the lift lines.
Is that the same as “Sierra-at-Tahoe”? I assume one is the mountain and the other is the resort name?
If so, that’s where I learned to snowboard 10 years ago. Soft spot in my heart for that place, in spite of all the bruises it gave me as a parting gift…
trading in new century has been halted and numerous auctions are springing up on ebay where the bag holders are trying to sell off their shares
Ouch.
something to laugh at on the net today
desperate bag holders were seen trying to sell their shares at local flea markets, ebay and some have turned to using the stock certificates as wallpaper to increase the value of their homes
there are reports of several CEO’s related to home building seen loading their cash onto private airplanes to be flown out of the country
a harried middle aged dentist broke through the security perimeter and asked about the process of returning the 5 houses he bought last year for a refund, and they just laughed
long term investors dedicated to dollar cost averaging have reportedly been still buying up shares with plans to be buried with them
a new trend has been talked about on the internet, instead of measuring their kids’ growth people have started to track the equity they have built every month for 75% of their gross income that goes to housing
there is a rumor that a Connecticut based hedge fund with enormous exposure to the mortgage market has been approached to pay up on the credit default swaps it has purchased. the owner of the hedge fund reportedly gave the requester a bag full of New Century and GM stock certificates as payment. when threatened with a lawsuit against his personal assets, he reportedly spray painted LLC on his face and walked toward his Porsche Cayenne
when a warehouse lender was asked whether they will keep funding until this new revolutionary business model is validated, the i banker simply replied “Show me the money”. Bob Toll meanwhile was seen with his slaves carrying bags of cash to his bank
Sunsetbeachguy was a witness at Enwrong,
WOW, four prophetic terms in one small sentence:
“Collateral “….”derivatives”… “accelerant”… “debacle.”
Way to go!
“She wrote a long letter…on a short piece of paper” …Traveling Wilbury’s
I wasn’t a witness just an observant employee.
damn, I barely even remembered that post. hwy50 has a really good memory. Kinda scary.
SunsetBeachGuy,
I write poetry…this blog has rekindled my journal juices
Wow — if that stock chart were an EKG, I would say the patient is dead.
http://www.marketwatch.com/quotes/new?dist=dropmenu
I went to the giant Downtown LA Loft Tour circlejerk this weekend with a client who wants to buy. They charge $20/person to get on a shuttle and they will drive you around to all the different developments. I think this is smart because if people were walking between developments they would clearly run in horror from the homeless, mentally ill, unwashed feces ridden streets.
Half the places were in demolition mode (i.e. not even a single livable unit yet constructed. Asking prices $630K for 900 sq feet. Just sign up for our interest list, and we’ll let you know when they are complete. )
The other half were ok, if they were $150K (since you would have to hire personal security to get in and out of the buildings at night.) A little bit like Mad Max.
Looked at a 900sq ft place off of 6th street that was asking $2900/month for lease. I told the guy to stop wasting my time and we left, laughing in his face.
Bottom line, LOTS of sheeple still drinking the koolaide, but even more units sitting empty. I saw, personally, about 2000 units in some stages of completion. Many will probably fall by the wayside, but there is going to be a ridiculous amount of inventory hitting the downtown market.
About ten years ago, I visited a lady who used to work for my parents. She was living in an apartment complex in Jamaica, Long Island. It had what looked like a guard tower with a gun turret at the entrance. That was ten years ago.
Thanks for the local update. I have continually wondered at the prices in downtown LA. I love the idea of seeing LA develop an urban core, and the number of units in development suggests that it may get there some day. However, I would not be willing to move to downtown LA without a significant financial incentive for facing the crime, filth, etc. on a daily basis. I guess most of the units are going to go rental.
In the long term, I do see hope for downtown. When gas prices are $5 a gallon, or gridlock is so complete that all commutes are unbearable, maybe we all will be considering living near work. Problem in LA is that only a few people (relatively speaking) work downtown.
I’m not sure that I agree that few people work downtown. It really bustles compared to almost anywhere else in the city. There are all of the central courts (county and federal) almost every bank, investment house, and financial institution has a presence. I liken it to the financial district in Manhattan. 7am-4pm it bustles, but the rest of the time it’s pretty quiet except in a few pockets.
” A little bit like Mad Max”
Try “The Omega Man”. HIGHLY recommended for LA people.
Basic problem in that movie: too few people were shopping. If the white eyes had just propped up the economy during the pandemic induced housing bust everything would have been OK.
I’m hearing rumors from mainland China investors along the following lines: The Chinese banks are offering great deals trying to offload US dollars. Every bank has signs in the windows touting their rates and availability.
This is extremely unsettling, if true. If China is making a concerted effort to offload the dollar, there will soon be a large “correction.” You can type that up and put it in a fortune cookie.
If anyone else has heard the same or can confirm, I’d be interested. Otherwise, I’ll wait for TICs data, but it’s badly lagging, so it will be after-the-fact confirmation.
KIA, I have no information, but it wouldn’t surprise me. Once these trends get rolling, they turn into an avalanche. Or a pig pile. If China wanted to inflict some pain on the US, now would be an excellent time. The sharks are sniffing the blood in the water. The threat of losing access to the US market would probably just be greeted with a shrug. If the US consumer is not going to buy anyway because of empty pockets, what does China have to lose? It’s a hollow threat.
I would dearly love to be a fly on the wall of a room in which Bush, Cheney and Paulson were having a conversation right about now. What do you want to bet that Paulson will suddenly have an urge to “spend more time with his family”?
We represent just 5% of the world’s population, and we aren’t the easiest to deal with, because we are running on past class, (a horseplayer’s term about a formerly good thoroughbred horse that is dropping down in value, vis a vis claiming races, not glue factory time, more like decreased expectations) and don’t you think China isn’t 100% aware of this…
China agrees to buy planes from Boeing - as long as wing assembly are done in CHina- now “China’s dream to have self- developed jumbo aircraft is expected to come true by 2020 if everything goes well, said an expert on Monday.
“We are now fairly well conditioned for making large aircraft with sound support from growing national economic strength, technological development and experience in manufacturing,” said Liu Daxiang, deputy head of the Department of Science and Technology Development under China Aviation Industry Corporation I (AVIC I)….”
So another export of technology comes back to bite us in the rear.
I would think that by 2020 such technology will be obsolete. It’s childish to think China is our enemy and that we can’t keep inventing new things anyway.
I agree with you to some extent Mark, but wing technology? The problem is that many new and exciting technologies have been exported overseas. !5 years ago China could not build a super tanker now they are the premier super tankers on the market. With most small computers being built in the Asian countries - as well as high tech specialty computers e.g. Cruise missile guidance systems, The technology out flo from the US will result in a significantly lower standard of living in the US. The job exploitation world wide that led to the shift in manufacturing from the US to Asia is resulting in creation of new jobs (at lower wages) in areas formerly US domain.
I agree. I supply to the manufacturing industry. My colleagues and I talk about this quite a bit.
If there’s a snowball’s chance in hell that those jobs are to come back, it rides on lower salaries in the US. Or a huge gain in salaries in SE Asia. Which is more likely?
We should build their nukes too. And space technology. While we’re at it, maybe we should outsource all the pentagon functions to China too.
Isn’t it dramatic how the warpigs who previously stirred the nation with fear with the red scare are now saying we have nothing to fear?
Stunning hypocrisy from that crowd.
Remember…”Total Carnage” …is a lagging indicator!
That game rocked. “Total Carnage! Iiiii… love it!”
They might have an over supply of North Korean “custom made” US dollars they are eager to get rid of.
Ever seen a color copy of yankee paper money?
Not bad. The paper quality is the X factor, and most counterfeits look good, but they dont feel right~
Another worrying aspect of fiat money.
“…Lastly, Thursday will bring the TICS number which printed a woeful $15 Billion last month. If this month’s data rebounds, the market will shrug off December’s reading as an outlier, but if TICS misses badly once again, all bets are off as worries about the structural integrity of the US economy may sweep the market….”
Daily FX March 12
http://tinyurl.com/2c4pkp
I will be in Shanghai and Hong Kong in 2 weeks. I will let you know what I see…w/ photos.
I wonder if TOL’s half-year-long DCB has finally reversed. Who will be interested and qualified to buy Toll Bros McLuxury homes w/o 100%+ financing as an incentive?
http://www.marketwatch.com/tools/quotes/intchart.asp?symb=TOL&time=20&freq=1&comp=&compidx=aaaaa%7E0&compind=&uf=0&ma=&maval=&lf=1&lf2=&lf3=&type=2&size=1&txtstyle=&style=&submitted=true&intflavor=basic&origurl=%2Ftools%2Fquotes%2Fintchart.asp
From Bloomberg: New Century said in a federal filing it doesn’t have funds to give to lenders including Morgan Stanley, Citigroup Inc. and Goldman Sachs Group Inc. The creditors want New Century to repurchase all outstanding mortgage loans they financed.
Are they asking to return everything that NEW ever sold to them, or just the recent ones that haven’t been securitized yet plus the defaulted mortgages?
This has been an astonishing few weeks, I had no idea how quick it was going to be, back when Russ Winter did the “NFI & NEW: End of glory days?” post on his blog. Anyone who followed his analysis and took action is doubtless sitting on a big pile of cash now. I wonder if “Joseph Sedgewick” cashed out before the freight train hit the shareholders.
NEW made over $50 bn of subprime loans in the last few years, so I strongly suspect the demands related to recent loans or early default loans.
“…In the US the consumer is king, responsible for more than 70% of all economic transactions. Thus the market’s focus will be centered squarely on Tuesday’s US Retail Sales report projected to rise by 0.3%. If the recent miss by Walmart is a foreshadow of the weakness in overall sales this number could surprise to the downside. If the report meets or beats the forecast, the dollar longs argument will be strengthened considerably as the notion of any Fed easing in the near future will disappear completely from the traders minds. To make matters even more complicated the rise in gasoline prices could actually push the headline number higher but mask the weakness of overall consumer demand. That’s why the market may key off the Retail Sales ex-gasoline as the real indicator of the health of the US economy….”
more from Bloomberg: New Century has received about $975 million of financing from Morgan Stanley. Part of the money from the New York-based securities firm was used to pay Citigroup Inc. about $717 million on March 8, after Citigroup demanded repurchase of its loans, New Century said in today’s filing.
I wonder which ones of Da Boyz will eat the others
The best part will be if (when) there’s a bankruptcy filing. At that time, the court will set aside such preferential transfers and may require Citigroup to disgorge or turn over the money it received. Then everyone gets to fight over who should be paid, and how much, from that money. Full employment for bankruptcy lawyers - but only those in mega-firms working for the big lenders.
The guy in the editorial has a point about northern winters. What he doesn’t say is there are other places than N Florida and that you may not be able to sell your old house for that he says it’s worth. Other than that, no problem.
Roidy
http://www.forgottencoastline.com/showpage.asp?ArticleID=2356
I’m sure Ben will post this one later. Funny how the editorial pages of the LA Times, unlike the Real Estate section, are talking about the credit bubble and the real estate bubble as if they were common knowledge.
http://www.latimes.com/news/opinion/la-ed-subprime12mar12,0,676190.story?coll=la-opinion-leftrail
Provocative article here:
http://www.321gold.com/editorials/moriarty/comment/20070311.html
The author feels that Israel intends to attack Iran within the next 30 days…
gold websites are for the terminally naive
Uh… Ben Jones has a “Money & Metals” blog. Would you characterize him as naive?
Portland, Maine Real Estate
A rare article about Portland, Maine’s real estate market. There is only one about every six months.
Reader Comments (below)
By RAY ROUTHIER, Staff Writer
Sunday, March 11, 2007
To a lot of longtime Mainers, the several loft condo projects now being built on Congress Street raise one big question: Why would anyone want to live there?
These are the Mainers who remember a time, 15 or 20 years ago, when the city’s main downtown artery was dotted with empty storefronts. And living in an apartment above the empty storefronts, as buses and trucks bustled in traffic below most of the day, didn’t seem that appealing.
But today, Congress Street is an arts and leisure destination, with operas and symphonies at Merrill Auditorium and paintings and sculptures at the Portland Museum of Art. In between there are restaurants, boutiques, an L.L. Bean outlet, and art galleries.
And the three loft condo projects smack in the middle of that stretch — 537 Lofts, Winslow Lofts at 547A, and Kimball Court at 490 — are attracting a wide range of people looking for an urban lifestyle in a relatively safe, walkable city with arts and culture.
Some are baby boomers looking for active retirement locales, which is part of a national trend. Others are people from big cities looking for an urban lifestyle on a smaller scale. Some are young professionals working in Portland already. Others are people who grew up in Maine and want to come back.
“I was looking for a place to retire to that was a small city, on the water, with an international airport,” said Linda Shorey, a lawyer who grew up in Palmyra, north of Waterville, but is currently living and working in Harrisburg, Pa. “If I was rich, I’d retire to New York City. But when I started looking around for places in Portland, I realized it had everything I was looking for.”
http://pressherald.mainetoday.com/news/local/070311movingdownto.html
Equity Nomads is the story of Portland, Maine these days.
Oh. My. God. I was just out for a walk around my office complex and I looked up to see the following written in the sky:
REFI HOME NOW 866-SOME-THING
Where the something was a number I couldn’t even read anymore. Is is ironic that it is right above the Option One building in Irvine, ca about now?
It is also ironic that the telephone number is rapidly fading….
First time poster here.
My “Ut-oH” real estate moment was when I watched a Century 21 commercial in Chinese with English subtitling about 6 months ago.
Subtle.
I found this craigslist listing interesting:
http://orangecounty.craigslist.org/rfs/292715295.html
The phone number goes to an outfit called Life Wave Energy Patch whose website is registered to a guy working for a real estate lending company called Living Waters Lending. They are implicated in real estate fraud out of Little Rock, CA (http://avenue-s.org/flashfraudalert.htm). $715K is more than I would pay for the shacks around here, but they’ve been selling in the $800’s so it kind of seems like it might be another scam.
Hi, I got a finding…
there are two MLS numbers 1243332 and 06394659, same address, same price but different house (pictures are totally different) and different property features. I sent an e-mail to remax asking which MLS is the actual property.
Bill Fleckenstein thinks RE is going into the deep freeze.
It’s going mainstream…..
http://www.nypost.com/php/pfriendly/print.php?url=http://www.nypost.com/seven/03122007/postopinion/opedcolumnists/wall_streets_mortgage_pain_opedcolumnists_nicole_gelinas.htm
WALL STREET’S MORTGAGE PAIN
By NICOLE GELINAS
March 12, 2007 — NEW Yorkers may be feeling smug: While real-estate markets are stumbling in much of the nation, housing prices in the five boroughs have stayed strong. Plus, the stock market has bounced back, temporarily, at least, from its recent decline.
But New York City (and state) shouldn’t count their surplus money yet. If mortgage-industry woes worsen, the concentrated fallout likely will be felt most deeply in New York - hurting Wall Street, tax revenues and perhaps even the city housing market.
New York’s stock exchanges may have been losing out to European competitors recently, but Gotham has kept its dominance in another bread-and-butter Wall Street sector: debt.
Specifically, Wall Street has reaped billions over the past decade by packaging small pieces of debt - much of it residential mortgages backed by homes sold around the nation - into huge bonds for international investors.
Earlier this year, the report for Mayor Bloomberg on New York’s financial industry noted that this “securitisation” business “has grown by over 20 percent annually in the United States since 1995, almost twice as fast as the corporate-debt market . . . and accounted for over half of revenues from all debt issuance.”
Are there any subprime shorting opportunities left? It seems like everything has mostly shook out.
This is just starting! There are and will be more opportunities on the short side. In one or two years most every one who bought from 2002 to present will be underwater - then the prime banks get hit. Look at the risk lenders like Wachovia, Wamu, Wells Fargo (the 3 amigos) and the homebuilding stocks to get smacked in this recession.
Given the ever-accelerating mortgage credit meltdown, I’m seriously considering shorting everything under the sun.
Doing the evening of page news roundup in the local “rags”, thought this might be of interest…
1)
So tell me how the state of Florida has any chance of lowering/changing their property tax millages if things like this are slowly being reported:
http://news-press.com/apps/pbcs.dll/article?AID=/20070312/NEWS01/70312019/1075
If they cannot afford to use state funding for alot of the major improvements needed for a large portion of FL… Where is the money going to come from? Or will certain services suffer as a result of this lack of funding, there is enough cash in the coffers to get FL through 2007 yeah? If they are only reporting this now at what I believe is the “iceberg ahead” period in this market… When will it occur
2008? 2009? 2010?…
2)
I feel that the new governors platform may be severly one sided in regards to its ability to make “changes” with this taken into account from the same publications website:
http://news-press.com/apps/pbcs.dll/article?AID=/20070312/SS04/70312068/1075
One out of two isnt bad yeah?
Just my 2 cents..
timmmmmmberrrrrrrrrrrrrrrrrrrr!!!!!!!!!!!
http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/NextTheRealEstateMarketFreeze.aspx?wa=wsignin1.0
When I was on I-275 headed into Tampa last week, I saw an billboard ad for a realtor that said, “NOW IS A GOOD TIME TO BUY!” Oddly enough, no mention of the $40 million NAR claim that now is a good time to buy AND sell - when every third house sports a realtor’s sign, as they do in Tampa/St Pete, it kind of negates NAR cheerleading attempts.
“FREE 50″ Plasma TV when you buy this home or any comparable home with me as your agent!”
This just makes me depressed.
Words of advice from my hair-dresser turned realtor :
“I just looked at a crappy small house for 1,300,000 on rosewood and lajolla. smaller than your house. tiny 4300 sq. foot lot.way less desireable neighborhood than yours, 6 blocks or so east of la cienega.It will sell within 1 month for close to asking (within 10 percent) are you sure you dont want that house? so what if some houses in compton go into foreclosure?”
Rest assured, the pain will only be felt in Compton.