Bits Bucket And Craigslist Finds For March 26, 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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Name:Ben Jones
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1st whoopee!!!!
http://www.youtube.com/watch?v=tkzb5cmmma8
Excellent. I remember people saying housing is illiquid so it will not pop. However, it is the same illiquidity that’s hanging people out to dry. Look at Serin for example. He’s been trying to get rid of his alligators from day one.
Thanks…….look at the perverse effect:
Once these FB see their neighbors credit ruined by foreclosure, i hope a lot of them will rent an apartment while they still have decent credit, then i guess we will see lots of “jingle mail” to the bank.
Why bother raiding your IRA and 401K? but i fear, that people have such an unreal attachment to “their homes”. That they NEED to be totally broke before they throw the towel in.
Hope springs eternal.
Many will convince themselves as time goes by that the bottom is near and all they need to do is hold on for a little while longer. Thus they will delve into their IRAs, 401Ks, credit cards, tap friends and relatives, etc. until the AWFUL TRUTH in the form of financial exhaustion forces them to capitulate.
Carrying costs. That’s the real “unstated” problem with housing investments. Yes, we talk about it often, but the MSM really has not yet taken up the charge on that front. Stocks are almost free to carry from year to year, and the transaction costs are laughable compared to RE. Houses are horifficaly expensive from month to month (even with NO leverage, and we all know how many flippers did that!). Add in the lack of liquidity, and you have the problem we see today. These people expected to be able to execute a sell order and have it carried out overnight. Try several months to a year before your sell order is actually executed.
that is one of the problems in Europe, carrying costs are extremely low: mortgage rates for ‘extra’ homes can be lower than 1% (after HMD) in Netherlands and maybe 2-3% in other EU countries, local taxes are usually way below 1%. After 5-10 years some upkeep is needed, but for empty homes it is usually nothing more than a new layer of paint. So people don’t lower their asking prices, they keep their homes on the market for years until homeprice inflation bails them out. For the last 25 years, that has proved to be a wise strategy - so people don’t care that housing is illiquid.
What a great plan, tax hard-earned income, and give property owners a break. That doesn’t seem very fair. I thought Europe was the god-head of equitable social theory.
can’t speak for all of Europe, but Netherlands is a paradise for wealthy (extremely low or no tax on asset gains), people with high income (the latter because of the huge HMD) and big business (corporate taxes far lower than in the US!!). It is also a paradise for lazy people who want it all without ever working for it, although slightly less attractive than 10-20 years ago.
For small business owners and the rest of the middle class, it’s a struggle where most people only survive by going deeper and deeper in to debt - sound like the US?
NHZ,
You just made me realize something. This is exactly what FL is trying to do to engineer a bailout. Remove the property tax on the homes and then people can just wait it out until inflation eats all the losses they woud endure. Dramatically reduce the carrying costs, and you can have all the people just sit and wait until the market will bear their price.
I have been against this plan from the beginning, but now I am more so. This will serve to further freeze the RE market, as now all those caught way underwater can just wait it out.
Govt, please, please, stay out of the speculative markets!
It is too bad America hates history. We spent the first part of the 20th century trying to fight low-carrying cost on property as the root of all evil.
Yeah, taxation of wealth versus income is the only way to damper the evolution of dynasties, and is much more fair over time.
After reading the Vanity Fair article, “City of Fear”, about Sao Paolo, Brazil, and the rampant tax evasion in Brazil in the midst of a global economy, I realized that income and property taxes are toast. In order for local governments to adapt and survive and grow stronger to overcome tyrannical central governments and global interests, sales taxes replacing income and property taxes are inevitable. Carrying costs? Feh. Other states don’t have the tax and insurance carrying costs that Florida does and some are leading Florida in foreclosures.
The state that goes with sales taxes first will be the winner and other states will follow suit, making state’s rights stronger and allowing more control over the Federal govmint. It will make Florida more attractive to residential property owners and they will have more of a stake in local government as well as the development of the state. The Florida sales tax proposal is truly visionary and like most visionary ideas, it is first ridiculed, then violently opposed and then accepted as truth.
if you think high sales taxes are good, just look at Europe and you will see the future … you can have high income taxes (for the middle class only of course) AND high sales taxes. A hefty sales tax on real estate might be a good idea over here to dampen speculation, but reality is that RE will probably never be taxed here - too much VIPs are living the good life because of RE speculation.
‘Goodbye’ tax withholding infrastructure … ‘hello’ black market. Never happen.
vast majority of the populace do not decide where to live based on taxes alone. if you argument is true, california would have been severely depopulated already.
I never said people decide where to live based on taxes alone. However, it will be more of a factor in years ahead.
I don’t live in CA, but from what I’ve read on this board, CA is becoming severely depopulated of actual tax paying citizens, in favor of deadbeats, courtesy of the housing bubble and social policies that penalize working folks.
After all, who cares where they live if they don’t pay taxes anyway? From some of the comments I’ve read on this board, CA sounds like the poster child for the nightmare welfare state.
Palmetto:
The one thing about this part of California (Silicon Valley) is that there is an awful lot of money to be made if you work in the right industry. That’s what keeps people here. Even though we get reamed with federal income taxes (and have to rent), we are still raking in the dough.
I guess that’s why people are willing to subsidize low-income workers with housing projects, etc. We know they could never afford to compete with us, but we still need them to serve us our Sourdough Jacks.
Wow, that’s cold. But I guess you’ve just illustrated a point I was wondering about. Cali seems to be earning third world status very quickly. A small group of wealthy or well-off folks, served by a huge underclass. That’s what it sounds like, anyway. Definitely no middle income class.
So how does that work? You folks that make the big bux pay to support all the low income folks? I guess, as soon as a person hits middle income status, it’s “Bye-bye Cali”.
Hey, how’s Bill Gate’s H1B visa plan working out for you all?
You’re right about the middle class. Even though my husband and I live like lower-middle-class people, we are officially “upper class” as defined by the US government. But we still can’t even afford to buy a house, much less a house with a view or a yacht or any of the trappings of an upper-class income. Out here, the middle class IS the upper class, and the upper class are folks who have made a killing off of stock options or, you guessed it, real estate.
That’s why so many people live here for a few years and then leave. It actually ticks me off, since I grew up in California and I don’t like to see the whole state being handed on a platter to the uber-wealthy. I understand why folks in surrounding states hate us so much for coming in with our “California money”, but most of us have little choice.
As soon as our income stream dries up, we will probably take our savings and bail. But not until then. As long as the money keeps coming in, we will continue to tolerate the silly economic quagmire that makes it all possible.
And once we leave, you can bet that all those Mexicans, Indians, and Chinese will go back home too.
Then it’s back to square one.
Not exactly. They still have interest costs from the bank.
Most people still have mortgages.
But it would help a little.
Bullseye. They’re ALWAYS more than expected. This is where people really get “no-vaselined”. This also helps to explain that although you DO “throw money away” (quoted ’cause you really don’t - just like you don’t throw money away when you buy groceries. It’s a cost of living) when you rent, you’re likely to throw even MORE money away when you buy a bubblicious home after you deduct these carrying costs and cannot generate the necessary rental income and/or sale price to stay out of the red.
NEW YORK (MarketWatch) — U.S. stocks turned broadly lower after data showed a surprise decline in sales of new homes in February. Sales of new homes fell 3.9% to a seasonally adjusted rate of 848,000, the lowest seen since June 2000. Economists surveyed by MarketWatch were expecting a rise to about 1 million units, on average was shedding 12 points to 2,437. Just prior to the release of the data, the Dow was down about 10 points at 12,471 and the Nasdaq was up about 5 points at around 2,454.
“…since June 2000…” Hmmm… that’s a few months after the dot com crash. Interesting. I wonder how far back one has to go to get lower than this. Way lower. Interesting.
New home sales will see the impact of tightened lending before existing homes (the way sales are recorded). Just wait for existing home sales for March and April.
That is very funny. The only part I disagree with is the pin that hits the stock market at the beginning. I believe the market is propped up at this stage of the game much more effectively than it was in 1987 or 2000, which explains how today’s selloff could quickly morph into a shrug of the shoulders…
http://www.marketwatch.com/tools/marketsummary/
Great link, thanks!
What does this mean? I guess the US has lost its sovereignty. Now global interests are dictating what we should and shouldn’t do with our currency. Eff ‘em. Get rid of the dollar and change the currency to acorns or something else. That’ll fix ‘em.
From Reuters, yesterday:
The International Monetary Fund will say further depreciation by the U.S. dollar is needed to help correct global imbalances in its latest World Economic Outlook (WEO), Germany’s Sueddeutsche Zeitung said on Saturday.
Quoting from a draft of the WEO, the paper said the Washington-based fund argued “extraordinarily aggressively” for a correction in exchange rates, above all so as to reduce the massive U.S. current account deficit.
The dollar, which slid to a 2-year low against the euro last week, should continue to depreciate in the mid-term, while the yen, the Chinese yuan and currencies of oil-exporting countries in the Middle East should all appreciate, the draft WEO said.
The WEO, which is due to be published in mid-April, will add that there is no great need for further interest rate increases by the European Central Bank, according to the paper.
Thanks to solid growth in the 13-nation euro zone, the ECB would not create problems by raising its main lending rate to about 4.0 percent from 3.75 percent at present, the IMF said.
‘no great need for further interest rate increases by the ECB’
of course not, speculation in the EU is rampant, the housing bubble is expanding at a healthy pace (still double-digit in some countries) and the War on Savers is teaching all the stupid citizens who want to live within their means a hard lesson, so everything is just great. A 4% ECB rate is about 7% below inflation (M3 is around 11% now), that’s even more loose policy than in the US. I just checked the rates on savings accounts and found that rates in the Netherlands are even LOWER now than they were 1.5 years ago before the ECB started their ‘tightening’ campaign. And mortgage rates in Netherlands are now about 0.3% above their four-century-lows.
I would vote for the change to acorns, as long as they promise that idiots like those from the central banks and IMF will not be allowed to trade virtual acorns.
That’s a pretty strong argument for buying assets of some sort, as holding the cash under those circumstances is foolish. How are the goldbugs doing in Europe?
Paging aladinsane! You were right, but some of us knew that. Anyway, those who flamed you for buying gold ought to be having a big plate of crow.
Still plenty of time to load up on the gold and silver!
Recent price dips from the Dow drop make a good opportunity. Investment money has yet to move to metals for safe harbor.
Just because a slow, steady drop in the value of your savings seem painless is no excuse not to do something about it.
Hi,
A long time ago I used to do business with this company:
http://www.oxfordmetals.com/index.htm
(I worked for a mine and they refined some of our gold). In general, you should google for some reputable smelting companies, they can usually sell you gold or silver as coins or bullion. Shop by comparing spot prices.
I think in Europe goldbugs are considered even more severe lunatics than in the US, despite recent history … everyone is buying real estate, stocks and bonds.
being a goldbug in Europe is more difficult because of the US/EUR exchange rate which has been very unpredictable in the last years; I think many goldbugs have lost money here over the last 1-2 years. I’m currently out of gold but following the market - will step in when there is a good opportunity in the near future.
Hey nhz, my buddies have been waiting for a good opportunity the last two years. They were waiting for a good opportunity when the gold price was $480 (US). They were waiting for a good opportunity when gold was $566. They were waiting for a good opportunity when gold was $608 (the first week of January). When gold went above $680 recently three of them expressed an interest in buying gold. They did not buy. Gold dropped to $635 or so and they stopped talking about gold.
My point? There is never a bad opportunity to buy gold when you buy a few ounces at a time. I bought last year when it was $692 per ounce. But I also bought when it was $566 per ounce and $608 per ounce. I’m buying three ounces this week.
Can you direct us novices to good places to buy?
Can you direct us novices to good places to buy gold?
Bill in Phoenix:
you are right of course, but for those who are late to the gold party the last two years have been very unpleasant. It takes a lot of faith to hang on to your investments when they tank 30 or 40% in a few months.
I do have a gold account though (can be converted to physical for about 1% charge), purchased right at a top about three years ago - that small investment has now appreciated about 40%. Problem is that the gold account is with ABNAMRO bank which might be purchased by Citibank - if that happens I will close all my accounts there because I don’t trust those Citi rats for a minute.
In the estados unidos…
It’s somewhat difficult to find physical gold bullion (i’ll explain)
You can stick gold in your retirement accounts (the dangling participle of my holdings, will the 24k gold Buffaloes roam?)
or buy it outright, usually from a coin dealer.
As luck would have it, there aren’t many of us left.
More than likely, the coin dealer you’ll buy your gold from, will not have the coins in their possession and they’ll buy them from one of a few dozen wholesalers, across the land.
Gold isn’t real estate (pulling my tongue out of my cheek)
Here’s the old rules many of you are used to:
“Buy” a $300k house for no money down, lie about your financial record, as you work at a shoe store in the mall and pull down $22k, and you fritter and waste most of that, as you are no doubt aware. (sorry to bring up the tradgedy that is, your financial condition)
Buy a Troy Ounce of Gold (kr, cml, ae, standard stuff, don’t get tricky) and this is how the deal will go down.
Today, a 1 oz Gold Krugerrand would cost you around $685.00.
To get delivery, you’ll need to pay in full with cash or a cashier’s check, for immediate delivery. Checks are frowned upon generally, as the margins are tight. (you could sell the kr for $665.00, on the basis of today’s Gold price)
Credit cards?
fugggghet about it.
Good old fashioned no bs transactions
You might as well “jump”
Don’t hesitate. Time is short.
“Can you direct us novices to good places to buy? ”
First go to http://www.tulving.com to find out what the wholesale price is for bullion coins. Then go to http://www.kitco.com to find the retail price.
For volume (20 0z. minimum) you can buy directly from Tulving. For small quantities you can try Kitco or your local coin dealer (but keep the kitco and tulving numbers handy so you don’t get ripped off). There are lots of other on-line dealers. Blanchard has been in business forever.
The way I buy is ebay. I know the retail and wholesale market prices for gold eagles and try to get something in between (or lower), including shipping costs. Note that I and others collect eagles by date, and some of the dates have very high prices. If you avoid these and stick with the common dates like 1986, 1998, 1999, you will get strictly bullion pricing. Or go for Krugerrands or Maple Leafs.
The “magic” of the information age:
Please google “Hannes Tulving Rare Coins”
I’ve studiously avoided telling you where to go, as my information flow might be just a little different from yours…
Please google “hannes tulving rare coins”
“I’ve studiously avoided telling you where to go, as my information flow might be just a little different from yours…”
Thanks for this information. However, I’ve bought bullion from Tulving without a problem. Strictly as information on volume pricing, tulving.com is a good source — free and updated daily. As I say, I buy on ebay.
regarding buying gold: maybe I’m lucky that I can get a gold account in Netherland (probably the central bank cooperates as long as they want to get rid of their gold in order to keep gold down; and probably most people don’t know they can get their account converted to physical). On the other side, if I put my money in stocks I can buy about 50% extra on margin if I want. For the money in my gold account there no such thing as buying on margin - too risky investment!
BB:
People delude themselves, based upon past performances of things, but I find honesty, once lost…
Is hard to find again.
Google works both ways, my friends…
If somebody has any gripe with whomever you choose to deal with, their past will catch up with them.
If they’ve treated people right, you’ll find out that info, as well.
The internet sword swings both ways~
All part of the New Darwinian Era.
An era of Responsibility and Survivability.
Be Smart.
“People delude themselves, based upon past performances of things, but I find honesty, once lost…
Is hard to find again.”
Truer words… I withdraw my comments on Tulving. I remember that there were many “investors” hurt in the burst of the great coin bubble of the late 1980s, and I do mean the LATE 80s. This was the bubble that followed the entry into the market of slabbed coins from NGC and PCGS. It’s one of the forgotten bubbles in our financial history. There’s a moral to this for our real estate brokers: you can’t escape your past.
Thanks again.
I never forget.
Can’t.
It’s baked in for the ages (or until the expiration date comes along, your milage may vary)
(Revenge is a dish, best served cold)
IMHO, the gold DECLINE has just started. I am going to pull the deflation card here, for at least a couple years. I am thinking under 500 an ounce.
Got you marked down, for down.
Duly noted.
I hear the government is trying to secure enough Yap Stones, Wampum and every other Odd & Curious Currency they can get their hands on…
Gold is so! 5,000 years ago.
Some Things Dont Change
Anybody know of some good weak dollar funds?
PIMCO FOREIGN BOND (UNHEDGED) C (PFRCX)
I’ve used apmex over the years and have found them to have the best pricing and are very reliable. http://www.ampex.com. They publish the spot price on the site and you are able to lock in your price immediately. I believe they sell the Kuggerands for $3 over spot. I agree with Aladinsane that bullion coins are the way to go, stay away from the numismatic coins.
As much as i’d like my numismatic homies to win at your expense, honesty will not allow me to go there.
A typical 1 oz gold coin has a spread of $15 to $20, while numismatic coins have spreads of 10% to 99%.
you don’t have Numismatic Immunity, I do.
“What does this mean? I guess the US has lost its sovereignty. Now global interests are dictating what we should and shouldn’t do with our currency.”
It says nothing of the sort. The dollar floats w/respect to other currencies, and the U.S. gov’t is (obviously) not trying very hard to support its value. The audience for this report is China, India, Japan, Saudi Arabia, Germany and other countries that have positive trade balances with the U.S.- some of these countries have been artificially supporting the dollar via their central banks, both to preserve the value of all the cash they have stacked up and to give them a trade advantage. This shows that the IMF is just joining Paulson (U.S.) in urging other countries to devaluate the dollar.
Somewhat true, but remember the US is the largest member of the IMF. The IMF recommendations to the US have been ignored. The IMF is concerned (rightly so) about the US’s current account deficit, underreported inflation and government fiscal irresponsibility.
If the US is to stay as the financial backbone of international trade then it will have to change its policies.
Auctions and Bankruptcies….. Burn Baby Burn.
http://www.heraldtribune.com/apps/pbcs.dll/article?AID=/20070325/BUSINESS/703250491/1007
http://www.heraldtribune.com/apps/pbcs.dll/article?AID=/20070326/BUSINESS/703260481/1007
From MSNBC - the “American Dream” turns sour in a loan squeeze.
http://www.msnbc.msn.com/id/17709131/
I think they have an outdated view of what the American Dream is. Not a modest home of one’s own, presumably paid off. The Dream is living large without work or deferred gratification.
It seems to be a longstanding dream — no wonder slavery endured as a human institution for so many centuries. No wonder gambling has always had such appeal. Something for nothing lures the marks, in culture after culture, century after century.
Well said.
You realize, they only borrowed about 4X their income (which was pretty low, so there is no way they should have taken that much) and could not keep up with it.
What about all the idiots who borrowed 6 or 8 or even 10X their income? How do they expect to fare any better?
They must have had lousy credit or not shopped at all for their loan. They were buying based on 6% mortgage but appear to have been in an ARM that started at more like 9%.
They got the bait and switch. They expected to get a fixed rate and made the mistake of not walking when presented with an adjustable loan. I actually feel sorry for this couple. They tried working more. It was the loan and some bad luck that did them in.
The LO probably was getting a kick-back for pushing them into that loan
Totally OT: (thought a funny story may be appreciated)
Last week we watched “Snakes on a Plane” a very stupid movie where thousands of snakes attack and kill a bunch of passengers on a plane.
Then, Sat night I went to bed. I was sound asleep when I suddenly had horrendous pain in my right arm, and I felt like something was attacking me. I jumped out of bed screaming (in a manly way of course!) and my wife was shocked awake and was saying “what what???!!!!”.
I told her “something BIT me!”. I could see her mind working. she clearly thought that I was having a snake on a plane nightmare. But then we looked and I had fang marks in my right arm.
I went to wash off the fang marks, and there was a bat flopping around on the floor. So in a manly way I screamed and ran like a manly girl downstairs away from the 8 oz bat.
(when I was more awake, It was really sad for me to know that I hurt that poor little bat. It was also SO gross knowing it had crawled into bed with me and was sleeping with me.)
Evidently, it was sleeping with me, when I shifted I hurt it so it bit me, then I hit it in my sleep hurting it really badly.
So I went to the local ER
-”I need the Rabies Vaccine, do you have it?”
-they said “why do yo need it?”
-”because I got hit by a bat”
-they replied “you got bit in the butt?”
-”no, bit by a BAT”
-”yeah sure, how do you know”
-”because I saw it flopping on my floor”
-”are you sure it’s a bat?”
-”uh, what else could it be? It looks like a mouse with wings and fangs”
-”why do you have a bat as a pet?”
-”I don’t, I was sleeping and it bit me”
-”why did it bite you?”
-”I don’t know, I was sleeping. I couldn’t ask it why”
-”so a bat just waltzes in your house and bites you while you’re sleeping?”
-”yep”
-”are you sure it wasn’t a cat or dog or something?”
-”it had wings”
-”maybe a bird?”
-”it had fangs”
(in fact, nobody would believe me until I showed them the fang marks)
So we go to the ER, and it was FILLED with crackheads and methheads. And a man calling the doctor “you stupid cracker”.
So then I spent my Sat overnight in the hospital getting huge shots in my butt. Luckily, they didn’t hurt at all, but it is a HUGE shot (15 mL… most shots are 1mL for comparison)
anyway, thought maybe a funny story would be nice to break the doom and gloom!
Geez, Housing Inspector, sorry to hear about that, glad you could find humor in it. I’m glad to hear the shots didn’t hurt, I always heard rabies shots were painful.
:-)!
also glad that you have the humor to share this story
really funny
You know if you had brought the bat, they could have checked it for rabies to see if you needed the shots. And I thought the shots went into your stomache.
typically bats avoid human contact. If you have one in proximity to you thats a good sign that it is probably diseased. Normal wild bats shouldn’t do what that one did. It’s like getting a tetanus shot after stepping on metal (which I have done) - better to prevent it. Also I think you are supposed to get the shots immediately even if you were going to have the bat tested, since the tests take a while and you should get the shots asap.
Fished a bat out of our pool last summer.
He was about 5 minutes away from dying and slowly came back to life.
Truly, a useful rat, with wings.
It’s all good.
H.I.C.
Thanks for the story. We went through something similar 2 years ago when my daughter managed to run into a raccoon and got scratched by it. 15 hours waitng in the ER on a night that managed to make the front page as being their busiest in history with a 6 year-old, and a whole series of shots later, we can laugh at it now, but it definitely is not pleasant. We were told that the fistful of shots in the stomach was an old-old thing, but there are like 6 or 7 time-series shots now.
You all fear the wild. Why?
I’ll give you my take.
Korporate Brobdingnagians have ruled the way you live, for most of your lives.
There are ZERO Dollars in catering to the few, that seek out the wild and it’s treasures.
When I lived in el lay, a staple of the gawdawful tv news, was the “lost hiker”.
The talking heads (correctly called newsreaders, in the UK)
will talk about some hapless soul that has gone missing and @ some point, one talking fool will give a “knowing look” to the other talking head (just like Sgt Friday used to sling at his partners), a “what was he or she thinking, being in the WILDerness?”
Mother Nature (always bat’s last) has many clients.
Aladinsane:
If you wake up with a bat in your bed, then it’s really best to separate yourself from it. That’s why God gave you fear.
I dispensed with my fear, long ago.
(copywrite FDR 1933)
Sometimes I get the feeling i’m the only man with sight, in a world of blind men.
I have hiked the whole AT, been to the top of McKinley, and been chased in by bull sharks surfing the inlet at New Symrna more times than I can count over the past 4 decades. I have plenty of fears, but the outdoors is not one of them.
Where do you live? Remind me to avoid that area!
There is at least one problem we don’t have in New York City. Rats are another matter.
LMAO!!!!!
A BAT!!!
I’m sorry that you were hurt but you definitely having bragging rights for the rest of your life!
Have you or your wife figured out how it got there?
Funny story telling!
My daughter had a bat in with her stuffed animals last fall. I thought it was a run down battery making the clicking sound so I was reaching into the laundry basket full of little animals and grabbing things and holding them close to my face and shaking them.
Luckily the thing was at the bottom and moved before I got to it. Of course my husband was gone for the weekend. My Adirondack manly man fil was called in but I was freaking him out when I screamed every time it stuck a tiny hand out from under my child’s plastic Barbie landscape where it had decided to run to.
Michael Jackson’s “Off the Wall” album to the rescue…I slipped the album under the toy trapping the bat and threw it outside. The dumb thing immediately started crawling up my foundation to get back in. Had to kill it. Ewwwhhhh!
You KILLED IT???
I pulled that thing off my house 4x and all it did each time was go right back. Even when I walked it down about 50 feet into my yard it still came back. My husband said that that’s pretty common. They always killed bats so they didn’t come back in.
(Sorry to offend anyone…usually when I hit a woodchuck or something I sulk for about a week and almost get in an accident trying to avoid it)
ew.
Have you gotten the atty to sue the builder of your house for letting little brown bats get thru the walls to hibernate? Also sue the hospital, the meth crack heads and the “stupid cracker” doctor. At least it wasn’t an aluminum bat, those really hurt - especially whacked across the head. LOL
Wow! Thanks for sharing - it’s one of those stories where you want to laugh and cry at the same time.
Two words of advice: “window screens!”
Did you get the bat tested?
It’s a lot less painful for you and much more certain as to what you potentially need treatment for.
Did you have the bat tested for rabies before you went ahead and got the shots?
Waaay OT: I know there are a few Ann Nicole Smith fans on the blog. I remember in particular TxChick had a love of this media icon. So I thought y’all would appreciate this headline:
http://tinyurl.com/2dnl72
House inspector, thanks for the humorous story! You are a great writer. It read like a good comedy script. I’m laughing with you, not at you! I’m truly sorry that you were bitten!
anyway, thought maybe a funny story would be nice to break the doom and gloom!
I bet the bat was depressed over losing its house.
Actually I watched one of those house flipping shows over the weekend, and a woman in Austin built a little house specifically FOR BATS under the eaves of the house she was flipping. Said the bats would eat mosquitoes. There’s a moral in here somewhere, besides the obvious one that I should quit watching those flipper shows.
That’s SO Strange…
I just read a story on the PETA website of a bat going to the vet, and needing several shots in his mouth because he bit a human in the butt…
PETA and its attorneys are STILL looking for the person that committed this atrocity.
…small world
Clouseau, thanks for bringing laughter to my gloomy morning. I have had bat encounters, but I had never, ever, imagined that one could crawl into the bed with you. That’s one really disoriented bat. When I was in my teens, we had one of those in our house. It was so odd, I think the poor thing was nuts. It would suddenly rush in through a window in the middle of the day. It happened so many times, we even named it Casper.
What happened to the bat?
Follow up:
We went home and caught the bat after returning from the ER>
It was very sad for me, because I had inadvertantly really hurt the bat when thrashing in my sleep. (I think I broke it’s wing)
The bat somehow flopped into the bathroom sink, but could go no further. It was trapped in the sink, the porcelan was too slippery for it to crawl out, and it’s wing was broken.
So I took a plunger and swept it into a box. It was sad actually, the poor little thing was really cute. And I’m trying to swipe it in a box. I hate hurting things… I usually escort animals out of my home… you know, like pick up a bug and bring it outside instead of squashing it. so putting a bat in a box so that I can send it to a lab to have it’s brains biopsied for rabies was too much for me.
We went to the hospital immediately (even before getting the bat). We had to get the shots right away.
The lab doesn’t open till today. We will drop the bat off, but the Rabies test takes a while to come back. So it won’t spare us the first 2 sets of shots.
FWIW:
We each got one rabies vaccine in the arm. No big deal. The rabies shot doesn’t have to go into the stomach, that’s old history.
We each also had to get Rabies Immune Globulin (a protein that can directly fight rabies). This is the BIG shot. in the butt. That said, it hardly hurt at all. It sure looked scary though!
The worst part of this for me is my guilt at hurting the poor little bat.
The second worst part was knowing that it was SLEEPING with me. So last night was hard to sleep (I kept thinking, is there a bat in here with me?)
Last night, my wife reached over and touched me in the middle of the night. I leaped out of bed (again, in a very manly way… yeah right) screaming like a manly little girl.
thus, today I’m a bit tired at work, not working on all cylinders.
I wonder how long It’ll take me to stop being afraid of that very cute 8 oz bat?
Don’t worry, Clouseau, it will pass. You obviously have very good karma for a bat to want to cuddle in bed with you.
“The second worst part was knowing that it was SLEEPING with me.”
Oh who hasn’t woken up to find something in bed with them they DEEPLY regret?
How is the bat doing?
What I should have said is:
Are they really going to biopsy the bat? If you already got some shots, why not just get the rest and keep the bat in a cage to observe whether or not it develops rabies symptoms? If it has rabies, you can bring it in and they’ll put it to sleep with gas. If not, you can keep it as a pet since its broken wing will probably never function properly again.
What’s the point in killing it now?
The bat died over the night, I’m not sure of what. My wife said it was dead this morning when it got to the lab. I’d guess it died from the trauma from me slapping it last night in my sleep.
That said, you never want to be flippant when dealing with potential rabies.
To my knowledge, there has only been ONE survivor of Rabies. Ever. Her name was Jeanna Giese, a 15 year old who was put in a coma under what has been called the “Milwaukee Protocol”. And this has not been reproducible.
thus, the standard of care is to:
1) give the shots to the patients as soon as possible.
2) biopsy the animal for rabies. If biopsy is impossible or unpalatable (such as family pet) then quarantine the animal and look for signs over a few days. that said, we are not very sure about signs of rabies in bats compared to domestic pets.
Observation of a bat is NOT equivalent to observation of a domestic pet, and considered unreliable.
I agree though, it is sad to waste the bat’s life. It is sad we don’t have a blood test for rabies in animals so we can spare their life.
and as I already said, it’s really sad that the bat died. to me it’s the ONLY sad part of the story, because the shots have been no big deal.
Wow, HIC. That’s quite a story. Sorry you had to deal with the bat being hurt. That must be difficult, but you certainly didn’t do it intentionally.
Well, I learned a couple of things from your story:
-bats can get into your house and your bed — and bite you!
-there’s only been one survivor of rabies (I had NO idea!!!)
-HIC screams like a manly girl (just kidding!)
Thank you for the story. It’s nice to hear some non-housing related stuff from time to time.
Hope you feel better soon.
housing outlook 2007 from PIMCO
http://immobilienblasen.blogspot.com/
jmf,
I always appreciate your brand of information. Thanks~
So, Pimco predicted national growth of 5% — NoVA (DC metro) saw a decline of 10-15%
Pimco predicts a national decline of 5% for 2007. I predict 15-20% decline for NoVA in 2007.
According to Bloomberg, Ohio is taking steps to bailout FBs:
March 23 (Bloomberg) — Ohio, which had the highest foreclosure rate among the 50 U.S. states at the end of 2006, plans to issue $100 million in taxable municipal bonds next month to help homeowners refinance mortgages they can’t afford.
http://www.bloomberg.com/apps/news?pid=20601170&refer=special_report&sid=asu8RitVhBIE
Yep, but will the FBs still be able to pay? This is an extremely ill-advised plan. Bailouts. That will be the most disgusting part of the bubble and a losing proposition. Ohio has just sealed its fate. If it was hurting before as a state, it is REALLY going to hurt now. Who would buy the bonds anyway?
This 100 million dollar proposal is suppose to bailout 1,000 FBs. However, we all know there are more than 1,000 FBs in need of bailout assistance. If 2 million households need bailout assistance, how much would it cost taxpayers?
I would so jump on that if I wasn’t an FB in Ohio. Make up some bs excuse on why I can’t make my mortgage because I overpaid for my house. Why should FB’s get all the good deals?
“It will be available to the residents of Ohio to take them out of their adjustable-rate mortgages, their interest-only mortgages and avail them the opportunity to move into a fixed rate mortgage which may now benefit their individual financial situation,” Connell said.
How many of these “homedebtors” can afford to refinance into a fully amortizing fixed-rate mortgage? Many of these people used risky loans to stretch affordability, and could have never purchased using a fixed-rate product.
jb
Exactly right, JB. They went into subprime for the exact reason they couldn’t do a fixed rate, even at current low rates. Ohio is issuing junk bonds.
So I have to wonder - why the heck did they buy? Are they seriously ALL under the impression that their low, low K-mart mortgage payment will never increase? I can see some people being naive, but the 20% or so who were subprime last year - all of them? C’mon.
While the plan is NOT going to put a stake through Ohio’s heart (christ, it’s only $100 million, and I’ll bet not all of it gets used either), as an Ohio taxpayer I can’t say I approve of the idea. The bonds aren’t even tax-advantaged, so the state will have to pay out more. Sounds like it just provides a backdoor away from dumb ARM loans that people didn’t understand in the first place. Call it Social Security for the Stupid. If people can’t pay up, why bend over to keep them here?
“christ, it’s only $100 million,”
$100 million here, $100 million there, pretty soon we’re talking real money.
Yeah, put that way, hey, a round of mortgages on me, I got this one. Somebody else can get the next round.
Call it Social Security for the lenders who otherwise would reap what they have sowed.
This is really stupid. As prices continue to fall more will default just because they make the rational choice NOT to continue paying off an asset at a price they’ll never realize.
Then Ohio taxpayers will be the bagholders instead of the banks (and their stockholders). Brilliant political move.
$100 million may not be much, I agree. It probably is not enough to lower the bond ratings of Ohio munis significantly. If it’s not so risky, the best revenge a responsible Ohio resident could do is invest in municipals for tax free income, but not those municipal bonds that bail out the FBs.
Of course this Ohio bond business might be grandstanding. However, it may instead be just a big can of cover-your-ass. Noting that the ‘refinance’ money amounts to $100 million, the State of Ohio is already much more into the lending business through the Ohio Housing Lending Agency, which issued $1.3 BILLION in mortgage bonds in 2006 for first-time home buyers. So the Ohio ‘bailout’ is even diddly squat compared to what Ohio already lends to homeowners. Yawn. Probably the entire $100 million will just end up keeping the Ohio Housing Lending Agency solvent.
Ooops. Link:
http://www.ohiohome.org/newsreleases/rlsmrb2.htm
Hmm, I’m looking over the Ohio Housing Lending Agency first-time - buyer loads. Plus side, they are fixed interest, not ARMS. Minus side, it looks like they do 100% LTV and subprime loans. Yep, they will need to $100 million just to keep their own Housing Agency afloat (which has $2+ billion in outstanding loans).
WOW! Thanks. It’s worse than I thought.
Front page of the WashingtonPost.com:
Immigrants First Hit by Subprime Foreclosures
Foreclosure Wave Bears Down on Immigrants
Economic Success Story Turns Sour as Thousands May Face Losing Homes
By Kirstin Downey
Washington Post Staff Writer
Monday, March 26, 2007; Page A01
Immigrants are emerging as among the first victims of a growing wave of home foreclosures in the Washington area as mortgage lending problems multiply locally and across the country.
Of particular interest:
Clearly the collateral damage to the local economy won’t be contained solely to obviously connected industries like home furnishings.
When I worked at a restaurant in high school and college, the owner told me he can see the economy turn before anyone else. But that was in the late-1970s and early-1980s. I think people subsequently forgot how to cook.
Yes, but did they forget how to microwave a frozen dinner?
One word: Ramen.
WT, restaurants and clothes retailers always have, and always will be the ones to feel the squeeze (and the good times) sooner than everyone else. A friend who works at a bank in a commercial area of LA that caters to a lot of restaurants tells me all the time that they have been hurting for over a year now.
Here it comes, the wailing chorus of victims. Well, that’s what happens to people who live off a victim mentality. What happens to victims? They get victimized, that’s what. What a surprise! Hey, I wonder if this year, when the illegals have their annual May march, if they’ll be protesting the mortgage industry?
Another thing I note is the phenomenon of people victimizing their own countrymen.
I’m sure they’ll be a wailing chorus of discrimination, too. Ugh.
palmetto,
“is the phenomenon of people victimizing their own countrymen”
This is a leading indicator…
Yes, I have to say that victimizing has been equal opportunity. I hate to see it any level.
In the end, people who victimize others always end up being victims themselves. I always like the story about a fellow who worked with one of my siblings and used to brag about the fact that he was still collecting unemployment. A month later, he was all up in arms about the fact that his home had been burglarized. He just couldn’t believe what was happening to society.
Under capitalism, man exploits man. Under communism, it’s just the opposite.
John Kenneth Galbraith
That was funny!
In exchange for a little yard work, I convinced the wife to let me play F* w/ the Realtor Sunday.
We arrive at the $800K + models and I begin to prep the victim (my wife usually walks away at this time) About the time I’m getting ready to drop the guillotine, in walks an immigrant family with an interpreter/ agent. I’m directed to the hostess who will answer my questions while the family of 7, hops in their primered mini-van and follows the agent to one of the move in ready homes. We waited about 20 minutes then went home so I can pull weeds. I surmised that the agent is acutely aware of the tire kickers and who the potential buyers are… and its diffidently not some one who drives up in a supercharged range rover.
Agents are on to bubble sitters now. I blame some of you here for ruining my fun.
…family of 7 hops in their primered mini-van
priceless.
The 7 were only the ones who showed up to the open house. 12 others, waiting in the wings, intend to move in to the $800k model. Hello, cow skull on lawn!
I predict that, in retrospect, it will turn out to be Hispanics (and particularly Hispanic immigrants) who were the greatest short-term beneficiaries and the greatest long-term bagholders from the subprime lending scam.
I think the housing bust is equal opportunity. All ethnicities suffer equally. It might be different from state to state, but overall, equal opportunity.
Yes, but if 40% of all subprime mortgages in California are held by Hispanics (which is the estimate by that community lending group), that’s going to attract attention like this story, talk about discrimatory predatory lending etc. btw 40% is roughly proportionate to Hispanic % of California’s population, the issue is that per-capita income for Hispanics in California is lower than avg. which means some of these folks probably have mortagges for trailers.
Read this LA times story for background - http://www.latimes.com/news/local/la-me-trailerpark26mar26,0,3370103.story?coll=la-home-headlines
Like most of their neighbors in the sprawling, ramshackle Oasis Mobile Home Park, the Aguilars have no heat, no hot water. On cold nights, the family of eight stays warm by bundling up in layers of sweaters and sleeps packed together in two tiny rooms.
“Yes, but if 40% of all subprime mortgages in California are held by Hispanics…”
They did not say “in California”; the 40% of all subprime held by Hispanics was on a national basis (see Reuters story linked in below). The percentage of California subprime loans to hispanics would likely be much higher than the national Hispanic share of subprime, as California has a much higher Hispanic population share.
“Hispanic immigrants’ dream hit by mortgage crisis
Web posted at: 3/19/2007 3:48:33
Source ::: REUTERS
WASHINGTON • Hispanic immigrants across the United States are being hit hard by the subprime mortgage crisis, with many risking their life savings in a failed bet on the American dream of owning their own homes.
Hispanics hold up to 40 per cent of mortgages in the troubled subprime loan market, where higher interest rates are charged to buyers with a damaged credit history or little borrowing experience.”
http://www.thepeninsulaqatar.com/Display_news.asp?section=World_News&subsection=Americas&month=March2007&file=World_News2007031934833.xml
Someone do something, we need to protect these illegals.
Looks like they’ll be going back to Mexico though.
No, some of them will be staying to reclaim their land:
“Jefferson Azevedo, a Brazilian immigrant, said he didn’t consider any immigrant illegal.
“We all know this is Mexican land,” he said. “They didn’t cross the border. The border crossed them.”
The counter demonstration was held by members of Save Our State and the Minuteman Project in an area with many Hispanic-run businesses.
The group of about 150 held signs reading “Good fences make good neighbors” and “No amnesty for illegals” as it was taunted by pro-immigration demonstrators.
One pro-immigration activist provoked jeers and threats from the group when he wiped the sidewalk with an American flag. A cordon of police kept the two groups apart.”
http://abclocal.go.com/kabc/story?section=local&id=5150002
Wasn’t it fronted by Conservatives of Kern County?
Phil is always lurking, in my mind.
Love this. It does mention mortgages in it somewhere.
http://www.gymjones.com/knowledge.php?id=15
Right On.
“If America could be, once again, a nation of self-reliant farmers,craftsmen, hunters, ranchers, and artists, then the rich would have little power to dominate others. Neither to serve or to rule; that was the American Dream.” - Edward Abbey
I hope a few people who aren’t yet yoked in to the heavy debt lifestyle read that. It pretty much sums up my theories on life. Take risk, stay unfettered and live, don’t exist for someone else’s pleasure.
“Neither to serve or to rule; that was the American Dream.” - Edward Abbey”
Thank you for that quote. Using that revolting phrase,the American Dream, to sell home ownership as the summit of American citizenship has made a travesty of the real American promise..”life, liberty and the pursuit of happiness”.
You realize that happiness meant property in the era those words were written.
I don’t get it!
I don’t either. Try this.
http://www.prisonplanet.com/articles/september2006/260906venturaquestions.htm
The precise moment we stop asking all the wrong people all the right questions, is when you’ll know we’ve turned a corner, in the way we think.
It’s still far, far away.
morgan stanley to auction off $2.5b in NEWC loans, presumably they’ll use ebay,lol
Places where immigrants cluster have been particularly hard-hit. Semidey said that the most calls are coming from Manassas, Woodbridge and Dale City in Virginia and Gaithersburg, Germantown, Capitol Heights and Langley Park in Maryland. But one recent caller was the owner of a $1.5 million home in McLean, a restaurateur who has seen her business slide in recent months as the slowdown in the construction industry pinches the pocketbooks of her Latino patrons. Another was an illiterate carpenter who bought a $750,000 house in Ashburn Village, Semidey said.
Francisco Santos, 31, who lays tile, makes $60,000 a year by working seven days a week. He became convinced that real estate was a can’t-lose proposition after the value of the townhouse he had bought in Woodbridge in 2002 for $95,000 climbed to $230,000. He and his wife, Linda, a homemaker, traded up to another house and banked part of their profits. The Spanish-speaking real estate agents with whom he negotiated the purchase persuaded him to borrow against his equity to move up again.
“They called me every day; they said we can do more business, that it’s a good time to do it,” he said in a mixture of English and Spanish. “They talked very sweet into my ear. I believed. I believed these people, and I did this business.”
So Francisco and Linda went to visit a spacious red-brick house on Lord Culpeper Drive in Woodbridge, with its master bedroom suite and well-equipped kitchen, priced at $540,000. Linda nearly swooned with pleasure as she looked around the interior. She thought: Here was her dream house.
They decided to buy the house, which was fairly easy because the Santoses had excellent credit, equity in the other house and money in the bank. The mortgage broker made things even easier by doing the settlement in their home, something many Hispanic families find more comfortable. That also made Francisco’s life easier because he typically works until 8 at night, making it hard to get places during normal business hours.
He tried to rent out their former house, but the tenants didn’t pay their rent, so the Santoses used up their savings to keep up payments on the two houses. They put the houses on the market but found no buyers. When they couldn’t make payments, their credit rating deteriorated.
The stress on the family mounted as collection agencies began calling, over and over. With two small children and another one on the way, the pressures grew. The couple quarreled, and Francisco Santos said he sometimes yelled at the kids for little provocation.
“I feel terrible,” said Santos, a legal immigrant. “I’m trying to keep control because my wife is pregnant, and I don’t want her to feel bad. It’s difficult. I was thinking about my kids, and their opportunity to have a good life. My wife, she says, ‘Why? Why?’ ”
The loan servicing company, American Home Services, will foreclose on the new house Saturday.
Hmmm..posted before me and I left off where it came from….
Foreclosure Wave Bears Down on Immigrants
Economic Success Story Turns Sour as Thousands May Face Losing Homes
By Kirstin Downey
Washington Post Staff Writer
Monday, March 26, 2007; A01
I think in the not-too-distant future, a lot of those far-flung suburbs are going to look as blighted as inner city neighborhoods did about 10 years ago.
Exactly, rainmayun. Blighted suburbs. Well, I think it is time people got back to their roots, anyway. For some, that means going back to the inner city. For others, back to rural areas. And for illegals, back to their country of origin.
For a while, I had a fantasy of snapping up 3 neighboring McMansions after all the dust has settled, and tearing down two of them to create one decent sized lot. But that was before I saw firsthand the shoddy workmanship going into the new construction in the development across the street from me, and before I had a grasp on how high energy costs are rising and will continue to rise. I think, all other things being equal, I still prefer to live in the city, and I doubt I’ll need much more than the 1400 sq ft I have now, for a good while anyway.
Kirsten Downey got a new one ripped for herself over at Calculated Risk a couple of months ago.
The title of the post was “Information is Power, which is Why You Don’t Get Any”.
Another was an illiterate carpenter who bought a $750,000 house in Ashburn Village, Semidey said.
WTF?
“Another was an illiterate carpenter who bought a $750,000 house in Ashburn Village, Semidey said.”
He’s do all right, just move to another part of the country and get another set of fake papers under a different name or move back to his original country, plus he could sell off the whatever is salvageable out of the house before it gets repossessed
“Places where immigrants cluster have been particularly hard-hit.”
This hits both legal and illegal immigrants. And it is not just limited to first time home purchases. I had an inkling of this when I was researching some of the homes in the small neighborhood where I used to live. A family one street over re-fried (oooh, bubble word for “re-fi”= refry) their home to the tune of $250,000, which they purchased for about $95,000.00 in 2000. I remember thinking it was a foreclosure in the making. Nice house, too, one of the nicest in the neighborhood, except it always had dump trucks in front of it, something to do with the family business. If the refry was done for business reasons, it might make sense, but it depends on the terms. And if the business is dependent in any way on real estate, it is probably taking a hit.
Again, note the phenomemon of people getting screwed by those from their own ethnicity.
I have watched the little old Anglo ladies who work the cash registers in the local shops painstakingly count out the correct change for illegals who can’t speak English. For the most part, illegals have been well treated by Americans. The majority of people I know do not cheat illegals, while the illegals think nothing of absorbing social services, stealing identities, lowering wages, forming gangs, etc. The mantra is “we just want to work”. BS. If that were true, then why all the breeding? HELLO!? There’s a HUGE difference between working and breeding. Liars get taken in by liars. Karma’s a b*tch. What goes around, comes around.
Everybody will cheat the “System” more than an individual. While I too find in our immigrant situation much to criticize, as a former immigrant myself (to Japan) I find nearly all the anti-immigrant blather here on this blog quite ugly in spirit and content.
We want their low-wage labor but not their problems. We want to have our cake and eat it too.
“We want their low-wage labor but not their problems. We want to have our cake and eat it too. “
I don’t want their low wage labor, its just a short cut that makes a few people wealthy while the price of products they produce don’t go down. The only products I have seen where prices have dropped is in things like electronics and most of that is machine made and has little labor content. At the same time the low wage labor drives down the wealth of everyone in the industry except the executives.
As to me buying these low wage products I often don’t have much of a choice, the stores buy what will make them the biggest profit and the choice is made before I even get to the store
“I find nearly all the anti-immigrant blather here on this blog quite ugly in spirit and content.”
And as a person who believes in the rule of law, I find the illegal immigrant phenomenon ugly in its actual manifestation. But hey, fair enough, then, would I be more socially acceptable to people if I just cheated my fellow man, broke the laws and got rewarded for it when I act like a victim?
What do you mean “we”? It is not the American people who want the low wage labor. It is corporations and global financial interests who want the low wage labor. I don’t. Besides, you get what you pay for.
Troy, it’s illegal immigration that folks object to. When you went to Japan, were you there legally?
My parents came here legally from Europe. Some of us with legal immigrant creds are appalled at what we are witnessing, vis-à-vis abuse of entitlements, an entire nation having to accommodate a foreign language…(my peeps never expected anyone in the US to speak their language. In fact, if we children spoke our native language in front of English-speakers we were scolded for being impolite). The list goes on and on.
I’m pretty sure you get the idea.
So he buys a house for 9 times his income. Somebody should go to jail!
There once was a thing called “debtor’s prison”…
Francisco Santos, 31, who lays tile, makes $60,000 a year by working seven days a week. He became convinced that real estate was a can’t-lose proposition after the value of the townhouse he had bought in Woodbridge in 2002 for $95,000 climbed to $230,000. He and his wife, Linda, a homemaker, traded up to another house and banked part of their profits.
Ok, so far - good move. Responsible. No financial problems. A+ Francisco!
The Spanish-speaking real estate agents with whom he negotiated the purchase persuaded him to borrow against his equity to move up again.
Uh-oh, Francisco do you have your own brain? Can you make your own decisions? You traded up once, it worked out well, why are allowing yourself to be “persuaded” to do it again? “Persuaded” means you already know you shouldn’t do it.
“They called me every day; they said we can do more business, that it’s a good time to do it,” he said in a mixture of English and Spanish. “They talked very sweet into my ear. I believed. I believed these people, and I did this business.”
And there it is - Francisco is a victim. He did absolutely nothing wrong.
PLEASE!
As posted above,Morgan Stanley is auctioning off 2.5b in NEW loans…does that make Morgan Stanley a victim too?
Same old, same old, if old Francisco had made bank, he’d be congratulating himself…his investment decision went south, so he’s a sad little victim, just like Morgan Stanley.
I was being sarcastic about him being a victim…
Wow, another person who got the break of a lifetime, and he decided to double down. No wonder why lottery winners lose all them winnings in 5 years on average. It seems no one knows how to take a financial windfall, and sit on it for a while before getting the greed bug. “Well, if I made this much with one house, can you imagine how much we can make with 2 houses, 3 houses, etc………..”
I think the sob story would have been more convincing (barely) if they would’ve sold the first home first, but it didn’t take long for the guy to HELOC it, did it?
This is why the idea that the mortgage crises will be contained in Subprime is flawed. Who knows how many of these silent seconds are floating around in the Prime and Alt-A. Looks like everything, EVERYTHING depended on the idea that real estate prices would continue to move up at un-normal rates. Basically, a Ponzi Scheme. All you needed was flat housing pricing for just one YOY to shatter it. Forget about lower real estate pricing. All you needed was non-appreciation. Can you imagine what is going to happen when these areas start getting into “Negative Appreciation” Well, you don’t have to………..It’s here.
Geez
Well, no matter what the ethnicity or legal status, it’s like the Prince said in Romeo and Juliet: “All are punish-ed”.
And that’s the nice thing about the housing bubble. It was a truly egalitarian phenomenon, providing an equal opportunity screwing for all who participated.
“All are punish-ed.”
Yup, My sister-in-law hit the California lotto back when it was the 6/49 format. They got 5 + the bonus number and cleared a LS payment of 432K.
Today, she is divorced, working two jobs and can barely afford the mobile home.
Maybe you should persuade your brother to start paying the child support.
For shame.
Hmmm, nothing about kids in the post. How do you know she didn’t snort away her half? (A cocaine reference since I am a child of the 80’s - no idea if people still use it.)
Also, what if this is his wife’s sister not his brother’s ex-wife? Should he still be shamed?
Or maybe I’ve missed a bunch of back story and everyone knows it and I’m the one jumping in with quick conclusions.
fyi. More mortgage business collapse fallout.
Changes are on the way at Roush Fenway Racing, which is losing one primary sponsor after this season and has been ordered by NASCAR to drop one of its five Nextel Cup teams by 2010. Ameriquest, the mortgage company that became the primary sponsor of Greg Biffle’s #16 car this season, has asked Roush Fenway to sell off the final two years of its contract, which expires in 2009. The lender’s struggling parent company recently announced a second round of layoffs, and Ameriquest last week pulled out of a 30-year deal as rights holder to the name of the Texas Rangers’ ballpark. “It’s very clear that they want to reduce their contract exposure to us,” Roush Fenway president Geoff Smith said Sunday at Bristol Motor Speedway. “If we weren’t able to do that, then you get into, OK, here’s your car, what are we going to do with it? You’ve got this lame duck environment going on, which is not helpful to anybody. So in practical terms, we can assume that we’ll have another sponsor for next season.”
“THHHHE CHILDREN” Hillary Clinton’s first words in her opening remarks beginning the SENATE’s SELECT COMMITTEE HEARINGS ON IDIOT LOANS, CRAZY REAL ESTATE BUBBLES, AND THEIR VICITMS
Who cares. She’s irrelevant.
NOT to us Noo Yawkahs, who didnt have any viable option to vote for.
She may be Ny’s senator, but since she has done nothing for the people of this state, just used the job to advance her personal ambitions, I’d say she’s irrelevant too.
“but since she has done nothing for the people of this …”
The problem with the average voter these days is they want some politiician to do something for them. The reality is that politicians do not produce. They are all feeding off the productive people. This source of income is lost on most of them. The extreme ones are the elitists, who put themselves on the pedestal. H.C. is one such elitist. Ask not what a politician should do for you. Ask for a politician to follow that rag called the U.S. Constitution. Americans are getting fed up by tax and spend, moreover fed up by the politicians who do not follow the Constitution. Many of us will reread that first paragraph of the Declaration of Independence sometime and follow its suggestions.
“She may be Ny’s senator, but since she has done nothing for the people of this state, just used the job to advance her personal ambitions, I’d say she’s irrelevant too.”
I’ll take irrelevant of incompentent any day. At least Hillary read a book once and can actally speak in sentences. God save us all, if you equate an ambitious woman with a brain vs. the MORON fiddling while Rome burns.
Don’t worry, folks — Hillary may be electable in New York, where people generally live on a different planet, but not on the national stage, where Monicagate will rear its ugly head and remind us all about what was unpleasant with the Clinton era.
“Monicagate will rear its ugly head” Nothing to do with Hillary , plus she shows me the kind of support any
frail human deserves when asking for forgiveness.
Let’s get the Swift Boat people involved in destroying Hillary’s charcter. Rudy’s character certainly shows by the way he treated his 2 ex wifes and his children. And now we have wifie #3 explaining the 1st marriage cover up. Wow, you New Yorkers sure no how to pick em.
“Monicagate will rear its ugly head” Nothing to do with Hillary , plus she shows me the kind of support any
frail human deserves when asking for forgiveness.”
Please don’t tell me that you actually believe any of the BS that this sociopathic, opportunistic harpy spews? Please- ‘It takes a Village’?!? Hillary really can’t understand this, but it takes a parent with a moral compass to raise a child. It takes a village to raise an idiot…
“sociopathic, opportunistic harpy spews” Here goes the Swift Boat attack of 2008! Any facts to back up this charcter assasination?
“just used the job to advance her personal ambitions,”
Just used the marriage to advance her personal ambitions, as well. No wonder Bill decided to sample lots of other cooking besides what came out of his own kitchen.
Hillary sure does look a great deal like Bill these days. When will she steak out a separate identity, or is that not part of the plan?
http://www.hillaryclinton.com/
Yeah, well guess what Hilary - it’s not just the children of stupid FB parents. It’s also children of responsible renter parents who don’t have their own backyard, can’t paint their room pink or blue, can’t have a dog, etc. because the aforementioned set of parents helped price the latter out.
I swear I’m ready to take a leave of absence from my job and go lobby on behalf of people like me who have been left in the wake of this mess. It’s not just about the FBs. I am incensed this morning - can you tell?
THANK YOU
That is exactly how I feel.
I’m with you, brother. I will lobby from behind the scenes against any Democratic candidate who pushes a taxpayer-funded FB bailout to “save the children.” Excuse me while I go out and puke.
Sister.
wow. you are out in force today!
ditto.
To whom should we address letters?
I’m thinking NPR and our state senators.
Are bank runs are caused by banks not having enough cash reserves? Cash reserve requirements are now zero. I read a Chuck Jaffe article at nasdaq.com about how due to the end of check “floating” at least one bank made a person wait 11 days to get the remainder of a cashed check, i.e. check for $23,000, only the first $5000 is recieved, the rest you get in 11 days. Is this how bank runs begin?
Saw my 1st 6pk of made in China beer at a Midwestern grocery store… does Budwieser = RCA (The TV manufacturer)? A distiller is a pretty secure job, was a TV factory worker viewed the same in the 1970’s?
No wonder it is so important to disconnect the Yen from the Dollar. The Amerodollar stands at the ready. Im not sure but I think the infomercial the other night said $450,000 loan and no payments for twenty years.
Maybe It IS cheaper to pay a $25-50 Bank wire transfer fee so you can withdraw or have access ASAP???
or wait the 11 days?
I deposited a $12k check at my Wells Fargo account and they only made $1000 available for the first 2 weeks. Apparently this was because my balance beforehand was only $4k? I don’t know of any decent banks around here anymore.
The Chicago Tribune writes an article about where realtors live and how emotion played a major part in their decision. It’s sickening how transparent this asrticle is.
http://www.chicagotribune.com/classified/realestate/realestate/chi-0703250360mar25,0,3653981.story?coll=chi-classifiedrealestate-hed
From the Guardian
Thomas Palley, a US economist, believes the Fed now faces a dilemma. “If the Fed pushes rates too high in its attempt to choke off wider inflationary effects of asset inflation, it risks triggering a credit crunch and defaults, as is now happening. Conversely, if it does not push rates high enough it risks triggering accelerated inflation as agents borrow more in anticipation of rising prices. This implies a knife-edge situation, with the economy being held hostage by asset speculation.”
As a good Keynesian, Palley’s solution to this dilemma is quantative measures to regulate the supply of mortgages so that interest rates could be cut without pumping up a new housing bubble. Credit controls are, however, anathema to the financial sector and such is its stranglehold there is currently no prospect of them being reintroduced.
This, though, is a case of the tail being allowed to wag the dog. Right back to Thomas Jefferson, there has been an American tradition that has viewed big finance with deep suspicion. Indeed, FDR drew on this when he talked in his inauguration speech of “social values more noble than mere monetary value”.
http://tinyurl.com/38s57h
“British holidaymakers are continuing to shun America despite the favourable pound-dollar rate, it was revealed today.
The difficulties in getting through American customs on arrival in the USA are cited as the greatest deterrent to visiting the country in a US-based poll.
A total of 4.17 million Britons visited the USA in 2006 compared with 4.34 million in 2005 and the pre-September 11 figure of 4.70 million recorded in 2000, figures released by the US department of commerce showed. …”We have lost millions of international travellers since 9/11 and the problem is only getting worse,” said Geoff Freeman, executive director of the Discover America Partnership, a coalition of American business leaders working to strengthen America through the power of travel…”As travel around the world skyrockets, the US is mired in a slump. It is time for (US) Congress to address this growing problem in a way that both strengthens our security and improves the efficiency of the travel process.”
Guardian Mar 26
http://tinyurl.com/2xx6uu
IS THIS THE FUTURE OF THE HOUSING BUST?:
Florida: City to Seize Homes Over a $5 Parking Ticket
Brooksville, Florida proposes to foreclose homes and seize cars over less than $20 in parking tickets.
Brooksville, FloridaThe city council in Brooksville, Florida voted this week to advance a proposal granting city officials the authority to place liens and foreclose on the homes of motorists accused of failing to pay a single $5 parking ticket. Non-homeowners face having their vehicles seized if accused of not paying three parking offenses.
According to the proposed ordinance, a vehicle owner must pay a parking fine within 72 hours if a meter maid claims his automobile was improperly parked, incurring tickets worth between $5 and $250. Failure to pay this amount results in the assessment of a fifty-percent “late fee.” After seven days, the city will place a lien on the car owner’s home for the amount of the ticket plus late fees, attorney fees and an extra $15 fine. The fees quickly turn a $5 ticket into a debt worth several hundred dollars, growing at a one-percent per month interest rate. The ordinance does not require the city to provide notice to the homeowner at any point so that after ninety days elapse, the city will foreclose. If the motorist does not own a home, it will seize his vehicle after the failure to pay three parking tickets.
Any motorist who believes a parking ticket may have been improperly issued must first pay a $250 “appeal fee” within seven days to have the case heard by a contract employee of the city. This employee will determine whether the city should keep the appeal fee, plus the cost of the ticket and late fees, or find the motorist not guilty. Council members postponed a decision on whether to reduce this appeal fee until final adoption of the measure which is expected in the first week of April.
The full text of the ordinance is available in a 605k PDF file at the source link below.
Source: PDF File Ordinance No. 743 (Brooksville, Florida City Council, 3/19/2007)
What a bunch of a-holes. I think munipalities would be better served if they could get state DMVs on board to not reissue licenses or plates until your parking tix are paid.
WOW Zero… you are smarter in 2 sentences then the whole City Council of Brooksville!…………. LOL!!!
This will get lead flying at both Brooksville City Councilmembers and Brooksville parking nazis. Pulling this kind of sh!+ is a good way to get lamposts decorated with politicians.
Paul
Feb new home sales? I thought the data was due out at 8:30 eastern.
848K, down 3.9%.
Turn out the lights!!
Versus expected increase of 7% per CNBC. The breakdown by region was crazy, down ~25% in Northeast but up ~25% in West. Does that make any sense?
Jim the Realtor at bubbleinfo.com has compiled some March San Diego numbers by week. Last week closings were down 52% vs. same week in 2006! Just one data point, but March could be really ugly if the Realtors don’t fudge the numbers.
BREAKING
NEWS New home sales tumble 3.9% to 848,000 annual rate, Reuters report; figures well below expectations. Details soon.
whoops… so much for any hope of revitalizing the bubble.
Don’t worry though. I read in the paper the industry will be rebounding by this Fall.
Very bad news for the bulls. Friday’s data was merely noise, today’s is downright ugly and more meaningful. Sell-off imminent?
I’d say so. Man, you can’t trust anything anymore. Breakouts, breakdowns, what have you. It’s a trader’s market. Great for the tax man.
Given the Fed’s ability to goose the system, I’m still skeptical of a big sell-off.
buttonwood blogspot
There’s just no doubt that the cash spigot is wide open not only at the Federal Reserve by way of its so called “window” at the New York Fed Bank, but also at the U.S. Treasury. The figures for Monday alone show that a 1-day $10.5 bln repurchase (repo) agreement was conducted at the NY Fed and another $5-1/2 BILLION was injected from the U.S. Treasury through a transaction known as a Term Investment Option, or TIO. That’s $20-BILLION in a day. This is temporary cold, hard cash that can go directly to money desks on Wall Street to influence the markets, or it can even be loaned out by the broker dealers which count among their ranks the biggest names in banking.
Right, but it’s time to screw over those who got squeezed out last Thursday and Friday or bought the breakout over the 50 dma just like the “h&s” devotees (huh?????) got hosed. Wash and rinse.
This is what I call stock market inflation. It is a very easy explanation for the “equity premium puzzle” which has dumbfounded the brightest financial economists in academia for years.
Wash and rinse. Repeat cycle as needed, ad nauseam.
Makes a decent living for me without having to answer to anyone. I eat what I kill.
I meant no disrespect. Takes a strong stomach, though. Mine’s just about had it.
Don’t know if this will come in as a link, but here is a story that shows how people can get sucked into a toxic. Not trying to excuse the borrowers, but people should realize how financially unsophisticated people can be ‘escorted’ into a bad decision…
http://www.9news.com/money/article.aspx?storyid=66926
No spillover effects from subprime implosion?
“Citigroup is weighing a restructuring plan that is likely to involve around 15,000 job cuts and a charge against earnings of more than $1 billion, according to a published report Monday.
CEO Charles Prince announced a cost-cutting review of operations late last year and has billed the outcome as critical “.
http://money.cnn.com/2007/03/26/news/companies/citigroup_jobcuts/index.htm
I quickly skimmed the front page WSJ article on the 15K “restructuring” job cuts announced by Citigroup for any mention of subprime lending. I either missed it, or it was completely omitted.
Grim Housing News..
Sales of new-homes unexpectedly slowed again in February, falling 3.9% to a seasonally adjusted annual rate of 848,000, the lowest since June 2000, the Commerce Department reported Monday.
Economists surveyed by MarketWatch were expecting an increase in February to about 1.00 million units.
Sales were down 18.3% compared with February 2006. Sales in January were revised lower to show a 15.8% drop to an 882,000 annual rate compared with 937,000 reported previously. Reported sales in December and November were also revised lower
Inventories of unsold homes rose 1.5% to 546,000, representing an 8.1-month supply, the largest inventory in relation to sales since January 1991. The inventory is up 26.6% in the past 12 months.
The number of completed but unsold homes rose to 179,000 from 177,000, up 43% from a year earlier.
http://www.marketwatch.com/news/story/new-home-sales-fall-7-year-low/story.aspx?guid=%7BA1D8CD82%2D1EB9%2D4E46%2DBDF5%2DDB0BA246F1DE%7D
Like I said, bad news. Hard to spin this into anything sanguine. Sell sell sell.
The elephant that was hiding under the living room rug just took a massive dump. Open the windows, please, before I suffocate.
priceless metaphor. Thanks for the laugh!
You think you have it bad? Think of the FBs with their head up the elephant’s a$$
“…unexpectedly slowed again in February, falling 3.9% to a seasonally adjusted annual rate of 848,000, the lowest level since June 2000, the Commerce Department reported Monday.”
Expect the unexpected (to the low side) from here on out, as main stream economists are in propaganda-inspired collective denial.
Regarding the 848K, does that (still) include cancelled orders? I am wondering if DOC will have to revise its new home sales counting methodology in the wake of this bust?
No, that was the reason for the revision in sales from January from 937K to 882K.
IMHO the revision to new home sales is not important, the important numbers will be revisions to existing home sales in May.
Hoz — Could they get it right on the first shot if they wanted to, or are revisions necessary to correct for order cancellations?
Don’t forget that they revised Nov. and Dec. lower too.
Revisions are expected for new home sales in both rising sales and declining sales markets. In rising markets sales are revised upwards. The home builders are much closer to reality now than 27 years ago when estimates were off by as much as 50%.
a joke back in ‘80 was ‘they aren’t giving numbers for new homes, they are naming them.’ Home sales numbers at that time were so horrible nobody wished to report.
Economists thought it would rise to a 985,000 rate? Is there anyone else in America who truly thought new houses are selling more rapidly? What are these people smoking and how can I get some? F
http://www.bloomberg.com/apps/news?pid=20601087&sid=a1O6o35MwpIA&refer=home
My take on new home sales figures, which as others pointed out, were ugly…
There’s no way to spin this one — the new home sales report was simply awful …
* New home sales DROPPED 3.9% between January and February, versus expectations for a gain of 5.4%. On a year-over-year basis, new home sales were down by a sharp 18.3%. And it gets even worse — the seasonally adjusted annual rate of sales – 848,000 – is the lowest going all the way back to June 2000!
* Sales were down in three out of four regions (Northeast, Midwest, and South).
* The supply of new homes for sale rose to 546,000 in February from 538,000 in January. That’s the highest since October, and it reverses the improvement in inventory trends we had seen the past few months. Worse, it represents 8.1 months of supply at the current sales pace. That is a huge deterioration from 7.3 months in January and a fresh cycle HIGH.
* Median prices? They rose to $250,000 from $243,200 in January. However, median prices are still down 0.3% year-over-year.
There is simply no sugar-coating these numbers. They show a new home market that is weak, weak, weak. The fact median prices rose, but sales dropped sharply, tells me that any attempt by home builders to raise prices will be met by stiff consumer resistance. The only way companies are going to be able to work through the major supply glut we have is by cutting prices and adding more incentives.
I’ve been saying for a while that the housing market would remain depressed in 2007 – that forecast looks spot on, given the deterioration evident in the Census Bureau figures. It’s worth noting that the subprime mortgage market didn’t really start falling apart until late February. That means these statistics do NOT include a big chunk of the fallout from tightening lending standards. Sales could be even worse in March, April, and May if lenders cut back on 100% LTV loans, stated-income financing, high-risk, short-term subprime ARMs, and more.
I’m going to try to get a chart or two up on my blog to give a longer term perspective on supply and sales…
http://interestrateroundup.blogspot.com/
Sales volume increase in the W and decreases in all other regions skewed median prices up; however, yoy prices were down 0.03 pct.
50% short. Fibonacci strikes again.
Does Fiboacci always strike the week after Fed meetings?
“Fibonacci” (misfired on that “n”)…
Hmmm. Yummy. I like Italian.
“When it comes to selling stocks, it is plain that nobody can sell unless somebody wants those stocks. If you operate on a large scale you will have to bear that in mind all the time. A man studies conditions, plans his operations carefully and proceeds to act. He swings a pretty fair line and he accumulates a big profit – on paper. Well, that man can’t sell at will.”
“Reminiscences of a Stock Operator” 1923
http://www.bankrate.com/brm/news/financial_literacy/March07_mortgage_poll_national_a1.asp
How funny. 34% of those that knew they had an ARM have no plan, what does that say about the 34% that don’t even know what kind of loan they have.
this is a great read txchick… look at the second chart, i’d like someone to interpret this for me:
What do you plan to do when your ARM loan readjusts?
24% answered “Don’t plan to still have the loan when it readjusts”… wtf does that mean? There’s a “Move” option (only 4%)… it’s not Refinance… it’s not get another ARM…. is this 24% the investors who don’t occupy the place? It’s the only thing I can think of.
It is amazing to us but most Americans do not realize that things have slowed much less that we are entering a crisis. Here is Chicago all you need to do is walk around and see all the for sale signs and check out the wildly differnt prices for similar units all of which are not selling, to see that things will get ugly. But taslk to mast people and the most you will hear is that things have slowed.
Not suprising since most Americans did not think that closing so many plants and moving them overseas was a problem till they lost thier jobs.
Don’t worry, all is well:
http://www.mortgagenewsdaily.com/3262007_Mortgage_Resets.asp
“Christopher L. Cagan, Ph.D., Director of Research and Analysis of First American CoreLogic recently released Mortgage Payment Reset: The Issue and the Impact. Dr. Cagan utilized two large databases to conduct his study: information on over 32 million single-family homes and condominiums and townhouses in 694 counties and 41 states plus Washington, D.C and including over two thirds of the nation’s population; and a database consisting of 25.9 million active first mortgages from all fifty states and the District.
…
The study found that the risk of default due to rate reset will result in some 1.1 million foreclosures, but they will be spread out over a total period of six to seven years. This number represents 13 percent of all adjustable-rate mortgages originated for purchase or for refinancing from 2004 to 2006 and will total $326 billion in debt It is further projected that an additional $112 billion will be lost post foreclosure and resale to remaining equity, lenders, and investors, again spread over several years. “These losses represent less than one percent of the total mortgage lending projected for that period. Thus, mortgage payment reset will not break the national economy or the mortgage lending industry.”
This impact, however, will not be spread evenly. It will be the teaser-rate and sub-prime mortgages originated in the last three years that will bear the brunt of the reset. These loans will begin the reset processes earlier than market-rate adjustable loans and are more likely to default.
The study projects that 32 percent of teaser loans will default due to reset as will 12 percent of sub-prime loans while only 7 percent of market rate adjustable rate loans will do so.”
That all sounds fine, but wait: here’s what looks like a peek at the assumptions:
“But these projections of foreclosure are sensitive to changes in home prices. Because the default risk is a combined effect of higher payments and lower equity even a small increase in house prices will lift homes into a positive or near positive equity position and allow potentially defaulting buyers to escape difficulty through refinance or sale. Conversely, a small decrease in housing prices will have the opposite effect, increasing the risk of default. In fact, each one-percent rise in national prices will result in 70,000 fewer homes lost to reset-driven foreclosure while a one-percent fall in prices will cause an additional 70,000 homes to enter foreclosure.”
Does this mean they expect RE prices to stay flat? And if prices drop 15%, then another 1 million will default?
Exactly, although we should be careful to believe that it’s a simple linear progression beyond a few percentage points. I bet things, in reality, rapidly decay once home prices drop 10, 15, 20 percent.
41 states plus Washington, D.C
9 missing states…which ones and why?
Ben posted from Bloomberg that The median U.S. home price was $212,800 in February was down 7.6 percent from a record in July. So I guess that 490,000 more foreclosures are already baked in.
Dr. Christopher Cagan, meet Dr. Irving Fisher. Dr. Fisher, this is Dr. Cagan… As you two have a GREAT deal in common, I’m sure that you’ll have much to discuss…
This from Barry Ritholtz at The Big Picture:
“This report is hard to reconcile with last week’s Existing Home Sales; One of them is likely wrong, and I suspect the NAR prepared Existing Hom Sales is the dud . . .”
So, any bets as to when the number crunchers at the NAR get hauled before the SEC or a Congressional committee to explain their fraud and attempted market manipulation?
Never. You need somebody with better “brand” recognition for congress to engage in the meaningless spectacle that is being-dragged-in-front-of-a-congressional-committee.
(Honestly, has the public display ever accomplished anything?)
Fingerpointing is an important part of the psychological resolution of a bubble and its associated frauds. Not that I expect it to accomplish anything other than a complete and utter revulsion and distrust at anything the REIC says from now on. But you have to admit, seeing DL taking the fifth amendment on live TV would be good theater and might well mark the bottom or at least the point where most people have sobered up and are picking up the pieces. Remember the Wall Street analysts, Enron, etc.
And listening to Michael Mandel of Businessweek spinning like mad on CNBC a little bit ago about how the subprime mess won’t spillover to the rest of the credit markets makes me wonder if the credit rating agencies won’t be part of the parade as well. To connect the dots, Businessweek is part of McGraw-Hill which owns Standard & Poors (which contributes over half the company’s earnings and stands to take it in the shorts if things unravel). Might Michael be “talking his book?”
Why shouldn’t the NAR be allowed to try its hand at market manipulation? If manipulation is good for the stock market, then why not the housing market?
Dirt Cheap Investments…
Lucky for you, nobody reads anymore and places like Amazon are more than willing to sell used books, for almost nothing.
It seems there is a financial bias against “used” information, for some reason. You win.
Absurd.
I’ll no doubt think of more titles, but here’s what i’d recommend:
http://www.amazon.com/Cadillac-Desert-American-Disappearing-Revised/dp/0140178244
http://www.amazon.com/Adventures-Your-Money-George-Graham/dp/142125316X/ref=sr_1_1/104-2041811-7233546?ie=UTF8&s=books&qid=1174922872&sr=1-1
http://www.amazon.com/s/ref=nb_ss_b/104-2041811-7233546?url=search-alias%3Dstripbooks&field-keywords=guns+germs+and+steel&Go.x=7&Go.y=11&Go=Go
http://www.amazon.com/s/ref=nb_ss_b/104-2041811-7233546?url=search-alias%3Dstripbooks&field-keywords=collapse&Go.x=8&Go.y=8&Go=Go
http://www.amazon.com/s/ref=nb_ss_b/104-2041811-7233546?url=search-alias%3Dstripbooks&field-keywords=blue+highways&Go.x=12&Go.y=8&Go=Go
http://www.amazon.com/s/ref=nb_ss_b/104-2041811-7233546?url=search-alias%3Dstripbooks&field-keywords=ten+lost+years&Go.x=13&Go.y=6&Go=Go
http://www.amazon.com/s/ref=nb_ss_b/104-2041811-7233546?url=search-alias%3Dstripbooks&field-keywords=anasazi+america&Go.x=9&Go.y=5&Go=Go
http://www.amazon.com/s/ref=nb_ss_b/104-2041811-7233546?url=search-alias%3Dstripbooks&field-keywords=Confederacy+of+dunces&Go.x=10&Go.y=10&Go=Go
Amazon is not selling used books. Individual sellers are selling those books from home, like eBay. Saying Amazon is selling used books is like saying that eBay is selling all those items on their website.
The fact that so many used books are sold on Amazon may indicate that a lot of people are reading. Just look at how many feedbacks some of the sellers have, in the 5 digits, and realize that about 1 in 10 buyers bother to even leave feedback.
Washinton post
On observing Federal Reserve Chairman Ben Bernanke minimize the likely economic impact of today’s deepening housing market problems, one has to wonder what, if anything, might the Federal Reserve have learnt from the bursting of the dot-com bubble in 2001. At that time, too, the Fed downplayed the economic consequences of a collapsing asset market. And it did so only to find itself, a few months later, in the awkward position of having to aggressively cut interest rates to prevent the dot-com crash from precipitating a deep economic recession.
Drawing parallels between the earlier dot-com meltdown and today’s unfolding problems in the housing market would seem appropriate given the very strong run-up in home prices over the past six years. As Robert Shiller, the renowned Yale University expert on the U.S. housing market, has correctly observed, between 2000 and 2006, home prices, adjusted for inflation, increased by a staggering 80 percent. That remarkable increase in home prices, which has no precedent in the United States over the past hundred years, increased household wealth by around 50 percent of GDP, or by an amount not dissimilar to that created by the earlier run-up in dot-com equity prices.
Among the more important factors fueling the housing market boom in recent years was the maintenance of abnormally low interest rates by the Fed in the wake of the bursting of the dot-com bubble. Not only did the Fed cut interest rates to as low as 1 percent by 2003, but it was also very slow in restoring interest rates to more normal levels over the next four years. No wonder, then, that speculative home purchases became increasingly rampant as the housing boom gathered pace.
Adding fuel to the housing market boom was an unprecedented relaxation of mortgage-lending standards and the introduction of a vast array of new lending instruments specifically designed to make it easier for the least creditworthy borrowers to buy homes. No longer were borrowers required to verify their income or to provide a credit record to qualify for a mortgage loan. And no longer did they need to pay high interest rates or amortization payments in the early stages of their loan, as adjustable rate mortgages and interest-only loans became the norm.
The trouble with today’s housing market is that the chickens are now coming home to roost as the period of easy home credit has run its course. Fearful of igniting inflation, the Fed has restored interest rates to 5.25 percent and it shows no sign of dropping its inflation guard any time soon. At the same time, an alarming rise in defaults at the subprime, or the weak credit end, of the home market has led to the folding of many subprime mortgage lenders, which last year accounted for as much as 20 percent of total mortgage lending. Rising defaults have also prompted the regulators, who were pretty much asleep while the party was in full swing, to now take it upon themselves to shut the easy mortgage credit door long after the horse has bolted.
As the easy credit cycle has run its course, home prices at the national level, which were increasing at a 15 percent annual rate as recently as last year, have already begun to level off. Looking ahead, it is difficult to see why nationwide home prices do not fall at an accelerating pace in response to the housing market’s rapidly deteriorating fundamentals. Not only do we have a large inventory of unsold homes overhanging the market and the unwinding of excessive speculative positions, but we are faced with the prospect that potential demand for those houses gets choked off by tightening credit standards and by the resetting of adjustable rate mortgages at appreciably higher interest rates. As if that were not enough, the housing market will also have to absorb an estimated 500,000 houses that will come back on the market as a result of foreclosures on defaulted loans.
Optimists argue that the prospective debacle in the housing market is not of the greatest importance for the whole of the U.S. economy, since residential construction only accounts for 6 percent of U.S. GDP. That line of reasoning, however, overlooks the very depth of the housing market recession as suggested by a decline in housing starts of over 30 percent over the past year. It also overlooks the likely spillover effect of a housing market recession on the many industries that provide furnishing or appliances to newly constructed homes.
More important still, the soft pedaling of the housing-market bust overlooks the very high probability that declining home values will almost certainly impact household spending decisions as households see their main source of wealth decline with falling home prices. As a result, we could very well see the housing market decline shaving off anywhere between 2 and 3 percentage points from GDP growth in 2007, which could take the U.S. economy close to recession.
It is all very well for Chairman Bernanke to act as a cheerleader at this very difficult time for the U.S. home market. It would be a grave mistake, however, for him to allow his wishful thinking to influence his interest rate decisions in the months ahead. If the Fed’s past experience with the bursting of the dot-com bubble is any guide, being tardy in cutting interest rates will only exacerbate the negative impact of the housing market on the overall economy and lead to an unnecessary degree of pain.
Desmond Lachman is a Resident Fellow at the American Enterprise Institute.
“…being tardy in cutting interest rates will only exacerbate the negative impact of the housing market on the overall economy and lead to an unnecessary degree of pain.”
Unfortunately, it was agressive interest rate cuts that created the mess we currently have in the housing market. I am not sure I understand how Lachman expects more respiking of the punchbowl to solve anything from here, aside from reinvigorating speculation and overbuilding of McMansions.
Right, GS. We may be about to the point where BB is going to find out what it means to be “pushing on a string.”
Time to buy foreign currency CDs.
some updated lyrics for Al Jolson’s 1932 Depression standard:
Once I built a website, made it run, made it race against time
Once I built a website, made it run
Buddy can you paradigm?
weak @ best
That’s hilarious and sad at the same time.
Interesting gold discussion today. the last time gold spiked, the prime rate was 12% and mortgages were 18%, inflation was double digits.
Volcker stepped in and cut rates, cleaned up the mess, and gold crashed and lingered for 25 years.
oops I mean Volcker raised rates, which cratered gold
A few on here would quibble over what caliber bullet was being loaded into the rifles, on the eve of them being lined up against the wall…
Enjoy that last smoke.
18% mortgages: not again in our lifetime, I’m afraid. In Europe they will need one full generation to bail out the stupid buyers of the last boom (by continuous inflation). In Netherlands longterm rates are now 3.5-4% (nearly the lowest in 400 years). 18% rates would annihilate the Dutch housing market and all the Dutch banks. And on top of that they deperately need to do away with the stupid HMD (should save at least another 50% off the price) and homebuyer subsidies and free housing put options (another 50% off at least).
Thanks to our brilliant politicians and banksters, there is zero chance of that happening, so gold will be OK.
continuous inflation: that should be continuous home price inflation (by keeping real rates negative).
“”This is just horrific,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics Ltd. The housing sector went into decline and hurt overall economic growth after a long boom. There have been signs the market reached a bottom and was struggling to recover. But Monday’s data posed the question whether the sector had more distance to drop.”
http://www.moneyweb.co.za/mw/view/mw/en/page94?oid=82399&sn=Detail
What data were they exactly looking at to make their prediction that a bottom had already surfaced? Must have been DL’s millionth prediction that we had reached a bottom.
“What data were they exactly looking at to make their prediction that a bottom had already surfaced?”
This was due to group think based on hearsay recited in an echo chamber. No data was involved in the opinion.
I was thinking…
I’ve made a couple of calls for the collapse: (March 6th, Alan Greenspan’s Birthday and March 15th, The Ides of March and perhaps it was prickful wishing on the former and historical precedence on the later)
And admit that i’d seem like a bad indicator to most, but…
2 things have dawned on me.
April 1st is coming, real soon.
A more highly appropriate time for everything to wind down, yes?
2ndly:
Growing Tulips for the first time, oh so easy to grow, but they are on a rather short leash, as far as their beauty goes.
Right now, they are vibrant, but will be dead and gone with a few weeks.
What better talisman to call this market?
Be honest, if it all fell apart today or 3 months from now, you wouldn’t be surprised either way, would you. It’s inevitable.
Another book you must read:
http://www.amazon.com/Extraordinary-Popular-Delusions-Madness-Crowds/dp/051788433X
I think next year will be the 150th Anniversary of it’s being published.
Good timing, to update, as neccesary.
You know what I like about the internet?
Out there in the “real” world, people tend to talk over one another and all too often, the overbearing one wins, by default.
We all talk in the same calm voice here, a good thing.
I’ve enjoyed having you stimulate my grey matter. Thank you.
Anybody see the 2 articles about housing in Barron’s? Shiller sees a cumulative nominal price decline of 20% to 30% over 5 to 10 years. And remember that’s nominal, real would be greater than that. He sees a slow and drawn out death-by-a-thousand-cuts decline.
Sy Jacobs is short Moody’s and McGraw-Hill.
Built on Sand (Shiller):
http://online.barrons.com/article/SB117469842778047601.html?mod=9_0031_b_this_weeks_magazine_main
Slow-Motion Train Wreck Picks Up Speed (Sy Jacobs):
http://online.barrons.com/article/SB117469260899347441.html?mod=9_0031_b_this_weeks_magazine_main
“He sees a slow and drawn out death-by-a-thousand-cuts decline.”
Yup. It’s a growing consensus.
make that 40-80% decline over 10-20 years for Europe. Yawn …
Ben,
You’ve been a good agent provacateur~
Keep it up.
2nd try. Anybody see the 2 articles on housing in Barron’s? Shiller predicts a 20%-30% cumulative nominal decline over the next 5-10 years. Long, slow and drawn out. Sy Jacobs is short Moody’s and McGraw-Hill.
Local foreclosures more than tripled in last year :
http://www.bakersfieldbubble.blogspot.com/
Tracking NODs in 93552 (palmdale) show 1600% YOY increase for Feb. This is getting ugly.
Anyone looking to buy boat and furnishings as well as the house? I look to see many more of these types of ads in the not too distant future.
http://phoenix.craigslist.org/rfs/300815881.html
Is it possible to finance the boat on the same loan you use to buy the house? (”Incentive” financing…)
From the WSJ Online:
Analysts Say Bankruptcy Filing
From New Century Is Imminent
By LINGLING WEI
March 26, 2007 3:08 p.m.
NEW YORK — New Century Financial Corp. likely will file for bankruptcy imminently, analysts said Monday, pointing to the latest move by two of the company’s major bank lenders to take possession of loans previously used to secure their financing.
The Irvine, Calif., lender of high-risk, high-yield mortgages disclosed in a regulatory filing Thursday that it agreed to transfer to Barclays PLC the outstanding loans it made with lines of credit provided by the London-based bank — in exchange for Barclays forgiving its obligation to buy back $900 million of those loans to repay the bank.
Meanwhile, Morgan Stanley has arranged an auction of $2.48 billion of subprime mortgages from New Century, which represent the collateral backing the investment bank’s $2.5 billion credit line earlier extended to the lender, according to an advertisement the New York firm posted in The Wall Street Journal on Friday.
Both Barclays and Morgan Stanley “felt so uncomfortable with” New Century’s ability to repay them in full that “they decided to just take the loans and auction them off themselves,” said analyst Christopher Brendler at Stifel Nicolaus. “I’m surprised that New Century hasn’t filed for bankruptcy already.”
Is NEW’s prospective bankruptcy filing further evidence that subprime problems are “contained”?
I think it means Morgan Stanley and Barclays decided to demand their collateral while they can still sell it for something. 50% of something (the subprime loans NEW put up as collateral) is better than 100% of nothing (or whatever NEW can pay its creditors after a restructuring which could take months). Of course as more subprime loans get dumped the more depressed their prices become.
We’re No. 2! (FL is No. 1…)
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Report: California Home Foreclosures Surge
2nd Highest Level in the Nation
LOS ANGELES, Mar. 26, 2007 (CNS) - More than 16,000 California homeowners foreclosed on their properties in February, a 79 percent increase over the same period last year and the second highest level in the nation, according to a report released Monday.
After Florida, California had the highest number of total foreclosure filings in February, according to a report released Monday by RealtyTrac, which monitors foreclosure activity.
California’s total of 16,273 foreclosure filings during the month represented a 4 percent increase over January 2007. The state’s February foreclosure rate of one foreclosure filing for every 751 households was 1.2 times the national average and ranked 13th highest among the states.
http://abclocal.go.com/kabc/story?section=local&id=5136210
March 26 (Bloomberg) — Connecticut officials asked for an arrest warrant against Mitch Heffernan, saying the former head of Mortgage Lenders Network USA, the second-biggest subprime lender to go bankrupt in the past year, didn’t pay employees as the company slid toward insolvency.
“We take pretty strongly the payment of wages in Connecticut,” Pechie said. “If you work, you should be paid. We’ve had people arrested over $125.” Each count of not paying a worker is a felony punishable by as much as $5,000 or five years in prison, he said.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aY7NrKJ8qRUE&refer=home
Subprime Defaults May Spread to Automobile Loan Bonds, S&P Says
By Mark Pittman
March 26 (Bloomberg) — Bonds backed by automobile loans may be hurt by rising subprime mortgage defaults as people with poor credit struggle with their household debt, according to Standard & Poor’s.
Capital One Financial Corp., Wachovia Corp., Wells Fargo & Co., and other lenders have lent more funds to people with bad credit in the past few years to sustain growth, S&P said today in a report by analysts led by Mark Risi. The loans are also for longer terms, increasing the probability of default, the analysts said. About 68 percent of 2006 subprime auto loans were due in five years or more, Risi said.
“There could be some fallout from subprime in auto loans,” Risi said in an interview. “We don’t have much data yet. We’re still in collection mode. It’s probably going to be hard to say for a while, but there have been some material differences” in the most recent subprime auto loan securities, he said.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a7etPDiLQq4s&refer=home
Tiptoeing out the back door…
——————————————————————————-
US subprime market
26 Mar 2007
Morgan’s New Century fire sale
New York Post
In a dramatic reversal, Morgan Stanley is in the process of holding an auction for $2.48bn (€1.8bn) in mortgages from subprime lender New Century.
The loans represent the collateral given to Morgan for a $2.5bn credit line the firm extended to New Century. As the company sank deeper into dire straits earlier this month, Morgan assured the market that the loans and repurchase agreements it had made to the company were in order.
It appears that Morgan has less confidence in the health of this collateral now that it had two weeks ago. Now, Morgan does not want to draw attention to the sale: It announced the sale of the 13,200 loans in a small public auction notice in a print ad Friday.
http://www.financialnews-us.com/?page=ushome&contentid=2347453295
Subprime won’t affect NYC, because it’s different there…
—————————————————————————————
Monday March 26, 2007
Senator wants federal oversight of subprime lending market
by Newsday
Sen. Charles Schumer, D-N.Y., has proposed federal oversight of the subprime lending market, warning that 53,000 families in the New York area are at risk of losing their homes when the rates of their subprime mortgages jump.
“These mortgage brokers prey on people who often are not sophisticated in terms of home buying,” Schumer said Sunday. “It’s just despicable because these are people who are putting all their hopes and dreams into a home, and then they lose it.”
Subprime lenders offer mortgages that often require no down payment and are made at low “teaser” rates that balloon after a few years. They target borrowers with low incomes or tarnished credit histories who otherwise might not qualify for a loan.
Schumer said an analysis by his office found that an estimated 1.8 million American families — including nearly 23,000 in New York City and 19,000 in Nassau and Suffolk counties — could face foreclosure within the next two years when their subprime loan rates spike.
http://www.dailymail.com/story/Business/+/2007032611/Senator-wants-federal-oversight-of-subprime-lending-market/
Subprime loans begin meltdown
Home foreclosure rate will climb, experts say.
St. Louis Post-Dispatch
Published Monday, March 26, 2007
ST. LOUIS - The possibility that Katherine Gwinn will lose her St. Louis home has unfolded like a nightmare. She has trouble understanding the forces that have led to frighteningly high mortgage payments, and she can’t control them.
The 53-year-old woman is among a rapidly increasing number of Americans swept into a maelstrom of foreclosures created by subprime mortgages - high interest-rate products targeted toward people with shaky credit.
The foreclosure rate among all types of mortgages has hit a 3½-year high, according to the Mortgage Bankers Association. And experts said the worst is yet to come.
“We are not even hitting the crest yet. We are standing here waiting to be knocked over,” said Chris Krehmeyer, executive director of Beyond Housing, a St. Louis-based not-for-profit group that runs foreclosure assistance and homeowner counseling programs.
Although there’s nothing new about foreclosures, Krehmeyer said, “what is astounding is the scope and scale of it.”
http://columbiatribune.com/2007/Mar/20070326Busi005.asp
(I can tell from the dearth of news stories today on subprime that the problem is fully contained…)
————————————————————————————-
S&P raises 2006 subprime mortgage loss expectation
Mon Mar 26, 2007 4:19pm ET20
NEW YORK, March 26 (Reuters) - Standard & Poor’s raised its expectation for losses on 2006 subprime mortgage bond issues to as high as 7.75 percent from a previous peak assumption of about 6.5 percent, an analyst said on Monday.
Most investment-grade bonds made last year would remain protected even as underlying loan performance would be the worst in history, S&P said in a report published Thursday.
But the revision may have a “material” impact on the ratings of collateralized debt obligations, or securities consisting of slices of other bonds, S&P said. Residential mortgage bonds made up an average 73.8 percent of CDOs last year, up from 42 percent in 2003, it said.
Companies such as S&P use loss expectations to help decide how much protection a bond must have to carry ratings ranging from the top “AAA” designation to those below “BBB-,” the lowest investment-grade mark. “BBB”-rated bonds have less protection than “AAA” bonds, making them vulnerable to losses due to the slowing U.S. housing market and poor underwriting practices.
“When we look at protections, we still think the vast majority (of “BBB-” and “BBB” bonds) are safe,” S&P analyst Michael Stock said. However, downgrades are expected to rise “more than in past history,” he said.
http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2007-03-26T201859Z_01_N26384687_RTRIDST_0_USA-SUBPRIME-RATINGS.XML
Only in California…
——————————————————————————–
Lawmakers to tackle sperm washing, subprime lending, smoking bans
http://www.sfgate.com/cgi-bin/blogs/sfgate/detail?blogid=14&entry_id=14686
My home was foreclosed on today (I rent it). I went to the auction. It consisted of a woman with a briefcase standing by herself talking to herself in a monotone yet hurried voice. Obviously just going through the motions as there was no one to listen.
I was there to be sure that the foreclosure happened, and naively thought that a bank rep would be there to bid. Obviously the bank just files the paperwork, supplies the opening bid (to take back the property) and waits the outcome.
I mentioned that she must be lonely, and she said sometimes there was a huge crowd. Based upon the place I live, all of the foreclosures have LTV ratios that are way underwater. 20,000 leagues / big ass squid underwater.
Interesting. At least the landlord from hell is out of my life. Now we’ll just see what the lender does.
Paul
MSM Update:
I posted yesterday that ABC News was running a feature on today’s (Monday) evening news. Hosted by Charles Gibson. I watched it tonight and found out that this isn’t just a “feature”, it’s a “series” (not sure if it will last all week). There will be a 2nd installment on Tuesday’s evening news.
The feature came on at approximately 5:50 pm (toward the end of the newscast) tonight….
About Ayn Rand…
2 Camps~
Love Her
Hate Her
I’ll be the first to admit, that those schmaltzy romances, took a little getting over, but hey, let’s not forget, she wrote Chick Lit, way sophisticated Chick Lit.
From my perspective, we are in about 666 pages into the 1074 page tome. It’s getting really meaty.
I know who’d i’d secretly replace the 1957 characters with, using modern charlatans. How about you?
A book that this year is celebrating it’s Golden Anniversary and should be required reading, across the land.
Why not, it’s like a good cook book.
To Serve Man (revisited)
Do you ever wonder how flippers are making out now that the California market has ground to a halt? My son just gave me some important insight to one possible career switch. He told me about one of his nine-year-old friend’s dad’s next career after making a bundle on quick flips around San Diego. As reported by my son, the fellow makes money by “taking pictures of naked ladies.” Something tells me the price of underground porn will be the next thing to go after housing prices…
The Renter’s Manifesto
Why home ownership causes unemployment.
By Tim Harford
Posted Saturday, March 17, 2007, at 12:09 AM ET
http://www.slate.com/id/2161834/
Waist deep in business? More like neck-deep in feces.
———————————————————————————-
Subprime Suspects
Wall Street firms that should have known better get slammed by the housing collapse.
By Daniel Gross
Updated Monday, March 12, 2007, at 4:21 PM ET
Wall Street will be hurt by the housing collapse
Wall Street will be hurt by the housing collapse
Who’s to blame for the slow-motion disaster of the subprime lending industry?
Today’s excellent front-page Wall Street Journal article (subscription required) on the collapse of mortgage company New Century Financial deftly captures the catastrophe. In the past decade, a host of new lending companies have sprung up and expanded well beyond the capacity of their inexperienced, nouveau riche managers. Operating in a déclassé market sector—subprime home loans=used cars—cheesy managers, sleazy mortgage brokers, and their Wall Street enablers created a credit bubble. As in prior bubbles, executives focused on short-term compensation and rewards (parties, Porsches, etc.) rather than on building sustainable businesses. And, the subtext goes, because these guys were outside the financial- and capital-markets mainstream, the damage caused by their demise will be limited. It’s a classic case of dumb money.
But it turns out there was plenty of smart money in this dumb money business. Sure, upstart lenders and naive foreigners have gotten burned by subprime loans. But many of Wall Street’s best and brightest, the investors and firms lauded in Barron’s and Institutional Investor for their superior investing acumen and unrivalled ability to gauge and manage risk, are waist-deep in the business. What’s dismaying about the subprime failure is that so many Wall Street aristocrats and establishmentarians, caught up in the housing-credit bubble, threw their money into these iffy operations in 2005 and 2006, and now are paying the price.
Let’s meet some of the biggest losers.
http://www.slate.com/id/2161651/fr/flyout