“The Downtrends Are Still In Place”
Some housing bubble news from Wall Street and Washington. “Facing criticism from members of Congress about lax regulation, ederal Reserve Chairman Ben Bernanke promised that the Fed would do everything possible to crack down on abuses that have put millions of homeowners in jeopardy of defaulting on their mortgages.”
“‘We at the Federal Reserve will do all that we can to prevent fraud and abusive lending and to ensure that lenders employ sound underwriting practices and make effective disclosures to consumers,’ Bernanke said in remarks prepared for a financial conference.”
From MarketWatch. “‘Combating bad lending practices, including deliberate fraud or abuse, may require additional measures,’ said Bernanke. ‘Markets can overshoot, but, ultimately, market forces also work to rein in excesses,’ the top central banker said. ‘In the long run, markets are better than regulators at allocating credit.’”
“Banks and other lenders are tightening their standards for subprime, near-prime and even prime borrowers, a Fed survey of banks’ loan officers showed earlier this week.”
“‘Curbs on this lending are expected to be a source of some restraint on home purchases and residential investment in coming quarters,’ Bernanke said.”
“About 14% of the outstanding first-lien loans, some 7.5 million, are subprime loans. Near-prime, also known as Alt-A or nontraditional loans, account for 8% to 10%.”
From Bloomberg. “‘We are likely to see further increases in delinquencies and foreclosures this year and next as many adjustable-rate loans face interest-rate resets,’ Bernanke said.”
“Bernanke said demand for high-yielding bonds in capital markets played a role in the fall in loan standards as subprime mortgage lending expanded. ‘The practice of selling mortgages to investors may have contributed to the weakening of underwriting standards,’ Bernanke said.”
“Lawmakers and consumer advocates have blamed the Fed and other regulators for lax enforcement during the record $2.8 trillion mortgage boom between 2004 and 2006.”
“At the urging of Congress, the Fed and other regulators issued a proposed guidance on prudent lending standards on subprime loans. Officials published the proposed guidance March 8. The Fed didn’t publicly rebuke any bank for failing to follow up on guidance on lending practices in the period.”
“Regulators could have ‘done more sooner,’ Roger Cole, the Fed’s chief bank supervisor told legislators in March. ‘Given what we know now, yes, we could have done more sooner,’ Cole told the Senate Banking Committee.”
From Forbes. “Each month, Daniel Oppenheim and Banc of America colleagues survey 4,000 real estate agents across the U.S. The topics. The numbers give Oppenheim a sense of pricing.”
“‘There’s still a lot of uncertainty among us as to when the recovery will come,’ says Oppenheim. Broadly, the data these days tell Oppenheim that home prices have further to drop. ‘We still have excess inventory relative to demand,’ he says.”
“These days, Budd Bugatch, furnishings analyst at brokerage house Raymond James, doesn’t mince words when it comes to conditions for companies in his coverage area. ‘Awful,’ he says, ‘It’s as bad as when it was when I was in the business in the mid-’70s.’”
From Business Week. “The news from the U.S. Census Bureau that housing starts actually increased in April was surprising, to say the least. But don’t let April’s report fool you, there is nothing encouraging in these new figures.”
“As in the past, the percent increase still fell well within the census’ margin of error of plus or minus 9.3%, so we can’t say for certain whether they even rose at all. Comparisons to last year were not pretty either: starts were down 16% from a year ago.”
“The biggest indication of a still struggling housing market came in the form of poor building permit numbers. In the month of April, permits fell 8.9%, the sharpest drop since February, 1990, to 1.429 million units, the lowest level in nearly 10 years. Compared to last year, permits were off 28.1%.”
“‘My overall take is that the downward adjustment in the housing sector is still ongoing,’ says National Association of Home Builders chief economist Dave Seiders. ‘I don’t view this little bounce as a sign the fundamentals have improved.’”
“Back in January many economists were sure the housing market was evening out. In the second half of the year, real estate would rebound, or so went the common prediction. Now, it’s obvious that a turnaround may not take place until the fourth quarter of the year.”
“‘The downtrends are still in place–probably not looking for a fundamental bottom until late in the year,’ Seiders says. ‘The signals coming out of ‘06 were that the demand side had stabilized, but everything was changed by the subprime mortgage market meltdown and subsequent tightening in lending standards. The uncertainties right now are tremendous.’”
The Associated Press. “A survey by the National Association of Home Builders released Tuesday indicated that there are more troubles to come as builder sentiment fell to an index reading of 30, matching the low point in the current downturn set in September.”
“NAHB economist David Seiders said he changed his forecast to show a bigger 22 percent drop in construction starts this year, with 2008 showing a small 4 percent improvement, and the current slump ranking as the most severe since the 1990 housing downturn.”
“‘The housing sector got grossly overheated during the boom period, and there is a lot of payback going on now,’ he said.”
From Reuters. “OceanFirst Financial Corp. said it decided to close down its mortgage banking subsidiary as the unit incurred significant operating losses in the last two quarters from subprime mortgage loan originations.”
The Orange County Register. “Option One Mortgage Corp. of Irvine is laying off 20 percent of its staff, or 600 workers, including 133 in Orange County. It also is closing 12 loan processing offices nationwide, the company said Wednesday.”
“The lender, which funds loans brought by brokers, will stop buying loans in bulk, said Christine Sullivan, a spokeswoman for the lender.”
The Daily Southtown. “ACC Capital Holdings Corp., parent company of sub-prime mortgage lender Ameriquest Mortgage Co., will cut hundreds of jobs in the Chicago area later this month as part of an earlier announced nationwide consolidation.”
“The move is part of a final resolution arrived at last year with attorneys general in 30 states who investigated the company for possible predatory lending practices.”
“ACC spokesman Chris Orlando stressed that not all the local layoffs are from Ameriquest, but also include ACC’s other subsidiaries, Argent Mortgage Company, a wholesale mortgage loan operator, and AMC Mortgage Services, which handles loan servicing.”
Bernanke put (re-link)
http://www.minyanville.com/articles/Bernanke-Fed-Subprime-Mortgage/index/a/12861
Oops — beat me to it.
Bernanke’s Speech from Federal Reserve
The Subprime Mortgage Market
http://tinyurl.com/yt8cy9
txchick 57
Are the homes insured through FDIC.
Very funny.
Wow! Subprime is contained alright — in the dust bin of failed companies.
If subprime is contained why are foreclosures rising? Why are lenders tightening their lending standards and shutting out potential buyers? Why are auto and retail sales down? Why are homebuilders laying off construction workers? Why is the GDP down? The sewage is seeping out from under the door Mr Bernanke, and it ain’t contained. Not by a million miles.
Implode-O-Meter jumped to 72 today.
“At the same time, we must be careful not to inadvertently suppress responsible lending or eliminate refinancing opportunities for subprime borrowers.”
There is a fine line between not inadvertently suppressing responsible lending and tacitly encouraging irresponsible lending. I sure hope the Fed is careful not to cross it.
This is the same line that seperates “manly” and “stupid”…
BTW: Line = a Euler diagram with a very large area of overlap.
But Greenspan told me to get an option ARM!
“The slowdown in the housing market probably has further to run, but it won’t have a significant impact on the rest of the economy, Federal Reserve Chairman Ben Bernanke said Thursday.”
The shrinking middle-class fits perfectly in our vision of a new world order.
WELL PUT!!!
I think I understand what is meant by a “Fed Put” ….but what is to be “Put” - DIA, SPY, IWM ???? Thanks
http://www.radioopensource.org/mortgage-meltdown/
Here’s a link to radio program about subprime mortgage problems. There’s really nothing new to long time readers of ben’s blog, but it’s a good program.
Very informative, but I don’t think is just minorities that are going through this situation. I find that there are a number of people that are going through this meltdown and I don’t think this meltdown discriminated against any race. It was all greed to get people into homeownership and refinance their homes for personal profit and gain.
All of the above!
Is Bernanke still dozing off after past several years? How has he become Federal Chairman? He seems to have absolutely no idea what is happening in US economy. A very dangerous Fed chief. He is going to wreck our economy and economic system!!!!!
Received this from a sinking flipper:
FYI,
I have been a real estate investor an unfortunately I am now in financial trouble. I have 6 homes I would like to sell - but 2 that I immediately need to sell before I go into default / foreclosure. These are extremely nice homes in New Tampa - Live Oak Preserve -that would be ideal for families, professional athletes or executives. The homes below are 2 homes I need to sell ASAP
I also have a townhome in Denver - priced much lower at $180,000 - 1900 SF that I need to sell asap also.
If you know anyone or have any clients looking for a great investment property these would be ideal rental homes - but also if you have any clients looking for a home in Tampa or Denver these would be great homes for them to live in.
Thank you,
What does he want for the Tampa places? Any link?
I know this person and can send you his info if you provide your email tx. I chopped off the bottom of the email with his info because I did not want to publicize his name and number, but I feel comfortable sending it to you tx in a private email.
gymnastgal32 at yahoo dot com
Sent you a copy of the entire email tx
Looks like your identity is out. I always wondered what Mary Lou Retton was doing these days.
WT Econ, tx has posted that email address before. The odds are, she’s not Mary Lou. Mary Lou is 39 — neither 32 nor 57 nor born in ‘57. But your deduction has its points.
I thought it was glassartchick at yahoo dot com
More info from the email:
Mahogany Virtual Tour - I paid just over $600,000 for this house - now I am offering it for $529,900. This was listed for $600,000 - so I have dropped the price by $71,000
It was rented to builder as a model home for $4490 per month. This is a huge home - about 5,200 SF - has 5 bedrooms, + office, large living room, great room, 3 car garage, huge bonus room and huge pool.
http://www.obeo.com/Public/Viewer/Unbranded.aspx?ID=97243
OAK Virtual Tour - I paid $500,000 for this home below - Now have it on the market for $469,900 - It was listed at $550,000 - So I have dropped the price by $71,000
It has 4 bedrooms + an Office, Large living room, dinning room, family room and eat in kitchen, huge pool and pol deck. Was rented to builder as a model home for $3720 per month.
http://www.obeo.com/Public/Viewer/Default.aspx?ID=97242
Wonder what happened to the builder who was renting these. BK ?? Those rental amounts are pretty hefty and would almost support the houses. Good luck finding J6P to pay them, though.
Thanks, but no thanks, Mr. Flipper. I’ll wait until the properties can be purchased on the courthouse steps to see if any deals are to be had. Good luck!
$180,000 for a townhome in Denver is not a good price. (depending on location) For $180k you can buy a house by DU in a neighborhood you can raise children in.
Where? I respectfully dissagree. I have looked from Wellshire, south to Broadway, west to Bonnie Bray, north and there is no place there for $180K for a SFR.
A couple of weeks ago on craigslist I saw some houses north and west of the DU area. Not the nicest parts of town but on the fringe for around 180k
hahahaha nice try… you aren’t from Denver are you…
http://denver.craigslist.org/rfs/332717462.html
Hmmm…. 1300 sqft “handyman’s dream” for $200K.
Yeah, I guess a new 1900 sqft condo for $180K is a horrid deal in comparison.
Read a little closer, the property isn’t a fixer…
Motivated Seller!!! Are you a Handyman that has always wanted your own workshop? This is the place for you. The Garage/Workshop was built just for that purpose. It has built in Stereo, Refrigerator, two 220V outlets that come from a 100 amp separate electrical box, and 33 feet of cabinets. (This was built by a gentleman that had a custom cabinet business)
So you can buy a house with no HOA and it has an workshop for 200k or you can buy a Townhome with an hoa for 180k. Personally I would buy the house because of no HOA and with an attached workshop your more likely to get a long term family type renter.
Another victim of the weekend “Get Rich With Real Estate” seminars.
Ideal for families, professional athletes, or executives. You name it! Any profession will do! Please somebody! Anybody!
Not a professional athlete, but I live in Denver and would be interested to see what this Flipper has for 1900 sqr. ft. at $180K. That is desperate, or in the ‘hood…….
“a great investment property these would be ideal rental homes”
Wow, if they are “ideal rental homes” (ie bringing in cash, and not hemorrhaging cash), then why does he want to get rid of them? He should sell his other properties that are not “ideal rental homes” and keep these gems. I’m so confused.
Great article at Minyanville re Barnake put and “great moments in mortgage lending risk management history.”
http://www.minyanville.com/articles/index.php?a=12861
There 2 positives are really the same positive… Big money supply and rising stock market. The stock market is not rising on anything as silly as profit gains or real economic output increases. It is up because the huge money supply is causing buyouts and buybacks. People are borrowing money to buy stocks. It seems to me that they are just “generating activity” so that they can take big cuts. No sigh that this investment is actually being used to build an economic foundation like factories, mines or businesses…. Just move money around and take your cut each time it moves….
How is this good for the economy?
Hey, this went in the wrong place. Should be under LEI rolling over, below.
Ben is going to crack down on abuses, just not the abuse of the monetary system perpetuated by the Fed. All you small-time operators keep your hands out of the till; who do you think you are, Goldman Sachs? Helicopter drops in the fall, baby.
One of the local Lumber 84’s in the Brandon area which used to do 53 million dollars/year during the boom is down to 23 million. The store is set up to do around 20 million so I guess all is well, but it does show as an example how out of whack things were on a retail basis during the boom.
During the speech, He actually said, “GDP at 2%” (after the cooked CPI comes in at 2.4)…….. no recession, economy is just in reverse for now.
Suprime has spiiled over and is gushing like a broken water main…. He stated its “going to get worse” and yet everything is fine….
Whiskey Tango Foxtrot?, Oh yeah, job growth and increased wages on the way…just ask your boss, you know the one that just lowered the health care benefit at work after laying off 10% across the board….our layoffs come next week…..I hate being the hatchet man.
And the LEI is rolling over. http://biz.yahoo.com/ap/070517/economy.html?.v=2
“…some of the states with the highest delinquency and foreclosure rates are among those most hard-hit by job cuts in the auto industry….”
from Mr. Bernanke’s speech May 17, 2007
I did not realize there was a loss of auto industry jobs in Florida, Mississippi, Louisiana and Alabama. I guess I do learn something new every day.
Bernanke is trying to make things sound rosy for the Wall Streeters. While at the same time feeding them little spoonfuls of reality. If he starts saying the sky is falling he’ll either lose credibility or will tank the stock market. So just like interest rates you need to dish out the gloom and doom in small increments at a time.
So far I like Bernanke. He’s kept my 401k humming while at the same time slowly pushing investors away from real estate.
If you like Bernanke now you will love him when he starts cutting rates. Your 401k will rocket…of course milk will be $8 per gallon and the dollar will vaporize but you will have lots more dollars to burn in the fireplace.
He won’t cut rates unless inflation diminishes. Personally in CA I put inflation at around 8%. I don’t see inflation subsiding for 3-5 years or if a major correction happens in the stock market.
You have to remember that Bernanke spent a lot of time studying the Great Depression. He knows that if the fed gets crazy and starts jacking up rates quickly there will be a depression. He also knows that if the lower rates in the short term business will pick up steam but in the long term you’re just creating a higher cliff for the economy to free fall from.
My guess is that the fed will jawbone the economy down as much as possible and then slowly try to increase interest rates.
The Fed cut rates from 6.5% to 1.5% from 11/29 to 1933 and we still had the great depression. The Japanese cut their rates to almost zero and they had deflation. No depression because they could still sell to America. Reducing rates will probably not stop deflation. The key to driving up prices in the post 2002-3 period was a strong dollar position and allowing dead beats and liars to borrow. Does anyone here think the wild loans will be made again?
Now that the dollar has fallen for example from Euro .82 to 1.36 is there a lot of room to let the dollar fall? With the 10 year bond’s downtrend tops line for the last twenty years crossing around 5%, won’t a break of that line mean that the FED is forced to RAISE interest rates to attract foreign capital and defend the dollar.
Folks, there really is a strong case for deflation. We had it in the 1840’s, 1890’s, and 1930’s. My gut says that you can not stop deflation in our type banking system.
I’m not so sure about the Fed lowering interst rates between 1929-1933…
What Caused the Great Depression of 1929?: According to Ben Bernanke, the current Chairman of the Federal Reserve, the stock market crash and the subsequent Depression were actually caused by tight monetary policies that the Federal Reserve instituted at that time.
Bernanke relates several key actions by the Federal Reserve:
* The Fed began raising the Fed Funds rate in the spring of 1928, and kept raising them through a recession that began in August 1929. This led to the stock market crash in October 1929.
* When the stock market crashed, investors turned to the currency markets. At that time, dollars were backed by gold held by the U.S. Government. Speculators began selling dollars for gold in September 1931, which caused a run on the dollar.
* The Fed raised interest rates again to try and preserve the value of the dollar. This further restricted the availability of money for businesses, causing more bankruptcies.
* The Fed did not increase the supply of money to combat deflation.
* As investors withdrew all their dollars from banks, the banks failed, causing more panic. The Fed ignored the banks’ plight, thus destroying any remaining consumers’ confidence in banks. Most people withdrew their cash and put it under the mattress, which further decreased the money supply.
Bottom line…thanks to the Fed, there was just not enough money in circulation to get the economy going again. Instead of pumping money into the economy, and increasing the money supply, the Fed allowed the money supply to fall 30%.
“The key to driving up prices in the post 2002-3 period was a strong dollar position and allowing dead beats and liars to borrow….Now that the dollar has fallen for example from Euro .82 to 1.36 is there a lot of room to let the dollar fall? With the 10 year bond’s downtrend tops line for the last twenty years crossing around 5%, won’t a break of that line mean that the FED is forced to RAISE interest rates to attract foreign capital and defend the dollar.”
The dollar has been weak since 2000, not just since 2002. The US currency to the Euro is dramatically undervalued (currently), however against the basket (which includes the Euro) the US dollar is still 25% OVERVALUED.
Yes there is a lot of room to fall. The US congress is meeting to implement tariffs on China because its currency is 30% undervalued. Japan is 35% undervalued. Russia is 35% undervalued. India is 15% undervalue. The Thai Baht (which caused the currency crisis of 1997) is 40% undervalued. The Loonie is 7% undervalued.
The US has already said that the dollar is to high and would like it down by another 30% against the basket.
This implies the DJIA would have to go to 19,000 just to stay even with the currency drop.
Since the US makes no real tangible items, all the imported items from China, India, Thailand, Vietnam, Mexico are going to cost more. Maybe this is not inflation, but last years $1000 plasma TV will cost $1300 which is certainly not deflation.
Bernanke’s take on the GD is ludicrous. That’s like blaming the hangover on the cup of morning coffee instead of the kegger the night before.
I have a friend who’s a health insurance agent. He’s been telling me that lately there has been a rash of his group plans drastically cutting the benifits in their plans to reduce cost. Result for him? Since he specializes in selling group plans, and his monthly residuals are based on premium collected, these reductions have made a big cut in his monthly income. Most of his big clients are companies that have some connection to the housing industry. Now, let’s move a space forward on the board. I have another friend who is a RN. She recently told me that traffic at ER was greatly reduced. Her explanation? Since a lot of people have had their health benefits slashed to cover only major stuff, or perhaps have rediculous deductibles, folks are only coming in now if they absolutely have to. Now there’s talk at the hospital of cutbacks.
Yeah sure Bernanke, it’s all well contained.
That is so true Ex-nv. I work as an R.N. here in Oxnard and the E.R. is not as full as usual except for the Gun shot and stabbing victims.
ER is the only medical care I ever get
Won’t go near a doctor unless there’s bones or body parts sticking out. And then only if you hide all the needles.
Don’t get me started. I could go on about how idiot “doctors” have completely jacked with my wifes health. It’s interesting, the advent of the internet has made it possible to expose the mess we see here with housing with blogs like this. It’s also made easier to expose our clueless medical establishment. The next time you’re given a diagnosis or a prescription from your GP, do a little research. You might be surprised. Like FB’s, added to the list of peope I cannot not tolerate are FP’s - those that blindly accept the OPINIONS of their doctors as absolute truth. FP’s = F-ed Patients. (rabid rant off)
I’m with you, Chick. I avoid doctors like the plague.
They are the plague.
My grandfather was a doctor, and grandmother a RE broker. Both grew up thru the dust bowl Depression. I STILL argue with the folks about their absolute trust in those professions. I think I am out of the will. But I can cover my lost future inheritance with a HELOC, right?
Doctors offices are full of sick people, why would I go there?
“They are the plague”
A little harsh?
Sure, we make mistakes… but overall I’d say we’ve done a pretty good job.
Look at life expectancies and quality of life now vs 100 years ago.
And remember, in many cases preventive medicine is much more important than emergent care. if you wait too long on some of the medical conditions, then the treatment is either less effective or perhaps nonexistent.
That said, it is typical of younger people (under 50) to despise the docs. It is because your bodies hold up well and you in general don’t really need us. It’s not until people get into their 60’s 70’s and 80’s that they realize how important some of these medicines/procedures can be.
that said, there are good docs and bad docs… and nobody is perfect. We all (myself included) make mistakes once in a while.
As for health care:
our system is overwhelmed right now. no slowdown at all for us. In fact, the Mpls metro area is dying for RNs, paramedical staff, and non-Family Practice doctors.
Typically, healthcare doesn’t slow until about 1 year AFTER official recession hits. That’s when people’s healthcare insurance gets slashed.
Yeah, there are some doctors who are going through the motions. But there are also some who really care and do a great job. I had some serious eye problems a few years back and was treated by a truly great doctor. He was head of the teaching department at a major university hospital. He knew me, was concerned, spent huge amounts of time discussing what was going on, was never rushed, and answered all questions. He eventually did surgery on my eyes, with great success. When I moved to New Zealand he took the time to correspond with my new ophthalmologist down here and was a friend. It ain’t all bad.
A very huge part of the increase in life expectancy over the last 150 years is not due to medical care, but to simple blunt force improvements in public sanitation and personal hygiene.
And most of the rest is due to the creation of antibiotics and vaccines. I took a public health class last semester. The first day or so was basically an explanation that it was engineers (water and sewer mostly) that were responsible for most improvements in public health, not doctors.
And who figured out that changes in water/sewer were beneficial to human life?
Don’t underestimate the advances that medicine has done for you.
the most important medical advance by far is cleaning air/sewer. no question about that
Vaccines (100% due to doctors) are #2.
Antibiotics (arguably) #3.
But there are other things as well. Such as (just to name a very few):
1) the mortality rate of many cancers. (look at the success we’ve had at most childhood leukemias and also breastcancer)
2) the improvement in life after knee and hip replacements.
3) the improvement in life due to pain medicines like ibuprofen/acetaminophen. (which we take for granted)
4) the improvement in life due to allergy meds like claritin, zyrtec, allegra, patanol, flonase, etc.
5) the significantly improved life of people with asthma due to inhaled steroids.
6) significant improvement in oral hygeine due to fluoride (of course people think its some sort of mind control thing, or due to the fluoride industry)
7) the significant drop in horrible thyroid diseases due to iodine in salt
the list goes on and on.
I’m not saying we’re saints… just to maybe keep some perspective.
the problem is you all conveniently forget what life would be like WITHOUT doctors and industrialized medicine. It is easy to see what it would be like. Move to rural China.
Reminds me of the two hicks I was listening to while waiting in the DMV in Front Royal Virginia (DMV closures in NoVA several years back made it more efficient to drive to a DMV 75 miles away). I was bored, and their conversations were such a hoot, that I decided to write them down:
Loud Talker’s New Friend:
“We live and a trailer and heat with wood.”
Loud Talker:
“Those doctors think their so smart just because they went to college” …
“I don’t trust doctors, that’s why me and my husband don’t go to them, and we don’t waste our money on health insurance”
Loud Talker:
“You earn the mini circle cutter for free when you buy $250 worth of product.”
Nothing to see here please move along folks
How will the Dr’s make their medical school payments?
Don’t know what you’re talking about. We can’t find enough people to hire and health case premium for me is $10 more than 4 years ago. Seriously I don’t see any signs of recession.
Ed, How many fingers am I holding up?
like im talking to my daughter, when you put a dollar in and get back 98 cents……thats called negative growth. Negative growth (ie: inflation> GDP)
Take a harder look Ned. Take out the “you’re” in the first sentence of your post and replace it with “I’m”, then start the sentence with “I”. There, that’s better.
Every place I have worked for the past 10 years there have always been hundreds of applicants for job openings.
Regarding health insurance premiums, it will depend on where you work. I too have fared well, but also know people who have seen their monthly share go from $100 to $400.
In the computer industry, the companies kept trying to sugar coat it.
Look, average American pays $300 a month. Average employee in our “industry” pays $200. You’ve only been paying $100, but we’re moving it to $150.
Ummmm… hello. Our industry is the service industry, which means you’re lumping us in with dry cleaners, delivery drivers, truckers, warehouse workers, the guy working the counter at Kinkos, movers, people working the garage at UHaul, AND, yes… Data Processing.
Eventually they gave up and just said, “Our costs are going up, so we’re passing it along to you.”
Thank you. A refreshing bit of honesty.
We get hundreds of applicants but very few that have skills.
The people we need have already left the state and we’re looking at loosing 40% of our skilled workforce in 5 yrs.
Notice how even their false GDP numbers are causing trouble now. Why is he looking at the average for the last year instead of recent data? Because independent economists expect Q1 to be adjusted to 0.7% or less soon, and Q2 to be 0%, or even negative.
http://tinyurl.com/33pzvc
“CHICAGO (Reuters) - A rash of U.S. mortgage delinquencies is not expected to hurt the broader economy, Federal Reserve Chairman Ben Bernanke said on Thursday.
“We believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited, and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system,” he said in remarks to a Chicago Fed conference.
Bernanke said the cooling of the housing market has been “an important source” of slowdown in the U.S. economy, which has experienced growth of a little more than 2 percent over the past year.
Housing market weakness has persisted longer than expected, he said.”
“Banks and other lenders are tightening their standards for subprime, near-prime and even prime borrowers, a Fed survey of banks’ loan officers showed earlier this week.”
I am hearing that getting a loan is a whole lot harder than it was just three months ago. Zero down is all but gone for even borrowers with high credit scores.
Without this crazy money I cannot see how prices can be maintained at anywhere close to current levels in bubble areas such as Florida, the West Coast and the North East. There just are not that many potential buyers with $60K down and great credit who are in the market to buy.
The BIG piece of the mess that is still a player is the issue of “stated income” loans, which IMO has more to do with our current mess than any other factor. If you can muster 10% down and have reasonably decent credit, you can still borrow just about any amount and state any amount of income.
Slight correction, zero down without providing income is all but gone for borrowers. A borrower that is able to demonstrate their income can still obtain 100% financing. On the prime side, I believe Fannie and Freddie are tweaking their automated underwriting programs to have potential 100% borrowers to show more reserves, lower DTI’s, and better credit.
The stated and no ratio 100% deals are only available to those with 700 fico’s or better, and they better have some reserves or their SOL.
Slight correction, zero down without providing income is all but gone for borrowers. A borrower that is able to demonstrate their income can still obtain 100% financing. On the prime side, I believe Fannie and Freddie are tweaking their automated underwriting programs to have potential 100% borrowers to show more reserves, lower DTI’s, and better credit.
The stated and no ratio 100% deals are only available to those with 700 fico’s or better, and they better have some reserves or they’re SOL.
In tight money markets sellers/realtors would do some creative financing in order to not need “new money “.
(1) The seller would take back a purchase money second and take on some of the risk so the lender would be willing to loan on a lower loan to value first TD note (requirements +approval of lender , appraisal is really tight to prevent fraud by parties ,and borrowers can qualify for both notes .
(2) Buyer to assume existing loan with the lenders appraoval .
(3) Sellers finance property if they own home outright .
(4) Buyers have parents go on title with them
(5) VA and FHA are often times assumable loans (subject to approval of lender and often times assumption fees or the loan can be called )
(6) Builders can offer homes at affordable prices where end-user demand is really there .
(7) Sellers can do a lease with option to buy or a ‘Contract Sale* where buyer pays down payment in installments until it reaches enough money to obtain lender financing . Usually down to tie down a price or a desired property or work toward ownership if your a renter .( Not wise to do in a declining market but might be good to do in a appreciating market but sellers usually don’t want to do it in a appreciating market .)
(8) Borrow the money from the mob (oh wait ,people have been borrowing money from the mob )
“Markets can overshoot, but, ultimately, market forces also work to rein in excesses”
And when they do, they can overshoot on the downside, too. Credit, house prices, expectations, emotions, etc.
Exactly and we will be at 1999 prices.
Just need to wait for the bottom. The crying from everyone telling you how bad real estate is as an investment will be the time to buy.
Mass psychology is the best way to play any market.
wise man once say (I cant remeber who)
“Markets can remain irrational longer than you can remain solvent”
Your wise man’s comments are well-targeted to stuck flippers who cannot find a buyer at 2005 price levels…
John Maynard Keynes
“Markets can overshoot, but, ultimately, market forces also work to rein in excesses”
I thought this was the one positive in BB’s speech. It sounded like he won’t be doing anything to circumvent market forces. With foreclosures increasing this year and next, lenders will continue to tighten as it gets harder and less profitable to dump their junk loans. Their reserves will be tested as they have to buy back non-performing loans, which will impact their balance sheets.
Bottom line, there will be an ever shrinking pool of qualified buyers, especially first timers. No one can absorb all this inventory with the specuvestors and voodoo lending going by the wayside.
Ben is working to keep the excesses going. They don’t call him Helicopter Ben for nothing.
“ACC spokesman Chris Orlando stressed that not all the local layoffs are from Ameriquest, but also include ACC’s other subsidiaries, Argent Mortgage Company, a wholesale mortgage loan operator, and AMC Mortgage Services, which handles loan servicing.”
Oh, no, not all the layoffs are coming from us. They’re coming from anyone and anything RELATED to us, too. It’s all good.
got a letter yesterday from our commercial loan servicing outfit (aka:escrow company for prive commercial loans), not only are they raising fees on account services, but newspaper indicated they have laid off staff in the downturn.
ALL GOOD, no problems, next
From an LEI article this morning: http://biz.yahoo.com/ap/070517/economy.html?.v=13
The reading tracks 10 economic indicators. Two of those readings were positive in April: stock prices and real money supply.
Are these the signs of a fundamentally sound economy? Hint: No.
“ACC Capital Holdings Corp., parent company of sub-prime mortgage lender Ameriquest Mortgage Co., will cut hundreds of jobs in the Chicago area later this month as part of an earlier announced nationwide consolidation.”
FYI, they are cutting over 500 jobs. Repeat after me…housing will not affect the overall economy.
Anecdotal pawn shop news…
I have a few friends in the biz, down in the city of angles and I called to pick their brains, for you.
These aren’t the kind of pawnbrokers that will loan on your plasma tv, or set of tools, or ipod.
They loan on strictly small items of value, i.e., jewelry, precious metals, rolexes, etc.
Typically pawn brokers like the ones I describe, will loan about 1/2 of what an item is worth, at true wholesale values, like 1/2 of melt for p.m.’s.
The 3 gents I talked to this a.m., tell me their loans have increased dramatically over the last month or 2, increases of 35% to 60%, and all of these businesses have been going for a decade or more, so they are cognizant of changes…
They also tell me the redemption rate (for pawn brokers like this, in decent economic times, 85-90% of the items left for collateral, get redeemed eventually by the person that got a loan on it) has dropped quite a bit, to around 70-75%, meaning more folks are letting things go, as they have no more dough…
And this is the high end of the pawn biz~
Imagine what’s going on in the lower tranches?
More acecdotal news. From DFW: (1) property manager, the largest in DFW, told me that they have many more evictions this month than normal, and (2) received minutes from HOA meeting in Sherman (on Oklahoma border) indicating that 75% of homeowners are delinquent. The dues are only $240 annually.
Just look at Craigslist - all the houses for rent in McKinney, Allen, Frisco, Keller and Little Elm. And some of the prices are still delusional.
I expect to see crime rates go up. Armed robbery and grand theft.
I expect to see crime rates go up. Armed robbery and grand theft.
The country’s morally and financially bankrupt.
The Wall Steet huckster’s have looted the till.
Everybody’s know’s the jig up.
And then there are those perfectly legal bankster/Fed crimes, like looting the U.S. Treasury, debasing the dollar, running the economy like a giant casino and offloading the cleanup bill to responsible taxpayers and savers.
I seem to recall (can’t cite it) that crime rates tend to go DOWN during recessions and depressions. Is my memory failing me?
There is some confusion and controversy surrounding this subject, but you basically have it backwards.
Az is correct. Crime will typically increase as money supplies decrease. There is lots of data on that trend.
You also get an increased incidence of mental health issues as economic hardship accelerates. The effects of adverse mental health conditions last far longer then the situation which triggered it. So while you would expect increases in crime and other delinquent behaviors during recessionary economies, the conditions which began the behaviors generally remain present in the recovering economies, thereby dampening resiliency factors.
That was the reader digest condensed version.
I wonder how well any researcher can isolate the recession from all the other variables to establish that crime is actually affected by recession.
Not that I disagree that it goes up, but is the cause the recession or perhaps fewer resources to control it (IE, if staff cuts hadn’t happened, would the crime rate have changed?)?
Hmmm had to find a paper that was easy to access. JStor and Blackwell Scientic aren’t generally available unless you have a subscription to the journal in question.
Will CEPR do?
Identifying the Effect of Unemployment on Crime
Raphael, Steven
Winter-Ebmer, Rudolf
Abstract
Previous estimates of the effect of unemployment on crime commonly omit determinants of criminal behavior that vary with the business cycle, creating correlation between unemployment rates and the residuals in aggregate crime regressions. In this paper, we employ several strategies that attempt to minimize or break this correlation and eliminate the accompanying omitted variables bias to estimates of the effect of unemployment on crime. Using a state-level panel for the period from 1970 to 1993, we explore the sensitivity of crime-unemployment elasticity estimates to explicit controls for per-capita alcohol consumption, a factor that has been shown in the past to be pro-cyclical and a partial determinant of criminal behavior. In addition, we use prime defense contracts per-capita at the state level as an instrument for state unemployment rates. Both controlling for alcohol consumption and using instrumental variables to correct for omitted variables bias yields large effects of unemployment on the seven felony offenses recorded by the Department of Justice. Moreover, in contrast to previous research, we find significant and sizable positive effects of unemployment on the rates of specific violent, as well as property crimes.
Check CEPR’s site for more. Early works of Phillip Cook are a good read too.
I used to work at a pawn shop and I have to disagree. The redemption rate all depends on your customers and the area you set up shop.
Also pawn shops aren’t such a bad thing. When I worked at one most of the people that brought stuff in were construction workers, single mothers, and poor families. Sometimes men brought in guitars and guns.
At least with pawn shops people are getting a loan (usually around 20% interest rate) for something worth around 2-3 times the loan amount. If the borrower doesn’t pay the money back the pawn shop sells the stuff after 45 days or puts it on Ebay.
Also all serial numbers when available are tracked in a police database. This is try and find stolen goods.
Compare a pawn shop that typically loans under $500 to it’s customers to a payday service. Pawn Shops don’t generally report late payments to your credit report. If you miss a payment you just have to pay more interest. If you don’t pay they take your stuff. With a payday loan you can seriously screw up your credit making it completely impossible to ever buy a house.
Compare a Pawn Shop to a HELOC. At least with a pawn shop they have something of value to take if you don’t pay up. With a HELOC the lender has to get at the end of the line before all the other creditors if the borrower goes into foreclosure.
Like I said previously the redemption rate all depends on the area you set up shop. In a midwest america town that large enough you can easily make a million per year. In downtown LA you’d be lucky not to be shot or clear over 30k.
I never bagged on pawn shops, and as I stated, this is the high end, which is like comparing apples to oranges, compared to the usual rank and file pawn shop that most of you are familiar with…
This is where you go, when you have serious items of value, you need a loan on.
Sounds like we should of had pawn shop owners underwriting the loans of America .
Anecdotal
Flea market business and anything with hobbies have been off dramatically since last Fall. Don’t even make “table money” anymore at some of them.
Lot of people walking around after paying 2-4 bucks to get in and not buy anything….cheap entertainment??
Why pay four bucks for a flea market when you can go yard-saling for free?
My God! There are some cheap bastards on this blog… but I like.
Slim, you’re my hero. Hey what;s the biggest purchase you’ve ever made (excluding house)? Mine’s a $7.5k car - if you don’t count the wife with a $25k student loan
You know, I would completely agree except that my work keeps selling. 07 has been my best year. I have no clue why that is. I haven’t changed mediums or had a major departure in my themes. One owner told me I’d become collectable- which to me means my paintings would sell less. go figure
I don’t know how it is where you are but in Phoenix art sells only to the rich and to young professionals who have substantial salaries and lots of credit. I have bought more art every year for the last several years even though I’ve cut back on a lot of other things. And I can tell you that lawyers are no where near a recession even if our clients are in one. My salary has nearly doubled since 2002 and they’re talking about raising again. It’s completely ridiculous.
Curious… when the inventory gets a little bloated, do your friends give better than average deals? Pawn shops usually acquire a decent supply of quality firearms.
‘Markets can overshoot, but, ultimately, market forces also work to rein in excesses,’ the top central banker said. ‘In the long run, markets are better than regulators at allocating credit.’”
AMEN!!! Are you listening Chuckie? Hillary? Harry? Probably not.
True free markets and central planning are not compatible concepts.
I agree that we should interfere with the correction process and institute bailouts for the reckless and irresponsible. However, this bubble would not have grown to monstrous proportions in the first place had federal “regulators” been doing their jobs. If the Fed had not dropped FF rate to 1% and held it there over 2 years, while Congress generously doled out capital gains exemptions to flippers, and GSEs socialized a ton of mortgage risk, this thing would have unwound a whole lot sooner. Part of the job of “regulator” is supposed to be taking away the punchbowl when the party starts getting out of control –not spiking the damned thing with Everclear.
The crux of the matter for me is, “free markets” are not natural self-creating entities that just spontaneously spawn from the earth, and maintain themselves. They are artificial constructs of rules that are designed, created, implemented and maintained by people.
The problem is not whether or not markets should be regulated –this is moot. Free markets, as we know them today, simply could not exist without some basic ground rules and common-sense “regulations”, like prohibitions against violence/coercion, fraud, insider-trading, anti-competitive collusion, monopolies, cartels, basic concessions to consumer/environmental safety, etc. See modern-day Sudan or Afghanistan for a peek at a 100% regulation-free, anarchists’ paradise “free market”. Is this really the kind of “free market” we want here?
crap! bold off
Ok, I give up, it won’t accept the “” tag. How do I turn it off?
off
Thanks!
The problem with this is that federal regulators are slow to react to anything, and their response is often politized. You can’t write regulations that prohibit everything that could possibly go wrong. That’s why a free market, with real consequences (read: no bailouts) is a better enforcer, IMO.
Agreed, with the small caveat that if the Feds weren’t actively involved with blowing the bubble to begin with, it would have collapsed much sooner and done far less damage. There’s no way government can repeal the business cycle nor prevent asset bubbles from happening. However, at the very least they can –and should– stay the f**k out of it.
“As in the past, the percent increase still fell well within the census’ margin of error of plus or minus 9.3%, so we can’t say for certain whether they even rose at all. Comparisons to last year were not pretty either: starts were down 16% from a year ago.”
YOY comparison = mainly signal
MOM comparison = mainly noise
he did not believe the growing number of mortgage defaults would seriously harm the economy” BB
he’ll still get paid
I wonder if we’re missing a point of Bernanke’s speach.
He’s talking about tighter lending on sub-prime, but as we’re all aware, that spigot is pretty much sht down now unless you have substantial down.
I wonder if these “prevent fraud” and “sound underwriting” comments weren’t really a warning to the Alt-A segments, since that is where a HUGE amount of fraud is continuing to happen.
Loan investors will just stop putting up money if they get abused with loss (which they are getting now ) and they will just make a bunch of new requirements . Loan investors will extend the buy-back times and might even required that the loan is seasoned so as not to be victimized by a cash-back scheme . They will require more down payment and maybe insurance on high LTV loans . Investors might even charge more money to make a loan or limit funds for only the best ,or not go very high LTV on refinances . It will tend to create a tight money market .
To go from a loose money market to a tight money market with this much housing inventory is a killer . Lenders weren’t suppose to make it easy for crime rings to invade .
How can you put a regulation in place that says “Loans are not to be fraudulent?” That implies that you never had that regulation/law to begin with . They already have laws on the books that say that contracts are not to be fraudulent or perjury is a crime .They already have the guidelines /rules for appraisers on what is and isn’t allowed in determining value .They already have the rule that it’s fraud to give cash back to a buyer after you inflate a appraisal , on and on . its already a crime to withhold information or material facts from a lender on a sales contract .it’s already a crime to submit a liar loan request under penalty of perjury and all the other things they can do to you if you try to fool a lender .
The point is that the laws were just not enforced ,
The point is that the laws were just not enforced
Bingo! The other elephant in the room is, the Fed, GSEs and Congress itself were active, complicit and willing partners in blowing this thing to monster proportions. If they want to start looking for “perps”, they might want to start by looking in the mirror.
Apparently, it was completely unreasonable for us to have expected our esteemed “regulators” to, um, y’ know… actually regulate. At this point, I’d be happy if they’d just butt out of the process entirely and not make a bad situation even worse with asinine bailouts. I’m dreaming, of course…
Ha, just got this email:
From: xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Sent: Wednesday, May 16, 2007 5:41 PM
To: xxxxxxxxxxxxxxxxxxx
Subject: Cold call — needs an attorney to help
5-16-07
Received a cold call for a gentleman who is in Bellevue, WA–appears he
bought some notes from a builder and the homeowners are not paying. He
would like someone to assist him in collecting, negotiating and perhaps
foreclosing and/or collecting on the debt.
Is there anyone out there who is interested and can help him?
Email me and we can “talk” some more if you are interested in helping
this guy.
For God’s sake, if you can’t find an attorney in Seattle you aren’t trying very hard. The place is thick with them. I had two who were roommates when I was in grad school at the UW. The local law schools pump them out and they don’t want to leave Seattle for the lifestyle reasons. I knew more underemployed attorneys than practically anyone else.
The properties are in TX though.
Oh, I missed that part.
I think Kent should be forgiven, on the basis that Bellevue WA has 300 times as many people as Bellevue TX.
Even though you missed it I know what you mean. There is a building in Seattle that has more lawyers in it that there are in the entire country of Japan. Atleast that was true in 93.
Buying “cash flow notes”… The newest late night, get rich quick, infomercial on the air.
I’m a lender. I have a loan that isn’t being paid, and I know if I foreclose I’m going to get $.60 on the $1.
So, I find some poor sap that passed the “idiot test” of responding to a tv commercial and paying for a get-rich-quick training program. I sell this sucker my non-performing note for $.75 on the $1.
He immediatly finds out the note is non-performing. He either resells it to another sucker for less, or just pays for the foreclosure and takes the loss.
I think this is another get-rich-quick program that I won’t be participating in. HELLO people. The market is awash in liquidity. If there was anyway to make money by lending people money, someone else would have already made that money.
That’s what I kept thinking. Why did the banks and loon originators fail to compete in my supersafe niche? In the end, I decided it was because the whole niche was so small (condo-ized trailer parks, loans on single lots with or without MH) that nobody wanted to bother to pay a loon officer a salary to understand it.
Thanks for giving this public servic announcement Darrell . We are living in a Nation of many psychopaths. Some one else gave a warning the other day about receiving official looking bank statements in the mail from a big lenders that were fake . The forms were designed to get people to call so they could steal their identity .
I think people need to watch out for the people that call on the phone offering money claiming they are a lenders . You have to know who you are dealing with these days .These crooks are going to get more and more aggressive if they can’t find any easy marks.
Darrell_in _PHX
You’re understanding of notes seems to be very very elementary. I’d take the note you just described all day everyday.
Keep thinking like that bubba… The more the better. LOL
As a matter of fact do you know of anyone in that scenario you described. I’d be more than happy to talk to them.
Learn a little bit before you criticize.
mr incomestream I think some of that stuff is a scam to unload non-performing seconds .
“At the same time, we must be careful not to inadvertently suppress responsible lending or eliminate refinancing opportunities for subprime borrowers.”
About the only bailout measure that I would tend to support would be a retroactive prohibition on prepayment penalties. I’m not a lawyer so I don’t know what the legal implications would be if Congress passed such a law and made it retroactive. But I can think of no legitimate reason for prepayment penalties on loans.
“But I can think of no legitimate reason for prepayment penalties on loans. ”
I can. It compensates the lender for interest rate risk, so that the lender knows that you’re not just tying up his capital. The prepayment penalty (theoretically) would allow the borrower to have a lower interest rate than otherwise.
A lender takes interest rate risk when they lend out their money. You lend out at X%… later it may raise to higher than X%, but the lender’s money is tied up at X%. Thus, typically a lender gets a HIGHER interest rate for long-term loans than short term loans, to compensate them for interest rate risk.
As example, if I lend you $10,000 at 5% for 1 day, it is unlikely that the going interest rate will go to 10% later today.
but if I lend you $10,000 at 5% for 30 years, I take the risk that the going rate will be 10%, but I’m stuck getting only 5%.
Thus, typically short rates are HIGHER than lower rates.
A lender may decide that they want a fixed rate for a long time instead of a short rate. Thus, they may be willing to do EITHER: (example)
1) 6% over 30 years, with a PREPAYMENT penalty
or
2) 6.5% over 30 years, no prepayment penalty.
this helps with interest rate risk. Because this way, if the lender lends at 6%, then rates DROP to 5%, the borrower will want to pay off hte 6% loan with a 5% loan. The lender then must take 5% (which is a loss of anticipated income)
A prepayment penalty makes it less likely that the borrower will prepay the loan, which will usually be when prevailing rates are LOWER.
Thus, prepayment protects lender.
This is also why prepayment penalties tend to phase out over the duration of the loan.
Hope that made sense.
Sorry, the lender takes 2 longer term risks with longer term loans:
1) interest rate risk
2) inflationary risk.
The money you repay is worth “less” than when you borrowed it.
I’ll tell you how they take care of that problem in New Zealand. You can’t get a fixed 30 year rate. The rates are fixed for a maximum of 3 years, then you have to take a new current rate option. The amortization continues as though the loan were a 30 year loan, but with a new rate. When I have told people here about 30 year fixed at 5.5% they can’t believe it.
Once the NZ market crashes, we are so buying there…
South Island, please.
You might have to wait a while. They (the government)are/is actually concerned about rising house prices. The central bank just raised interest rates to slow price increases. Mortgages here are at 8.5% fixed three years. The government has said they will raise rates more to slow sales. Affordability is actually discussed here, and there are concerns. On the other hand, I have bank deposits earning 7.75%/6 months. The biggest problems you will have coming here is qualifying for immigration (I fortunately have dual citizenship)and the exchange rates. You’re making a big bet when you buy or sell NZ dollars. Seems like every time I do an exchange I get it in the shorts, except right now. Four years or so ago the NZ dollar was $.50 US. It’s now $.74 US. My money here is worth LOTS more US dollars (but it’s still here - paper profits). But the rates change and there is no way to predict which way. The high NZ dollar really affects exports. NZ has had a balanced budget for a while but lower exports aren’t helping. I am a wine maker here and believe me, the high NZ dollar has hurt wine exports.
I’m retired…
Looking to do the eternal summer gig and can stay up to 3 months, per visit.
Don’t kid yourself that NZ is somehow going to weather the real estate bust, by it’s lonesome…
It’s LBJ’s domino theory, but instead of worrying about communism taking over the world, it bubble-ism that has emerged as the winning entry.
http://www.time.com/time/printout/0,8816,1622015,00.html
Excellent, I remember this man as the only voice of reason in the runup to Irak.
Having a little email fun with this guy. Damn, I’m bored:
http://dallas.craigslist.org/rfs/332815611.html
I’m not sure I’d want a ramodeled house.
Nice catch Slim, no wonder the author can’t sell the house, no one can figure out what ramodeled means
Was it ramodeled with real ramen ? I picture myself breaking down a wall for dinner.
It’s insulation and it’s what’s for dinner.
“$3K down takes over the existing mortgage”
What’s up with that, saw a lot of this in the Phoenix craigslist listing. 3k must make up the back payments if I need to dump a house. I would just say Free House take over payments.
I’ve got one better:
http://fortlauderdale.craigslist.org/rfs/331470271.html
“I’m leaving Florida and am giving my Delray loft condo away under a LOAN ASSUMPTION PROGRAM, whereby the interested party will simply take over my mortgage payments with absolutely ZERO for a down payment. … If you are the lucky person, I will also give $2000 in cash-at-closing as a bonus.”
Hysterical.
Seems like reality is finally kicking in:
http://realtytimes.com/rtmcrcond/California~San_Diego~dawnlewis
“The inventory of homes available for sale has increased dramatically. New home communities are still building new homes in many areas of San Diego creating even more standing inventory. If you’re buying in San Diego this is your opportunity. If you’re selling a home in San Diego the increased inventory has caused the time it takes to sell a home go way up. Many home owners are selling their homes for lower than they want because they are in a position where they have to sell. The lower priced homes get sold first while more persistent home owners won’t reduce the price of their home until desperation sets in. At this point the market has come down even more. Having an expert with many years experience is essential in this kind of market.”
“If you’re buying in San Diego this is your opportunity.”
Opportunity to buy near the top of a crashing market????? Hmmmm…. I think I’ll pass.
“There has never been a better time to buy or sell a home.”
NAR
C’mon guys, when was the last time you saw a realtor write something like this:
“Many home owners are selling their homes for lower than they want because they are in a position where they have to sell. The lower priced homes get sold first while more persistent home owners won’t reduce the price of their home until desperation sets in. At this point the market has come down even more.”
I’ll give her a lot credit for telling the ugly truth….
“Having an expert with many years experience is essential in this kind of market. The Lewis Team is here to help.”
Why is it that lately whenever I come across the word “expert” I want to barf!
It’s a virtual put, basically the Fed doesn’t so much buy your losses from you (at a higher price) like a put, but that they make circumstances so favorable that even if you took a loss on the last deal (NASDAQ bubble) the next deal will more than make up for it (housing bubble).
Why does the paper spin everything positively?
I noticed one of their banner ads.
http://www.mosaictempe.com/
Fancy website. Catchy slogan “How Ironic. A high-rise that is actually down to earth.”
Dig down, dig down….
http://www.kmldevelopment.com/news/DetailNews.php?NewsID=6
“Set amid the vibrant, multi-cultural backdrop of Tempe, KML Mosaic rises 21 stories into the desert sky and offers 212 customizable residences, including 45 city flats, six townhomes, 152 Tower Condominiums and nine penthouses.”
“Mosaic’s diverse, amenity-rich residences start at the $400Ks.”
Within a mile of this place, there are dozens of places to rent a studio for $600, a 1 bedroom for $700-800 or 2 bedroom from $800.
So, I should buy for $3000-3500 a month when I can rent for 1/6th the price.
Oh goody, where do I sigh up?!?!?
They also ran a news story announcing this “real estate conference”… which they are running banner ads for.
http://www.markbosworth.com/flash/
” Wealth is not created by taking from others. Wealth is created from gross increase. It is the principle of abundance. There is enough for everyone. We are totally empowered to achieve all that we desire. You can have it all.”
blah, blah, blah…..
Being a jurnalist must suck. In school they talk about integrity and ethics. Then you get into the real world and have to tailor every story to the wishes of your advertisers.
OK 110+ degree direct sunlight all day and all those windows i’ll bet they aren’t even tinted. or insulated triple glazed.
Hmm…. do curtains get hot enough to catch fire in that kind of weather with no AC on (to save $$$$$$ )
Anyone see this yet?
http://www.azcentral.com/news/articles/0517Immigration-Congress0517.html
“WASHINGTON — Key senators and the White House reached agreement Thursday on an immigration overhaul that would grant quick legal status to millions of illegal immigrants already in the U.S. and fortify the border.”
Didn’t we do this “just one time, we promise” thing about 20 years ago?!?!?
70% of the citizens are against amnisty…. but the Dems and Reps both want it. Darn those voters that keep getting in the way.
I like the part about sending them back. That’s about it. It will be interesting to see if this passes.
Too expensive to send them back.
Create a workable system that allows employeers to validate citizenship of employees, and FINE THE SNOT out of anyone that hires an illegal.
Take away the jobs, and they’ll go home on their own. MUCH more cost effective!
I’m going to have to wait and read the actual text of this new bill. After reading the actual text of the previous bills, I can say that the MSM did a lousy job of describing them.
I’m sure that shocks the readers of this blog.
Is this how they’re going to prop up prices?
Comment by House Inspector Clouseau
2007-05-17 10:37:44
“They are the plague”
A little harsh?
Sure, we make mistakes… but overall I’d say we’ve done a pretty good job.
Look at life expectancies and quality of life now vs 100 years ago…
Medical profession shouldn’t get the credit for that. Abundance of clean food, clean water did the trick. With natural immunity people who don’t starve, and don’t eat junk, and don’t inject chemicals (incl. medicines) into their bodies will live for a fairly long time. Yeah, here and there some will die of cancer, heart-attack, etc. But keeping away from the doctors on the whole is not a bad idea!
I hadn’t beento the doc for years. Had a couple sinus infections, and a recurent stomach ache in the area of my appendex.
He sent me in for a head scan to see if I had a deviated septum causing the sinus infections.
A month later, my slowly leaking and totally crystalized appendex burst, I went septic and I just about died. Total organ shutdown, 7 hour surgery, week+ in the hospital peeing out small amounts of a coffee-looking substance, waiting for the liver and kidneys to start working again.
Glad the docs were there when it burst. Wish the doc had been more concerned when I’d been complaining about a recurrent stomach ache in the area of my appendix.
The lesson here is this: Go to the doctor only in an emergency.