Bits Bucket And Craigslist Finds For May 22, 2007
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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Marc Faber Bloomberg Interview ” Final Stages Of A Bubble”
No Place To Hide / LBOs Attack Finance Company Bondholders
The Conundrum Unwinds
A Comeback for the S.&P. (If the Yardstick Is Dollars)
http://immobilienblasen.blogspot.com/
jmf, your link to the Faber interview doesn’t work (in english or in german!).
thanks for the hint.
the problem is with bloomberg.
their audio/video is down at the moment
is up again.
I had to go to Bloomberg’s video menu
http://www.bloomberg.com/news/av/
and find Faber’s talk. It didn’t come up with Firefox, but IE was OK.
Since I refuse to download the evil windows program, care to summarize what Faber said?
Story here:
http://www.bloomberg.com/apps/news?pid=20601086&sid=aq1iGt2GNOlM&refer=latin_america
Thanks, Jay. Did anyone read Ken Fisher’s latest (advertised at the bottom of the story to which Jay_Huhman provided a link) ? I don’t often agree with Fisher, and don’t want to give his outfit my email address, but would be curious if any of you know what he’s saying nowadays.
In a nutshell: there are asset bubbles everywhere you look. Almost no assets of any kind are a good investment right now. Faber is investing in farmland in places like Vietnam, Thailand and Argentina.
Faber thinks that the collapse of all these simultaneous bubbles will have to result in a serious global economic downturn.
But then if you don’t invest in assets, do you trust currency?
Dong, Bhat, and Peso
farmland purchases denominated in the preceeding three currencies is tantamount to exploitation IMHO.
Why not invest in textile mfg in India? Little fingers make great rugs……
Thanks, Jay.
“Laguna Villas Apartments in Ocotillo has sold for $38.5 million.
The 272-unit apartment complex had been slated to be converted to condominiums, but it will stay apartments, according to the buyer, Valle West Tennis Club Apartments of San Diego.”
http://tinyurl.com/226rch
Thanks to everyone for all their excellent advice and assurances about how safe it is to run in Central Park in the evening. I can’t imagine a more wonderful place! The trees were lush, the weather perfect, and there were runners, cyclists, families, strolling lovers (no minstrels though) everywhere! Not once while I was there did I think about Casey Serin.
If you want to enjoy the real city, get out of the tourist prices and congestion of Midtown, and head south of 30th Street. I recommend a stroll down 5th past Madison Square Park, over to Union Square Park, down and over to Washington Square Park, south through Soho, and over and down through the Lower East Side. Even at 5 pm on a weekday, you’ll find it quiet and President.
Lower Manhattan used to be great and hopefully will be again, once the construction stops.
“I recommend a stroll down 5th past Madison Square Park, over to Union Square Park, down and over to Washington Square Park, south through Soho, and over and down through the Lower East Side. ”
And you will end up in my neighborhood at the end of your walk.
I agree completely about getting out of the tourist areas. They convulse me. I stay away from Times Square. The Village, Chelsea and Soho are all good. There are many many good bars and restaurants. Little Italy has become hit or miss. If you eat in Chinatown find a place that does the jumbo shrimp with the sweet mayonaise, broccoli and pecans. I love that dish. You have to try it if you have never tried it before.
Please do me one favor. Do not buy anything from the creatures that sell knock-offs from cardboard boxes or little black attache cases. Don’t encourage their existence. Enjoy your stay. It’s another beautiful day.
I get a kick out of the knock-off sellers. I mean, really, doesn’t it really sum up the ridiculousness of the designer market with the fact that it is possible to produce, sell, and profit from something priced at a tiny, tiny, eentsy-weentsy fraction of the price one would have to pay for the copied product in a high-end store with pseudo-snobby staff? Every time someone shows me their $25 Rolex, I laugh at the people who buy the real thing, at least those who have to think before spending that kind of money (as opposed to those who have so much money it doesn’t matter - the people for whom such items exist)
I have to say the last time I was up there, I forgot my watch and could get a knock off for less than a cheap watch in any other store. I was pretty surprised when it kept accurate time. Works great for when I need a knock about watch that I could care less if it got broken/scratched/dirty whatever.
ny- is a great place- enjoy your stay
My favorite cheap fun in the city was to take one of the NY waterways ferries and take a trip around the island for under $10 depending on start and stop points. On a summer afteroon, I could take a book and ride around all afternoon in the sun. Or the SI ferry out and back, though there was no deck access the last time I was on it. The Beast is hokey but still good for a laugh.
You guys are really whetting my appetite! I am going to wear my shoes out again walking around today.
BTW NyCityBoy I sent you an email. Thanks!
Maybe one of those creative San Diego investors would be interested in this. LOL
http://forums.dallas.craigslist.org/?forumID=5194
Oops. Wrong link. Here it is
http://dallas.craigslist.org/rfs/335865742.html
too funny.
Somehow, I see YOU as beeing a good “proprietor” of such an establishment.
Mistress txchick with her 20 lb trout!
Flagged for removal.
It was “Texas BDSM Ranch” seeking investors.
Maybe the Lajitas Resort folks ought to look into this angle. Oh, wait, they already have chains and such around their necks and various body parts!
Fixing up some Manteca Lajitas for breakfast…
lol tx-chick
we should send david l there
he has been a very bad boy
Hah hah…tell him the “safe word” is “It Always Goes Up”, but don’t mention to them that you told him that. Should be good for quite a laugh…
That was hilarious! Thank you all.
Droughtville, USA
Tampa Bay, as of 2 weeks ago, could supply just 28% of their average daily potable water demand…
http://www.wtsp.com/news/local/article.aspx?storyid=55142
Again, this surprises me. I thought it rained every day in Florida. Arizona I could understand. What’s going on?
It surprises all that aren’t aware of their surroundings…
Or perhaps the drought in Minnesota?
http://www.virginiamn.com/mdn/?sect_rank=1§ion_id=70&story_id=209021
2/3rds of our country is in mild to severe drought conditions, and the summer isn’t even here yet…
That’s exactly right. I doubt if any but a tiny percentage of the folks in Tampa and Hillsborough County have ever travelled the river (gorgeous, serene canoe trip, btw) or visited the source of the river at Crystal Springs. They would find a high wall around the Springs and maybe that would raise some questions, like, WTF is happening here?
Palmetto, I thoroughly enjoy taking a canoe trip down the Hillsborough River. It’s beautiful, peaceful, and very serene. Maybe it’s a good thing more don’t enjoy it or it would become populated and some kind of drunk fest, as is the case with the Santa Fe river.
I can explain this, WT, at least as far as the Tampa area goes. The Hillsborough River is the main water source for Tampa. The popular fiction, given to the masses, is that the headwaters of the Hillsborough River is the Green Swamp, which takes up parts of Polk, Pasco and I believe Sumter Counties. However, anyone in the area who has traveled to the source of the river will come upon Crystal Springs in in the very northeast part of Hillsborough/Southeast Pasco counties, from which the Hillsborough River flows. The land upon which Crystal Springs is located is privately owned and the Springs used to be operated as a small, refreshing, public attraction for locals and the occasional tourist lucky enough to happen upon the springs. Then the private owner of the land struck a deal with a private company that sells bottled water. A high wall went up around the Springs and the public was barred in or around 1999. They left a meager little spout sticking out through the wall so folks could fill a jug with spring water if they wanted to. Meantime, the private water company pumps out the springs so they can sell bottled water all over the country under various brand names, or sell it back to the locals at the supermarkets. Because of the wall and the fact that it is a private corporation, no one knows the extent of the pumping operations. But I’ll give you a hint: if you sip bottled water with a fancy French name, chances are you’re sipping something that comes from a Florida spring.
SwiftMud (South Florida Water Management District) should have taken the land by eminent domain years ago, before this happened. That would have been a true, decent use of eminent domain, instead of the perverted way eminent domain has been used in recent years to take land from homeowners and turn it over to developers. Now, if they tried to take the Springs by eminent domain, the cost would probably be ungodly and the owner of the land would point to all the profit he gets. So instead, everyone screams about the level of the river during Florida’s normal dry spring period and taxpayer money builds a failed desalination plant and reservoirs and the media hyperventilates about the level of the river and urges water conservation. With or without the springs, water conservation is a good idea. But I guarantee you that if more people took a little trip up the Hillsborough River to Crystal Springs and saw that wall, there would be more questions as to why the level of the river has gotten so low in recent years. Yes, there’s more population. And that has coincided with the pumping of the springs. Double trouble.
Desalination plants use a lot of electricity, so much so, that you’d have to power them using a nuclear plant.
Nuclear plants need a lot of freshwater, in order to operate and nobody wants them in their backyard.
6 of one, half a dozen of another…
The same thing has happened in Chester Co PA. A fancy company with initials P. bought a couple of acres and pumps the wonderful aquifer furiously, lowering wells in the area. Odd that they can sell this as a “product of France”.
In Chester County? Dang, I grew up there! The water wasn’t THAT special.
It will rain, this is the dry season here. It will rain as hurricane season gets going, and everyone will complain about that. However, I have no dbout that Tampa is now using more water than evere due to what has happened there. Gonna be alot of brown grass untill the rain does come but than at least you don’t have to mow it.
Climates Change
They’ve been drawing down the aquafers faster than they can be replentished for years. I remember hearing a few years ago that some buildings in an adjoining county were sinking because of the depleted ground water (that was going to Tampa).
http://sarasota.craigslist.org/rfs/335828083.html
On Sarasota’s CraigsList today under “RE for Sale”
I suspect it’ll get flagged pretty quick.
OK you guys.. fess up… who wrote this??
WOW-Housing report came out today–Down 3 straight quarters-read here
Reply to: hous-335828083@craigslist.org
Date: 2007-05-22, 1:51AM EDT
Well, the housing report came out today and its official, for the 3rd straight quarter prices were down. Sarasota and cape coral areas were the 2nd worst hit area in the country at a 12% loss (So much for everyone wanting to live in paradise!). That’s a loss of 12 thousand dollars per hundred thousand (but wait my realtor says things are going up–HA). Well, what did we expect after all. Record prices caused by record investors = record declines and it should be interesting to sit back and watch as things plummet. For all the nay-sayers who think I’m a pessimist just do as Bush and STAY THE COURSE. For the rest feel free to read the housing report (read it all to get the whole effect and look to see how the the national realtors association tries to tell everyone again how things are leveling out. they are so stupid). click here. here’s a funny quote from the national realtors association a little while back about the declines. “Just four months ago, it looked like we were on the road to a very nice recovery. Then the sub prime [mortgage] market blew up, and that has substantially inhibited lending. It was a monkey wrench that was thrown in; no one would have predicted it two years ago, no one.” -David Lereah, former National Association of Realtors, chief………………. Yup we couldn’t figure out that after all this buying that things would eventually go down. And who was it from the NRA (David Lereah)that lost his job (pressured into resigning) for lying to the American people, trying to manipulate the market so things wouldn’t go down. (click on the second link you may never trust the NAR again). I would as much trust what the NAR has to say about as much as I would have a monkey watch my bananas! Last quarter, they said it was poor weather that stopped people from buying. Seriously, you cant listen to these people they are ridiculous and really have no idea. The sad part is that many Americans think that because their name sounds official you believe whatever they say. Please, they dont have any clue and worst most are liars.
http://money.cnn.com/2007/05/14/real_estate/first_quarter_NAR_prices/index.htm?postversion=2007051514 http://thickrealestate.com/category/the-corrupt-david-lereah/ Info from Fox news
Paint Lipstick on this Pig: Ponzi Finance Blowoff
http://wallstreetexaminer.com/blogs/winter/?p=785
I liked the chart comparing Burns’s housing stats vs NAR-reported stats, but couldn’t figure out if it was volume of housing units, or some kind of price index. ??
Just want say how refreshing it was to talk about the market in Philadelphia and surrounding ‘burbs yesterday. Not sure if I’m happy with the apparent consensus that the rise in RE prices in Philadelphia over the past years was linked to a change in the city demographics, but it was nice to chat a bit about a place that I am familiar with, as opposed to Florida and California. It was nice to hear from the Philadelphians out there - I’m not the only one out here wasting my time (sorry Ben) posting messages on a blog. Have a great day everyone!
“Not sure if I’m happy with the apparent consensus that the rise in RE prices in Philadelphia over the past years was linked to a change in the city demographics,”
Hilarious. Really. The only thing different about Philly is that there are still people delusional enough to think that it is different there. There’s an old saying that applies to Philly now more than ever, ‘you can put lipstick on a pig, but…’ you know the rest.
For persons with six-figure incomes and few deductions, PA is the best income-tax environment on the eastern seaboard, apart from FL (and we know what the problems are there).
Didn’t realize PA was considered to be on the Eastern seaboard- I guess because the Phil port has access to the Atlantic Ocean?
Are Cleveland and Chicago and Detroit and Milwaukee and Minnesota also part of the Eastern Seaboard, since their international ports also have access to the Atlantic? Not disputing, just asking, since of course the Great Lakes states will be ground zero of the next real estate bubble during the Great Ten-Year Drought cumulating in 2017.
Didn’t realize PA was considered to be on the Eastern seaboard- I guess because the Phil port has access to the Atlantic Ocean?
Nah it’s just because everybody ignores New Jersey.
The only thing different about Philly is that there are still people delusional enough to think that it is different there.
It’s not so much that it’s different here, as it is that there has been an influx of wealth here that offsets the hit that the middle/under-class has taken. If things are different anywhere, it’s not a function of geography, it’s a function of economy. That is, it’s different where the wealthy folk reside.
Yeah it was funny that the Phila. thread started a minor $hitstorm. How appropriate.
eastcoaster, if you’re out there: Yes, I did hard time at all three Cabarets!
Black Orchid Glad to hear that the Brandywine Conservancy was able to acquire one of those parcels. The disappearance of open space in Chester County is tragic.
votequimby I don’t necessarily think it would take a white outsider mayor to turn things around. Had I still lived in the city, I’d have voted for Katz, and this time around, Tom Knox. Believe it or not, I like Chaka Fattah. I think he’d have been good for the city. But it looks like Nutter’s the guy, and I don’t know enough about his record to say anything relevant.
“Here lies W. C. Fields. I would rather be living in Philadelphia.”
W.C. Fields
Wow - I have to go back and re-read that string; didn’t realize it extended into Mayoral discussions….
There’s a local story of a woman that has been missing for the past three weeks. Her husband has become a suspect. Here is the latest twist…
http://www.suburbanchicagonews.com/newssun/news/395262,5_1_WA22_STEBIC_S1.article
Mortgages on missing woman’s home more than home’s value
PLAINFIELD — Mortgages on the Plainfield home of Craig and Lisa Stebic exceed the home’s value, public records show.
While it is not uncommon for couples going through a divorce to find their main residence drained of its value, the records indicate that couple may have overextended themselves financially.
Lisa Stebic, a Libertyville High school graduate, was reported missing May 1, and her family has since celebrated Mother’s Day and her 38th birthday in her absence.
The mother of two was last reported seen by her estranged husband at 6 p.m. April 30 in the Plainfield home they shared. It is believed that her purse and cell phone were with Lisa at the time she left; however, neither her credit cards nor cell phone have been used since her disappearance.
Upside down on their house, divorce pending, a mortgage they couldn’t afford (3000/month (+ IL taxes, etc) on about 90k of salary), and now a woman is likely dead.
ugh
It is sad.
Not that I think anything this drastic will become an epidemic but I wonder how this housing correction will affect things like the divorce rate over the next 5-10 years.
I read recently that the trend for the divorce rate has been down. However, the reason most couples get divorced is due to money/financial trouble and the average couple has more of their wealth tied up in their home than anything else.
I wonder how many couples stay together (at least at the same address) because it is pretty obvious that their incomes could not possibly support 2 households.
I have a ‘pin money’ job at a major 3 letter outdoor retailer…at our last sale we were off by 9.1M–the blame…insert drumroll…gas prices and changes in the housing market! 9 million!?!?
Well, at least the cause wasn’t the arrival of the cicadas, then you would’ve been short by a kajillion bajillion.
Listening to radio here in phoenix and there is an advertisement on the radio for a home for sale. It starts by saying “Would someone be crazy enough to advertise their house on the radio?”, which in itself is a sign of the times.. Then it goes on to state the attributes of the house including sq footage, 3 car garage, etc.. but the part that surprised me is that it also said that the buyer would receive 25K cash back after closing… Isn’t this illegal? and to advertise it on the radio just seems blatantly illegal? not sure I can mention the radio station but it is an AM station and I’ve heard the advertisement 2wice now.
Legal shmegal. I wants my hoochie-bucks.
schrute bucks, you mean….
Anything, Michael, just pet my head.
Pretty sure it’s not illegal anywhere, so long as it is fully disclosed — as in, on the loan documents. The lender(s) must know about it.
houses sit on the market with no sales, at least in dc, if they are not priced correctly
http://dcbubble.blogspot.com/2007/05/new-mantra-for-slowing-market.html
Hey folks, I see some Texans here. Here’s a question. If you could choose any place in Texas to settle down, buy a house, and raise 3 girls, where would it be? My wife is not certain she wants to stay in her current position here in the Waco area and my work allows me to live pretty much anywhere. For professional reasons she would prefer to remain in Texas but as a doctor she can easily apply for positions pretty much anywhere in the state. Not being from here we don’t have ties to any particular location. Any suggestions? We’re mostly interested in family quality of life factors such as:
good public schools
no long commutes or horrendous traffic
good interesting diverse (i.e. non-sterile) neighborhoods
good recreational opportunities
We’re just starting to poke around thinking about the Fort Worth, San Antonio, Austin, and Houston areas, and some of the surrounding smaller towns but don’t have any particular place (or region) in mind yet. We’re not unhappy here in the Waco area but just want to know what else is out there.
We don’t necessarily want or need to buy right away. But I don’t want to end up moving into some sort of potential foreclosure wasteland or traffic hell. There must be some good spots left in Texas.
Depends on your religious and political leanings, in my opinion. Austin was the only town I found that didn’t consider me a freak of nature for not being a Baptist bible-thumper. And it’s got great culture (music, etc.) for Texas.
“Depends on your religious and political leanings, in my opinion. Austin was the only town I found that didn’t consider me a freak of nature for not being a Baptist bible-thumper. And it’s got great culture (music, etc.) for Texas.”
Oh, please. Austin’s “culture” consists of bad college cover bands. There is a mystique that Austin has for fed-up Californians looking for an “affordable oasis” in the dark evil sea of “red” states. (It seems that Raleigh is the other perceived “oasis” for Californians fed up with housing prices.) Outside of California and NYC there is more to the US than Austin and Raleigh.
Except for a tiny portion centered near downtown where UT is, Austin is not a “liberal oasis.” San Antonio, Dallas and Houston have far more in the way of culture, however you define culture - the fine arts, museums, restaurants, ethnic diversity, you name it. Austin doesn’t even have a zoo for Pete’s sake, except for what goes on in the Capital.
I don’t fit your stereotype. Nor do Ben or TxChic. So please spare me your “blue state” vs “red state” bashing. It’s so 2004. There’s a lot to be critical about, (humidity, giant cockroaches), but these stereotypes are dumb.
Well, “near downtown around UT” is where I spent all my time while in Austin. It does give you a skewed view of the whole place, sorta. It was a much cooler place in the early 1980s than it is now, I’ll give you that.
Agreed on Austin. Maybe it’s not all good, but most of my wife’s family lives there, and based on her comments and my (limited) experience, it beats Dallas any day.
Austin. Possibly Ft. Worth.
I wouldn’t raise a goldfish in Dallas and Houston ain’t much better. And you’re talking to someone who actually was raised in these hellholes.
You’re a goldfish?! How do you type with those fins?
Austin…..
I was wondering where the affinity for trout-slapping came from.
Actually, it would be considered an act of mercy flushing your goldfish down the toilet…they’d be going to a better place.
Amarillo might be worth considering. It has a strong medical community for your wife, the traffic isn’t too bad, and the bubble-bust should be somewhat mild compared to other areas. The south side of town sits on the northern edge of the caprock, so it’s table-top flat, but the northwest part of town can be quite pretty with it’s rolling hills and mesas. I’m also quite fond of Canyon, which is just south of Amarillo. If traffic is a big concern for you, then the cities you mentioned might be a problem.
Amarillo also has some of the most exciting (if that’s the right word) weather in the US. If you like tornadoes, hailstorms, dust storms, and blizzards, you’ll love Amarillo!
amarillo is a truck-stop
A truck stop - That’s exactly how I know it, the_voz. I would add “overgrown” to your comment.
I can’t believe anyone who has lived anywhere in TX would recommend Amarillo as a place to live.
If you two a#$ clowns had taken the time to read Kent’s requirements instead of automatically thinking about the places you like, you might understand my answer a little better. His priorities weren’t abundant natural beauty or a vibrant, metropolitan area. He wanted a place with little traffic, good schools, and a safe distance from the bubble. Add the fact that his wife is a doctor and my recommendation makes sense. If he had different requirements, then the answer would have been different. By the way, you might have a better understanding of a place if you actually got off the highway now and then.
ease up marky….I grew up in Amarillo, went to Amarillo high, left at 17, never went back.
I do have a tiny bit of experience in that part of Texas.
I would check out the Hill Country area around Austin and between Austin and San Antonio maybe Round Rock, San Marcos, Lockhart. Great BBQ in Lockhart!!
I would avoid the I-35 corridor between Austin and San Antonio. These towns have been overbuilt and the traffic sucks. Much of the charm in places like New Braunfels has been lost over the past decade as the inflow of people continues. I’d look in northwest San Antonio, away from I-35. Maybe Kerrville. Nice big hills and lakes, and San Antonio is nearby so that you’ll have access to the airport and business community.
Shhhhhh! Don’t talk about Kerrville. That’s my “secret” place.
Okay, Marble Falls? Lampassas maybe?
“We’re just starting to poke around thinking about the Fort Worth, San Antonio, Austin, and Houston areas”
Eliminate traffic=no go on any of these.
You may want to look into some East Texas areas, like Tyler. If you can stand the hillbilly factor its kinda nice, plus its close to LA……and you can get your riverboat gamble on. Lotsa Lakes. Plenty of trees…
Secondarily, one of my favorite places is Canton (East of Dallas) they have a fun thing called “First Monday”
Thanks guys, had to step out for a few hours and didn’t get to participate in the thread that I started.
Was just in Austin this afternoon and with the new Highway 1 tollroad at least it is possible to get into the Research Triangle area from the north without monster traffic anymore.
What I’m actually thinking is smaller towns that are within striking distance of major cities but perhaps just outside the commuter traffic zone. Like perhaps Georgetown north of Austin, which is probably still within the Austin commuting hell, but not quite as bad as Round Rock. But I really don’t know much about Georgetown except that there’s a nice university there. Tyler has come up in conversation but I’ve never been there. I suspect there must be some smaller cities in the metroplex area that aren’t completely gridlocked if you plan to live and work there and not try to commute to central Dallas or Fort Worth.
Anyway, we’re just starting to think about this. Every evening my wife is looking through the job postings in her Texas medical journals and asking things like: “Hey, what about Waxahachie?” which is what she asked me last night.
For me the absolute #1 priority is top quality public schools. First, because we have 3 young girls, and second, because I’m getting out of environmental consulting work and want to teach science.
I’m in Waco today looking at homes. (Possible transfer from Corpus.) I’m rethinking this Waco thing though and thinking somewhere in the Hill Country might be alot nicer.
My Austin house tenant just switched from teaching math in Austin public schools to the Kyle-Buda school district–says he’s enjoying his job a lot more these days– he’s got great kids and great parents who are involved in the school.
“There must be some good spots left in Texas.”
Check out Lajitas……some good deals are coming down in June on the Brewster County Courthouse steps! Fresh air, close to transportation (Rio Grande river), little traffic, a Field of Dreams. (Ben, I’m not letting that one go, am I?)
I recommend El Paso. The people are almost as friendly as the cockroaches. I think there are schools here. We have high art - consisting of second story graffitti. We have a few restaurants, but a whole lot of restrunts. Mullets are acceptable. Shoes are optional. Smiles completely unacceptable. Hey, don’t laugh, I got my kitchen retiled for $900 bucks - plus tile, adhesive and grout.
Hey snabs, do you know imploder?
Nope
..Just watching H. Paulson on CNBC and it occured to me as obvious as it is that the plan going foward is to create a new equity bubble. Yes I know it has been discussed many times, but it was clear today listening to him that the housing bubble is soon behind us, and the market will see greater growth going foward. Every pundit was towing the line that no problem with the market records every day. ‘ we need investors that were burned from the tech meltdown to get back in the market ,there is more money out there than all the hedge funds put together. It’s different this time ,and don’t see much downside risk as the market is undervalued’.
The Vanguard 500 index fund’s NAV increased an average of somewhere between 8% and 9% over the last 20 years. There is a small dividend, so it is probably closer to 10%, which is about right. So I’m not anticipating a market crash. Paulson could be right…for the next 2 years. But I expect a market crash sometime between late 2009 and 2012 bringing the Dow to 8000.
concur as to asset bubbble building in market.
risk is contained as long as insane chinese investors cash in/borrow money/and flood their own market…… when the Chinese meltdown happens, its too late to get clear in the US market.
Tread lightly, >90 days long in US market is risky at this juncture IMHO
Based on the technicals of homebuilders, mortgage lenders, and REITs, we should see a big down-slide in July/August once the Q2 results come out. Those with homebuilder shorts or put options, be patient. The downward movement will come assuming nothing crazy will happen with the private equity vultures.
Now may be a good time to bust out some REIT shorts or inverse ETFs, REITs are in definite all out bubble territory and is the next sector to go.
An equity bubble will not compensate for the housing downturn. The housing bubble created employment in the REIC and allowed J6P to refinance his house and spend the money on consumption.
J6P is now maxed out and cannot participate in the stock market. An equity bubble will just result in more money flying back and forth between the big pockets, and do nothing for consumer spending, which is the big problem.
The housing bubble was broad-spectrum enough to get the economy out of the dot-com crash, at the cost of vastly higher consumer indebtedness. It’s the mother of all bubbles and no other bubble is big enough to generate a recovery from it.
An equity bubble will just result in more money flying back and forth between the big pockets, and do nothing for consumer spending, which is the big problem.
———————
Seems logical, but maybe we’re seeing a real bifurcation of the “haves” and “have-nots”.
Maybe the PTB are giving up on J6 for now, and the “rich” will just try to make money off each other and the possible growth opportunities in developing countries — USA be damned.
I’m starting to wonder about that equity bubble, myself. Starting to think hard about going long & just giving up the shorting business for a while.
Too much funny money floating around the globe, IMHO.
http://www.nypost.com/seven/05222007/business/demand_woes_at_home_depot_supply_biz_business_suzanne_kapner_and_zachery_kouwe.htm
FRAUD ALERT!!
http://www.foreclosure.com/listingdetails.html?ps=50&o=dos&tab=f&cno=037&pi=&bhi=&pg=&z=90810&pa=&st=CA&bdi=&ci=&listingid=6641542
This foreclosure just popped up today. It’s zestimated/foreclosed REO value is At least twice what normal 3/1 1000 sq ft are going for in this very marginal working class/heavily immmigrant section of LB. If anyone on this Blog can get the exact street address i will take a short trip and look at this property.
This kind of Mort fraud crap is occurring-has been occurring-all over the marginal rundown areas of LA County, which is in IMO keeping the LA Median prices at rediculously insane trumped-up levels.
BTW Dataquick finally has the LA times zip chart up for the general public. Still seeing abnormal YOY in some really crapped out Inner LA burgs(EG Maywood,Bell,), which raises more red flags.
Peter, the address is 3250 Adriatic Ave Long Beach, California 90810
http://www.zillow.com/HomeDetails.htm?zprop=21246699
Zillowed that property and also drove by it for an upclose look. Very plain 3/1 boxey 1944 built stucco. Looks like yard still kept up OK, Grass and plants still watered and trimmed. Two coupes on the driveway. No sale nor foreclosure sign: zillow shows it to have sold for $997,560 on May 12, 2007. All the 3/1 and 3/2 homes in this area are worth no more than $450,000, and it is definitely a declining aging working-lower class inner LA Burg.
This stinks big time, though it is not out of the ordinary in the Fraud-infested LA crapburgs.
tick tick tick tick tick tick tick tick tick tick
‘
boom.
http://financialsense.com/fsu/editorials/andros/2007/0517.html
disaster
its the only thing I can think oif to describe the flight to insanity in the Chinese Stock market, but it wont play out till after the summer meltdown. So, with the US econmy in tow…those billions of chinese will tug away while the US econmomy continues to say “I think I can, I think I can….”
This is how a gas shortage, real or imagined, gets going…
http://biz.yahoo.com/ap/070522/bp_oil_shutdown.html?.v=4
The Biggest Investment of our Lives. LOL
http://www.elpasotimes.com/news/ci_5953245
Newspaper story on housing from Santa Maria (Cali central coast):
Santa Maria Times
Economic House of cards
http://tinyurl.com/3e2c9q
It attempts to explain how we got to the current housing market, and how soon and when we will “get back to normal”. Unfortunately, it reads like a mishmash of random quotes form various people in the RE industry, thrown in with an impossible to follow ‘logic’.
Truly, you have to read it, I couldn’t make stuff up like this if I tried.
I loved the attempt at logic:
Last time the peak was 220K
Then it dropped to 180K
Now it reached 500K, so even if you bought at the last peak, you. make money.
Therefore its a great time to buy (implication: the next peak will be way over a million).
To bad median incomes haven’t risen. With a 60K income people can swing a 180K mortgage, but not a 500K mortgage. How are they supposed to service the loan until the next peak (if it ever happens).
“service the loan” ?
why, real estate in Santa Maria shoots up every time Micheal comes to town to defend against another of his “play dates”
But slow-growth policies and attitudes in San Luis Obispo and Santa Barbara somewhat stagnated those economies, according to analysts with the UC Santa Barbara Economic Forecast Project.
That led to fewer people buying homes in northern Santa Barbara County, and sales slowed. Prices leveled off and, in some cases, dropped.
What? Lack of homes led to less demand???
I thought the not-making-more-land argument led to increased prices.
Come on, you deadbeats, buy homebuilder stocks! You’re missing out on a big party here! Make 4% per day, for no reason at all!!
(I’m taking a big hit on HB put options, but then I’ve always been a party-pooper.)
Anyone have any rationale whatsoever as to why HB stocks are rallying right now? Fundamentals continue to deteriorate, and these stocks are gaining 2-4% per day…
the short squeeze is on, big money lookin at heavy short positions are garning lotsa attention from LBO vultures….
man, the market seems pretty rigged to the upside right now….must be the kung pow chicken.
Obvious short plays like the HB stocks will be used to “kill the shorts” time and time again until the last day these dogs blow up and go BK.
Apologize if this has been posted already.
http://tinyurl.com/2ptwxa (NYT reg. required).
Some of the highlights:
“Their credit card debt came to $22,228, including $380 in monthly finance charges. Interest varied from 12.1 percent to 32.24 percent. The Moellerings also have a mortgage of $93,000 and a home equity loan balance of $68,574, at 8 percent interest.”
They bring in about $66k/year.
“A 42-inch television, an $800 Christmas gift from Mr. Moellering to his wife, occupied the older child, 4, in the living room.”
“Their debt escalated when they decided to get married. They paid for rings, a reception, a honeymoon and a new bathroom — about $50,000 in a seven-month stretch.
‘In such a short period of time, there’s no way to do it other than credit card debt,’ Mr. Moellering said.”
Did it occur to them to do it over a longer period of time. Or maybe save the bathroom remodeling for later. I’m not sure if the article is trying to make you feel sorry for them, but I have little sympathy for anyone who just bought an $800 TV, when they have over 20k in credit card debit.
Halliburton Co., the Houston, Texas-based oil services company, is shifting the company’s focus and capital investments away from North America and toward the oil and gas-rich Middle East
“We’re looking for as many young Arab and Asian engineers, technicians and professionals to come and join our organization,” Lesar said while swigging a Coke in a swanky hotel meeting room.
“As we build up our headquarters offices here it’s not going to be by transferring people from the U.S., it’s going to be by hiring locals,” he said. “Unlike the States, there are more people in this part of the world who are interested in careers in the oil and gas industry.”
http://news.yahoo.com/s/ap/20070522/ap_on_bi_ge/halliburton
At Ben’s HBB: “…it gets better everyday”
Bernie Mac here:
“Don’t just feel the “love” these Texas oil company’s feel for the citizens of America…you listening America…I’m telling ya, they “love” us baby, they sure do, that’s what I’m talking ’bout America?
Bugs: “Got oil”?
Last I heard, the UAE doesn’t have an extradition treaty with the U.S. Coincidence?
What a great place to relocate Halliburton and Herr Cheney for that “rainy day” . . . .
Spent a fair bit of time in Dubai. In the summer, it gets Death Valley hot. As for their hiring, I bet they won’t be hiring a lot of Arabs, except from Oman — they’ll go for the low-cost Indians, Sri Lankans, Filipinos and the like.
How much US taxpayers money being “absorbed” by Halliburton?
Oil and taxpayers go together like Politicians and money.
The Dubai office allows him to be closer to the world’s largest oil companies, like Saudi Aramco and the Abu Dhabi National Oil Co., whose leaders he seeks to court.
Lesar said the company is negotiating for a new Dubai headquarters office while he shops for a home in the city’s cutthroat housing market.
Halliburton’s remaining top executives will probably stay in Houston, although the company plans to hold some of its board meetings in Dubai, Lesar said.
“This isn’t a giant transplant from Houston to Dubai,” Lesar said. “I don’t see the need to have my senior executives sitting 10 feet from me.”
Halliburton will continue to pay U.S. taxes on its global earnings, although Lesar and other Americans may have personal tax savings from working in tax-free Dubai and the company could save on capital purchases made here.
1 gallon of gasoline: $3.35
We can’t build anymore refinery’s…it’s not cost effective!
Lesar said… “I don’t see the need to have my senior executives sitting 10 feet from me.”
How far away is his executive secretary sitting?
“..although Lesar and other Americans may have personal tax savings from working in tax-free Dubai..”
Having soaked the taxpayers for every nickle they could, the Halliburton execs now high-tail it out of the country to live tax-free, while thru their no-bid contracts they continue to plunder the Treasury.
These patriotic Americans make me so proud.
Subprime bailout hits snag
Tuesday, May 22, 2007
By JASON METHOD
Gannett New Jersey
An effort to have the state provide up to $500 million in loans to homeowners struggling to pay high-interest rate mortgages stalled Monday as proponents considered how to help the neediest borrowers.
State Sen. Ronald L. Rice, D-Essex, tabled his own bill that would have authorized the loans. He said he wanted to reach an agreement with Gov. Jon Corzine’s administration on how the loans might be offered before voting on it in the Senate Community and Urban Affairs Committee.
http://www.courierpostonline.com/apps/pbcs.dll/article?AID=/20070522/NEWS01/70522004/1006/news01
Mortgage official defends subprime loans
They should be preserved as tools to buy homes, MBA chief says
By Robert Schroeder, MarketWatch
Last Update: 3:29 PM ET May 22, 2007
WASHINGTON (MarketWatch) — The chief of the Mortgage Bankers Association defended the use of subprime loans Tuesday, saying they’ve enabled millions of Americans to buy homes and urging that a fix for that sector of the market not end up hobbling the entire mortgage industry.
At the same time, MBA Chairman John Robbins acknowledged that “unethical actors” in the mortgage industry have hurt borrowers and damaged bankers’ reputations.
Subprime delinquencies have jumped in the U.S. as interest rates have climbed and house prices stopped rising. Subprime loans are usually extended to those borrowers with blemished credit records.
But Robbins, in a speech at the National Press Club, said subprime loans remain “an extremely important tool for providing homeownership opportunities in this country.”
“We must find a way to prevent future abuse without eliminating subprime loans,” Robbins said in a prepared text.
“I want you all to remember that three million Americans used a subprime loan to purchase a house,” he said.
http://www.marketwatch.com/news/story/mortgage-banker-defends-subprime-loans/story.aspx?guid=%7BCA2C0E30-7240-48F4-AF46-49CD8C96F5AD%7D
“…acknowledged that “unethical actors” in the mortgage industry have hurt borrowers and damaged bankers’ reputations.”
Daffy: “Bugs… what do you call 99 bankers at the bottom of the ocean?”
Bugs: “eh, …a slow start”
Found this site thru i-tulip:
Somewhat OT but housing, world economy, dwindling resources…just a few degress of separation from our primary focus
some might enjoy: http://europe.theoildrum.com/node/2550
monitors & graphs production of different energy commodities–includes links to discussions
Officials from oil giants Exxon Mobil, Chevron and Shell Oil, along with major oil refiner Valero Energy Corp., were asked to testify at the hearing but declined to appear.
Federal Trade Commission member William Kovacic said his agency was closely monitoring the U.S. gasoline market for any unusual moves in prices.
“Because gasoline consumers typically do not reduce their purchases substantially in response to price increases, they are vulnerable to substantial price increases,” he said.
Speaking to reporters before the hearing, he declined to comment on whether the FTC has found any evidence in the current price rise of oil companies overcharging consumers.
http://news.yahoo.com/s/nm/20070522/us_nm/usa_congress_gasoline_dc
At Ben’s HBB: “…it gets better everyday”
Bugs: “eh, got gasoline?”
Building contracts tumble
Contracts for future construction in the Pittsburgh metropolitan area dropped by 47 percent in April, McGraw-Hill Construction reported. The value of residential and nonresidential contracts was $202.9 million, down from $384.4 million in April 2006. For the year to date, contracts were 23 percent lower than the same period in 2006. The value of contracts for the first four months of 2007 totaled $709.2 million, down from $924.1 million for January through April 2006.
http://www.post-gazette.com/pg/07142/787902-28.stm (that’s whole news article)
ALSO, a 12 unit townhome development near ,me has sold a whopping 5 units since 2004… The prices were about 995K, now they’re down to 799K. It’s a nice neighborhood, but still that’s a big decrease.
I hope you are all proud of yourselves ruining this couple’s retirement plans. http://money.cnn.com/2007/05/22/magazines/moneymag/retirement_interrupted.moneymag/index.htm?cnn=yes
Perfectly good plan shot to he@!. At least these people had the guts to come clean on their problems. OK. I admit it is a guilty pleasure reading these types of stories.
“Run Forrest…Run!”
The film tells the story of a simple man (or gump) and his epic journey through life, meeting historical figures, influencing popular culture and experiencing first-hand historic events while largely unaware of their significance, due to his lower than average intelligence.
http://en.wikipedia.org/wiki/Forrest_gump
America the Beautiful
“But being in good company is no comfort to the couple. “We’re in this beautiful area and see our neighbors doing fun things like cruises, golfing and going to the country club, and we can’t enjoy any of it,” says a frustrated Carol.”
“Old School” lesson book:
Aristotle: “…you cannot directly pursue happiness”
All I can say is that this article & couple… sum up about 70% of what Ben’s HBB has been pointing to all this time.
Bernie Mac:
“Listen America..it’s time to straighten up and fly right…doggone…that’s what I’m talking ’bout America…you listening America?”
Forrest is shown to have been taught much about life by his mother (Sally Field). Forrest often recalls her favorite sayings, including “Life is like a “stucco” box of chocolates; you never know what you gonna get” and “Stupid is as stupid does.”
“…see our neighbors doing fun things like cruises, golfing and going to the country club, and we can’t enjoy any of it,” says a frustrated Carol.”
Nope, not as long as you keep that $900,000 second home in the Outer Banks, Carol. Aren’t life’s choices a b*tch? Who’d ever have thought that you’d have to choose between a Radisson cruise and that big, expensive house that you spend some time in each year. Now, now…here’s a hankie. You just go ahead and cry your poor little spoiled, greedy eyes out.
You’ve read my mind, Chip.
These whiny, sniveling losers are unbelievable. They actually think they **DESERVE** a profit on those homes and shouldn’t have to sell a $900K “vacation” home??? WTF???
Just got this e-mail from Zip Realty:
Window of Opportunity
As anyone who’s ever tried to sell a house will tell you, bad weather can definitely affect your ability to sell a home. If the weather is terrible, nobody comes out to shop, nobody makes offers, and sales numbers fizzle.
Well, we’ve just witnessed the “bad weather” impact on a national scale. After three straight months of steadily rising home sales nationwide, the stretch of stormy and frigid weather that hit many parts of the country in the early Spring took a chunk out of home sales numbers for the month — they were down by 8.4 percent.
The chief economist for the National Association of Realtors, Dr. David Lereah, said the sharp decline was not a total surprise. “For months,” he said, “we’ve been expecting a weather ‘hit’ on home sales” — and it finally arrived with a solid punch.
But a patch of bad weather alone is not going to knock real estate out of its ongoing recovery pattern. Dr. Lereah points out that the key underlying economic fundamentals for home sales continue to be strongly favorable.
The weather related decrease in sales, he says, “is masking improved fundamentals in the housing market, with lower mortgage interest rates and motivated sellers” — plus vigorous employment growth and low core inflation rates.
Mortgage rates continue to hover just above 6 percent for 30-year conventional fixed-rate mortgages, according to Freddie Mac, and slightly below that for 15-year rates.
Rates are actually lower this Spring than they were a year ago, and they remain less than a point above all time lows.
Prices in most local markets are relatively stable, even down a little in some areas — which means the ball is very much in the buyers’ court.
More houses are available, there’s less pressure to make decisions on the spot, and there’s no question: Sellers are more open to reasonable offers, and are prepared to negotiate and even throw in some extras to move the deal-like helping out on closing costs.
So think of the next month or so as a window of opportunity — a window that won’t stay open forever.
Forget the negative news about the weather. Now’s the time for serious buyers to get out. The weather is definitely more cooperativeand and look at the many seriously well priced homes that are now on the market.
With sales rebounding in the weeks ahead, those houses won’t be around forever.
Written by Kenneth R. Harney
“To blame professionals for that is in error,” he said. “Unfortunately, we have some folks that turn to the dark side and do things that are abhorrent to us and illegal and harm society.”
No, it’s not about bankers or mortgage lenders or real estate professionals…
http://news.yahoo.com/s/ap/20070522/ap_on_re_us/idaho_shootings
“it’s all related”…don’t blame “professionals”
How to talk out of multiple sides of your mouth at the same time…
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Mortgage defaults hurting housing market, economy, Fed chief says
http://www.thesouthern.com/articles/2007/05/20/business/20322820.txt
US economy to mostly dodge mortgage woes - Bernanke
http://www.timesofmalta.com/core/article.php?id=262113
Bernanke vows to study mortgage woes
http://www.heraldnet.com/stories/07/05/20/100bus_fed001.cfm
Fed chief optimistic about subprime mortgage woes
http://www.miamiherald.com/103/story/111092.html
Bernanke plays down US mortgage woes
http://www.smh.com.au/news/Business/Bernanke-plays-down-US-mortgage-woes/2007/05/18/1178995354892.html
Mortgage lenders get creative
Rising competition is forcing mortgage sellers to generate new products to win customers.
By Les Christie, CNNMoney.com staff writer
May 22 2007: 1:17 PM EDT
NEW YORK (CNNMoney.com) — Following the subprime mortgage market collapse, new loans are down, and lenders are turning back to safer - less profitable - offerings. But with tougher competition and a shrinking market, they’re getting a little more creative.
In January, more than 60 percent of all mortgage loans were made to prime customers with FICO scores of 650 or more. Those customers most often go the traditional 30-year, fixed-rate route - a simple, unsexy product that offers lenders little room to differentiate or to squeeze more profits out of their loans.
That means there’s a smaller pie of less profitable loans to be divvied up, prompting lenders to come up with new ways to market their offerings.
“Everyone is trying to be a little creative,” said Bob Moulton, founder of Americana Mortgage Group.
http://money.cnn.com/2007/05/21/real_estate/new_mortgage_products/?postversion=2007052213
HSBC Says It Has Curbed
Subprime-Mortgage Woes
By AMY OR
HONG KONG — HSBC Holdings PLC Chief Executive Michael Geoghegan said measures taken to deal with the bank’s subprime-mortgage problems in the U.S. are working.
“Deterioration has been contained…In the first four months of the year, the rate of increase in delinquency has slowed,” he said at a shareholders’ meeting in Hong Kong, without giving any figures.
But Mr. Geoghegan said the situation may worsen. “In the second half of the year more loans in this portfolio will reset and will undoubtedly have some problems for some customers,” he said.
Mr. Geoghegan said the extent of the expected worsening will depend on the health of the U.S. economy and its property market.
To further alleviate the situation, the lender said it will restructure up to US$4 billion of subprime U.S. mortgages on more manageable terms this year and is seeking to securitize some of these subprime assets.
HSBC said in early March that impairment charges at its North American personal financial-services unit rose 34% to $6.68 billion in 2006 from $5 billion in 2005, after the souring of acquired mortgage loans.
http://online.wsj.com/article/SB117986298027411182.html?mod=googlenews_wsj
If Hurricane Hank decrees that the housing slump is over, then I guess it is over. Never mind all those ghost McMansion tract home developments in the middle of the southwest buyers, or the 74+ defunct lenders since the start of 2007, or the exponentially rising NODs in markets formerly known as frothy…
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Most U.S. Stocks Advance, Led by Financials and Homebuilders
By Michael Patterson
May 22 (Bloomberg) — Financial and real-estate companies led most U.S. stocks higher for a third day after Treasury Secretary Henry Paulson said the slump in housing is “largely” over.
Washington Mutual Inc., Citigroup Inc. and all 16 homebuilders in Standard & Poor’s indexes rose on speculation demand for housing may rebound. MGM Mirage surged the most since 1989 after billionaire Kirk Kerkorian said he wants to buy the company’s Bellagio Hotel & Casino in Las Vegas.
“The stars of the day are the homebuilders,” said Michael Metz, chief investment strategist at Oppenheimer & Co. in New York, which manages about $10 billion. “Investors feel that the worst is over for those stocks.”
http://www.bloomberg.com/apps/news?pid=20601103&sid=aWAmLTKS75XY&refer=news
…southwest desert with no buyers…
Everyone but the kingpins were to blame for the subprime mess…
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Bernanke wrong about subprime
Published Fri, 18 May 2007 12:00:00 GMT
Mortgage market commentary
Lou Barnes
Inman News
…
Offensive to me, on page four of the subprime remarks Bernanke adopted the Wall Street line that mortgage misbehavior was the work of originating firms. Sure. Those poor, innocent investment bankers (IBs) had no idea what they were buying. He is right that markets are “self-correcting” now, and it will be a while before the IBs and the rating agencies again conspire to ignore suicidal mortgage risk just because they can re-sell freshly painted derivative trash at fat prices.
However, if Bernanke does not grasp the role of Street suction in this mortgage episode — runaway IB demand for bad product — then I have very little faith that he has correctly measured other risks inherent to the nouveau sausage machines.
http://www.upstatehouse.com/rss-display.php?id=inmannews63247
News from Denmark. Deutsche Bank proclaimed that their market is 30% overvalued and fourth most over-valued globally. (What’s worse? Ireland, Spain, Australia, UK?) Condos in Copenhagen proper declined 6.9% in Q1 2007. (That’s 28% annual rate!) Inventory has reached a historical high. YOY prices are still up in double digits. I recall that 2005 increase was 25% nationally and 40% in premier suburbs north of the city where I grew up.
So US, Spain, Denmark, Ireland (?) are tanking. The UK is still hanging in there nominally….. Sweden (esp Stockholm) is still hot and getting hotter. A drab 1960s concrete apartment in a Stockholm suburb now costs 30X the exact same unit in a depressed rural town where there has been no price bubble.