Bits Bucket And Craigslist Finds For May 18, 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.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
November 2024 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
From a sheriff’s sale notice Bedford Gazette, Bedford PA, MAy 18, 2007
“Title to the said premises is vested in J P Morgan Chase Bank f/k/a Chase Manattan Bank by deed from Gordon E. Diehl, Sheriff of the County of Bedford dated 02/15/2006 and recorded 02/15/2006 in Deed Book 1106, Page 764.”
There follows a paragraph on distribution of the funds. Then:
“Seized and taken in execution and to be sold as the property of J P Morgan Chase Bank f/k/a Chase Mangattan Bank , Judgement of the Bank of New York, as trustee for Amresco Residential Securities Corp. Mortgage Loan Trust 1997-3 under the Pooling and Servicing Agreement dated as of Septemner 1, 1977-3 Plaintiff(s) VS J P Morgan Chase Bank f/k/a Chase Manhattan Bank Defendant(s) entered to number 508 for 2006.”
Date of the sale is June 8, 2007.
It appears that even the banks are not paying their mortgages. I have never seen a case where one bank is foredlosing on another bank. Is this a new case of leaving the keys on the counter and walking out?
How’s this for a wild guess. Amresco originated a loan to some deadbeats. Amresco sold the loan, along with a bunch of others, to Morgan Chase. Morgan Chase foreclosed on the FBs and ended up with REO. At some point, Morgan Chase found that the whole ball of wax it bought from (Dallas-based) Amresco was no good,and so under the terms of some 1977 contract, one of Amresco’s trusts was required to buy back the whole mess. This made the bad note the property of Amresco once again, but now the equity interest in the FB’s house was in the name of Morgan Chase. Either because Chase and Amresco couldn’t agree, or because there wasn’t any simpler way, Amresco’s BONY Trustee is the one who now has the right to try another auction. Someone else have a better guess?
When I get some time today I will try a trip to the court house to see if I can learn more about this. I wondered if the first foreclosure may have been on the second and now the holder of the first, having not been paid was taking its turn.
It’s not the bank foreclosing on it’s the bank foreclosing for the other bank. Here’s a likely pattern.
1 Loan originated at Dewey, Cheatum, and Howe Residential Mortgage Services LLC.
2 Loan sold to American Residential Loan Mortgage Company.
3 Loan placed in a securitization trust AMRESCO Capital Trust 1997-3 (Issued March 1997)
4JP Morgan was probably the underwriter and either along with the underwriting Chase Bank bought the servicing rights (for which they collect a few basis points of the interest and all late fees).
5 Borrower defaults
6 The following the servicing agreement JP Morgan Chase forecloses on the home and either pays or will deliver the proceeds of the eventual sale to the capital trust.
7 The pension funds that bought the trust’s bonds doth rejoice for they have been paid
The lawsuit is about how and when the proceeds of the foreclosure will be delivered to the trust from the servicing company. (Servicing companies like to hang on to the float and have been known to delay foreclosure out so they can generate additional late fees).
After trip to the courthouse:
First mortgage Option One Mortgage $55,900 assigned to Bank of New York trustee etc.
Second mortgage American Loan Center $60,450 assigned to JP Morgan Chase.
Sheriffs deed from first foreclosure 2/15/2996 . Second foreclosure filed 4/20/06. Writ of execution filed 2/17/07. Sale June 8, 2007. There seems to be a long delay between filing a case and a sale in this county, 14 months.
Ben, your headline says May 16. I think today is the 18th?
Oh man, I thought this was Friday. It’s only hump day.
Thanks, more coffee please.
http://www.youtube.com/watch?v=ReyWn8X8CxM
Put that coffee down, Ben. Coffee is for closers!
not housing, but I am sure some of the folks here will have good comments, there is a wave of companies being taken private, what impact will this have on the stock market and how do this companies benefit/or not from privatization? No Sarbanes/Ox, so fewer lawyers is an obvious one…
Well, no more stupid union rules, its either be flexible or find another job.
What i dont understand is, if say Microsoft today is buying aQuantive for $60 a share last sale $35 so a 60% premium…..but 2 years ago it was stuck at $10….why is $60 a great deal and $10 a bad deal? I see this so much lately.
http://finance.yahoo.com/q/bc?s=AQNT&t=5y
That’s why value investing works. There could be several real reasons for the change though, too. The business could have grown or improved, the buyer could have become more desparate, (corporations are run by people who generally experience the same emotions that we all do and panic at times).
Usually the premium is paid because the buying company can either improve one of their own businesses or cut costs at the bought business (some examples are Bk of NY and Mellon have many similar functions most of which only require perhaps 20% larger than either company would need alone. Other times it’s a company like PG & Gilette who can better negotiate with retailers for shelf space than either could have alone.
Frequently, the assumptions can be inflated (Daimler Chrysler is a good example of that) or there are cultural issues (this is especially a concern at banks and ad firms).
The private buy-out of Chrysler is one of those special cases: it goes like this: Borrow money to purchase Car Mfg., close down North American Plants and ship them to China, Buyout the Pension plan (aka: take it now or you get nothing), and VIOLA: Cost reduction and the Chinese Mfg gets the keys to the production line.
The beauty of globilization.
Yeah, the private plan makes sense, (private firm loses no brand equity in the cram down). I was refering to the original purchase. Daimler-Benz planned to have massive design synergies that never really panned out.
roger that, I was talking fallout from the buyout
In the case of Chrysler, commentators were saying the private equity outfit would have an easier time dealing with the UAW since they wouldn’t have to deal with German unions at the same time. Also that Daimler, in effect, paid the private equity folks to take Chrysler and its pension and health burdens off of Daimler’s hands. Certainly the auto industry is exceptionally burdened in this way, maybe not uniquely burdened?
This is one of the things I figured out about a year or so ago… I’m sure I’m one of the last to finally “get it”.
Unless you are in a field with HEAVY barriers to entry, company paid pensions and medical benefits to retirees simply CAN NOT work.
If you set aside the money now, a new competator will pop up that doesn’t set this money aside, and undercut your prices.
So, to be competative, you must not actually set the money aside, just promise to pay these things in the future. Once the time comes to have to pay these, a competator will come along and udercut you.
As a registered Libritarian, I HATE to admit it, but the ONLY way for a pension system to work is to have it govt run. My preferred method would be for everyone to save for their own retirement, then rely on family if/when thier savings run out. However, looking at the American population, it is clear we’re not mature and responsible enough to be trusted with our own retirement.
ARG!!!! Life sucks.
I never considered that. But couldn’t a company stay competitive by keeping salaries lower and actually putting the money aside and investing it?
No, because no one will work for you if your salaries are lower. The workers want top salary AND pension and medial.
That’s what UC does. Thankfully they also do a better job of investing for retirement then CALPERS does.
UC pays less than other universities, and people accept the lower salary in exchange for higher pension contributions?
some folks have to work the whole year = wow
what’s a pension ?
No, professors move to the midwest, where salaries are identical (sometimes more!), and the cost of living is a fraction of what it is in CA.
If you can last a while at UC, the benefits are good, and they haven’t required employee contributions since the early nineties (that changes this year).
Exactly, no one stays here for the money. Ideally you want one spouse out making bucks while one stays are UC.
Now my UC is facing it’s bomber retirement picking up now and going strong until we loose approx 40% of our top salary workforce in 5 yrs.
Darrell,
UC wages are low and the people with skills that can get out, do. This was really the case from 2003 to 2006. I haven’t see a lot of people leave for the midwest this year but boy do we have a lot of retirements.
Now, the comment about accepting low wages is interesting because frankly wages in the central valley are that bad all over. We grew during the tech boom where salaries did increase for those industries. After tech came RE and those are some of the last well paying jobs here. But the average person in Sacramento? it’s all flat from here.
I stay because I happen to feel a commitment to publically sponsored research and I act as a custodian of the public money. Now as researchers leave for inland states because it’s cheaper to conduct research in those locations and they can get more valueable work done, you’ll see people like me leave. My dedictation is to the work, not the state.
Darrell,
I doubt even the govt can run a pension system. Look at social security and where the govt pension plans are currently at. What you are seeing in the private sector is a precursor for what is going to happen in the govt in the next 10 to 15 years. Unfortunately for us tax payers the govt will just confiscate more of our earning to pay these bloated pensions as they go insolvent.
You can’t promise someone the world in the future and then fail to fund it now. This is exactly what the defined benefit pension plans do.
I agree. The govt. has done a horrid job.
I guess that is the Catch-22. The immature and irresponsible public that can’t handle their finances, elects a representative body that can’t handle the nations finances.
All you would need to fix this is ratings of pensions similar to AM Best’s insurance ratings. A pension is little different from a traditional fixed annuity, which have thrived in the private sector. People may not be good at math, but they are quite good at evaluating offers once the information is available. If company A promises $70,000 and an 80% pension with a AAA pension rating, but company B offer’s $75,000 and an 80% pension with a C- rating, I think most folks are sharp enough to realize which is their preferred choice.
Most of the issue with pensions has been a one time shift of many, many people from dying at 40-60 to dying at 70-80 (the elderly haven’t started dying older, but vastly more people are collecting benefits). Since too little savings was made early on, adjustments will be needed.
Darrell
Very well said, but alas the solution is not so easy.
If everybody saves alone, then you miss the benefit of the ” insurance principle”. Each person lives on average to say 75, but some may live much longer, say 95. Each person therefore needs to save enough to live to 95. In a scheme with everybody saving for 75 together, then the young deaths subsidize the old deaths. Far less savings needed.
The question is who can be trusted to run such a scheme. The fact that the social security money is already spent in Iraq, bridges to nowhere and plugging the budget deficit etc makes it clear that the answer is not the government. Leaving money lying around washington is a guaranteed loser. Industry is not the answer either, because companies don’t last as long as people do, with rare exceptions.
Not sure what the answer is, but it maybe looks like auto insurance - companies that do nothing except guarantee payments in exchange for premiums. But they have to be heavily regulated, like banks, so they don’t just take the money and run. Can’t rely on just the market because the feedback comes fifty years too late. If your pension is being embezzled who’s to know until your retire?
And who knows the average age at which my age group will die, until my age group gets old enough that we start to die?
I agree that a HIGHLY regulated industry like auto insurance would be a good option, but we had to pass laws to FORCE people to buy auto insurance, and still there are areas of Phoenix where 80% of people are dricing without auto insurance.
So, a govt. that yanks the pay out of your check before you get it. It lets you pick wich pan you want to join?
Like a manditory 401(k) that only allows you to invest in very safe areas??
Oddly, CNBC just had a segment on that showed 80% of people think it is a good idea to make 401(k) participation manditory. A higher % than actually participate themselves.
Daimler gave Chrysler away IMO…They wanted no part of the fallout from the union cuts to come…Better to have some obscure owner do it….
Sometimes walking away with nothing is winning.
Punting on 1st down
In 1916 Georgia Tech beat Cumberland 222 - 0
The highlight of the game for Cumberland was a play that only cost Cumberland 3 yards. Cumberland never got a punt off.
I knew taking Cumberland + 221 points wasn’t the mortal lock, I thought it’d be…
not union cuts, UNION DECONSTRUCTION after the North American plants go to China.
I never understood unions. Why wouldn’t you just leave and get a better job somewhere else if a company treats you like crap?
unions were an important factor during industrialization, but once unions lost the “victim” status, they go the way of the veloceraptor
Why wouldn’t you just leave and get a better job somewhere else if a company treats you like crap?
Hyperspecialization. If I’m one of a few hundred people in the world who knows how to weld a car frame together in such a fashion that it won’t fall apart after 100,000 miles, I have a limited number of companies that I can work for.
Back in the 1950s through the 1970s, this was no big deal. You’d work at the same company for thirty years.
Today, that welding job is done by a robot (hopefully one not so suicidal as to throw itself off a bridge) and the hyperspecialized job is the guy sitting at a computer workstation designing the robots. Since he’s a keyboard jockey, there are plenty of other people out there who want his gig, and plenty of other jobs available to him. It isn’t a big stretch to go from industrial robot designer to, say, architect, to, say, software engineer. The hyperspecialized engineer really gets to adapt her skillset much faster than in the past, and can be much more mobile in the job market. Hence, what’s the point of the union?
In places like Germany, unions actually play a much more constructive role in looking after the interests of workers without killing the goose that lays the golden egg. British unions are the worst on the planet. They care nothing about the company or the country, they just want to push a Marxist class-struggle agenda. No wonder the UK is so far down the tubes.
Yeah, but the British ruling class had been pushing a class-struggle agenda for a long time before there were any unions. Read about the Clearances in Scotland, or some DIckens.
What goes round comes round.
Profitable companies leaving the public sector, leaving behind the struggling ones in an environment of rising gas prices, lower consumer confidence, a declining housing market, etc… can mean only one thing: the DJIA is going to go up, up, up! /snark
You’re right. Up another 41 in early trading.
The Chinese just gave Blackstone Group another $3 billion to invest in private equity deals….
Taking a company private can be very lucrative in situations where the market has not properly valued the company or the company benefits from non-transparent capital and reporting structure. The recent upsurge is probably due to advantages in non-transparent financing of the acquisition due to the carry trade and derivatives i.e. that which makes the acquisition possible requires that it stay in the dark.
The financing is pretty transparent (borrow from the bank and buy a vanilla swap). It’s more or less the same thing that drove home prices, up cost of financing is still very very cheap (because as rates rose, risk premiums declined). The credit cycle will correct and lots of those companies will return to the public markets.
From what I’ve read, it’s a case of reducing supply pushes prices up. If memory serves (probably not, too early in the am
something like 6-10% of public equity has been retired in the last year or so. And prices have indeed gone up… 20% in 12 months. Yowza.
Can I take my “snark” back?
6-10% of public equity has been retired in the last year or so
I’d love a reference to this if someone has one handy.
Don’t worry, they’ll make (dillute) more.
“Solid job and population growth coupled with slight gains in home prices should help Colorado survive a housing slump in relatively good shape, an economist with the Federal Reserve Bank told more than 100 people at the Fort Collins Hilton on Thursday night.
“Colorado never experienced the big boom in the housing market,” that some other states experienced, said C. Alan Garner, assistant vice president at the Federal Reserve Bank.
“It may not have seemed like a good thing at the time” but it puts the state in a better position than many others as the housing market tries to rebound from a record number of foreclosures, slumping home sales and stagnant prices. ”
Garner and Crag S. Hakkio, special adviser on economic policy for the Federal Reserve Bank, made the presentation as part of the bank’s biennial economic forum in Colorado.”
Wrong. Colorado did experience a boom in the housing market from 1995 to 2000, and it would have busted in 2001/2002 along with the tech bust, but for the fed panic on low rates. Now Colorado is poised to pay the piper. A mere delay only. Garner and Hakkio should be working at the Walmart checkout rather than spreading bad info.
I guess OH and MI are in good shape too using his logic
“Solid job and population growth coupled with slight gains in home prices should help Colorado survive a housing slump in relatively good shape, an economist with the Federal Reserve Bank told more than 100 people at the Fort Collins Hilton on Thursday night.
“Colorado never experienced the big boom in the housing market,” that some other states experienced, said C. Alan Garner, assistant vice president at the Federal Reserve Bank.
Replace Colorado with Chicago and that’s what I hear all the time. Chicago’s boom has been from 1993 to 2005. We didn’t get the the 20% yearly appreciation but we got 7-10% yearly during that time. That has caused an entire generation of people in this area to think that’s the standard.
FWIW, median prices in many Colorado communities are well below national averages. Not saying that they are affordable, but at least “starter” homes in my neck of the woods are in the 180K range, and not 500K+.
Even Boulder is cheap when compared to SoCal.
Here is an example of a 180K house in Loveland.
http://homes.realtor.com/Prop/1078090488.
Its bigger and nicer than our old house in Escondido, CA, which according to zillow is “worth” about 500K.
I think prices have gotten so out of whack that we’ve lost a sense of what “affordable” is.
$180,000 may sound affordable to many on this board compared to what they see in their areas but break it down. Based on current rates, if you have good credit and can put 20% down (how many buyers have those two things in their favor?) you can afford about 3.5x your yearly gross. In order to afford $180,000 you’d need to make $51,400. Now for a couple that kind of income is certainly achievable for most but your average individual (that those $180,000 homes are being marketed to) looking for a starter home doesn’t make that.
Depnding on where you live the bulk of individuals make between $30,000-$40,000. That includes large markets like Chicago. That would mean they would need housing priced in the $105,000-$140,000 range. Where do you find that in any metropolitan area which is where the majority of the population lives?
You could argue that maybe individuals shouldn’t be buying homes but at this point in the game the housing industry can’t afford to price out singles and divorcees.
$180K in Chicago will get you a 1/1 condo conversion on the northside.
The fact of the matter is that a lot of households have dual incomes. The $180K is increased $360K.
The other consideration is that a lot of mortgage pre-date the boom. My parents bought their (small) home in a nice NW suburb of Chicago for $100K in 1998. Comparables sell for the $270’s. My parents mortgage is now $125K after a refi and with taxes, it’s a little over $1,000 a month. If I wanted to buy the exact same house for sale accross the street, I’d be looking at a mortgage payment of over $2,000 per month plus taxes and insurance.
In essence, its the new entrants to the market that have been priced out, the first time homebuyers. Those with enormous equity, like my parents, will be OK .
My family members own a ranch on a small lot in Portsmouth, NH. About 3 years ago they mentioned the mortgage payment….$75.
“In essence, its the new entrants to the market that have been priced out, the first time homebuyers.”
That’s the whole point. It’s first time buyers who reduce inventory. Otherwise everyone is just trading houses.
$180,000 will get you a real bad 1/1 conversion in Chicago. If it’s even a 1/1, more like a studio, and that’s only if you make $51,000+. Fair prices for starter homes for a couple runs around $250,000, not $360,000.
“My parents bought their (small) home in a nice NW suburb of Chicago for $100K in 1998. Comparables sell for the $270’s.”
You believe 170% appreciation over 9 years (19%/year) to be reasonable? If I were you I’d tell your parents not to tap to much of their equity just yet.
This is the qualtiy of homes you get in the norhtern half of Chicago for under $180,000…garbage.
http://tinyurl.com/25f6fh
I like your comment about trading houses because that rings true.
Going back to my parent’s home, comparables were going on the market for $270K in Rolling Meadows. Are you familiar with the 3bd/1ba post- WWII starter homes in and around Arl. Hts and Rolling Meadows? Yeah, they bought theirs from my grandmother’s estate after an appraised value of $100K. The neighbor’s wishing price (exactly the same house, different color) is for sale for $269,999K.
My parent’s home is the traditional ’starter’ home. My grandmother moved when she got married to my grandpa shortly after the Korean War. She paid $15K in ‘56 (IIRC) for the house and it was already a resale.
I cannot, would not, and will not pay $270K for a ’starter’ home in Rolling Meadows. Especially when these places need LOTS of work. They’re old, small and haven’t been updated since the 70’s (even some the 50’s!).
what’s worse are the bungalow ’starter’ homes in the bungalow belt. Unless you were fortunate enough to buy one when they were starter home priced i.e. 1920 - 1998….you’d better have a lot of cash because they sell for $350,000 and up now. The bungalows in the better neighborhoods sell upwards of $500,000. Some developers tear off the roof and make second level. Those are million dollar homes. A doctor the next block over on Keeler paid a tad over a million for one on Keeler. My other neighbor bought a 1 level bungalow on Kedvale as an ‘investment’ for $440,000. He put it on the market the following year for $550,000. It didn’t sell. he’s renting it for $1,600 per month.
Ok, it’s friday afternoon and I”m rambling and going off target. Time to get my a$$ over to federal court and drop off this order (in a chap 13 ’save the house’ bankruptcy case! God I love foreclosing on people’s homes)
That includes large markets like Chicago. That would mean they would need housing priced in the $105,000-$140,000 range. Where do you find that in any metropolitan area which is where the majority of the population lives?
You can still find that in Northwest Indiana - in a non-ghetto portion mind you. One that is within 5-10 minutes of a park&ride South Shore stop. One hour or less to downtown Chicago by rail.
It’s not a surprise that the South Shore ordered more train cars last year - they are at capacity.
I work in St Charles. I would communting 4 hours everyday.
I work downtown and have a few coworkers that make the commute in from Indiana every day. It works really well for people in the Loop, and they seem to enjoy it quite a bit. I think the Metra trains are a bit nicer, but the South Shore is not bad by any means.
In Colorado,I have a Nothern Colorado question. Why is there such a sudden jump in properties for sale as you cross the Boulder/Larimer county line going north? The lots seem the same size, so I’m not buying the “barriers to development” argument.
Also, you had made a comment that you didn’t see many vacant properties for sale. Au contraire, I find them all the time in you neck of the woods. You just need to know the signs, because it’s not always dead grass. If you check out coloproperty.com, you’ll find plenty of listings with pictures of empty rooms.
We might make an offer at 2000 sales price+6% on a property in Loveland, but I still think that’s generous (only 15% off asking). We’ll probably wait until later this year, and if it’s still for sale, maybe we’ll start eating into the 6%.
What I meant was that you don’t see neighborhoods full of vacant houses like in some of the boom markets. Don’t get me wrong, the Loveland market is weak. But its not the disaster that SoCal, Vegas or Florida are.
As to why more for sale in Larimer? My guess is that its simply because its farther away from Denver, and with all the local job losses its become more of an exurb. If you have to commute to Denver Longmont will be more desireable.
We might make an offer at 2000 sales price+6% on a property in Loveland, but I still think that’s generous (only 15% off asking). We’ll probably wait until later this year, and if it’s still for sale, maybe we’ll start eating into the 6%.
I think it depends on which market segment you are looking at. I have found the 300-500K segment to be on life support, and I think that waiting this segment out can be fruitful. For instance, there is a golf course McMansion accross the street from us that just had it price lowered, but only about 5%:
http://homes.realtor.com/Prop/1067056703
I expect that it will come down more before it sells. The owners divorced and its empty. Its been on the market for almost a year now.
Still asking too much. Bought for $403K in 2003.
Assessor info
Provided, they probably had to put in landscaping, sprinklers, etc., but that’s not desperation yet. Somebody should offer them $403K and see if the realtor balks at the “insult”.
Curiously, a very similar one just a few doors up the street did sell for about 470K.
Provided, they probably had to put in landscaping, sprinklers, etc., but that’s not desperation yet.
They did a pretty massive landscaping job to the house. Of course in a soft market that won’t help much.
http://www.iht.com/articles/2007/05/17/bloomberg/bxatm.php
From the article:
“We need a deal to go bad, as long as we’re not in it,”
lol so true, but… famous last words
Reminds me of a NASCAR race…. Car is pushing like a dump truck (understeer for you open wheelers) and we need a caution. We just don’t want to be the caution.
Usually, the guy haveing handling problems IS the caution.
Our economy could use some understeer. We’ve been loose for about a decade and our rears are striping the walls!
http://www.minyanville.com/articles/Van+Gogh-S%26P-Sotheby%27s-Greenspan-1987/index/a/12873
Excellent article which answers some questions for me. This year has been my best for sales and yet I see everyone tightening down on spending. If one of my pieces makes it to Christies, I’ll buy everyone lunch >; )
Do you have a website? I’d love to see your work. I’m an art aficionado.
TXchic
My GF site: http://www.roxyart.com
Thanks
Here’s another: http://www.karinrandlett.com .
My personal opinion, art does better when the general economy’s not so great. Like people get back to basic, human stuff. Just a theory!
The auctions at Sotheby’s not withstanding. That just seems to be a case of people having so much money they flat out don’t know what to do with it. People waiting for the RE bust in Manhattan can just thank their lucky stars that those 100’s of millions got blown on a few paintings instead of going into the local RE market.
I’ll send the link to your email when I find it.
Lunch…You cheap B******……LOL
You should treat us all to a $250 dinner and write off the $25,000 as a business expense.
LOL I never thought of it that way. OK we all eat like kings and wonder off in a cabernet induced haze.
What kind of people are buying your work? Any idea what their line of work or net worth is?
Out of 2 galleries in SF. I’ll ask.
When “Irisis” sold in 1987 I made note of it….it was sold to the Japanese at the top of their stock market…..
I’ve never been one to follow the crowd. I find value in its most basic form: food, shelter, family, health. Everything else is extraneous (although running water is a good thing). Will never have all the goodies that are deemed valuable (at a given moment) by the masses, but I’ll always be rich.
My personal version is shelter, food, and Escoda synthetic Mongoose brushes.
Mikey, no artist I know is in it to be rich (except the folks from the animation dept where I went to school). We do it to stay sane. It makes us rich in spirit. I take pieces off my walls and hand them to people all the time.
We do it to stay sane.
I have to admit I am completely unable to comprehend this. I took the enneagram personality sorter (just for fun) and scored the lowest (most negative) on the artist category. Artists have it tough emotionally in today’s world. It’s ironic that works of art become highly ‘valued’ during times of financial euphoria.
Gwynster -
I have great respect for people like you who follow their hearts.
Aside from my kids’ work, my favorite paintings are those that my grandmother painted when she moved to an assisted-living home. My wife laughs at them: she misses the point, as I think most (ignorant masses) people would.
shame on FORBES
old info
all BS
Live in Seattle? If you own your home, chances are you’re celebrating.
That’s because the city’s median home price in the first quarter of this year hit $380,200, an increase of 12.3% from a year earlier, according to data from the National Association of Realtors (NAR). Median home prices in the Pacific Northwest as a whole soared; in Portland, Ore., prices jumped 8.9%, and in Salem, Ore., they grew 15.6%.
Southern metros also boasted gains. In San Antonio, prices went up 11.2%, and Austin, Tex., prices climbed 5.4%. Charlotte, N.C., and Raleigh, N.C., rose 6.4% and 6.3%, and Richmond, Va., and Norfolk, Va., improved 6.2% and 5.9%.
“In San Antonio, prices went up 11/2%…”
also note, Inventory YOY is up 43.3% in San Subprime
It’s all BS. Who cares.
“It’s all BS. Who cares”
I care about this wild increase in inventory in that is (1) ugly (2) ruinous to our tenuous quality of life and (3) not selling particularly well or quickly - so senseless, so senseless
I meant who cares about a bunch of BS in a stupid magazine. They can say what they want, good luck trying to actually execute based on anything you read there.
Got it.
Here’s something executable (if you have the right bond broker). Republic of Iceland 7.25% notes due 5/17/2013 are currently priced to yield 8.95% to maturity, in Icelandic krona. If you believe that ISK will fare no worse than USD, this is a yield that has a chance of keeping up with inflation. AAA rated.
If you buy the bonds, can you immigrate to Iceland?
Sometimes walking away with nothing is winning.
Punting on 1st down
I like Ice in my drinks, sheepishly remember a Vanilla Ice song or 2 (damn you, memory~) and Ice skated a lot when I was a kid.
Do I qualify?
to azlender: I read a few months ago that some banks are expecting Iceland bonds to get a rating below AAA before end of 2007. I wouldn’t be too sure about getting your money back in five years …
These days, an “AAA” rating means only that the rating agencies have stamped “AAA” on their report, after being paid lots of money by the issuer. It certainly doesn’t mean that your money is safe, if it ever did.
“Here’s something executable (if you have the right bond broker)…”
Is your broker buying them directly (in units of 10,000 ISK), or are these components in a bond fund? Thanks for info…
Check out this Phony FLIP this House
http://www.myfoxatlanta.com/myfox/pages/Home/Detail?contentId=3200981&version=2&locale=EN-US&layoutCode=VSTY&pageId=1.1.1
Wow! Great video. Turns out he didn’t even own the properties and never found real buyers for them. Those buyers were fakes!
4 days in a row… Hope someone posts a link to this tomorrow so we can keep this streak going!
Some of us can’t get here everyday, so this is OK in my opinion.
Man, that guy is one smooth operator. I watched a couple of his shows. I thought he was pretty smooth–seemed like he knew what he was doing.
China to Tighten Up on Rates and Loosen Up on the Yuan
The Chinese central bank said it was widening the yuan trading band to plus or minus 0.5% per day against the U.S. dollar, from a previous band of plus or minus 0.3% per day. The yuan has traded in a limited band against the dollar since July 2005.
The bank said it was acting to improve the managed floating exchange rate regime based on market supply and demand. It said it was also seeking to promote development of the foreign exchange market and strengthen the pricing and risk management capabilities of financial institutions.
The central bank also lifted the bank reserve requirement ratio by a half percentage point, and it also increased its benchmark lending and deposit rates.
MarketWatch
http://tinyurl.com/ysxzwd
Check out bonds
http://www.bloomberg.com/markets/rates/index.html
wish I understood the implications more, but everyone else, Germans, Chinese etc are raising their rates,and less overseas buyers of ours = more pain for those that are already on the verge.
when rest of world tightens, and we hold, its a de-facto lowering by the FED……you gotta think globally
Brokeback yield curve…
stucco you fricken crack me smooth up.
tightening credit and letting the dollar fall… Nice.
WAIT!!!
“The yuan has traded in a limited band against the dollar since July 2005.”
What? A narrow band means it is up a little, down a little, but flat.
Dollar is all down against the Yuan since they unlocked.
http://finance.yahoo.com/currency/convert?from=USD&to=CNY&amt=1&t=5y
This is not a narrow band.
I suggest you look at the Euro/Yuan & Euro/USD & Euro/Yen.
The US has little basis to criticize the pace of the dollar collapse. Either the US tells China to stop buying US T-bonds and interest rates go through the roof (which would strengthen the dollar) or the US allows inflation to explode.
China doesn’t care what the US does so long as China can generate 15M new jobs/yr.
tick tick tick tick tick tick tick tick tick…
Boom
Right.
The Chinese buy and we have too much liquidity causing all these crap “private equity” deals. They don’t buy and interest rates soar while the falling dollar causes mass inflation.
Damned if they do, damned if they don’t.
day-um
Notice that the bursting of the US housing bubble and the Chinese’s decition to ease the the fixed exchange rate coincide perfectly?
Chinese products are about to become a lot more expensive and they Chinese will be able to afford to buy all of our food and products. It is going to be interesting.
if we feed the chinese corn, what are we going to feed our autos?
The New Pyrrhic Fool Cells, might work…
http://en.wikipedia.org/wiki/Pyrrhic_victory
China is the world’s 2nd largest grower of corn. It was the 2nd largest exporter. Now China has stopped exporting corn and is importing.
As an aside yesterday I posted that I received $15.51 for mailbox milk for April. I was wrong. It was $16.09. Up $1.02 in the last month. Up over $4 since December.
They’re milkin’ ya man…
Is this why the U.S. Treasury yield curve is lurching up across the full duration spectrum? Market-based mortgage rates are moving up in tandem. Soon only buyers w/govt subsidized rates will qualify.
—————————————————————————-
BUSINESS BRIEFING
30-year rates hit 5-week high
May 18, 2007
Rates on 30-year mortgages jumped to the highest level in five weeks, Freddie Mac reported in its nationwide survey. Thirty-year, fixed-rate mortgages rose to 6.21 percent this week from 6.15 percent last week. It was the highest level for 30-year mortgages since they averaged 6.22 percent the week of April 12.
Rates on 15-year, fixed-rate mortgages rose to 5.92 percent from 5.87 percent. Five-year, adjustable-rate mortgages rose to 5.92 percent from 5.89 percent. One-year ARMs, which had shown the biggest upward movement last week, were unchanged this week at 5.48 percent.
http://www.signonsandiego.com/uniontrib/20070518/news_1b18bizbrfs.html
Some of my favorite articles are the ones that were written a year ago when Realtors® were so busy deriding talks of a downturn. These two articles are written by the President of EWM Realtors®, one of the largest local realty companies in South Florida:
http://www.ewm.com/company/articles/normalmarket/
http://www.ewm.com/company/articles/bubbletalk/
You’ll love where he quotes our favorite cheerleader, David Lereah. His articles are a perfect cliche of Realtor® talking points:
In defense of continued high prices, he writes, “At its foundation, the real estate business is relatively simple. Real estate values are created by “supply and demand”. As the demand increases for homes (or any type of real estate) and the supply decreases, values will always rise. If we can accurately measure the demand for housing and correctly project the future supply of housing, it’s fairly easy to predict the direction of sales activity and the subsequent changes in value. The data needed to arrive at these conclusions is readily available; therefore, building a graph of future values is fairly easy.”
What funny about this is his own website provides very nice, interactive graphs that clearly show a ballooning supply and dwindling demand: http://www.ewm.com/trendx/
Of course he uses the old, “they’re not building any more land” argument when he writes, “The fact that we have virtually no land left in Miami-Dade County upon which to build single-family homes leads us to believe that values for single-family homes will continue to increase at very favorable rates due to the pressures of demand versus the shrinking supply of land. It’s the basis of economics. As the supply remains the same while the demand continues to increase, it’s inevitable that values will go up.”
In light of the approximate 15% price decrease we’ve seen in South Florida since he wrote the articles, coupled with the ballooning supply and non-existant demand, I can’t figure out why he’d leave those articles up. I guess he figures there are still a bunch of gullible buyers still out there.
http://cbs2chicago.com/homepage/local_story_137214558.html
Last night story in CBS Chicago.
As always they were presenting the FB as oh! poor victims of the evil lending industry. I guess they cannot read or have no way to contact a lawyer (there are even free attorney services for low income people).
I got so angry when I watched that story last night! They are paving the way for a bail out. My husband says that if that is what the majority wants then we cannot do anything…
If politicians try, I will go to Washington to protest!
I have the link for the video on my site if anyone missed it.
What I am predicting is some fairly angry protests on yesterday’s immigration reform since most polls show american’s dissapproval ratings as very high.
Bailing out FBs will feel like slap and tickle compared to letting the immigration packet to through. Maybe that is the plan- divert our attention with the immigration issue and sneak the FB bail out in the back door.
That was my DH’s guess. He used to work for the ILL house of reps. Nothing like watching the machine in action to make you cynical for life.
I was wondering if it is a distraction….
Now I don’t think so. We have too many houses and too many more under construction. Even inflating away the current unaffordability won’t save the construction industry from collapse… one of the only industries we can’t outsource to China.
We need to get illegals out of 16 poeple per house, into a more normal household structure. Not to mention all those family memebers they’re likely to be able to bring over. This is the only way to create enough demand to keep the houses full and the builders building.
Not to mention the EXTREME need to get more young people into our workforce to pay Social Security for the Boomers. The illegals still have a MUCH higher birthrate than citizens.
So, fill the houses, get them paying more Social Security.
Some are estimating that the current amnesty bill will add 100 million by 2020. That should fill a few empty houses. I wonder where these 100 million newcomers will drive their cars, where their drinking water, electricity, gasoline, etc. will come from?
http://www.heritage.org/Research/Immigration/wm1076.cfm
With those types of numbers, we won’t have to worry about anymore jobs going to Mexico. We will effectively be the MSA - Mexican States of America.
the polls are biased.
Immigration is coming and coming fast…It may seem un-American to think that the salvation of this country is going to be a function of immigration (well, most here are immigrants generationally removed) but despite the costs Social or otherwise. Immigigration means expansion. Expansion means more consumption
Goldilocks dies when consupmtion s..loo…ww..sss/
As has been mentioned earlier, capitalism requires growth to work. In a finite world this poses some serious issues. As I mentioned above, where is the fresh water going to come from, especially in the western US?
How big will metro LA become? It already reaches Victorville. What happens you have 100 million living in SoCal? Will LA reach all the way to Vegas?
Goldilocks needs to learn to live in sustainable way. It is possible to grow the economy without importing millions of uneducated, impoverished workers. Japan has shown that it can be done.
“The actual crisis hasn’t started yet,” said John Groene of Neighborhood Housing Services. “We’ll see that in a couple years.”
Hey Neil
Got popcorn?
Neil is unavailable right now. Busy working his mojo on his honeymoon. Go Neil!
I hope he didn’t marry the chic from the “Suzanne, I researched this” commercial. He’ll be hen pecked.
Congrats Neil!
Some time ago someone (Paladin I believe?) was tracking homes in his area that were fairly obviously fraud. He was exposing them, contacting lenders and their ratings agencies, and whatever else. I think he was planning to setup a website. He dissapeared. Did he get offed by some crime family or what?
He posted in and said he will be back.
Like Tony ‘the knife’ Mozillo..That guy makes Tony Soprano look like a quivering weakling..
http://finance.yahoo.com/q/bc?s=CFC&t=5d
The fact that the “authorities” have convinced him to keep silent for whatever reason has me concerned. I hope he isn’t getting played.
Tax cuts not for everyone
A House plan wouldn’t help many at the lower end.
http://www.sptimes.com/2007/05/18/State/Tax_cuts_not_for_ever.shtml
A leading legislative proposal to trim Florida’s property-tax bills would save the average homeowner about $1,500, or more than 50 percent. But the savings would not be distributed evenly.
A St. Petersburg Times analysis of county property appraiser data has found that about 55,000 homeowners in Pinellas and Hillsborough counties, or one in 10, would not gain a penny under a plan recently floated by House Speaker Marco Rubio, R-Miami.
Many of those who would be left behind live in lower-cost housing, including mobile homes or over-55 condominium communities. Forty-one percent of those owning property worth less than $100,000 would not benefit from the cuts. About 98 percent of those who own homes valued between $200,000 and $1-million would.
Some would save more than others. For example, owners of Hillsborough County homes worth $1-million or more would enjoy an average tax cut of $8,000.
Rubio, whose proposal will be debated Monday by a joint House-Senate committee on property-tax reform, is not worried.
“My pet issue is the poor seniors. But those aren’t the people that are generally complaining,” Rubio added. “Would they take a tax cut? Sure … but you want to focus on the people who are paying more.”
Rubio said he believes his plan will boost the Florida economy by eliminating Save Our Homes, which he called an artificial drag on home sales, and put more cash in residents’ pockets.
But county property appraisers who assisted the Times with its analysis - and who admit having a vested interest in robust local governments - were critical of the direction of the property tax debate in Tallahassee.
“I had a feeling that the people at the low end of the housing spectrum would get nailed, and they do,” said Pinellas County Property Appraiser Jim Smith.
http://www.azcentral.com/blogs/index.php?blog=164&c=1&page=1&more=1&title=metro_phoenix_home_price_drop_beats_nati&tb=1&pb=1&disp=single
“I’m not one to jump to the conclusion of a biased media. I don’t see the media being right or left politically. They are simply after ratings.
However, with the extreme positive spin of this blog and the Republic’s real estate articles in general, combined with the heavy advertising by the industry, I’m forced to assume, at a minimum, there is a HEAVY conflict of interest that is challenging the journalistic integrity of this author, this web-site, and this news paper.
In the end, “news” is really just about advertising revenues.”
What do you guys think of my post???
Great post, Darrell. I wonder, however, why this is a new phenomenon. Haven’t the media outlets always been for-profit businesses?
I think the net driving down readership/viewership is really putting a squeeze on them. When they had high ratings, the advertisers wanted them. With low ratings, they have to chase the advertisers.
I see them as “pro extreme wealth” meaning they won’t run things that won’t interfere with the wealth accumulation of the megabillionares who own them.
I think the realtors were lobbying congress yesterday. I mean, I know they always have their regular lobbyists, but a portion of the rank and file is in for a conference or something this week.
I was taking the Metro home and the car was filled with people in suits wearing huge name tags encased in nylon and plastic pockets on cords around their necks. The nylon pockets had little metal buttons on them reading (I kid you not) “Vote Realtor Party”. They were also carrying around gift bags (pink tissue paper!) from the US House of Representatives. This sounds like a classic DC thing where interest groups come to the Hill and all go visit their own Congress critters at once to make a buzz about their issue.
Is it just me, or shouldn’t realtors be back showing houses to potential buyers in the middle of May? I think this sort of strategy smacks of fear, at least for this group of people at this time of year.
And in case anyone was wondering, they all looked very well fed and well groomed. Not starving or shabby yet.
“Vote REaltor Party?”…pink tissue paper…
this is surreal.
What do they think Congress can do, enact legislation to keep house prices at a “permanently high plateau”? Maybe they look well fed because they have a spouse who is gainfully employed.
crazy $hit
LIErah moves to MOVE
stock off 30%
this guy is poison
http://finance.yahoo.com/charts#chart1:symbol=move;range=3m;indicator=volume;charttype=line;crosshair=on;logscale=on;source=undefined
There is an nteresting juxtapositioning of articles in the SD Union Tribune’s Business section today:
Limited fallout seen in mortgage mess
Fed chief also spurns added regulations on lenders
By Jeremy W. Peters
NEW YORK TIMES NEWS SERVICE
May 18, 2007
“Markets are better than regulators at allocating credit,” Fed chief Ben Bernanke said in a Chicago speech.
The Federal Reserve does not foresee a broader economic impact from the growing number of mortgage defaults and home foreclosures, its chairman said yesterday. And he cautioned that heavy-handed regulation of lenders could have the unintended effect of adding to the strain on the troubled housing market.
http://www.signonsandiego.com/uniontrib/20070518/news_1b18bernanke.html
Foreclosures in April shatter March record
By Emmet Pierce
STAFF WRITER
May 18, 2007
A record 525 San Diego County dwellings were reclaimed by lenders or sold at auction in April, surpassing the previous record of 433 properties in March.
(Graphic: San Diego County residential foreclosures
There were 1,346 notices of default issued, the first step in the foreclosure process, DataQuick Information Systems reported yesterday. That was a 3.5 percent decline from March, when 1,395 such defaults occurred, but more than double the 554 notices in April 2006.)
Default notices are typically filed three to five months after a payment is missed. Most homeowners bring their loans current before foreclosures occur.
During the first four months of the year, DataQuick reported 1,707 foreclosures in the county, compared with 238 during the same period last year, an increase of more than fivefold.
That is a 617 percent YOY rate of increase in the number of foreclosures, for anyone who is interested in such statistics…
http://www.signonsandiego.com/uniontrib/20070518/news_1b18default.html
How did I miss this quote???
http://www.cnbc.com/id/18725377
‘I actually like Senator Chuck Schumer’s (D-N.Y.) response a little better: “I hope that Chairman Bernanke is right when he says that a slumping housing market will not affect the broader economy, but I would not bet the house on it.” Sue me, but I love a good cliché!!’
Sorry if this has been posted before; but it’s too got to not post twice (or 5 times, for that matter).
Hot REO deal in Oakland, CA:
http://tinyurl.com/263pss
bleh…”too good”, not “too got”.
That one should be the “poster child” for the madness in the housing prices….
$300K for a falling down shack with no lot? Where do I apply for the loan?
At Bank of America?
PHX is not as bad as some areas.. However, back in 2003 a guy I know bought a 1955, 900 sqft crap-box. 3 years later sold for $185K. INSANITY!!!
$1600 a month to own something you wouldn’t want to rent for $800?
I am familiar with that area. You couldn’t pay me 300k to live there. Terrible neighborhood, rundown, questionable industrial area around it, just terrible. Crappy house, crappy schools. That’s just plain insane. Thanks for posting.
It is amazing that anyone could list that property as priced except in jest. It looks like the shed where I store my lawn equipment.
I laughed. Still, it is the bay area… Hard to believe in the soft landing.
a boxcar for 300k?
cant you negotiate one from the L&L for about $1500?
Oh, yeah its the land.
Where can I pick up another acre for 1.4 million?
yahoo news items of interest
http://biz.yahoo.com/brn/070509/21853.html?.v=1&.pf=banking-budgeting
http://finance.yahoo.com/expert/article/moneyhappy/31052
http://finance.yahoo.com/how-to-guide/banking-budgeting/18442
PLUS THIS ONE
http://finance.yahoo.com/real-estate/article/103039/Facing-the-Housing-Mess
That house looks like an old fishing lure shop. Ugh. And bars on the windows! I guess you were right when they said here about Californians having buckets of money and a boatload of stupid. I think Bank of America got the price wrong, they need to chop off 3 zeros. I guess that’s why everyone hates BOA too!!! Hahahahaha…
looks like an old fishing lure shop.
Funny….
“Californians having buckets of money and a boatload of stupid”
to
Californians having buckets of debt and a boatload of stupid
Not to mention that shack is in one of the scariest neighborhoods you can imagine. Drive by capital. Just a few years ago, those were going for way under $100K in Oakland.
If you hold onto this same property for the next five
years and enjoy a modest 3% or $21,000 increase in value per year, you
will make over $100,000 in equity.
Happy “buy now” talk from a realtor from March
Oops. Aren’t things already off by about 5% in the Santa Monica area? Or is it just flat?
News from the Emp:
My Empire, the Inland Empire, is a little devoid of anything of substance and sorry about that.
One cool thing going on, is the Planes of Fame airshow, in Chino, this weekend…
Mostly WW2 planes, including all 3 flying P-38’s in the world~
http://www.planesoffame.org/
Just tell em’ you know me and it’s still full price, for admission…
Emperor Norton II, of the Inland Empire
Were any advisories issued by the DHLS today? Thanks.
Apologies if someone has already posted this:
Best and Worst U.S. Housing Markets
“It’s becoming more difficult to put together financing for new development projects,” says Miller. “That’ll actually provide some constraint on supply, but that’s a couple years down the road. You figure the lead on new development is probably two years, so it’s going to be a couple years before units stop coming off the conveyor belt.”
Yikes!
Wow — Implode-o-Meter has jumped from 66 to 72 in just 24 hours or so — though it stayed flat at 66 for a while.
A great quote from the commentary therein:
“I have had many apartment owners tell me they turned down a renter because the renter had a low credit score, and then the renter went out and bought a house”
FICO credit scoring retooled
Fair Isaac change to launch in fall
BY NICOLE GARRISON-SPRENGER
Pioneer Press
http://www.twincities.com/business/
Excerpts from the article:
Fair Isaac is making it easier for lenders to separate good borrowers from bad with some fairly significant changes to its Classic FICO credit-risk scoring model.
In essence, the changes to Classic FICO shrink the gray area by 5 to 15 percent. The biggest improvements are in the system’s ability to determine risk in three consumer segments: new accounts, subprime borrowers and borrowers with thin or young credit histories. Those are areas in which lenders have been burned recently.
The changes to Classic FICO appear to address
criticisms raised by industry analysts and competitors over the last year or so, said Craig Focardi, an analyst with TowerGroup, a research and consulting firm in Needham, Mass.
Executives at VantageScore, a new system developed by the country’s three top credit-reporting agencies, have touted their product as more accurate and predictive than FICO. Questions of whether a better FICO score might have averted the subprime-mortgage crisis also have been raised.
Though the specifics of the new model are proprietary, Watts said one major change to Classic FICO is the addition of two more population segments. In the past, Classic FICO grouped consumers into 10 groups - such as high-risk borrowers, borrowers with thin credit profiles, etc. Each group uses a slightly different version of the credit-scoring formula.
OMG!
See what Casey Serin’s better half has cooked up for him after a family intervention into his debt fueled debacle!
It is priceless…
A stray female dog has adopted us and she looks like one that adopted us earlier, so we’ve named her…
Deux’d
Where do these people come from?
Numbers alone can be twisted to say just about anything the presenter wants them to say.
He goes on to prove just this:
The $0 - $299K single family residence segment currently sits at 163 days of
supply (a nationally “balanced” market is 180 days of supply - we are slightly
better).
The gross supply of SFR under $1 million is at 17,424 as of this writing.
That number has also been fairly flat in the last three months. This number
indicates that the number of new listings is roughly equivalent to the number
of sales.
Notice how he uses days of inventory for the first group of houses and
inventory numbers for the second. This is so he can avoid saying sixteen
months of inventory, or as BMIT
puts it 28,000!
The mind boggles.
Couple Learn the High Price of Easy Credit
The mind boggles.