Bits Bucket And Craigslist Finds For April 9, 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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an autopsy on the march jobs report
plus some hussman
http://immobilienblasen.blogspot.com/
the 58,000 increase in construction was a suprise- everyone I talk to is laying off- these are service contractors- -most have hired steadily since 1993
Must be Keebler elves cause there are no new construction jobs.
I’d believe Pravda’s numbers, before I believe my government’s numbers…
It pains me to say that.
Unfortunately this appears to be a true statement. I prefer
JoongAng Daily from Korea and Ria Novosti from Russia.
How were the Sequoias? The fish did not bite at all this weekend .
Were you using a subprime lure?
Those used to work…
Back in the day.
Just getting warmed up for the spring Bass run in a few weeks. So the lures had to be under water.
And then the large mouths try to bite more than they can chew.
“Bass fishermen know that if they get the timing right, they can catch 100’s of fish in a single day and quite often it can take more time to clean then catch your share. ”
Kinda like subprime
My buddy’s quite the fly fisherman and a 98.5% catch and releaser, (who isn’t?) and we went to a swimming hole (not yet, give it 2 weeks) and he caught a real pretty 13 inch Rainbow Trout and nothing more.
Quality, not quantity.
We named it Mr. 1.5%’er…
Hmmm… Good.
Another good week for the Housing Rout. NY Times , OK everybody, is running stories about All Things Bubble, and we are questioning the very nature of the Ownership Economy. In
NYC, ownership means you will rent out your attic and basement to cover the bills and pray that values go up. Lot of pain coming.
Haiku, lyrics and/or Limericks always welcome….
Not just in NYC, here in the Tampa Bay area, too. People are renting rooms with a bath in their homes. And asking what used to be the going rate for a one bedroom apartment. Good luck with that.
This week, for the first time in Sarasota I saw ‘ROOM for RENT’ signs stuck in the grass.
Penina, check out Craigslist for Tampa Bay and Sarasota/Bradenton. Under “Real Estate”, click on “Rooms/Shared”. Usually there are just a handful of ads, mostly for students looking for roommates. Now, it seems more people are looking for someone to help them with their mortgage payment. $600.00 for a room with a bath! In the Tampa Bay area. What a joke!
Or share a bath for $600!!
From Sarasota CraigsList:
>>The rent is $600/mo and includes all the utilities. The bedroom is good-sized with a large closet, and you would share a bathroom with a female roommate (who is not home much–she’s a live-in companion for a lady in Englewood). Let me know if you are interested and need more information.
“This week, for the first time in Sarasota I saw ‘ROOM for RENT’ signs stuck in the grass.”
Which might fit nicely with the uptick in divorces we expect.
I have a cousin who drank the kool-aid and bought way too big of a house for a single mom with three kids, and she had to get a boarder last year to make ends meet.
They’ve been doing this in downtown St. Petersburg for a while. A lot of houses here in Hyde Park rent out their dinky garage apartments to help cover costs, but such rentals are illegal because of the zoning, though I don’t see the city enforcing the law. Of course, it hasn’t seriously enforced zoning laws for six or seven years now, because doing so would have stopped the local bubble in its tracks. And now anyone with money or the right contacts can get a “variance” for anything.
You should turn all these people in. Even if no one ever follows up on the report, you can at least say that you did your civic duty.
Renting of rooms will act to soak up the demand for rentals of houses/apartments. This will put price pressure on rentals in general.
This price pressure from rentals will act to furher skew the already skewed rent-to-buy ratios thus extending the incentive for would-be-homebuyers to hold off their buying.
Heck, that nothing - in Phoenix they are packing them in 80 people to a house:
http://hosted.ap.org/dynamic/stories/A/AZ_IMMIGRATION_RAID_COOL-?SITE=VARIT&SECTION=US&TEMPLATE=DEFAULT&CTIME=2007-04-07-11-47-41
And how about Michigan?
http://tinyurl.com/36cnua
That is a really sad story about Michigan. And here’s what I don’t get: officials from the state gov are wringing their hands about it, and yet there are people who can’t afford their property taxes. Drop the taxes, meatheads!
States must balance the budget. Dropping taxes would mean slashing gov expenses.
Badly needed spending cuts.
Dropping taxes means the pork gravy train might come to a halt.
at least soon they’ll have FREE mp3 players
They can’t. The state of Michigan has a $600-800 million dollar shortfall this year and a projected $2 billion (yes, with a b) shortfall next year since the legislature eliminated the loathed SBT tax without also voting to replace the revenue. The Dem. governor is proposing a 2% tax on services (barbers and lawyers) while the Rep. legislature is floating a 9.5% sales tax on everything.
Last week, they had to make some kind of deal to avoid laying off state troopers. NO ONE lays off state troopers unless they’re desperate. (Imagine the soft on crime election ads).
Michigan is bleeding population that will never return. The “housing crisis” here will be solved (once again) by bulldozing excess capacity.
At least we’ll have practice when the real recession arrives…
Don’t be so down on the Great Lakes area…
Where are we going to put all the Southwest Drought Refugees?
Hmmm…
“Michigan is bleeding population that will never return.”
Population will return. I am not counting Michigan out yet. I agree with the bulldozing of excess capacity, though. Wishing and hoping that will happen in Florida. As to taxes, those proposals make Florida’s sales tax proposal look mild in comparison (since it eliminates the property tax).
Governments are just going to have to do what people do: tighten their belts and do without. You can’t squeeze blood from a stone.
Sorry. I’m not down on Michigan or the Great Lakes. I moved here from Chicago only a year ago and love the place. That said, I grew up in classic rustbelt Ohio. My hometown has the same population now as when I left in 1985 (50K +/-). Unless manufacturing returns to the U.S. in currently unimaginable way or hurricanes/drought/lack of AC drive people from the sunbelt, population in these places is not going to increase ahead of the birth rate.
Detroit is a mess and Ann Arbor had a pretty decent bubble going, IIRC. As a whole though, most of the state is quietly depreciating and what I’d call a manageable rate. Having dodged most of the run up, I think the state will be in a much better position than Cali and other states where its going to be like shutting off a crack pipe.
Water = 24 Karat Gold
Perhaps a water pipeline like Alaska. Sorry folks, can’t have it - that’s one of our best natural resources and it’s all ours.
Seriously, are there industries that need alot of water in their production process? Maybe the state should go after those industries, if they exist.
There can be no water pipeline from the great lakes.
There is a natural flow that requires standard levels for the sustenance of life as well as shipping. To think that Ohio and Michigan and Canada, three states that have the most to lose, will happily let Cali & Arizona deplete their natural resources for free is laughable.
We’ve already seen what happens when Oregon & Washington power utilities pull rank on Cali’s demands. This is nothing like the uproar starting over water that will be starting in the middle-teens.
The deprivations at Hetch Hetchy and the Colorado River will come back to haunt, as global warming is seen to be increasingly caused by the unnatural population in what is otherwise the desert of the Southswest.
It wasn’t called “The Great American Desert” in the 19th Century, for nothing.
Oh yeah, money quote from 1823:
“The party’s geographer, Edwin James, wrote of the region, “I do not hesitate in giving the opinion, that it is almost wholly unfit for cultivation, and of course, uninhabitable by a people depending upon agriculture for their subsistence. Although tracts of fertile land considerably extensive are occasionally to be met with, yet the scarcity of wood and water, almost uniformly prevalent, will prove an insuperable obstacle in the way of settling the country”
http://en.wikipedia.org/wiki/Great_American_Desert
Paid4Now,
Your interpretation is wrong.
Just because there was no runup doesn’t mean that the state will be in a better position.
The correct interpretation is that the loose lending held up prices which otherwise would’ve collapsed completely (same with Colorado.) They are in as much of a bubble as anywhere else except that since nobody thinks of assets declining in value, it appears that there is no bubble.
They are going to have a disastrous time.
The way I remember Washington state electric utility prices was wierd. (Most power from Hydroelectric - dams and Nuclear energy.)
When water levels were low prices went up. (Not enough capacity.) When water was plentiful, prices went up. (CA didn’t buy as much electricity - we have to make our profit somewhere.)
There must have been some Goldilocks years where the water resources were just right, but I don’t remember them
Last week, they had to make some kind of deal to avoid laying off state troopers. NO ONE lays off state troopers unless they’re desperate. (Imagine the soft on crime election ads).
This is a trick your gov officials pull. They throw out cuts for police, fire and anything related to children first, knowing full well that voters will go for tax hikes rather than cutting public safety and child services. How come they never throw out employee wage cuts and benefits and all those other wasteful gov programs. Deep cuts are possible if they’re motivated enough.
you must rememebr, a reduction in the rate of expansion is considered a wage cut for public works. so, the usuall 2-3% increase lowered to 1% increase, is considered a REDUCTION, even though its an EXPANSION.
Basic government accounting.
That gambit won’t fly in the future. Can’t go to the well when the well’s dry, so they’ll have to start making real cuts. They cut the wrong things, it’ll be their ass, too. Can’t wait.
“a couple in their 40s, left recently after they learned their house would be foreclosed upon. The husband, a carpenter, had lost his job. The wife did not work. They crammed what they could into their white Bonneville and drove off without saying goodbye.
Laitis said the house was paid for at some point but the couple took out a $75,000 home equity line of credit to buy a car and build a garage, now half-finished.”
Here we go again, the story starts out saying it is about the loss of auto jobs - but in reality it is about the bling, bling nonsense. Yha, let’s have a paid-off house then take out $75,000 and spend it on a new car. As financing a car for 30 years is such a good idea, especially the local cars.
Easy credit is the problem. Handing out credit cards to Katrina refugees had similar results. Consume, Consume!
In NYC if your a FB, it more like living in your basement while you rent out the rest of the house to make mortgage payments.
I actually know a couple of Brooklyn Brownstone owners who do this.
I have a friend in S.F. South Bay who rents out her whole house and lives in a travel trailer in the back yard in order to make her mortgage payment. Talk about the joys of home ownership.
I know people in both Bellingham and Seattle that do this. Both college educated idiots. “Bought” houses that they cannot afford to live in so they rent them out and rent smaller apartments for themselves.
The one in Seattle even owns a DUPLEX! How stupid is that? Can’t even afford to live in one half of her own building!
For an insiders look into current Florida real estate conditions from Mike Morgan go here:
http://globaleconomicanalysis.blogspot.com
Waiting for the Blood to Rise
It’s becoming a bloodbath beyond belief! 2nd inning only.
Nice tie.
http://www.youtube.com/watch?v=QlccRuCT7Bc
I liked the lapel pin of the Jig saw piece.
Ya gotta watch the viral video: genius loses cool when confronted, linked on above piece
Hillarious!
Yeah, give me the minute of by life back for the real estate guy… but at least I got to see viral video genius!
http://www.youtube.com/watch?v=aXJVxmWTmkg&NR=1
That’s farkin hilarious. I didn’t even realize the guy was interviewing himself until the end!
Whenever I see matching blazer/uniforms in a realty office, I flash back to the Wings sitcom episode where the character was drummed out of The-red-the-green-the-lavender-and-the-gold Corps of Bonny Doone Realty for selling the house WITH the owners priceless chandelier.
We probably reached a critical mass, over the long 3 day weakend…
I believe this is the week for fireworks~
If sparks were to fly on 4/11/07, it would be highly appropriate.
Yep, even the local NBC affilitate ran a story last night on all the foreclosure activity in the Tampa Bay area, including “tips to help you keep your home”. I only saw the promo for the segment, so I have no idea what “tips” they gave. But you know it is getting bad when the local TV station is jumping on the story. I guarantee you they waited until they couldn’t squeeze another dime out of the local REIC, otherwise they wouldn’t have run it.
Could one of the “tips” have been: Pay your mortgage?
Probably something along the lines of this article from thestreet.com (here’s the short version: try to refinance to a fixed mortgage, contact the mortgage holder and try to work something out, or try to contact a non-profit/housing assistance agency to help you out)
http://www.thestreet.com/pf/newsanalysis/opinion/10348954.html
Pretty shallow stuff, but well-intentioned, I guess.
I keep hearing this “tips to help you keep your home” thing, and I get a chuickle every time. Reason being is that it makes the assumption that folks actually want to keep their home. I know so many folks that, now that their home hasn’t materialized into the cash machine they originally visualized, are now viewing the home as a massive ball and chain. I have a friend who bought a home two years ago that he couldn’t stand, a real piece of crap. His kids complained because they had their own rooms in the nice place they used to rent, but now they were stacked on top of each other. He bought the lowly POS ’cause, like so many others, he felt that ha had to act now or miss out on hopping aboard the housing escalator. Two years later and about 50K dumped into the place for renovations, he just found out he’s about 20K upside-down. The dude put all the renovations on credit cards thinking he’d refi and consolidate with all the presumed appreciation. His ultimate goal: sell in another year and actually buy the house they wanted, instead of the POS they settled for. The last time we talked he told me that he wasn’t going to be stuck with this house. I didn’t ask him to elaborate, but I think I knew where he was going with it. If someone were to come along and offer him a plan to “keep his home” I don’t think they would be met with an enthusiastic response, to say the least.
Sure the guy is an idiot, but that’s a sad story. All he wanted was a better life for his family. Isn’t that all these greedy people wanted?
Yeah, he wanted a better life for his family, so he stuck his kids in a bunch of bunk beds. They can’t even fart in peace.
I played in a golf tourney on Saturday. The guy I was playing with is a lobbyist for a sub-prime lender. He said the Gov of Ohio wanted the lenders to set up an 100 million dollar fund to help borrowers from going into forclosures. I have been sending this guy stuff from this blog for about six months. He knows there is trubble ahead. I also told him that I would never trust a mortgage broker, RE agent, or appraiser again. He actually agreed.
Did you see the 101 year old lady with the hole in one? Pretty amazing.
Where was the hole in one? Huston? I have played with some women in their 90’s that were pretty good.
Oh, I heard about and I’m sorry I can’t share in her joy. Golf is a brutal sport. Here’s the way it works: you play for 25 years and never come close to a hole-in-one. Then you invite your cousin out to play that has never touched a club. Of course he has no equiptment, so he has to use the crusty old set that you keep in the back of the garage that you use to mix paint or kill gophers. After just mutalating the course up to that point, you arrive at the first par three. Without even a thought, he picks the wrong club, hits a skulled worm-burner that hits the front lip of the trap, ricochets about 30 feet into the air and, you guessed it, straight into the hole. I don’t know why i play this game.
I tend to do my best golfing sans club and balls…
LOL, ex. Have you ever heard Robin Williams’ rant on the origins of the game of golf? Hilarious.
Not even gonna try and cute some of the beauties from that performance. You’re just going to have to click the link and enjoy for yourself….
http://www.youtube.com/watch?v=6X04wZpqx3U
I spent the weekend reading “Empire of Debt: The Rise of an Epic Financial Crisis” by Bonner and Wiggins. Echoed much of what I’ve picked up here in the past 1.5 years, as well as verbalizing much of what I believed about this mess. While I never agree with 100% of what an author writes in a typical book of this magnitude; I found myself frequently nodding my head and saying, “yes, completely”. From great one liners to entire chapters that should be quoted in the MSM, the authors present a convincing - and given the past year since the book was published - an apparently accurate picture of what is come from this financial mess.
My recommendation: practice what the authors preach and check out the book from your local library. Put those home-debtor property taxes to work while simultaneous cutting down your local communities’ sales tax dollar revenue stream.
Whoever recommended “Traders, Guns and Money,” thanks. I read that over the weekend. Very interesting!
Hmmmm. Where’s my Amazon login? Added TG&M to the cart along with ‘Liar’s Poker’. Should be here by the weekend. Thanks.
TG&M, eh? Have to get that one, too. EoD’s a classic.
Received “Crash Proof” today from Amazon; can’t wait to get into it.
I have to find a book on micro for my MBA
when I searhc micro-+interesting - textbook
even google comes up short
any suggestions ?
tia
Microfinance?
I don’t know why, but the “-” symbol never seems to work for me on Google.
Bonner’s books are a fun read but he’s really the biggest pitch man to the doom and gloom and gold bug crowd. he runs agora, i think, an enormous newsletter house. some great stuff in there - internationalliving i like - but mostly chicken little. it gets old after, say 10 years.
You’re right - I should have added that Empire of Debt is partly a sales pitch for gold. You can learn from those trying to sell you something, even if you don’t end up buying.
Here’s the thing, it’s easy to point the finger and call out a chicken little when all one has to say is “the sky is falling”. But when someone says “the sky is falling” and goes on to back it up with something subsantial, I listen. If some tells me they think they’re dying of cancer, I think to myself here’s a doom-n-gloom hypochondriac. But if someone tells me they’re dying of cancer and proceeds to hand me a x-ray of a malignant tumor, I ask “how long do ya got left”.
Bonner may be a chicken-little-doom-n-gloomer, but he presents a pretty strong case. Dismiss it all you want, but if it was me, I’d start wearing a hard hat.
You’ve never been an ex-, in my book, Sire.
Good analogy.
Bonner doesn’t sell gold, he buys it. He identifies himself as a ‘contrarian’. Not sure who the doom and gloom crowd are, however, this blog isn’t exactly a magnet for folks forecasting a rosy outcome for housing, so does that make us doom and gloomer’s as well?
I like to think of us as realists. If the future is doom and gloom, there’s no point in pretending it’s not so.
Speaking of doom and gloom, Prudent Bear’s David Tice was just quoted in the NYT as predicting a 50%-60% drop in the stock market.
I finished Empire of Debt last week. An interesting read indeed. One of those books that makes you go, “Hmm . . .”
FYI: Bloomberg television has a 2 hour “In Focus” special on the subprime crisis today at 12 PM EST.
“It has become appallingly obvious that our technology has exceeded our humanity.”
Albert Einstein
Wrong blog
“Joy in looking and comprehending is nature’s most beautiful gift.”
Albert Einstein
ditto
is that a good ditto or a bad ditto?
“Knowledge is good”
Emil Faber
huh?
NVR Inc. cut to underperform at Credit Suisse
Pulte Homes cut to underperform at Credit Suisse
Centex upped to outperform at Credit Suisse
D.R. Horton cut to underperform at Credit Suisse
Ryland Group upped to neutral at Credit Suisse
ivy zellman was busy….
The sulphur lining would be that sole “outperformer”?
Grim
Centex overperform?!?
Everything else sounds like a very late wake up call.
But its good to finally see the main stream stock agencies respond.
Got Popcorn?
Neil
Credit Suisse must be stuck with a pile of Centex stock they’re hoping to unload onto suckers.
See what Lennar just did with its sub’s ?? Sent a letter to all sub’s telling them to reduce prices on all work including completed work by 20% or be excluded from bidding for 6 months…
We have discussed here about the major builders and why they keep building…Its because they can find margin through the type of practice discribed above…They are ruthless competitors and will take no prisoners (including previous purchasers in a tract) when they have to….We will now see not only layoffs in the construction industry but also lower wages for the tradesmen that remain….
Glad to see NVR get that downgrade. That is the one HB stock that has somehow avoided the downdraft so far this year. Trading at $700/share as of last Thursday (up from $400 last July)…
“Not everything that can be counted counts, and not everything that counts can be counted.”
Albert Einstein
Save the Fraudsters
http://wallstreetexaminer.com/blogs/winter/?p=617
“Almost 60 percent of the stated amounts were exaggerated by more than 50 percent.”
Really Russ…
All you need to know.
Good Work.
To save the interested reader some trouble, I copied this out of the Primer on Winterisms:
‘JULS: Joe Ultra Light Sixpack, buyer of housing near or at the peak in Bubble or Map Of Misery locales, often with little or no money down, no or low documentation. “Victimizied” and lured by the financial sphere into a myriad of scam and toxic financial mortgages including exploding ARMS, interest only, pay options, negative ams, subprime cannonballs and other notice arrives in the mail “surprises”.’
on MSNBC tommorow
BUY NOW RE show……….
so how many are they buying
Headed up to San Francisco
For their BUY NOW RE show
I got my hush puppies on
I guess I was never meant for this real estate bubble show
And honey how can I say I didn’t know
That it’d get so slow
Come Monday, here’s a bit of cleansing light
Come Monday, more foreclosures begin to ignite
I spent 43 long years in a brown el lay haze
And i’m just now making things right…
Silent spring for Gangnam realtors
“Spring has arrived, but the season of rebirth may not touch Korea’s real estate market ― especially in southern Seoul areas. Housing prices in Gangnam, which were previously booming, have dropped, but sales are still slow.
According to the district offices of Gangnam, Seocho and Songpa in southern Seoul, only 272 houses were sold last month, a mere 11 percent of the deals a year earlier and 7 percent of the figure last October. Experts blamed the freeze on transactions on a series of government anti-speculation measures and harsh restrictions on mortgage loans.”
Joong Ang Daily April 9
This is next year in the US as the lenders come under pressure and reality hits the borrowers.
Ouch!
That’s a serious downturn in transactions. Do you read Korean? If not, where did you get that information? Thanks…
http://tinyurl.com/ynwyk7
JoongAngDaily (english)
That’s the sound of the men working on the joongang…
Hoz:
For your insight into the beyond, I bestow upon you:
“Agent Provocateur of the Day”
Would somebody else help connect the dots, win a prize?
Why “Agent Provocateur”? I am not a troll. Just reporting on the news relating to downturns in RE and the economic conditions around the world that justify the downturn.
LOL
Besides I like all metals, not just gold. And some I like more than gold. (at least short term 1 -2 yrs)
Sorry about this late post lots of news this morning.
(april 10) “Vice-Minister of Commerce Wei Jianguo said yesterday that China would introduce more policies to boost hi-tech and machinery imports, especially from countries that had a large deficit with China.
“One of the main ways to trim the trade surplus is by increasing imports of advanced technology and key equipment,” Wei said. ”
(More Cray Computers needed as well as advanced wing technology)
and in other news
“Both the countries (ROK & China) are keen on free trade agreements (FTAs) but want to jointly study the possibility of setting up a Sino-South Korean free-trade zone before deciding when to launch their FTA negotiations.
China has FTAs with more than two dozen economies, while the ROK just inked its first with the United States. It is trying to hold talks with India, Canada and Japan in the hope of signing FTAs.
Experts from China and the ROK have agreed that an FTA would promote bilateral trade and investment further, boost their economies and create more jobs.”
(and why China doesn’t give a hoot about what the US does to violate previous trade agreements and China will continue to act like China)
“Nation faces grim job situation,24 million job seekers ”
(China needs 15M jobs per yr just to get ahead, this year is on track for ~9M jobs - break even. Last year there were riots for jobs in every major city, this year might just be worse. China does anything it can to create jobs and the US is picking a trade war that can bring both countries down.)
I guess some people are still buying. Nicolas Cage just purchased this home near me:
http://www.liladelman.com/property-details.asp?id=1112&PageFrom=SearchResults
It sold about 7 or 8 years ago for about $7mill, was thouroughly renovated, and was put back on the market maybe 18 months ago for $19mill.
Housing slump cuts state and local revenues. More contagion — higher taxes, diminished public services, fewer public employees.
http://www.nytimes.com/2007/04/08/us/08housing.html?em&%20x=1176177600&%20n=63ca906c7f56d4f0&%20i=5087%0A
http://tinyurl.com/zipfb
I’ve been price tracking this house for about a year now. It was first listed on the market in May of last year for 235K and after sitting on the market until September, it finally sold for 187K. The idiot who bought it slapped a coat of paint on the inside & outside (it used to be this ugly green & yellow color outside and had this room with hideous yellow paint inside) and relisted it. What an idiot.
Here is the old listing http://tinyurl.com/prior
your linkys not worky
oops sorry about that… let’s try again…
Original listing
2nd listing
http://washingtondc.craigslist.org/nva/apa/308568432.html
Leads you to this:
http://www.myspace.com/owntrevorshouse
Submit a 500 word essay with $1000 entry fee, and if you win, you get the house free and clear.
Insanity in all directions. What’s the fastest way to sucker a bunch of people out of $1000 each? Oh right.
I’ll flag that scammer off. Raffles are TOU violations on Craiglist. Thanks.
great find. desperation leads to inspiration. did you notice the check is made out directly to a mortgage co?
“Why does aladinsane keep posting inane Einstein quotes?”
Packman
“aladinsane looking in the past for answers to the future”
aladinsane, in 3rd person singular.
Actually, thinking about quantum physics helps me keep the ridiculousness in perspective. That is, it helps to realize that what we perceive as “reality” may actually be an illusion, and it is wise to take everything with a grain of salt.
Now you are thinking.
Funny, it lead me to a different perspective:
Not only is mother nature a bitch, but she’s a subtle and misleading bitch.
More immediate for you Packman, sorry for being so old…
“I have a different vision of leadership. A leadership is someone who brings people together.”
“America is a Nation with a mission - and that mission comes from our most basic beliefs. We have no desire to dominate, no ambitions of empire. Our aim is a democratic peace - a peace founded upon the dignity and rights of every man and woman.”
“For diplomacy to be effective, words must be credible - and no one can now doubt the word of America.”
“I think you can judge from somebody’s actions a kind of a stability and sense of purpose perhaps created by strong religious roots. I mean, there’s a certain patience, a certain discipline, I think, that religion helps you achieve.”
“I understand I’m running against a person who is so anxious to become president, he will do whatever it takes.”
george w. bush
I could go on and on and on and on and on and on, if you’d like.
A year and a half ago, I was arguing that QM was more illustrative of price phenomena than classical mechanics. Its not “prices are like a thrown ball, it rests in its upward trajectory until it starts falling.” Rather: “A house has no price until a sale (observation) has been made. An appraisal is really just an expectation value, but until there is a collision between a buyer and a seller, all estimates of value are just informed guesses.”
Think Pendulumly
Sounds about right. There is a probability of a sale occurring at a particular price. Until the sale actually occurs, you don’t know what the price is.
And if your neighbor is selling, well, then you should expect a result that involves interference.
In that case shouldn’t we be quoting Plank…or is it all relative?
Walking the plank?
er,
Walking the Planck…?
http://en.wikipedia.org/wiki/Planck’s_law_of_black_body_radiation
With all the stories about 20 immigrants to a house I wonder whether we’re violating the Pauli Exclusion Principle.
And, one of the main lessons of quantum mechanics is that observation of a system changes the state of the system. That is certainly true of RE- once enough people OBSERVE the downhill trend, it will accelerate.
We drove through west palm beach and boca raton this weekend, I have never seen so many for rent signs on larger “upscale” houses, and of course lots of for sale signs… Does anyone have historical inventory levels for the MSA’s for say the past 10 years?
Readers’ opinions on why the the housing market can’t climb out of the slump from the Chicago Tribune.
http://tinyurl.com/2gxtjz
Yeah, buyers are “greedy” because they refuse to pay outrageous prices.
A buyer can only be accused of being “thrifty”. It’s sellers who are greedy.
That’s actually a great article. Out of the dozen or so “reasons” readers gave for the housing slump, only one is “the media stories caused anti- home buying hysteria”. All the other reasons given are the REAL reasons : loose lending, sky-high prices, overbuilding, delusional sellers, etc.
The general public is beginning to really understand what has/is happening. I predict that within a year, every single foolish head-in - the- sand buyer that’s still left will finally be flushed out.
Sightly OT, yesterday “Parade ” magazine did an article on “Real Estate myths”. their number one myth? That you need a realtor to sell your house. LOL. They basically said that was NAR propaganda. The NAR bashing is starting. Once it gets going, watch out. There is just SO MUCH fault to find with these A-holes that it ‘ll never stop.
At the risk of being the 418th person to post this:
http://www.cnn.com/CNN/Programs/paula.zahn.now/
thanks for the notice; I must have missed the previous 417 posts!
close quote (I hope)
I hit finance.yahoo.com this morning to see if the dow was headed down or up. Up it is. However, a banner advertisement rendered in flash caught my eye. It appeared to be advertising a $40K HELOC For $2xx a month. The advertisement had things like “Fancy dinners… $2xx a month” “New kitchen… $2xx a month.” The xx is that I don’t remember the exact value, but this was BoA, not some no-name.
I have a favor to ask. Does anyone know where I can get data to help me understand this claim by Page 1 of the Washington Post today? (Have rents “skyrocketed” over the past 20 years?)
“Still, housing activists are delighted to have like-minded “housers” in charge. They finally get to meet with leadership and provide wish lists to staff. And they have serious wishes: Over the past two decades, as the population has increased and rents have skyrocketed, the number of federally assisted apartments has not budged. “
I hear that the next occupant of the house on 2600 Pennsylvania avenue is going to have to spend upwards of 100 million dollars to move in.
What do they mean “in two decades?” 1999 to 2000 counts as “two decades.” I caught a real estate article in the L.A. Times a couple of weeks that stated that “Orange County home prices decline for the first time in two decades.” That being said, my rent has doubled in the last 11 years in a crummy apartment in a nice suburb of L.A. And certainly gas has increased over 200% in the last 8 years.
What?
2000 - 1999 = 1
If your rent only doubled over the past 11 years, how could it have increased 200% (thereby tripling) over the past 8 years?
If your rent only doubled over the past 11 years, how could it have increased 200% (thereby tripling) over the past 8 years?
If it went down 33% in the first 3. Somehow I don’t think that this is what he meant, but it IS mathematically possible.
OK. I’ll buy that.
uh, nitpick alert.
1600.
Typo. Wasn’t “move in”, it was “move it” (ten blocks, apparently).
Question is, does he want to move it to 2600 Pennsylvania Ave NW (rock creek park, next to Georgetown) or 2600 Pennsylvania SE (Across the river in Annacostia)
Real Estate that’s rapidly going up in value in the Golden State?
That would be this year’s wildflower season, currently on display throughout the Low Sierra~
Utterly spectacular right now, from 1,500 feet on upwards…
Last week I saw a 1,000 foot high wall, with about 65% coverage, of California Golden Poppies…
A glimpse of Mother Nature’s (always bat’s last) Gold, nearly vertical.
She has many clients~
Wildflower coverage this year is about 15% of normal. Usually by now it’s Jackson Pollock time in the Southern Sierras, but it’s very sparse out here. Please flush more frequently?
Thanks.
I have question how the reserve requirement (or required reserve ratio)would work in reverse. Hypothetical: suppose you could convince the majority of M1 depositors at a specific bank to switch their money to another bank say within 30 days time…what happens to the fractional lending of the other 90%?
There are essentially no reserve requirements - that ended around 1995, with Greenspan’s blessing. Idiots.
With no reserve requirements, the banks are free to create (lend) as much money as they want to. And that’s exactly what they have done, witness the stock market, housing, take-over mania, bubbles…
“print the money out of thin air” and loan it. Biggest con there every was. It’s been done before but today, few if any know their history or even care or our to lazy to read what has happened in the past. Sad. Many will learn the hard way.
someone here posted a very good link a long long time ago showing how Greenspan did this, I think in 1990.
See if this works. I think txchick57 posted this link originally…
http://www.itulip.com/forums/showthread.php?t=292&highlight=reserve+requirement
motepug, chilidoggg, &Jerry…
Thanks for the input & link…self-education going on today. I was thinking about the bank in Florida that lent a large portion of Bank $$$ to that developer that’s gone broke…I know that the FDIC covers the depositor $$$ amounts under $100,000 I was just wondering what happens when this amount of actual deposited money is lost and/or withdrawn in a short period of time…
That means the bank has to borrow the money it doesn’t have from the Federal Reserve. That’s what the Federal Reserve really does. It lends the mony overnight to the bank in need at the current Federal Reserve rate. I guess the bank fails if it can’t pay back the money within a certain period of time or something like that. I’m really not sure what happens if the bank can’t repay the Reserve.
These highlights don’t seem to be very good for the Alt-A Lenders!!!
American Home (AHM : american home mtg invt corp com
AHM25.84, -0.41, -1.6%) said that first-quarter earnings will be roughly 40 cents to 60 cents a share, down from its previous view of $1.11 to $1.17 a share. For 2007, it forecast earnings of $3.75 to $4.25 a share, compared with the $5.40 to $5.70 a share it previously predicted.
The company also announced that it is cutting its quarterly dividend to 70 cents from its previous level of $1.12 a share. 37.5% decrease!!!
American Home also said that it plans to raise the interest rates charged on mortgages.
American Home said Friday that earnings will be lower because investors in the secondary-mortgage market and the market for mortgage-backed securities (or MBS) offered to buy its loans at “materially lower” prices.
It’s getting worse:
http://www.bloomberg.com/apps/news?pid=20601087&sid=az2zfbLCR36Q&refer=home
“April 9 (Bloomberg) — American Home Mortgage Investment Corp. shares fell as much as 19 percent after the company’s loans attracted few bids from investors, fueling concern that losses at subprime lenders are spreading to higher-rated credits.
American Home reported few bids and lower-than-expected prices for its Alt-A mortgages, granted to people with strong credit ratings who don’t meet all the criteria for conventional loans. A week earlier, M&T Bank Corp., partly owned by Warren Buffett’s Berkshire Hathaway Inc., cut its forecast because of weak demand and higher defaults on Alt-A mortgages. M&T said investor concern about the increase in bad subprime loans is hurting prices for less-risky mortgages.
“There’s no question the credit problems we’ve seen in subprime are blending into Alt-A,” said Fox-Pitt Kelton Inc. analyst Matthew Howlett in an interview. “It’s reflective of the poor underwriting that has gone on in this sector.”
American Home’s stock declined $4.29, or 17 percent, to $21.55 at 12:33 p.m. in New York Stock Exchange composite trading. The shares had dropped 26 percent this year before today. American Home is a real estate investment trust or REIT that originates home loans and invests in mortgage securities.
Loans Sour
The lender said it had to write down its portfolio of low- investment-grade and residual securities to reflect current market values, and boost reserves to pay for Alt-A loans that it had to repurchase from investors because borrowers didn’t make their payments.”
What a media whore…
‘Apprentice’ to help sell Vegas condos
LAS VEGAS - Donald Trump is using his assistant-grooming reality show to sell units in his second Las Vegas condominium tower.
For a one-hour episode of “The Apprentice” scheduled to air Sunday, contestants were tasked with devising a marketing plan for Trump Tower II, which like its predecessor will be 64 stories of gold glass just off the Las Vegas Strip, developers said.
The challenge is formidable. Las Vegas’ once-hot condo market has cooled in the past year, leaving dozens of projects stalled in blueprint stages and many condo buyers wanting out.
Trump’s Las Vegas projects are partnerships with casino owner Philip Ruffin, owner of the New Frontier hotel-casino next door.
Both towers include about 1,300 luxury condominium units, with a hotel rental option, at prices ranging from $700,000 to $7 million.
Tower I is expected to cost $600 million and be completed in early 2008. Tower II, targeted for completion two years later, is estimated to cost $700 million. Gross sales on the towers are projected to reach $2.5 billion, making it Trump’s largest project to date, said Jack Wishna, a dealmaker involved in the project.
Regardless of the plans contestants devise, “The Apprentice” episode is itself a shrewd piece of marketing, Wishna said.
“It probably would cost us $60 million if we were to advertise for a full hour on prime-time TV,” he said.
http://news.yahoo.com/s/ap_travel/20070409/ap_tr_ge/travel_trump_condos;_ylt=AjFURYq5GSX2h89viNIdk3XMWM0F
“It probably would cost us $60 million if we were to advertise for a full hour on prime-time TV,” he said.
Yeah, but he might get a better ad for his $60 million than a couple of half-baked presentations made by people arguing constantly with each other. How much of the condo itself do they show on the program?
As for Trump’s blatant use of his (or NBC or Burnett’s) show as marketing, he probably realized this is his last chance to do it. Seems that The Apprentice is headed for the dustbin. The move to 10 PM ET, and other signs (including no announcement of the next season) seem to indicate that viewers have grown tired of show’s formula, an hour of arguments capped off by a capricious firing (or two). Donald, you’re fired!
I watched the show for a couple of seasons until it became too annoying and the contestants too superficial. (And oh my god, if that’s the cream of the crop we are doomed!) Everything was about selling Trump crap from real estate to water. And if it wasn’t selling his crap it was selling someone else’s. He’s had to have made a lot of money off the show but I think he has reached saturation and people are really tired of him. It’s interesting how many times he’s built up this successful real estate persona only to have it disappear when the market turns and he (whoops HIS COMPANY) goes into bankruptcy.
I think we can add this to the list of bubble bursting signs
1.) Condo conversions
2.) Taxi driver talking to you about his RE investments
3.) Donald Trump telling the little people now is the time to buy and make a fortune
http://www.usagold.com/gold/coins/pics/gold-bullion-kim-thanh.jpeg
Passports are usually made out of paper traditionally…
The graven images above were a fleeing Vietnamese National’s Papers, in the guise of thin 24K Gold Taels (about 1.25 troy oz) that allowed safe passage to the wilds of Westminster and beyond.
How do I know this?
A company I worked for, loaded up a 747 with as much cash as they could carry, as there was going to be an unusal bit of bullion business going on, for they were strictly buyers~
Guam, 1975.
They ran out of cash real early in the venture…
click on the link to place your order
lots of compelling articles if you still need convincing
read, click, buy
Foreclosures change in one week. A small comparison of data from the http://www.foreclosure.com/
The foreclosures on their lists:
04/02/07 California Los Angeles County
168,208 19,487 2,248
04/09/07 California: Los Angeles County
173,604 23,287 2,864
A one week change:
Nation-wide = 3.2%,
California = 19.5%
LA county = 27.4%
got champaine?
The national figure is up to 174,131 as of noon, less than two hours after your post. This foreclosure counter is climbing faster than the national debt clock.
Their numbers are always going up from Friday to Tuesday and down Tuesday to Friday. That’s why it only makes sense to compare them on the weekly basis. Apparently, the weekends are not breaks for the foreclosure process, but for the sales of them they are.
Anyway this week jump is huge and unusual. IMO it means it’s much harder now to short-sell in the pre-forclosure state.
San Diego County foreclosures took a huge jump, it’s now at 3491, up from 3066 Friday (and 2939 last Monday).
Michael:
Does the website post the change, or have you been keeping track of it personally?
I try to keep track of it recently.
Subprime problems solved. Boost your credit:
http://realtytimes.com/rtcpages/20070409_creditboosting.htm
“Federal and state regulators say it’s one of the fastest-spreading new scams in the mortgage market: Internet-based companies that artificially raise loan applicants’ FICO scores by 50 to 200 points by implanting credit accounts of consumers with outstanding payment histories into the credit files of borrowers with low scores and bad payment histories.
Worse yet, officials say, the companies may not necessarily be breaking any law themselves, even though their clients may be committing fraud.
Here’s how it works: Say you want to buy a house but your FICO score is subprime — a 580 mid score. You sign up with one of dozens of companies now offering to make you an “authorized user” on a credit card account of a person with a perfect payment history and a high credit limit.
You will not physically receive the credit card, and thus you won’t be able to charge anything on that account. But as an authorized user, all the years of perfect payments on the card will be transferred into your credit files at the national bureaus — Equifax, Experian and Trans Union.
That, in turn, will raise your FICO scores almost immediately, possibly by 50 to 100 points. If you need higher score boosts, the Internet sites offer two or three additional “authorized user” accounts — at package prices that often are in the thousands of dollars — and promise to push up your FICOs by 200 points or higher.”
Also dont forget mortgage fraud scammers using ‘credit partners’ with good credit. Search craigslist for this in any city you find them daily.
All this credit fraud adds up to a higher-than-expected future foreclosure rate.
yeah, its also shocking to see REALLY HIGH foreclosures in the most affordable places like TX. Overbuilding/overlending as we know.
That’s funny. I don’t think my husband has any mention on his record of my credit card, on which he is an authorized user. I’m pretty sure that the only way to have a line of credit listed on your credit record is to be a responsible party to the debt.
Having learned not to recommend stocks or commodities (since my timing is always off - LOL) take this recommendation for what it is worth.
Yesterday I posted a bit on China stopping export of Rare Earth Metals to “reduce its trade deficit with the US”. The US produces ~$28M / yr and consumes $1B with 74% coming from China.
Lynas Corporation in Australia
http://www.lynascorp.com/
Do your own research, but having caught the Cobalt ride for the last year this should be the next ride.
Observation over the weekend: There is a house for sale on a somewhat busy street on the way to my place that has been for sale since last year. They just started out with a for sale sign, added multi colored flags, ballons and just this weekend the newest thing is a FOR RENT sign. There are about 4 houses for sale within a block of this house also. On a Sunday morning local business program one of the top stories was the Trump tower in Tampa. The tag line was “the Trump tower looks like it will never rise above sea level”. Also today on CNN Money there is piece on who is to blame for the sub prime mess. As you all can guess they are the “usual suspects” discussed on this blog daily. Happy Monday
Notice that the CNN article doesn’t include the borrower/debt serf as one of the six parties “to blame”.
apparently, after an uproar of emails from the public today, they added a 7th category…”the borrower” that almost restores my faith in the msm.
I just had a chuckle, driving by a house in my neighborhood that has been on the market for the past year. Started at $620K, now $539K. The owner can often been seen working on the place. Today, there’s a delivery truck in the driveway, “Granite Designs.” That oughta’ work.
“Money is like manure, of very little use except it be spread.”
Francis Bacon
Zillow competition. Reasonable estimates with occational total wild guesses (1.6x asking price on some!):
http://www.eppraisal.com/
When you search, a window with this text pops up:
“The nationwide homeownership for the third quarter of 2006 is 68.9 percent – and is expected to increase to 70 percent by 2010″
Wouldn’t this be more accurate?:
“The nationwide homeownership (including temporary owners) for the third quarter of 2006 was 68.9 percent – and is expected to drop to 55 percent by 2010. Bank owned homes is expected to rise to 15% by 2008″
Was it one of my most learned blogger colleagues here who said that one possible next bubble would be in biotech? Perhaps it was texaschick57. At any rate did y’all see DND and NUVO over the last few days? Holy price rise Batman!
A friend called me at 0600 today and mentioned NUVO. I don’t buy on tips, but was intrigued by the premarket volume. Now I know why. That pup’s up 50% on the day. And DNDN saw a 20% jump last week and another 24% so far today. Biotech could be where loose change wants to go.
Here is a few lyrics to enjoy…
Ridin’ that train, real-estate pain,
Casey Serin types ready, so watch your greed.
Rubble ahead, Bubble behind,
And you know that notion just crossed my mind
This old house doesn’t make me one dime,
And those central bankers to raise a quarter a time,
Hits refi junkies, who are certainly due,
Without a quarter to lend, you know its unravelin’ again.
Ridin’ that train, real-estate pain,
Casey Serin types ready, so watch your greed.
Rubble ahead, Bubble behind,
And if I’d drinkin that kool-aide, I’d just lose my mind.
Trouble ahead, equity in red,
Take my advice, you’d be better off dead.
Monthly payments a slippin’, train hundred and two,
On the wrong track and headed for you.
Ridin’ that train, real-estate pain,
Casey Serin types ready, so watch your greed.
Rubble ahead, Bubble behind,
And you know that notion just crossed my mind
Trouble with you is the trouble with me,
Got two good eyes but you still didn’t see.
Come ’round and bend, you know its the end,
The fireman screams,”wasn’t this the house of your dreams?”…
-Starve
Excellent!
Well done!
Check out this article:
Bay Area sees jump in listings for homes
Market sees 12.2 percent increase in March, nearly double the activity reported in other metropolitan areas
http://origin1.contracostatimes.com/business/ci_5616951
The funny part are these two internally inconsistent quotes:
“The California Association of Realtors did not have figures on the Bay Area’s historical February-to-March inventory change.”
“…similar increases for new listings happened in 2004 and 2005, when the market was hot.”
Huh?
American Home Mortgage Shares Fall on Profit Forecast (Update4)
By Will Edwards and Jody Shenn
April 9 (Bloomberg) — American Home Mortgage Investment Corp. shares fell 15 percent after the company’s loans attracted few bids from investors, fueling concern that losses at subprime lenders are spreading to higher-rated credits.
First-quarter profit will be 40 cents to 60 cents a share, the Melville, New York-based company said in a statement on April 6. It was expected to earn $1.06, the average estimate of eight analysts compiled by Bloomberg. The quarterly dividend was cut to 70 cents from $1.12. Earnings for 2007 will probably be $3.75 to $4.25 a share, the company said, instead of the $5 analysts predicted in the Bloomberg survey.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aCcktIgjSO6U&refer=home
From a blog in today’s Portland Press Herald - an agent that counsels friends to rent.
April 09, 2007
Rent vs. buy?
I saw this analysis of renting vs. buying in the Boston Globe yesterday. http://tinyurl.com/38ebks
I like the premise - an attempted justification of buying in a sky-high market. Portland’s nowhere as bad as San Diego, but it’s another way…of looking at things.
However, it’s pretty flawed. The author doesn’t say how he arrives at the cost-of-homeownership number for the first year. Does his theoretical couple put money down? What are property taxes? Insurance? Repairs? All those things renters don’t have to pay?
Another problem - he says that if their home’s value decrease, that’s not so bad because taxes and insurance will also go down. What? Not in my world. If the market goes down, assessed value still stays the same. And insurance is calculated by replacement cost, which isn’t based on market value.
It makes a lot of sense to rent in the Portland market. A particular house might sell for $300k, but would only get $1700/month in rent. A condo/apartment might sell for $200k, but be only $1000/month to rent.
I view buying a home as a lifestyle choice. In the long run, it’s cheaper than renting. You own it; you can renovate, plant things, do whatever you’d like. Every month you pay down the mortgage and build equity. You hope the value increases over time and boosts your equity. Your payment remains constant for 30 years, hopefully. Rent’s less predictable.
If you think your situation might change in a year or two, rent. Don’t buy as an ‘investment’ for the short-term. A home I sold recently had last been purchased in 2004; my buyers paid LESS than the sellers did three years ago. That’s happening not infrequently.
I’ve actually counselled friends and clients to rent instead of buy - they’ll be happier for the short-term. Sure, I don’t get a sale, but when they’re more settled and are ready to buy, they’ll call me.
However, if you’re pretty settled and have just been on the sidelines waiting for the right time to buy, be glad you waited a few years!
http://tinyurl.com/2rnonh