Bits Bucket And Craigslist Finds For May 24, 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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Financial Firms Taking More Risks With Their Own Capital / Economist
Builders Laugh at Paulson? / Greenberg
Paulson, Wu Cool China Growth; Local Leaders Add Fuel
http://immobilienblasen.blogspot.com/
Excellent! jmf~
It looks as if paulson and goldman sachs are doing all the wrong things…
Paulson’s body language is not very convincing to me that the housing market is under control.
http://www.paperdinero.com/BNN.aspx?id=194
excellent!
have added it.
He blinks a lot when he lies…
Now that Lereah has moved on from his position as serial bottom caller in chief, it looks like Hank Paulson is vying to fill the void.
Weeee arrrr near uh uh uh a hou hou housing botto ah ah low. This guy better not go sky diving and have to count to ten.
Greenspan called the top in Shanghai. That won’t make da boys at the Fed happy.
is china in a bubble? no. why? because virtually can’t find anyone who doens’t think that. it’s probably overvalued. however, in 2000 you were crazy if you thought the market was in a bubble. in 2005 you were crazy if you thought housing was a bubble. who doesn’t think china is a bubble?
“who doesn’t think china is a bubble?”
The Chinese retail investor. And it’s essentially a closed market, so it doesn’t matter what anyone else thinks.
I’m not saying China won’t go higher, but it’s definitely a bubble. Is there any market in history that reached an average 50 times earnings that didn’t turn out to be a bubble? Greenspan was right (while simultaneously being a douche): it’s just not sustainable.
weird al greedspankovic
who doesn’t think china is a bubble?
The woman in the picture in this month’s National Geographic shown humpin’ newly mixed concrete up a flight of stairs in yoke buckets for the princely sum of 40 cents a day.
Maybe New Orleans outta put some of those welfare fatties I saw hangin’ around the Astro-Dome screamin’ for the government to do somethin’ to save their sorry azzes to work, so the next time a storm hits they have the physical
capacity to walk their way out of town.
I’m going to forward your comment on to Jesse Jackson and Al Sharpton to see if they have anything to add…
I think instead they are going to build an elevated moving sidewalk - “only 3.2 Billion Federal taxpayer dollars”.
Funny when Grand Forks, North Dakota got hit with a major flood in 1997, I never heard anyone complain that the residents should have just walked out by themselves, or that the government was spending too much money on repairing the damage.
I wonder why?
http://www.grandforksflood.com/
GreenSpan may have called a top in Shanghai, bout like the monkeys spinning the bottom in US housing market.
Calling top or bottom doesn’t make it so. So…..do the Chinese have more spicy mustard to throw on an already smokin hot mandarin chicken…………
hang on, I gotta read the tea leaves……….ouch, Chinese double down, and martket rockets. Chicken bones confirm tea leaf reading….
Nobody’s calling a top; they’re calling a bubble. Meaning it’s way above true value, but of course could still get more overpriced. It’s a sell for the long-term, which is what matters most due to the problem with tea leaves you mentioned.
no top, just getting bubblicious, I agree.
True value is in the eye of the beholder, I think the Chinese really know its different, and as the massses continue to heave money on an already top heavy pile, the pile begins to implode, and rush for exit is dangerous.
So, I have to agree, that 60-90 day (short run) outlook is bullish, and a long term sell is correct.
I cant quite get my mind around what the signal for getting out of the Chinese market is going to be. The answer to that question is worth big money.
They buy based on things having an 8 in the price or ticker number (quote on the latter, “management must be savvy to acquire that) and sell based on the digit 4! It’s a massive bubble and probably going higher (I’d put it til the first major setback in the Olympic plans).
Reassurances on the building industry plus biased reporting on new home sales statistics don’t seem to be working very well…
http://www.marketwatch.com/tools/marketsummary/
Charge!
http://biz.yahoo.com/cnnm/070523/052307_amex_mortgage_charge.html?.v=3&.pf=personal-finance
Now that is just STUPID!
It’s not stupid if you’re responsible with your credit and pay your bills. You just have to run the numbers and if it makes sense I think it sounds like an OK deal.
“responsible with credit”
That’s funny!
Many of us are responsible with credit. I am. Aren’t you? This may be a good deal for us. It’s stupid for the FB and/or people who are irresponsible.
If you read it, these are only for prime, doc loans - & are checked every month to make sure you’re still prime even after the mortagage is closed. For people who never carry a balance from month to month, like myself, this is fantastic.
“Consumers shouldn’t pick a mortgage because of the opportunity to earn card points. “If you are not paying off your bill in full every month, you probably would be paying a 15% to 18% interest on a mortgage that has a rate of only 6% to 7%,” said Curtis Arnold , founder of CardRatings.com, a credit-card-information Web site. “These rewards programs can be very addictive.”
Look everyone, a warning!!! I can bet that in a few months when this idea flops and we now have people that are delinquent on their AMEX payment they are going to scream ” I didn’t know that non- payment would result in huge late fees, over the limit fees, and increased APRs.
This idea is as stupid as any I have seen in the cc industry.
If the consumer thought that REO was bad enough now they are going to have collection agencies calling them for the charged off credit card bill.
This is going to be the desperate last payment or two for many FB depending on what their credit card limit is.
As far as any “rules” involved these usually get thrown out with the bathwater.
I can tell you that after working in the cc industry the rules are often ignored and people end up getting cards when they clearly are not qualified under “the rules”.
A certain top ten credit card issuers High Response, Broadscale and Secured cards are not suppose to be given to:
People in prison.
Former customers with charge offs.
People with former BK.
People under the age of 18.
People that had been charged with fraud.
I have seen ALL of these examples end up with a card MANY times.
I agree with Lou. I put EVERYTHING on a cc and pay the balance at the end of each month.
I use the bank’s money, during the float, for free….so I make money off the bank’s money. At the end of the year, it’s a tidy sum…so why not?
Dude, I do exactly the same thing. If I could put my rent in the credit card, I would. That would get me faster to that free international plane ticket. Like everyone else here, I also pay the full balance every month. It’s not a bad idea at all, and in fact I think for many people it would be good to get that mortgage payment listed just underneath the spa and the restaurant bill. I know that looking at the list of expenses every month gives me a good idea of where the money is going. It should be a good thing, and most people would not be so stupid as to pay interest on a mortgage and then interest on the credit card for that same payment?
I agree with Lou. I pay off all my credit debt at the end of each month. I stay within a budget. If I can points or cash back by putting my mortgage payment (if I had one) I would. The only reason I don’t charge my rent to a card each month is because my development charges an extra $24.95 for that “service”.
I understand that MOST people are responsible with credit but for those of use that are it’s a good deal. Those of us that are responsible with credit get points & cash back because of the morons that carry balances and pay 20%+ interest.
Next year I plan on buying a new used car, cash. I’m going to charge it to my AMEX, pay it off right away and earn points.
that should read, “I understand that MOST people aren’t responsible with credit…”
so is AMEX stock a buy? I wonder in a few years though when everyone rings up a few months of mortgage payments on their CC and then gets foreclosed.
I always thought, as a young adult, how easy it would be to cripple our country, if the Soviet Union could have somehow, thrown a spanner in the works, that is our credit card way of life…
The situation today is 10 x as perilous as the late 70’s, early 80’s was, in my mind.
2 Different kind of crisises that look similar, but not really.
This should be interesting. Is the IRS going to send a 1099 for the value of the points earned since this will result in a windfall for those who pay on time?
Credit card points, like any other sales incentive, are just a discount on the sale price. They’re not income, any more than that toy with the McHappy meal or the “free” gas with the new car is income. Or the granite countertops.
If you’re getting points from spending your employer’s money, yes that’s income. But not from your own money.
Agree. I have been using rewards cards for years & always pay them off. They can be a good deal.
All the credit card millionares are coming out of the woodwork.
You spend more more when you pay with credit over cash.
I plan on making my money the old fashioned way, by earning it.
Making money on credit cards sounds like money for nothing, or FB flipper investors.
so? what’s the difference between charging 2 thousand a month for purchases and charging your mortgage for rewards? people put bills on their card for points. good if you pay it off every month.
“You spend more more when you pay with credit over cash.”
Not if you don’t pay interest.
“Making money on credit cards sounds like money for nothing, or FB flipper investors.”
I make money off the backs of the people who are stupid enough to pay interest. Yes, it’s money for nothing for me but the CC company isn’t losing. If everyone paid their CC bills on time these incentives wouldn’t be offered.
Everyone pays/buys more on average when they pay with credit versus cash. The reason is that paying with cash hurts, paying with credit is easy.
Nothing I can say is going to change your mind obviously, so please go on to make your fortune by using credit cards. “The more I spend, the more I make!” LOL
“Everyone pays/buys more on average when they pay with credit versus cash.”
Everyone?! I didn’t realize how up to date you were on my spending habits. I have a budget that I stick to and the e-statements I get from my CC companies actually HELP me track that spending better. I have a friend who CASHES his check every Friday and by Wednesday is wondering where it all went.
I NEVER said I was making a “fortune” using credit cards but every little bit helps. With the points I earned last year used to I converted them into AmEx gift cards to give to my nieces & nephews for their B-days. Those are gifts I would have “bought” any but instead I “earned”.
I believe you’re confusing “everyone” with “on average”. On average, a human is 5′6″ or whatever. But not everyone is that way. Certainly people can be more susceptible to spending. But not everyone. For some of us, credit cards are simply a good cash management tool and sometimes even a boon. During my undergrad years, for example, I did the ol’ 0 percent no fee cash advancement and parked 30K + in interest bearing acct and then repaid before the period expired. Sure, it only made a grand or so, but it was free money as long as you didn’t charge anything else on the cards. Now? My cable bill, my power bill, my storage unit, etc all go on credit card. I also make a min of two payments a month, as I have a two week grace period. That way, I do not need to transfer cash out of my savings if for some reason my cash flows are mismatched, I can wait for a paycheck. I keep an exceptionally tight budget and can’t recall any binge spending and have a savings rate of over 40 percent of take home and have only student loan debt outstanding. “Everyone” != “On Average”.
No, he said everyone. By saying that he included me in his statement. Maybe he should have said most or many.
That only works if the credit card is not charging you interest based on the average daily balance, even when the balance is paid off at the end of each month.
see:http://www.themoneyblogs.com/creditbloggers/my.blog/reader-question-what-is-average-daily-balance.html
“Everyone pays/buys more on average when they pay with credit versus cash. The reason is that paying with cash hurts, paying with credit is easy.”
This is a big reason gasoline companies make it a pain to use cash now (prepay only BS). They like to say it is to prevent drive-offs but they know that credit card users won’t feel as much pain at the pump. If everyone had to use actual hard-earned cash for thier gasoline, they would be out for blood.
Perhaps not. Businesses are charged a fee for the privilege of accepting credit card payments. Some gas stations still give a discount to cash buyers, particularly in small towns. I saw it just the other day while driving through Kansas on my way home from vacation. BTW, I’m on the cash-only side. Credit cards are fine for those who don’t mind the hassles. Frankly, my life is much simpler without them.
I saw you in Brighton, about 1985…
You put on a hellova show~
I want my, I want my do re mi
I want my, I want my do re mi
Now look at them yo-yos, that’s the way you do it
You play on your house’s financial ability
That ain’t workin’, that’s the way is used to be
Money for nothing and serfdom and servitude for your earthly eternity
Now that aint workin’, what the hell were you thinkin’?
Lemme tell ya, these guys were dumb
Maybe get a 420 fico rating
Maybe get foreclosed on, whilst numb…
I’d do this in a heartbeat if I could. I charge everything I can to get airline miles and pay the bill in full each month. It’s free money.
oh god this will kill alot of folks. the mortgage is probably a little higher rate than market and the fees on the late pmt to amex will be absolutely killer.
TOL Brothers announces awful earnings. Will that rally the homebuilders? We will see what the new home sales numbers look like at 8:30. We will continue to see 2 truths in this market. 1) The numbers lie like crazy. 2) Reality doesn’t lie.
The environment is getting worse and worse for the builders. Soon they will turn on each other. But some rosy + or - 12% fictitious number will give them a short reprieve. How many times will we hear about “the bottom” today?
Check out Bon-Ton stores (BONT)
That’s a big loss but this stock has gone up almost 200% at one point during the Goldilocks rally. Do you think it will actually hurt this stock or will this shed off reality like so many others?
I’m hoping to short a bounce after the open, let’s put it that way.
What about the subprimers? They were up huge yesterday. I would have to think LEND, FMT and the like would become good short plays in the very near future.
I prefer shorts where all the bad news isn’t already known. Personal preference. For instance, the REITS about 8 weeks ago or the semiconductors.
But it sure seems that all the bad news in the subprime sector has now been forgotten. An Alt-A shock would crush them again.
Just like inflation is everywhere EXCEPT the United States it looks like financial markets are overvalued everywhere except in the United States…
“European stocks are overvalued and could fall by at least 10 percent within three to six months, a Morgan Stanley (MS.N: Quote, Profile , Research) equity strategist said on Thursday.
“Tactically, we are neutral equities and overweight cash, seeing a correction of at least 10 percent,” Vice President for European Equity Strategy Ronan Carr told an investor conference in Oslo.”
http://tinyurl.com/27ryhc
It’s different here! Everyone wants to invest here!
We were homeshopping in Waco yesterday and the reception that we received at 2 DR Horton developments led us to believe that the salespeople hadn’t seen any other humans in days. We were just there to scope the market as we intend to rent if we make the move but we did notice that their prices had come down about $10K and there were lots of incentives to be had.
I also wondered how a town of 115,000 rated a Jos. A. Bank, Chico and Anne Taylor stores. Are they just throwing those things up anywhere they find a vacant lot?
It’s got a big school in it (Baylor) and a lot of those kids come from upper middle class families.
TOL - now yoy w 06 benchmark looks better
try 05
Second-quarter net signed contracts fell 25 percent to $1.17 billion from $1.56 billion a year earlier. The company signed 2,031 contracts — before cancellations — in the latest period, a 14 percent decline year-over-year
Gasoline prices are up another half cent. Rising gasoline prices offsets some of the bubble risk associated with owning real estate, but only in the inner cities and places with good access to public transit.
http://dcbubble.blogspot.com/2007/05/four-buck-gas-good-for-dc.html
I can’t wait to buy one of those Broad Street condos due to gas being up a few cents. That will be well worth the $950,000 asking price. My wife will be very happy. How much does gas cost?
Cityboy just because you can’t afford something doesn’t mean no one will make that choice. Seven figures is pretty standard for a NYC one bedroom…pre-bubble, post-bubble whatever-bubble
my point is that with all else being equal, higher gasoline prices start to be a factor when they near four bucks a gallon
http://dcbubble.blogspot.com/2007/05/four-buck-gas-good-for-dc.html
Try $6-$10. We’ve been close to 4 for some time now and gas quantity is still growing (just slower than it had 1-2% vs 3-5%).
Oil prices are way out of whack. Check out the spread between WTI crude and Brent. It’s about $6 a barrel, absolutely massive. Manipulation of the US market won’t hold, and oil will close this gap. Get ready to pay much more for gas.
According to the WSJ, mortgage brokers are resisting rules that would require them to advance the fiduciary interest of borrowers.
Personally, I think fiduciary responsibility is a quaint concept. Instead, mortgage brokers should have to have their customers sign a piece of paper with, in 24 pt type:
“I understand that this mortgage broker will cheat me and destroy my future if he can, and I cannot trust him or her.”
Works for any broker.
That’s funny. It reminds me of the huge MERCURY WARNING sign that I saw at the grocery store in front of the fresh ocean-caught fish the other night. It made me very hungry for fresh swordfish and tuna when I saw that sign.
It looks like the durable goods number will lead to today’s bull$hit stock rally. I meant “bullish” stock rally. Those factories must be humming.
Anybody notice the long bond yield went back over 5% yesterday?
do they cut rates much during STAGflation ?
The yield curve is no longer inverted…Until the feds raise interest rates. Didn’t you know, the fed’s new mandate is the keep the yield curve inverted perpetually!
When it gets over 6%, I’ll start to get interested.
roger that
The 10-year note crossing 5% will stir the markets much more (and it’s flirting with 4.9% this morning). Aren’t most mortgage rates now pegged to the 10-year note? If so, mortgage rates will continue creeping up, which will only prevent even more RE buyers from qualifying. And a puch above 5% might lead to a melt-up spike in rates.
YAHOO MARQUEE’
Farewell to a Real-Estate-Funded Retirement
Money on CNNMoney.com
When the housing market sank, so did many dreams of retiring on property investments.
Yeah, it’s amazing, all that wealth from the unprecedented rise in real estate prices, the stocks, and the bonds, and STILL nobody can retire.
WTF is wrong with the people? Have they outspend and overspend their paper wealth?
They tapped into the “wasted” equity in their houses because they are “sophisticated.”
More Bad Housing News?
“April showers bring May flowers, but April home sales may just bring more rain. If you’re a housing-data junkie, you know already that the National Association of Realtors announces new-home sales on May 24 and existing-home sales on May 25, and you’re probably not expecting much improvement.”
http://tinyurl.com/yrpehe
Yesterday, someone started a thread about the possibility of mortgage fraud in Northern Virginia. The names of the buyers/sellers were all Middle Eastern. After thinking about it, I wondered if there were other instances of this actually being uncovered. A quick Google search found this:
http://www.aina.org/news/2007041194958.htm
“A man arrested in December at the Kansas City airport with $70,000 in his bulging pockets while trying to board a Southwest Airlines flight claiming the money was actually Muslim prayer books, a San Francisco mortgage company executive who went on the run from the FBI in November, seven people arrested in September in Salt Lake City with ties to al-Qaeda, and a co-defendant in the Sami al-Arian/Palestinian Islamic Jihad trial all have one thing in common — the growing trend of terrorist associations with mortgage fraud rings in the US.
Financial experts say that mortgage fraud has become the fastest growing type of white-collar crime, and terrorist organizations have been quick to jump on the trend. But what concerns federal authorities is how regularly mortgage fraud is showing up in terrorism investigations.
In the past year, several high-profile mortgage fraud arrests have been tied to federal terrorism investigations, most notably a ring busted up in Salt Lake City that is alleged to have direct ties to the late al-Qaeda leader in Iraq, Abu Musab al-Zarqawi. Federal agents have been trying to track the hundreds of thousands of dollars illegally obtained by Sharif Omar and his associates in the mortgage fraud ring. At least $40,000 was transferred to an account in Jordan. From there, federal officials believe that money went to Sharif’s brother, Shawqi Omar, who was seized in a raid by US forces in Iraq in October 2004 and is accused of working for al-Zarqawi’s terrorist network in Baghdad. Shawqi Omar is still in US military custody.
…..”
Has this article been discussed here before?
I would say this is just symptomatic of the administrations priorities. The terrorist witch hunt means that 90% of FBI resources are looking for terrororist. In the course of these “rabbit hunts”, the agents are stumbling over the crimes that actually are occuring.
I had an interesting thought yesterday….
1) Is China’s market setting itself up for a major correction (or crash)?
2) How would said crash affect the the US markets?
3) Would a crash in the Chinese stock market even matter? They’re sitting on so much cash..
Along the same line…
I think China is currently living in 1920’s America where everyone is making money. They cannot forsee a future where the stock market isn’t rising. They’ve never experienced a US style recession/depression like the 1930’s. China was too caught up in its communist experiment to be really affected by the worldwide global depression. Just like a toddler will inevitably stick his hand into the hot fire and get burned, so will China learn about capitalism the hard way.
Any thoughts?
Batten down the hatches……Greenspin is opening his mouth again……
A repeat of the 30’s worldwide would be interesting to say the least….a lot of FB’s, speculators on Wall Street would probably kill themselves if they would have to live in a soup or bread line again. Most of the iPod generation would be incapable of surviving in a physical or mental state a world where eating out of garbage cans and living in “Hoovervilles” would predominate.
China’s market goes….the rest of the world will follow suit.
Why will the world follow if China’s market goes? Won’t the rest of the world find other places to buy crappy underpriced plastic garbage?
It might be a good thing; China’s oil consumption will lower, meaning lower oil prices worldwide; There will be less plastic garbage to purchase so American’s might actually save money; Some of the exported manufacturing jobs might actually return to the US (maybe?); Commodities prices will lower because less demand..
China has polluted itself to the point of non function in the most basic human need, water.
Their 2 generation run @ capitalistic fun, is now over.
Back to your regularly scheduled great leap forward.
Even in a worst-case, global depression oil and commodity demand grown will only slow, not reverse.
Not only have government officials come out and said the Shanghai Market is getting “frothy” (if I may paraphrase in the US common vernacular). And, and, and GS plays the “unsustainable” card……….yet, the Shanghai machine keeps chugging……whats my point, What, pray tell, is the signal to run for the exits?
Geo-political turmoil, North Korea rattles Beijing tower with a fly-bye? No
Indian Subcontinent clash with nuclear powered neighbor? No
Middle Eastern flare up? Cant get much worse till Iran gets dragged in.
EU……too busy baking bread and having picnic lunch on month long vacations.
America…….good ole USofA….information capitol delivers data destruction?
I know what’s wrong; I don’t have my tin foil hat on. Now, that’s better. Technology age deservers a tech David to the Chinese Goliath. Im freaking out man.
China has never had a depression? Until a few years ago China was nothing but one long depression! Add to that the opium wars, the Japanese WW2 occupation where millions were butchered, the racism the Chinese experienced in the USA, etc. Yup. China has never had it tough and had to suffer like like Americans. Makes you wonder if the crap hits the fan if China is seasoned enough in hardship to weather the storm like most Americans who are steeped in suffering and adversity.(lol) Jeez. Most Americans bitch and moan if the gardener doesn’t show up or the Mexican washing their gas guzzling SUV misses a spot.
Good point. Only Americans can be racist. Chinese? Never.
“They’ve never experienced a US style recession/depression like the 1930’s. China was too caught up in its communist experiment to be really affected by the worldwide global depression.”
Commmunist Chinese state wasn’t founded until 1949.
In China the Communist Revolution became essentially an extension of the “May the Fourth” movement against warlordism which is named after 4 May 1919 but was a nationally gripping political movement starting as early as 1917. This lack of understanding and sympathy for Chinese struggles with warlords from 1916-1927 causes a lot of confusion and clumsiness in modern dealings with the Communists.
The only reason a great many American families don’t own an elephant is that they have never been offered an elephant for a dollar down and easy weekly payments. ~Mad Magazine
But then you have to feed the elephant…oh wait !!!
Chris
My elephant is BIGGER than your elephant.
It’s okay. Just don’t show any fear. Elephants can sense fear.
Record Hamptons Home at $103 Million Signals Market Resilience
http://www.bloomberg.com/apps/news?pid=20601087&sid=ax_xjdO1Ws1Y&refer=home
But the lower end of the market is falling apart!
Pretty funny story about a family getting robbed while moving into their new neighborhood. Little did the thief know that the FB was more broke than him…
http://www.local6.com/news/13380966/detail.html?rss=orlpn&psp=news
I guess that Orange County FL is the new “OC”!
Some good stuff in here about the Trump Tower in Chicago. Highlights include:
25% of the 825 condos still not sold.
Trump says “Competition from the better markets in other locations like…Las Vegas is affecting sales in Chicago”
Since January he’s only sold 8 condos.
And scariest, by 2011 there will be 16,300 new for-sale residences in downtown Chicago.
http://www.chicagotribune.com/business/chi-thur_trump_0524may24,1,5122335.story?coll=chi-bizfront-hed
I was about to remark that there should be some great bargains in Chicago in a few years, but then I remembered that condos come with maintenance and association fees that can be raised pretty much arbitrarily high, and therefore should not be bought at any price.
Sorry if this is a double post. It showed up and then disappeared.
Sales hit a wall at Trump Tower downtown. Come on down and buy a condo, they’ve stopped raising prices:
http://www.chicagotribune.com/business/chi-thur_trump_0524may24,1,5122335.story?coll=chi-news-hed
http://www.boston.com/business/ticker/2007/05/report_ne_econo.html
The forecast organization said it expects median housing prices in New England to decline through the second quarter of next year, with the steepest price declines expected in the final three quarters of this year. A slow recovery is expected beginning in mid-2008, but the region’s housing prices aren’t expected to return to their historic pre-slump peak until the middle of 2010.
By the time the slump ends, New England’s median housing prices are expected to drop 12% from their pre-slump peak, bigger than the more than 8% decline forecast for the nation by Moody’s Economy.com, an economic forecasting company.
“‘The housing price decline in the region is significant, but the decline is not expected to be as pronounced as the decline in the last housing recession in the late 1980s and early 1990s,’ said Ross Gittell, the organization’s forecast manager and a professor at the University of New Hampshire.”
*******
And why is that?
I hardly expect it’s any different in Massachusetts than in California, where the average mortgage payment in 2006 was 22% higher than at the last housing market peak in 1990, in inflation-adjusted terms.
2010 for a return to peak prices is very optimistic, to say the least. And so is having prices down only 12% for that matter (and that’s also lacking an adjust for inflation).
This report seems to be based as much on “hopeful” forecasting as on reality.
I think it’s optimistic even to hope for a bottom by 2010. We’re still at the tip of the iceberg, and prices have only just started their correction. A nominal bottom might occur in 2012, and a real bottom (inflation adjusted) in perhaps 2015.
It is different on the Philadelphia Main Line…the rich biatches there engage in serial nanny abuse:
IT’S APPARENTLY going to take more than a few anger-management classes to slow down the millionaire Main Line nanny-boss-from-hell…
“I’m important, you’re nothing!”
no entitlement mentality here, move along…
Oh, don’t even go there! I could rant all day long about these brat ranchers, not only in Philly but everywhere.
In Texas, do they say things to their help like:
“You’re not calling anyone, bitch!
If someone hadn’t been hurt, this would be comical.
Worse. I’m sure things go on in the gift wrapping rooms of Highland Park that couldn’t be discussed in polite company.
beaten with a bag of carrots…… I can’t contain my laughter at this line.
… banking heiress Susan Tabas Tepper was sentenced to probation and fined for hitting a nanny with a bag of carrots and beating the woman up …
Using carrots as sticks really is thinking outside the box. Bush should make her Ambassador to the UN.
Hey, this couple got arrested for SLAVERY on Long Island today. See, Philly will always be one step behind New York!
http://abclocal.go.com/wpvi/story?section=nation_world&id=5334481
“one of the women was forced to eat 25 hot chili peppers at one time.”
Can you make this stuff up?
Hey, I can do that, no problem! Living in Texas does have its advantages.
My cousin’s husband tells her it “defeats the purpose” to eat peppers as hot as she does. He says it kills the taste buds.
Is it true that it’s better to eat bread instead of drinking liquid if the heat gets to be too much?
The hot sensation from hot food comes from a neurotransmitter. Like any strong sensation one can develop a tolerance, but no amount of hot food will ever kill taste buds unless you mean temperature.
“…our dung-colored, cookie-cutter crapbox is worth every penny of its inflated price”
Vegas is the Pits Pt II
Trump trumpeting condos for sale
Too few sold so far, the developer says
http://www.chicagotribune.com/business/chi-thur_trump_0524may24,1,5122335.story?coll=chi-news-hed
All the talking heads on TV are SOOOOOOOO clueless.
They are talking about this 16% jump in existing home sales as if it is good news for the housing market. Hello!!!! Did you not see the 11% drop in prices, IN A SINGLE MONTH!!!!
How is an 11% drop in the new home price going to “unjamb” the existing market? It is massive down preasure on a market that is jambed because people can’t sell for what they owe.
NO WONDER exisiting home sells in PHX fell by 9% in April. The new home builders are KILLING the exisitng home market with thier price cuts!
This new homes sales number is a disaster, not a saving grace, for the existing home market.
The spin is sickening and I had to stop watching CNBC for my own sanity. Yahoo finance’s morning headline “stocks surge on record home sales data”… hahaha. Now toned down to “home sales soar by record amount’ hahaha because the stocks aren’t surging.
The price drop is AMAZINGLY high, wow.
Right…. Stocks jumped 50 pts in 10 minutes…. Now gave back that, the 25 pts it was up before this number came out, and is heading down for the day.
YEAH, UP 16%!!!!!
Oh wait……… prices down 11%! Oh shite!
The general market may be quiet but the housing stocks went through the roof for a bit. How does TOL declare such a huge loss and then the stock shoots up because people seem to think that the housing market is well again? (Rhetorical babble to myself. No need to answer.) 11% price drop isn’t good for any industry.
This stock market is broken, and then some. If every builder had given away all its inventory for free last month, the HB stocks would presumably be at record highs today. (”Yay us! The inventory overhang has been cleared! U…S…A! U…S…A!”
Good one. LOL.
Because all the bad news is priced into the stock and the news, while bad, was not as bad as expected.
Please.
Also the 30-year fixed went up from 6.21% to 6.37% over the last week . . .
The economy is going gangbusters, by all reports, and inflation is on the rise, so I guess one should expect an inflation risk premium to get priced into the long end of the T-bond yield curve?
I for one think the existing home sales news is wonderful.
Something we should all celebrate, but the prices will have to come down a lot more than 10% before we’re done.
I guess I should of said, “disaster for people trying to sell their house without a massive price cut!”
Great for people that plan to buy in a year or two.
CNN MOney has the headline, initianny:
New home prices plunge
And a couple hour laters the headline became:
New home prices plunge, sales soar
Local Realtor, aka Fomer Real Estate Mogul facing 8 foreclosures:
http://www.bakersfield.com/hourly_news/story/148844.html
Let the Schadenfreude begin!
Gotta love that marketing photo…I had to say to myself “Gee wiz, he sure does have his thinking cap on! What a smart RE investor!”
Caption on photo:
David Crisp, president/Realtor of Crisp & Cole Real Estate,
surfs for pornworks on a computer at the front desk of the office at Platinum Investments.How old is that twerp?
How could anyone be so farking stupid? A once in a lifetime chance to make giant bank and they don’t know when to quit.
27 or 28
You lie! Really?
No! LOL.
I talked to this clown twice and walked away laughing everytime at his bullshit. He actually believed this run up in prices was because of him.
test
My original post died. Ugh!
Yes he is. He is done!
crispy -
You must recognize this is a watershed moment.
I recall the day you explained here, probably nearly two years ago, where your handle came from… and I’ve been waiting for this kind of moment since then!
Incredible.
“Crisp” is now officially “Crispy”….couldn’t of happened to a better guy!!!!
Maybe he was taking sweet dealz advice from Casey Serin . . .
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHHAHAHAHAHAHAHAHAHAHAHAHAQHAHAHAHAH!!!!!!!
(deep breath)
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHHAHAHAHAHAHHAHAHAHAH!!!!!
Thanks for the update. Will be down that way this weekend to visit family and friends.
Platinum Investments name change: Lead Investments
Uranium Investments.
Checked out the property on draper court (the 1.3 million dollar loan mentioned in the article) on zillow and the house was purchased in ‘04 for 615K. These tools paid the guy more than double…IN BAKERSFIELD…near the end of ‘06. Now, according to the Zestimate, they are 50K under (not that there is anything to justify this home being anywhere near a million).
Translation- they are screwed!
Wow, a pop and drop. Haven’t seen one of those since February? I think I’m going to cry . . .
“New home prices plunge, sales soar”
Dead Cat Bounce?
I know that there is an old adage in the hotel industry that the 3rd owner of the property is the one who will stay solvent.
I wonder over how many years these SHAsHED PrICE$!!! homes will have to change hands before they reach equilibrium.
Sales still down 10% YOY.
Wait, his mother’s name is Tu Crisp. Does he have a brother named Apple?
lol
lol
No but he’s got one named Extra.
Tu Crisp. Isn’t that K-Fed’s new handle as the fry cook at Mickey D’s?
Perhaps he has a cousin Coco playing for Red-Sox that could help him out?
http://en.wikipedia.org/wiki/Coco_Crisp
AP headline from yahoo(with apologies if it’s already been posted):
“Home sales soar by record level”
But lo and behold we find:
“However, the median price of a new home sold last month fell to $229,100, a record 11.1 percent decline from the previous month.”
Repeat after me:
Dead. Cat. Bounce.
My apologies for having to say this again: Sales still down 10% YOY.
“Sales still down 10% YOY”
Yes, 10% drop (in sales volumes) year over year. How does that justify the “home sales soar by RECORD level” headline? The 16% increase is April over March (which was a crappy month)…
Oh and thank you. No apology necessary. It is I who owe the apology for not reading the thread! I’m a victim of my own irrational exuberance, but at least the scope of that is confined to this blog and not some POS McMansion I overpayed for!
Ans my apologies for not cluing into that. Sheesh - spin meisters running at full volume these days. I should have known that figure was really shady. I still do think that the “uptick” in -recent- sales qualifies as a dead cat bounce. Could even be the only one we get if things get really nasty.
I did notice a bunch of “sold” signs around seattle, but also a ton of “reduced price” signs and even more properties on the market.
I think the market might be scooping up the last of the FBs. Not to mention the stupidest, if the predominant opinion of the market on this blog prevails(and I personally think it will - we have history, the numbers, common sense, and hell the laws of physics themselves on our side).
The cheerleaders will eventually be made to understand that real estate is not exempt from the second law of thermodynamics. I’m looking at YOU Learah…
Got chaos?
Seriously. You need a Ph.D. to sort through all the BS that is spewed nowadays. While I think people generally are stupid, I can’t completely fault them for being utterly clueless about reality given how the truth is constantly skewered.
Lansner blog: 72% claim they won’t touch home equity to fund retirement
http://tinyurl.com/lzgbg
That is another pipe dream. Have you ever asked people when they are going to retire? Seldom is the answer past 62, at least the ones I have asked. Yet you look at the statistics of how much is contributed and held in 401k plans and there is a disconnect there. They apparently think the government will be there for them because of the entitlement mentality. In general, the citizens in the US are living in a fool’s paradise.
I agree.
Most have seriously underestimated the amount of money needed to live “comfortably” in retirement…
Just ask my in-laws…
“Retirement is WAAAYY off in the future. I don’t need to worry about that right now. There will be plenty of time to deal with that later.”
Question-When is the best time to plant an oak tree?
Answer-50 yrs ago.
Of course not.
http://www.voiceofsandiego.org/articles/2007/05/24/housing/930reverse042307.txt
“With Little Cash Flow and Lots of Equity, Seniors ‘Reverse’ Mortgages
The National Reverse Mortgage Lenders Association estimates 1,759 reverse mortgages were made in San Diego last year, more than 14 times the volume in 2001″
From a post on Herb Greenberg’s blog:
“Family member #1
House purchased in 2001 in NJ 115,000.
Mortgage amount financed 80,000.
Current mortgage balance 2007 200,000.
Spent an extra 20,000 a year for the past 6 years.
Family member # 2
House purchased 2002 in NJ for 124,000.
Mortgage amount financed 121,000.
Current mortgage balance 2007 245,000.
Spent an extra 24,487 a year for the last 5 years.
Now that these families have pretty much maxed out their house ATM’s
there will be no more ridiculous spending. The other problem is
that now, they have to service this debt which means even less spending.
I can’t possibly know the only two families that have been living large
on MEW. I think the national figures for MEW are low. I believe we are
at a point in this country where consumer spending is just going to
fall off a cliff.”
And this is why I believe the Fed to surreptitiously do everything within its power to respike the inflationary punchbowl, despite all disclaimers to the contrary. The pain of letting the market correct thirty-five years of deficit-financed insanity is just too unbearable to even contemplate. Far better to defer the pain to some undetermined point in the future.
…why I *expect* the Fed…
There is little the FED can do. If they lower short term rates there will be a run on the dollar pushing up long term rates. Are they going to make further loans to upside down borrowers? They must increase borrowing substantially to hold up the debt structure. They will be lucky to keep borrowing at current levels as asset prices fall. Once fear sets, in it is game over. Semi solvent borrowers are too frightened to take out further loans and banks will not lend to deadbeats again out of fear.
The Japanese kept a lot of bad loans on the books in the last 15 years. They still carry them but prices still fell in stocks and realestate. They like the USA in the 30’s were a creditor nation and therefore had some control over their interest rates. Our nation must go to the world market to finance the government and trade deficits. This means we have limited control in our ability to keep down interest rates.
The odds are that we are looking into the jaws of deflation.
Calling a 2.9% decline a “jump” is really stretching the limits to putting lipstick on a pig…
———————————————————————————
Subprime mortgage stocks jump
Comments from Countrywide, HSBC suggest worst may be over
By Alistair Barr, MarketWatch
Last Update: 4:42 PM ET May 23, 2007
SAN FRANCISCO (MarketWatch) — Shares of subprime mortgage lenders such as NovaStar Financial and Accredited Home Lenders jumped on Wednesday amid signs the worst may be over for the struggling sector.
Other lenders that focus on so-called Alt-A mortgages, including Impac and American Home Mortgage also climbed, while shares of Fremont General (1:41pm 05/24/2007 FMT12.30, -0.37, -2.9%) surged 27% on continued optimism about its new retail banking strategy.”
Fair is foul, and foul is fair:
Hover through the fog and filthy air.
http://www.marketwatch.com/news/story/subprime-mortgage-stocks-jump-signs/story.aspx?guid=%7BDA7A128C%2D690B%2D4CF3%2DB764%2D6177CFF88E53%7D
Right, don’t understand everyone’s fascination with them as a short play. That’s played out for now, at least in my opinion. I like semiconductors much better as a short.
Nice decline this afternoon. Reminds me of the February one sorta, as that one had the Nasty down x3 as much as the Dow on a percentage basis, just like now.
“Indeed, Piper Jaffray’s Napoli said subprime mortgage stocks were also climbing on takeover rumors.”
Somebody must have proven the rumors false, from the looks of the subprime share dump that is underway. I think Marketwatch.com ought to tend its bylines a bit more closely…
Whoops! How’d that happen?!?
————————
New Century Says Probably Overstated 2005 Earnings
‘CHICAGO (Reuters) - New Century Financial Corp. (NEWCQ.PK: Quote, Profile , Research), the largest U.S. subprime lender in bankruptcy, on Thursday said it uncovered accounting errors in its 2005 financial statements, and probably “materially” overstated earnings for that year.’
http://snipurl.com/1lwmk
Bogus numbers sez the B of A person…………
In a research note, Bank of America analyst Daniel Oppenheim said the data likely overstated the April sales increase. The issue boils down to the fact that the government doesn’t take cancellations of sales contracts into account.
The Census Bureau tracks the sale of a new home, but once a contract is entered, the deal is considered final. That number isn’t changed if the contract is canceled, nor does it change if the contract is canceled and then resold later on.
Oppenheim has argued that new-home sales reports in February and March have underestimated the true level of demand because they didn’t count the resale of homes where contracts had been canceled. That would make the big month-over-month jump in April an artificial comparison.
“We think the reality is that trends worsened” in April from recent months, Oppenheim said in his note.
Inventories fell to 6.5 months of supply at the current sales rate, down sharply from the revised 8.1-months level in March, the Census Bureau said.
The raw inventory of homes totaled 538,000 units, the lowest level since January. But although inventory has fallen, it remains at historically high levels.
And as Oppenheim points out, the inventory number is also misleading.
“While we believe inventory levels are falling, as builders focus on selling speculative inventory, the Census Bureau continues to understate the inventory levels because canceled homes do not get counted,” Oppenheim said.
This is OT, but it is relevant in terms of the myopic MSM.
The fans of the TV show Jericho (yes I am one) have taken to the internet streets to protest the cancellation of the show and are inundating CBS with emails, calls, petitions, and ….. nuts. Taking a queue from the final episode and that famous General who during the Battle of the Bulge replied to the German surrender offer with “Nuts!” the fans have now sent CBS over 15,600 pounds of nuts. And yet no mainstream broadcast media has picked this up, yet. hmmm, I wonder why?
http://www.nutsonline.com/jericho
http://www.jerichorallypoint.com/sm/index.php
The housing slump that began to ripple across much of the nation’s housing market last year has hit especially hard in New England, and isn’t expected to go away soon.
The forecast organization said it expects median housing prices in New England to decline through the second quarter of next year, with the steepest price declines expected in the final three quarters of this year. A slow recovery is expected beginning in mid-2008, but the region’s housing prices aren’t expected to return to their historic pre-slump peak until the middle of 2010.
By the time the slump ends, New England’s median housing prices are expected to drop 12 percent from their pre-slump peak, bigger than the more than 8 percent decline forecast for the nation by Moody’s Economy.com, an economic forecasting company.
http://www.boston.com/news/local/maine/articles/2007/05/24/new_england_economy_to_lag_nation_through_2011/
Glenn Beck is doing a show discussing how after inflation housing was not really such a great investment.
The Bubble ideas are mainstream.