Bits Bucket And Craigslist Finds For July 5, 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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suggestion on other thread:
how many do you think made a killing by selling high - then renting, or substantially downsizing… should continue this topic!
Judging by everything i have read, probably a Dozen in all of America. And I’ll bet 11 of them post on this blog.
roflow- and it’s always they sold in may or june of 05
I sold in Sept of 2005. Did OK, I don’t mind saying. Wasn’t exactly a killing, but far more than I ever thought I’d see for that house.
we sold a family home in malibu in oct. 05. huge price but can’t buy a place to save my life. i have big bonds and a crappy apartment situation. looking forward to leasing a mcmansion when my prison term is over.
We sold in Aug 05′…
A ruthlessly un-updated 1966 tract home in a nice area of the city of angles is not exactly the family treasure, if you know what I mean and I think you do.
One of the easier selling decisions ever to confront me.
My next door neighbor and her ex-husband sold their Tempe home in 18 days. They priced their home intelligently - below all the comps. The comps were real comps - same model. She said they did not make a killing but they wanted to sell fast and they did.
Where is the City of Angles? Research Triangle?
I sold (in Australia) in mid-2004, and after a slight decline prices have gone up 10% since then. The median price in my city is now around 8 times average weekly earnings.
Interestingly; now we’re close to an election the lack of affordability for young buyers is starting to become a big political issue, but as one newspaper editorial pointed out they want to make housing affordable for new buyers and simultaneously keep prices rising for existing owners. In the long term this simply can’t be done.
they do it in the Netherlands … just invent another housing subsidy every few years …
I sold two primary properties, 3 multi-family rental properties and a few dozen newly constructed townhomes between June 04 and sept 05. Consider myself fortunate to have escaped with my financial life.
We sold our Sarasota house in May 2005 and bought a foreclosure here, paying less than half what we got for the Florida house. As mentioned before, the timing was just good luck, not an awareness of the bubble.
Sold in 45 day (from first list to closing) in March 2004, due to job loss (all the evidence at the time indicating that I would have to relocate….I will say this for my agent; told him I needed to sell the house, and didn’t want to carry it for 6 months trying to get top dollar. We eventually listed at $3,000 under the comps, and sold to the first people that looked at it.
Thought about buying again, but could not believe the 20% year appreciation, especially when the local economy has never been that great. The local economy did not justify anything near the increase in prices.
I was beginning to think I was just a crazy old curmudgeon/party pooper…..then I ran across this blog.
Would be nice to have a house…….I have several projects that I would be working if I had some shop space. But I’m not going to commit financial suicide this late in life to own a house
Sold in September 2005, and now sitting on not only that California profit (40% in 2 years), but money I’ve been able to save during two years of renting a nice, small apartment. Sadly, I still don’t think I’ll ever be able to buy again in California, though. I sold the house because I hated the community (Castro Valley).
Why do you think you won’t be able to buy into California real estate anymore?
i sold my home in so cali in aug 05. i bought in nov 06 in kingman az. sold 2/1 no garage built in 1963 for $225,000. bought new custom built 3/2/3 car garage 1/4 acre for $192,500 20% down 30 year fixed $1004.00 piti. thanks to ben jones.
I actually did sell in early June of 05, but that didn’t stop me from being an FB anyway :-). I just saw the writing on the wall (easy to read in Colorado) and was trying to keep the damage from getting any worse…
Nobody I know would dream of selling and renting except us. We just sold this month with an awareness of the bubble and because we were tired of ownership of a fixer-upper. VT is almost late to any economic party. Our peak was this last summer/spring. We didn’t make a fortune but it worked out: the only thing now moving in VT was starter houses below $200K like ours. I can’t tell you how relieved I am to no longer own a house and be out before this thing really gets rolling.
My in-laws *canceled* selling their Florida property this spring because they “didn’t believe in renting”. They believe they’ve already lost $20K in equity since then. Too bad for them…they are always looking for the next “get rich scheme.” They’ve caught all the bubbles thus far: invested in Enron and tech stocks, took huge losses and sold out remaining stocks and invested almost everything in real estate. They are the perfect bubble indicator. I’ll try to let everyone know when they get scared enough to start dumping properties. Once it reaches them, it will have reached J6P that real estate doesn’t make money.
Yes, please keep us posted
My in-laws *canceled* selling their Florida property this spring because they “didn’t believe in renting”. It wouldn’t have mattered, because the market was already crashing by spring and the house probably wouldn’t have sold anyway.
and probably about zero in Europe …
everyone who sold out a few years ago (after 500% appreciation or so) is by now completely priced out. Even if the EU bubble pops, getting back to that price level will take many, many years (if ever) because our dumbocrats will fight it tooth and nail. There is no escape from the EU bubble, except for those who left Europe.
Our family did !!!
We have a rental business that my dad started when he semi retired 15 years ago. Every month everyone in the family sends any extra cash and we were buying rentals. 2.5 years ago i transferred to Florida to help out and saw the steep increase in pricing. We decided to sell three duplexes. They sold in 3 or 4 weeks for approx 22 times annual rent. The new owners jacked the new rents to cover expenses and all the renters left !!! Last time i looked most were empty. We rolled ALL the money into our other properties and are now totally debt free !!! Needless to say we haven’t purchased anything in over two years. Its gonna be a few years before i see anything cash flowing with 20% down.
I flat refuse to buy anything that has negative cash flow. The best part…rents are actually falling in Cape Coral and its putting more idiots that bought at the peak under water…bwwwwhahahaha.
Chris
Good for you! I like a landlord with sense. Tends to corelate well with working plumbing.
I sold my apartment in Manhattan in July, 2005 after having lived there for 15 years. Sold for four times what I paid for it. Never had a second mortgage or HELOC. We rent now in the same neighborhood. Prices were coming down through Q3 2006, but they have recently been climbing again evidently. Very difficult to gauge the market because indices don’t apply, eg. Case-Shiller doesn’t include coops which is 75% of the apartments in Manhattan and OFHEO doesn’t include jumbos which is most of the market. I sold because I am near to retirement, no longer committed to NYC, and had 70% of my net worth in the apartment. REnting in Manhattan, however, is hell. Still, we will put up with it for a few years and then decide whether to relocate to a cheaper spot, possibly abroad. I am so glad that I sold in 2005. It solidified my financial position. I tried to persuade others to sell, but no one listened. A couple of them have put their places in NJ on the market recently however. Seems to be a tough market there, though.
My parents sold an investment condo in Arlington, Va. in May 2005 that they had owned for nearly 20 years. I thought they should keep it, as it was in an excellent location, and was cash-flow positive — although the building was starting to really show it’s nearly 50 years of age. But, Mom wanted to cash out - and, God bless her, she was right, and now just has $200k in a money market as a result of timing the market pretty darn well. 79 years old (at that time) and she was making better calls than all those sharp flippers less than half her age. Although, in truth — she just sold it because a realtor friend said it was good time to do it, and gave her a 4% commission deal.
And the condo was never hard to rent — and we had a few runs of tennants who stayed 3 or 4 years at a clip.
Closed on my 2br/2ba condo June 2, 2005 after owning three years in Falls Church, just over the Arlington, VA border. Made 137% profit after reading Dean Baker’s Economist article and reading Patrick.net. But I switched to this blog a while ago. Buyers went zero-down, 3 year ARM. It will be resetting…now.
Rented in DC for a year until I moved to SF. Everybody thought I was crazy not to buy. Right about the crazy, wrong about the buying. Still renting with no intention of buying, but my current place is too big, too expensive and not easy enough to get to Caltrain via bike or public transporatation. I have an extra room and bath available until November if anyone is interested…
We bought a 3/2 SFH in O’side (San Diego) in 1998 for under $120K. Sold it in mid-2004 for $400K. Been happily renting ever since.
Won’t buy until we see prices that can produce positive cash flow.
I got my crappy little condo for $46,900 in 1999. Bought it with $2,000 down in June. In December my a/c went out and I bought a new unit for $1,900. So I had $3,900 in the place. I sold to an investor group in August of ‘05 for $125,000, which is a totally absurd price for a one bedroom unit. Part of the deal was I could rent the place back for 2 years at $450 a month. I made $74,200 so I’m happy with the deal. I was a first time home buyer so I got to keep the entire amount. As they say, you can’t lose money taking a profit.
I bought a nice low-milage 05 Chevy Malibu as my old Honda Civic was ready to die on me. The rest went into Hip National Bank.
Bought (Valencia CA) 6/90 $287k- Sold 9/05 $715K. Kept my original mortgage, 20% down variable, at one point interest rate was close to 4.5%. No helocs. Got full asking price. Probably the last in Valencia to do so. Went thru the last housing downturn, and could feel it happening again. We were very lucky.
We sold all our properties including our primary residence over the spring, summer, and fall of 2006. Did well on everything except the last rental property because we had to wait until the renter’s lease was up, and by then things had really slowed down. (Arizona)
We rented in AZ for a while knowing we were moving out of state, and now we just signed a one year lease on a house in Utah.
I hate renting, but we are in a nice new house in a golf course community for about half of what it would cost to buy. Plus, I am seeing some of the same houses that I looked at here last summer that are still on the market a year later. For now, we wait and see.
What’s funny is that I am the one who had to convince my husband to sell everything. And I had to talk him down a few times from buying here in Utah. I see a lot of men here blaming the women for putting on the pressure to buy. I’ve had to run the numbers by him again and again to make him see the light, so I feel their pain, but it’s not always the women who want to buy and settle down.
Yeah, that frustrates me a little about this blog, too. I’ll grant you that it is generally women who have a “nesting instinct” (whatever that is) but the men in my circle are just as likely to want to buy, too. I ran the numbers to convince my husband to sell and handled most of the financial details of our sale. It was my father-in-law who spent 45 minutes on a Sunday morning trying to convince my husband not to sell. My mother-in-law (also the keeper of the books in her family) was surprisingly neutral on the subject. Both folly and intelligence seem to be equally spread between the two sexes. (I’m the intelligent one, of course -
)
usually the comments are in response to a media article - blame them 1st
Vermonter, I’m the intelligent one too!
Actually, my husband is brilliant in certain ways…he’s an engineer and has amazing practical skills as well. But, he tends to listen to his co-workers and the word on the street and takes it at face value. I’m the worrier…the one who researches everything and tries to cover all the bases.
Dallas
http://www.dallasnews.com/sharedcontent/dws/bus/stories/DN-Subprime_05bus.ART.North.Edition1.43d768e.html
“Separated by 2,500 miles and little money for airfare, Mario Ramirez’s mother had never met his two sons. But in 2005, the 84-year-old woman lay dying in Colombia, and Mr. Ramirez knew he had to take his 7- and 11-year-old sons to see her. He just didn’t know how to pay for the trip.”
WTF!? I’m supposed to feel sorry for this guy?
Yes, that’s the real Texas market. But not to worry, Bimbo McTitjob sold $10M in Highland Park houses to idiots from NY and California last month. Let them eat cake!
ref:
ELAINE WHITFIELD’S BE$T MONTH EVER
Elaine Whitfield (Dave Perry-Miller/Ebby Halliday) just called to tell me May was her best month ever! She sold $10 million including 10025 Meadowbrook Drive, listed for $4,850,000 which had been on the market for 3.5 years. I was with Erin and Travis Mathews last week perusing 6606 Stefani Drive, $2,199,000 and fabulous, where both Briggs Freeman agents told me they are busier than a one-armed paperhanger, with calls coming day and night from out of town buyers.
posted by Candy Evans | July 3rd, 2007 3:07pm | filed under REAL ESTATE
Thanks for the lead to D Home, almost unbelievable.
ELAINE WHITFIELD’S BE$T MONTH EVER
Elaine Whitfield (Dave Perry-Miller/Ebby Halliday) just called to tell me May was her best month ever! She sold $10 million including 10025 Meadowbrook Drive, listed for $4,850,000 which had been on the market for 3.5 years.
You know it doesn’t take a lot of effort to sell 2 or 3 houses a year. Try working in the midwest, where selling 20 or 25 still doesn’t pay enough to live. The year I sold 15 and grossed $20,000 was when I decided to give up my RE license. After expenses I netted about $12,000. Some realtors really are Realt-whores, and believe me they will do anything to make a buck. They’re the ones that make the NAR top sales people list. It used to make realtors here mad, because selling 3 houses compared to 25 is the same as working 3 hours a week compared to 50. They just happened to live in an expensive area and got a couple referrals, but luck.
Also from that story:
“Selling would mean moving with the kids into an apartment.”
How awful! The horror!
Why not sell the kids?
The story illustrates why it is important to learn the language of the country in which you are living, working and doing business.
Oh GAWD NOOOOOOOOOOOOO
that is so politically incorrect, we have to adjust to their needs, and understand their culture, and sue the bad bad lender who took advantage of them……
That horrible lender put a pen in Mario’s hand and left him alone to seal his fate. “Sign now or you will never see your mother alive”…..it was a no brainier for Mario.
As usual “politically incorrect” refers to a demonstrably false element of a political agenda. Spanish speaking immigrants from Central and South America are adopting English as their primary language faster than any other immigrant group in history.
The housing bubble is a big issue. Why isn’t it interesting to you? Why do you have to make this blog all about immigration issues with the housing bubble as a sideline. There are lots of other blogs and political web site, some more popular than this one, that focus on all aspects of the immigration issue. Arguing that the housing bubble was caused by immigration does not make sense.
There is such a thing as caustic political correctness and you are engaging in it here right now in a way that dampens down discusion of the real issue people come here to talk about which is the housing bubble.
Hnnn, don’t know. I’ve been poating on this board since it started (under another name). At first it was anon (you’d include the time on replies).
Some general OT politics do creep in but generally Ben keeps it on topic. And it is the very best there is on RE, the economics and politics of RE, the issues of RE.
Maybe it’s not the language–maybe it’s the old adage, “Greenhorn.”
He didn’t know how the game is played here. Buy the tickets with a credit card. Even if the debt balloons to thousands, in Texas they can’t take the house.
“America are adopting English as their primary language faster than any other immigrant group in history.”
How on earth would we know this?
In the early part of the 20th century immigrants did not even teach their kids the native language (german, italian, etc), so thoroughly did they want to Americanize the kids. And public school classes were taught in only one language.
When there is no possibility of slipping back home (lack of funds, wars…) and no multi-language official forms, you learn the mother tongue in a big hurry.
“Spanish speaking immigrants from Central and South America are adopting English as their primary language faster than any other immigrant group in history.”
Would love to see where you got the data for that one. This would include, more or less in order, Colombians, Salvadorans, Guatemaltecos, Venezuelans, Peruvians, Hondurans, Argentinians, and so forth (leaving out Brazilians and Mexicans).
COLLECTIVELY this group is learning English faster than Norwegians did 100 years ago, or Bosnians or Koreans are today, or any of another hundreds upon hundreds of possibilities. Yeah, right. Obviously a well-documented fact. . perhaps by some Latina schoolmarm?
News from Europe/UK
BOE just raised rates to 5,75% ( up 0,25%)
should be good news…especially when you read numbers like this….
According to Morgan Stanley, an investment bank, debt-servicing costs are at their highest as a share of disposable income since the recession of the early 1990s (see chart
Since 2000 household debt has soared from 110% of disposable income to 160%
Real disposable income grew last year by just 1.3%, the slowest since 1982 and less than half its average rate in the past two decades. So far this year, retail-price inflation has outstripped increases in average earnings, leaving workers worse off.
“BOE just raised rates to 5,75% ( up 0,25%)”
Should we expect the dollar to continue getting pounded? Or are the currency markets ueber-klug just like the U.S. stock market, so all the bad news is already priced in?
POUNDED. Even on Squawk Box this morning they were saying the pound to $2.06 or higher in the near term. The Fed has lost control of the situation. Oil is still over $71 per barrel. Covert inflation, especially in the form of reduced product quality, continues to run rampant. The world is swimming in debt. But look on the bright side, the DOW, Nasdaq and S&P futures were up again this morning.
the ECB has left rates at 4%…….
but they remain vigilant…. lol
The next time you stay at a Hilton chain hotel you will be directly contributing to the Blackstone Group. They are buying Hilton for $20 billion +. And you thought Paris was the only reason to dislike the Hilton name!
Yep, and Carlyle Group is in talks to acquire Virgin, which, if it happens, means I’ll be giving up my Virgin Mobile service.
What a bargain….
Blackstone paid only 42 times the earnings from 2007 for Hilton….
Great deal for Hilton shareholders
palmetto
here is a number that make the Vergin deal look like financial suicide…
the cashflow is already only 1,5 times higher than the current debtpayment ( pro forma revenue in the meantime is going down!)
how it makes sence to finance this takeover with more debt is beyond me…..
Alchemist at work
jmf: That’s expected. They’ll hike in September, me thinks. Not that that’s sufficient, but still bad for Spain.
jmf: Thanks for the analysis. As I’ve often said on this blog, I’m not the sharpest tool in the shed when it comes to finance. Buy low, sell high and spend less than you make is about it for me. I have only the dimmest understanding of these deals that the big boyz do.
However, I’ve always admired Branson and any contact I’ve had with his products has always been positive. That’s how I judge a company. I would hate to see Carlyle vulture the Virgin brand.
palmetto:
i´m also no “expert” .
But i think common sense like you describe it is helping to see some things that some of the “geniuses” refuse to see…. (like housing, subprime, cdo, cds, spreads etc)
jmf: We just need to get England off our backs and we’ll all be fine, LOL! Just wait, England will be pointing its finger at the US when the stuff hits the fan globally.
Blackstone up 2.8%
I think the market is happy that they didn´t overpay..
Just like they didn’t overpay for Equity Office Properties last year? Look for a buying opportunity when Blackstone implodes.
Pound at $2.06…glad I dropped my subscriptions and memberships in British historical groups/model magazines this spring with their renewal times.
I do not suspect the Brits will be exporting much at that high sterling price or do they make anything anymore?
I believe they still make buy-to-let loans…
“…or do they make anything anymore?”
They do make pound notes though, lot’s of them…
the Brits are exceptionally good at exporting housing bubbles and housing bubble millionaires; production still running full steam while Europe and Down Under are struggling to absorb all the production.
Yes, well, I’m probably going to get flamed for this, but we’d all be better off if we just disconnected from England. BOE dictates to everyone. I’m sick and tired of England hiding behind the big skirts of the US and making it look as if they’re following our lead, when it is really the other way around. Dang England and its tickety-boo financial NWO.
I just returned from vacation in England. Oh god, the dollar is sooooo sick vs. the pound. We were paying the equivalent of $30 for a bowl of soup, bread, butter, and cheese. Unbelievable! I told the wife we had to delay buying a house for the next year in order to pay off our trip (and we were staying with relatives for free most of the time!)
In the past, that would have been cause for rejoicing here in Florida, because we usually got waves of Brit tourists and investors when the dollar declined against the pound. You can also track this on ebay. Brits are much more likely to purchase stuff from the US when this happens(especially if it is some antique or collectible from England that made its way here)
Central Valley Guy, you make a good case for putting a fixed percentage of your portfolio in an alternative currency. Gold, silver, and platinum bullion.
On another subject, I notice the T-bill rates are inching back up. Happy to see that.
That must be why I hear so much French and British in here in SM. Or maybe it’s Baywatch.
I’ve said it before and I’ll say it again. The market this past year have me completely baffled.
From Times OnlineJuly 5, 2007
Latest interest rate rise to ‘dampen housing demand’
Higher mortgage costs could cause more families to become overstretchedLucia Adams and PA
Homeowners faced another hike in mortgage costs today after the Bank of England raised interest rates by 0.25 per cent. The base rate now stands at 5.75 per cent - its highest level since March 2001, following five increases in 11 months.
Today’s rise was widely expected as inflationary pressures have remained strong.
The increase is certain to be passed on by lenders, meaning that borrowers will fork out an extra £16 a month on average on a typical mortgage of £100,000.
http://property.timesonline.co.uk/tol/life_and_style/property/article2031010.ece
Is the persistently-benign CPI change a credible measure of inflation when hooligans are stealing beer kegs to sell the “precious metal” which they contain as scrap?
Kegs become precious metal as scrap prices keep surging
Beer industry hurting from increase in thefts
By Emily Fredrix
ASSOCIATED PRESS
July 5, 2007
MILWAUKEE – Tap it, don’t scrap it.
With metal prices rising, beer makers say they expect to lose hundreds of thousands of kegs and millions of dollars this year as those stainless steel holders of brew are stolen and sold for scrap.
http://www.signonsandiego.com/uniontrib/20070705/news_1b5kegs.html
Save those pennies and nickles, too, boys. Pre-1981 pennies are mostly copper and worth about 3 cents in metal value. Nickles has about 9 cents of nickle, zinc and copper in them.
When you start seeing pennies and nickles disappear, you will know Gresham’s Law is in full play, bad money drives out good money…even the lowly penny.
How many years before the copper in a pre 1982 penny hits a buck? Sticking my finger to the wind and reaching under my posterior aspect? 13 yrs
Scrap metal prices were one of Alan Greenspan’s favorite measures of nascent inflationary pressures.
Greenspan’s shoes at the Fed remain hard to fill
Wall Street seems to warm to Bernanke
By Greg Burns
CHICAGO TRIBUNE
July 5, 2007
His million-copy memoir comes out in September, his speeches command more than $100,000 apiece and nearly every remark he makes gets scrutinized by investors across the globe, but some people wish Alan Greenspan would just shut up already.
In the 17 months since he left the Federal Reserve, Greenspan has taken to voicing his opinions with increasing frequency, stirring up the markets and making this 81-year-old rock star of the financial world an even tougher act to follow for his successor as Fed chairman, Ben Bernanke.
Yet the tide may be turning. Wall Street is warming to Bernanke’s quieter, steadier methods of communicating the Fed’s intentions, while Greenspan’s new role as a paid consultant for a bond fund underscores his retreat from the seat of power.
http://www.signonsandiego.com/uniontrib/20070705/news_1b5greenspan.html
What, did they put the M3 in Greenspent’s “box index” and ship it to china?
“His million-copy memoir comes out in September…”
*******
I wonder how much time he will spend defending his panicked response to the ‘01 recession and 9/11?
Now gather ’round children and let me tell about the time Interest rates went to… 12%
Yes, it is a scary story…now hear we go…once upon a time… you get a $750,000 loan at 4.5 % but then… a very bad thing happened…
Not to worry — l-t T-bond inflation risk premiums are “contained.”
I was there….Many, Many good business people never recovered from Volker’s blind sided move….
Hey Clouseau, I have a good friend in your neck of the woods that just jumped in line to be a GF. I found out he just bought a new house (against my better judgement which he didn’t want to hear). I also found out he didn’t sell his house before he sold his other house. He bought a house in Prior Lake for $370,000 +. He has his house in Eagan up for $260,000 +. Maybe I’ve been gone a long time but houses for nearly $400,000 in Prior Lake? There is nothing like an Indian reservation to drive prices higher.
His Eagan house is a “starter house”. I don’t remember “starter wages” in Minnesota being in line with $260,000 houses. He has had some “serious interest”. But no offers. I started to ask where he thought this “starter buyer” would get financing but I shut up. He may or may not get a real lesson in the housing bubble via carrying costs or price depreciation. This is a friend for 20 years and I will have no sympathy for any lesson he is taught.
NYCityBoy
Starter wages in Taxasota is 10 bucks and hour….good jobs pay 18-20 dollars an hour…if you find them.
Eagan suburban is a basket case along with all the Metro area with upwards of 40,000 homes for sale in the 7 county area with another several thousand being added each month. Prior Lake, my gawd, that place is going to collapse like a house of cards when this whole ball gets really rolling by next year with all the ARM resets.
Your buddy trying to “trade up” is to use the term thoroughly screwed…you cannot sell a 260K house here now. Properties will have to drop by at least half for anyone to qualify and afford them.
I would like to be wrong but think this is the last good summer before we go into the RE Bubble abyss.
From my recent viewing of listings in Minnesota I was putting the necessary drop at 30 - 40 percent. I would not be surprised to see 50. The bubble was in Minnesota in the late ’90s. Things were going wild in areas like Eagan, Bloomington, Woodbury, Cottage Grove, South Saint Paul, etc. They have never had to pay for those sins. The reckoning is coming.
Hey, I’m at that indian reservation as we speak! (Mystic Lake RV park).
I agree with your assertion concerning price collapse here. Lot’s of indications that the gig is up. Lot’s of inventory, for sale signs and price reductions. Still in the early innings though. There are some bank repos popping up as well. I have many of friends (some in RE) in the area so I’ll keep you posted as I hear about RE pricing. I leave here on Sat so won’t have any direct intel until we visit again next year.
Auger;….Are you a R/V ‘r ??
Scdave, yeah, been RVing since mid 04 in our motorhome. Out “living the dream” with my wife, daughter and two dogs, quite the adventure
Favorite place so far, neo Kerouac?
Auger - why don’t you become the OFFICIAL ROVING REPORTER for this blog?!
Post pix and narrative of what you see area to area
Good for you….Been there and done that…A Wonderful way to see America & spend lots of time with wife, kids & the dogs IMO…Wife & I just bought our new one and are very excited…Enjoy…
Well, for the most part I try to stay away from the big cities unless we are just passing through so I doubt I could add much to the intel side of things in that regard. I do comment on what we see while traveling although I haven’t posted any pics yet. I’d be happy to comment as the summer progresses because we are going “on the road” starting Saturday. I’ll keep you guys posted if something noteworthy is witnessed!
The serious interest buyers, usually can’t even afford the house. The ones that can try to show no interest at all, in order to get the best price.
Hey, when they stop scraping them and use them as rafts to go to another country…that might be some kind of indicator for housing…to early, no coffee…
NATION’S HOUSING
What’s old is new again in real estate finance
Zero-down sub-prime mortgages may be out, but Freddie Mac and the FHA have tried-and-true programs.
By Kenneth R. Harney, Washington Post Writers Group
July 1, 2007
http://www.latimes.com/business/investing/la-re-harney1jul01,1,356752.story?coll=la-headlines-business-invest
U.S. Subprime Defaults Set to Rise, Credit Suisse’s Parker Says
By Patricia Kuo
July 5 (Bloomberg) — Delinquencies and defaults on U.S. subprime mortgages will keep rising as problems in the housing market persist, said Robert Parker, vice chairman of Credit Suisse Asset Management.
The share of U.S. subprime mortgages entering default in the first quarter was the highest in almost five years, according to the U.S. Mortgage Bankers Association, as the country suffers its worst house-price decline since the 1930s.
“It’s naïve to assume the worst is past us in the U.S. subprime market,” Parker said at a bond market conference today in Hong Kong. “At least over the balance of this year, the subprime default rate will rise.”
http://www.bloomberg.com/apps/news?pid=20601103&sid=aD1kL9RyvL5Y&refer=news
Bear Stearns Dismembers U.S. Treasury Bear Market (Update4)
By Daniel Kruger
Bear Stearns headquarters, New York July 2 (Bloomberg) — Treasury investors can thank Bear Stearns Cos. for smothering the bear market.
Traders who cut their holdings of U.S. government debt just a few weeks ago as retail sales increased and job growth accelerated are now snapping up Treasuries. Demand is being fueled by speculation that losses at hedge funds owning subprime mortgage bonds such as those managed by New York-based Bear Stearns and London-based Cambridge Place Investment Management LLP will spread and slow the economy.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aMiBbzQgTsPc&refer=home
when will this house of cards, ie the subprime bond market finally tumble?
What I want to know is, how long can they keep putting lipstick on the pig and talk about “containment”? Sooner or later, the dam’s gotta break. Or does it? Well, if it does break, I’m betting on this fall (or maybe Q1 2008, to give people time to default on the re-sets) for the “Oh, sh^t!” moment.
Implode-o-meter just hit 93.
I’m with you: the stuff will hit the fan by the end of Q1 08.
Gonna be bloody, NoVA. When the re-sets come, there will be people trying to hang on for a while and make the payments. Some will try to re-fi, but won’t be able to as credit contracts even more. And the, the coup-de-grace: the Christmas pink slip. Many layoffs occur at Christmas. (I’ve always thought this was rather cruel). So Q1 2008 will really be a moment for many.
come on palmetto, first it was oct 2005, then it was summer 2006 and then mid 2007. Now onto 2008. At this rate, it can go on and on. I don’t have such long life that i keep on waiting, you know.
LOL, well, its still sort of mid-2007 and we ALMOST made it, with that Bear Stearns kerfluffle. But, oh no, they found enough fingers to plug the dike, apparently. Reminds me of a bunch of medieval peasants with a battering ram at the gates of the castle. The gates haven’t quite given way yet. C’mon blokes, back up and make another charge for it!
Or, as John Gruden used to tell the Tampa Bay Bucs before they won the Super Bowl: Pound that rock!!!
“Once more unto the breach, dear bears, once more,
Or reinflate the bubble with our high-priced buys! . . .”
Miamirenter points out that a lot of “armageddon will arrive in….” prediction dates made on this blog have come and gone. Looks more like the decline will be slow and steady for a long time, instead of a quick, convulsive drop to the bottom. Japan deja vu?
Bill, I agree. The doom won’t be as bad as most of us doom and gloomers have been predicting. However the Japanese survived 15 years of RE and stock price depression AND they save a substantial amount of their incomes. Americans typically have a negative savings rate. So times will be tough for the greedy specuvestors in America. They deserve to suffer.
No much worse than Japan and possibly longer. Japan is and was a nation of savers and never had an instilled belief that real estate only goes up. Japan at the beginning of their collapse had a younger demographic than the US currently has. US retirees will be in full force in 10 years, in the past most retirees owned their houses free and clear. This is no longer true. The individual retiring from her Long Island house will try to sell to cover her debt enabling her to retire. This will occur nationwide. The moneys needed to cover the shortage will have to come out of retirement accounts (if the moneys have not already been spent - there are indications that 11B was liquidated from 401K’s in May and that 401K liquidation is accelerating).
A whole group of individuals have seen RE only go up and will be looking for the bounce to sell to retire. This will keep the market depressed for years. Like Japan, we will raise a generation that will live never seeing RE go up.
Sorry for these rambling thoughts, but as I and others have posted before. There is no quick fix for something that took decades of mismanagement. We will muddle are way through this, but I would be surprised if less than 15 to 20 years.
I second that Bill. If you look at the 1990 peak, it took until 1995 until foreclosures peaked, then 1997-1998 to muddle along the bottom. And that was the result of a recession. The US has not had a recession yet. If that happens, it will take 2-3 years to play out in the housing downturn. I am looking for investments, but as Cobradriver says, nothing provides a return on the invested down payment. We need to drop another 30-40% in CA. So Palmetto is very early to call the bottom. Even if the MBS market melts down, it will take another 2-3 years to play out. I will just continue to rent and save $3000/mon off the 2005 cost of owning. When the $720,000 house in which I am living sells for $325,000, it will make sense to own it. Until then, I keep funding the retirement accounts.
I’m with Hoz. This is going to take a very long time, IMHO.
Seriously think there’s the potential we’ll never see peak bubble prices in decades (or our lifetime?), especially if we don’t get massive inflation.
All I’m saying is that I disagree with some of the bloggers in recent threads who think times will be tough for everyone. That’s like saying no investment or currency will protect you. That’s bull. When growth stocks are bad and bonds yield 5%, you get 5%. What’s bad about a positive return? When stocks are booming, bond yields are low. When investment x is down, there is always an investment y that is up. This is exactly why I am the biggest fan here of diversification.
‘And the, the coup-de-grace: the Christmas pink slip. Many layoffs occur at Christmas’
I call that ‘Hammer Time.’
sobay, I read statements like that a year ago, and also the year before. Didn’t happen. But a broken clock is correct twice a day so …
surprise surprise the repo man is getting busier
http://articles.moneycentral.msn.com/SavingandDebt/SaveonaCar/SaveOnacarDyn.aspx?cp-documentid=5083079
Gee, you mean Mr. & Ms. American can’t actually afford all those $50,000 automobiles? I’m shocked.
Sorry for OT wanted to get back to Saywhat? on this from yesterdays Bits, Bucket and C-List:
““I’m sure many aren’t even trained to be nice never mind trained to analyze and solve the problem.”
As an educator, that is exactly what we are trying to do. At least most of us are.’
I think our education system is teaching our students to analyze and problem solve (thank you for that) but I believe many are not allowed to use those skills once in their hired positions. Many customer service types follow a script and if the problems go beyond that script they must pass their issue onto a manager. Even many managers often quote guidelines robotically instead of actually offering true support to the customer. It’s corporate policy/training approaches I’m harping on….But education, I think they’re still trying to put out the quality student (at least for the kids that come prepared to learn)
We’re on the same side, Saywhat?
Politcal correctness rules America. As an example, the recent terror events overseas boasts headlines about these terrorists were in the medical field. Buried in the story is what the real problem is and we all have read between the lines. Same for most corporate policies. PC rules! Don’t speak the truth fo fear of the PC police. MSM
“Politcal correctness rules America.”
Ain’t it da trute, kc, ain’t it da trute! It’s been sheer insanity since 9/11. We get pounded by a foreign terror attack and what do we do? Yee-haaa! Open the borders! Let ‘em pour in from everywhere, while we send our sons and daughters to die in some desert hell-hole so that private contracting firms and oil companies can make a mint.
Like txchick, I’m pissed today. I’ve had it.
Ditto here….
What happens in a “run on the hedge?” I guess we will soon learn…
Exiting hedge funds
Published: July 4 2007 12:52 | Last updated: July 4 2007 12:52
Many an irate bank customer has fumed “But it’s my money!” upon being informed they must wait or pay for the privilege of accessing an account. Once the cash is deposited, however, that statement is not entirely true. And when there is a run on the bank, it quickly becomes clear that having cash and having a claim on cash are two very different things.
The same goes for hedge funds. Earlier this week, United Capital Asset Management, a mid-sized Florida hedge fund manager, was forced to suspend redemptions temporarily from several funds holding asset-backed securities. Wobbles in structured finance, provoking Bear Stearns’ recent woes, had spooked several investors enough that they demanded their money back in short order.
http://tinyurl.com/2rerem
It must svck big time to be a European or Asian subprime hedge fund invester. Not only are the fund assets getting slammed by the subprime implosion, but the falling value of the dollar creates a double-whammy if the investers are so lucky to get any cash out of the burning hedge.
Excellent term GS I love it “burning hedge”
“redemptions”
Love that word as it applies to the hedge fund mess. No chance at redemption for many investors. They’ll be going to hell.
Seriously, though, these hedge funds are open only to people with a high net worth (over a million, maybe it is over half a mil these days), the theory being that there is high risk, so they can afford to take a hit. So, sh^t happens and they’re taking a hit, too bad so sad. However, the “investors” seem to think they’re entitled to get their money out. Enron for everyone!
Have you ever invested in something supposedly open only to “accredited investors?” I have, several times. Let’s just say their due diligence is less than stellar. As long as you say you are, that’s good enough for them. We’ll see if that stands up to legal attack though.
Case history suggests that the statement of “accredited investors” will stand. When GPU (a widow and orphans stock) lost 90% of its value and canceled dividends, the courts accepted accredited investors as anyone that chooses to buy a stock. “Anybody who plays the stock market not as an insider is like a man buying cows in the moonlight.”
Daniel Drew
People know when they enter these funds that they are restricted from withdrawing their money for a period of time. It’s the price they’re supposed to pay for these “guaranteed” 35% annual returns they all demand.
Yeah, I’m pissed off this a.m. This endless bullshit market is really getting to me.
“This endless bullshit market is really getting to me”
Me too! I watch this nonsense in amazement, but I really refuse to join in the Overhyped, Overbullish environment that John Hussman of Hussman funds describes…I guess I am just not that big of a gambler.
me three. I feel as though the avg investor is just a big sucka in the VERY gamed system of ever increasing wackiness. MBSs, CDOs, hedge funds, most derivatives, synthetic CDOs, and ALL their ilk need to disappear.
We need to get back to basics. Common sense, being able to back up deposits, knowing the true risk in your book, accountability, moral hazard, etc.
I feel like cashing out everything -regardless of penalties- and putting it in a tin box on my property.
My rule of thumb is that the more complicated an investment vehicle is, the shadier it is. All of these “master of the universe” types trying to hoodwink people into giving their hard-earned money. Legitimate investing is about fundamentals, which aren’t that difficult to understand.
Just out of curiosity, when was the last time a market made sense to you? Would be interesting to have an experienced investor/trader pinpoint that and then look at what’s happened since.
In ‘01 and ‘02
“Once the cash is deposited, however, that statement is not entirely true. And when there is a run on the bank, it quickly becomes clear that having cash and having a claim on cash are two very different things.”
Yes, and therein lies the crux of ‘FDIC insured’ accounts. Over what time span and at what value will you receive you monies?
Market insight: Fund bail-out reveals dangers of a Bear hug
By Francesco Guerrera in New York
Updated: 6:11 p.m. CT July 2, 2007
“Congratulations. Now don’t screw up.” The legendary greeting meted out by Goldman Sachs elders to new recruits encapsulates the mixture of confidence and anxiety at the heart of Wall Street.
For all their greed-is-good paeans to unbridled competition and ever more daring deals, the pinstriped alpha men and women inhabiting New York’s skyscrapers live in constant fear of failure. History makes sure of that.
Every time US financial wizards got too confident and piled herd-like into a hot market, a “screw up” brought them down to earth. In recent weeks, it has been the turn of the tough guys and gals at Bear Stearns to reflect on the fragility of their craft.
http://www.msnbc.msn.com/id/19552427/
Don’t know nothin’ about no mystification, but this new era will surely end badly…
Hedge Funds Mystify Markets, Regulators
Deeply Powerful, Largely Unchecked
By David Cho
Washington Post Staff Writer
Wednesday, July 4, 2007; Page A01
Wall Street chroniclers one day could look back at the early 21st century and easily dub it the Era of the Hedge Fund. The question is whether it will be remembered as an age of reason or irrational exuberance.
Hedge funds hold unparalleled sway over the financial markets, as confirmed by the recent unraveling of $20 billion in Bear Stearns funds. Portrayed as the new masters of the universe by author Tom Wolfe, hedge-fund managers are responsible for more than a third of stock trades and control more than $2 trillion worth of assets, according to industry researchers. Each of the top hedge-fund managers earned more than $1 billion in 2006 alone.
http://www.washingtonpost.com/wp-dyn/content/article/2007/07/03/AR2007070302240.html
from WSJ 7/5/06
Economists at Merrill Lynch admit it is hard to predict how the slump will play out from here. “We are not sure how deflating a $23 trillion asset class — the value of real-estate assets on the household balance sheet — will end, but we doubt that it will end well,” Merrill economists wrote in their recent report.
if it is now this complicated that we do not know what will happen with this pop, we no longer can say any safety nets erected to ward off 1929 will work.
A lot of those safety nets were lifted in the last 10 years because of the restrictions being “archaic.” For instance, selling short on an uptick only has been struck. Pretty much a sign of a top to say the least.
I got up this morning, grabbed a cup of coffee, and drove around Skaneateles Lake in New York. It’s amazing how many ‘For-Sale’ signs there are for waterfront properties. There are some houses selling however… wait, don’t make me say it, yes, to out-of-town buyers.
The FL & CA equity locusts are still swarming I hate to say.
Up on Lake Erie over the weekend and the bulk of waterfront houses had for sale signs. It’s a big area for 2nd homes. Sure sign things are tanking.
GW, where on Erie are the bulk of waterfront houses for sale?
Thanks
For what it’s worth, the German constitutional court has now decided that Argentina must pay back their debts outstanding since the 2002 crisis.
Good for the court. Wish we could get some of our money back, too.
Argentina ows about $100 billion to foreign investors. The German court now ruled that the crisis was over, so Argentina can now repay. The big question certainly is how Argentina will react, and what Germany could do if they refuse to pay.
There’s no excuse for Argentina. They’ve partied for decades on the foreign dime. If they refuse to pay, tell England to stick it and take over the Falklands.
but the biggest party was going on at London-based HSBC and some other UK banks. They, and their elite customers, are the main culprits for bankrupting Argentina and they made out like bandits. Whatever happens, I don’t think the middle class in Argentina will ever see anything back of their steep losses in the crash.
“They, and their elite customers, are the main culprits for bankrupting Argentina and they made out like bandits.”
I’m tellin’ ya, everyone ostracize, shun and embargo England and we’ll ALL be a lot better off on the planet.
Their food is awful (I visited last year). No loss.
Not to worry, China will bail Argentina out in exchange for its raw materials and cattle. China won’t care who is in office so Kirchner’s wife can succeed him in this election. The foreign bond holders will get paid off, just like Russia paid off its 1916 bonds.
‘The foreign bond holders will get paid off, just like Russia paid off its 1916 bonds.’
Notice the growth of currency in circulation growth 1914-1917:
http://som.yale.edu/~drey/rusbonds/rus_ms.htm
hb not bearish enough - 60/40
http://post.polls.yahoo.com/quiz/financeresults.php
Australia is in Iraq for the oil, says the defence minister…
http://news.bbc.co.uk/2/hi/asia-pacific/6272168.stm
at least they are brave enough to admit it, unlike the Dutchies who are in Afghanistan and next year probably in Sudan for the same reason (supporting GWB’s Oil Wars and the future profits of the Royal Dutch oil company).
Not too much oil on Afghanistan, lots of Taliban. We still owe them so I thank the Dutchies for their service.
A 2.5 percent increase in one month represents a 34 percent annualized rate of inventory growth. The inventory crash continues.
Number of Unsold Homes Increases
By James R. Hagerty
Word Count: 405
The number of homes on the market in 18 major metropolitan areas continues to grow.
Total listings of homes in these metro areas at the end of June was up 2.5% from May, according to figures compiled by ZipRealty Inc., a national real-estate brokerage firm based in Emeryville, Calif. The data cover all listings of single-family homes, condominiums and town houses on local multiple-listing services in those areas.
http://online.wsj.com/article/SB118358467443957330.html?mod=home_whats_news_us
Overheard on the tow path in Philadelphia the other day:
Four bikers were talking about the housing market.
Biker 1: The real estate market just went off a cliff. If you have anything sell it now.
Biker 2: I’ve never lost money in real estate until now.
Biker 3&4: various grunts of agreement.
They went on to talk about it for an other 20 or so minutes. I was doing some gardening and they were all within earshot. One of them owns one condo and three lots, trying to unload all of them now.
I assume you’re not talking about the Hell’s Angels.
Hahahaha.
No annoying people who think they’re all Lance Armstrong. They wear tight clothing and drink lattes at La Colombe.
And don’t forget the obnoxious behavior of not following rules of the road…running stop signs, biking 3 wide, etc. I REALLY despise those wannabes. Why do bicyclists always b!tch about how cars mistreat them when all they do is blatantly disregard the rules of the road?!
Regulators Tighten Rules
For Subprime-Lending
By Damian Paletta
From The Wall Street Journal Online
Federal bank, thrift and credit-union regulators issued beefed-up guidelines Friday aimed at curbing weak underwriting standards for “subprime” mortgage loans.
The move was welcomed by consumer advocates, who had called for more-restrictive policies, while some in the banking industry argued that the changes could restrict many borrowers’ access to credit.
The new policy comes after a record number of borrowers with these loans — so named because they are generally made to consumers with shaky credit histories — entered the foreclosure process at the end of 2006 and the beginning of 2007. Many of the homeowners were overwhelmed by flattening house prices and increases in monthly payments. These problems have forced dozens of companies out of business. Multiple Wall Street firms holding bonds backed by subprime mortgages are bracing for heavy losses.
http://www.realestatejournal.com/buysell/mortgages/20070703-paletta.html
“some in the banking industry argued that the changes could restrict many borrowers’ access to credit.”
Uh, that’s supposed to be the idea, right? Since when does everyone have a “right” to borrow money?
it looks more like the banks resent the idea that their right to sell money is being restricted.
Everyone has a “right” to borrow money ever since certain pols legitimized the “ownership society” concept.
I had the most annoying discussion yesterday. A friend of mine is looking for a house in DC. I have no problem with that and wish him the best and hope he’s happy with whatever he finds. However, the conversation turned to the market and how “it’s a good time to buy before interest rates rise further.”
Finally, I couldn’t help myself and had to step in and speak my mind. After speaking what I consider obvious points 1) rising interest rates will bring lower prices; 2) it’s better to buy with high rates and low prices than vice versa; 3) the market is still vastly overpriced; 4) 95% of the people cannot afford the median house; 5) defaults are just beginning to kick in; etc. etc.
His response was that all markets are local so none of that makes any difference and that I’m obsessed with timing the market. Ugh! I can live with the first statement. I can agree to disagree on that one. However, I found the “timing the market” statement to be offensive and insulting. I don’t care if I buy before the bottom is reached or after prices start to rise. (I am convinced, however, that markets always level off in these cycles so I am not at all concerned that prices will begin to skyrocket immediately after the bottom is reached.) I simply will not pay double what a house is traditionally worth.
Sometimes I feel like 90% of the people have no clue what’s going on. It’s so frustrating. I shouldn’t do it but I’ve become obsessed with being right.
The conversation kind of makes me wonder if I wasn’t talking to the real Lance…..
I think I’ve dissuaded one person from buying now, but my rental community (1950’s) has hemmoraged about 4 people on my block of 20 in the past 3 months of people who have bought homes thinking its at the bottom/great time to buy. If these are the people buying now and inventory is still increasing - what does that say about sales a year from now. It depends on when these people who think 10% less than rediculous is a good price - have all bought.
I’ve learned to avoid conservations about real estate. People tend to be way too emotional about the subject. A good friend once told me: never get emotional about your investments - which is a good reason why people shouldn’t consider their homes to be investments.
I have noticed a lot less real estate conversations among my co-workers. Two years ago that seemed to be all they wanted to talk about.
The best way to handle these types of conversation is to offer you opinion with the old Dennis Miller disclaimer, “but I could be wrong.” Then, leave it alone; you’re not going to win an argument with someone who is absolutely convinced that we have a healthy Real Estate market (local or otherwise).
The good news is they will remember your conversation 3 years from now when their new purchase is down 50% from their purchase price.
I went through the same thing in 1999. A few of my friends warned me about my bullishness with tech stocks. I laughed at them and touted all the “profits” I had made while they sat on the sidelines. No one was going to convince me that I was doing the wrong thing.
By the end of 2000 when all “profits” had disappeared, I was finally forced to admit that they were right and I was wrong. My friends were vindicated back then, just like you will be by 2009.
Hear Hear!
In the past 2 weeks, I’ve been told the same rising interest rates line by two people who think I should buy now. All they really understand of the situation is that the RE market here in San Diego has slowed down a bit. This is their take from the MSM. Well obviously, it’s time to jump in, right??
In trying to explain how screwed up and ridiculously overpriced the SD market is, I made the mistake of mentioning foreclosures piling up rapidly and in record numbers. That just solidified the idea that I’m crazy for not buying because foreclosures are always a steal, in their minds. Never mind that those foreclosures are still piling up because they are ridiculously priced too. Nothing else I said even registered. *Sigh*
I also got the “timing the market” remark. Am I timing the market? You betcha. I backed out of buying after I started to understand what was going on. I’d agree that 90% of people out there have no clue. Personally, I prefer doing my own due diligence rather than relying on bullish RE cliches and NAR talking points. Being right on this can be a pretty lonely place outside the HBB and other blogs.
You will get the same resistance when you buy a house at the bottom and everyone looks at you like you are insane.
Bungee jumping, anyone? A little plunge protection, please…
http://www.marketwatch.com/
“All our best men are laughed at in this nightmare land.”
Jack Kerouac
I got out in July 2005.
And a day goes by that I don’t look towards the sky and give thanks…
Check out my old zip on realtytrac: (90650)
It is absolutely mindboggling.
You have to scroll in on a map view, because there are “too many to view”
In my section, 1m long by .5m high on the map, there are 118 listings. 6 are resale. ALL THE REST are preforclusure and bank owned.
Scary.
Scary.
New “mysteriously-caused” fires of under-construction RE in the Phoenix area (Mesa and Gilbert):
http://www.azcentral.com/community/mesa/articles/0705abrk-fire0705.html
http://www.azcentral.com/community/gilbert/articles/0704gr-fire0704-ON.html
These are several structures - destroyed.
More woes:
http://www.azcentral.com/community/gilbert/articles/0704gr-fire0704-ON.html
Notice the graphic by Credit Suisse toward the middle of the page, which shows the ARM reset schedule out through 2011. And some of you think 2008 will be the bottom? LOL. Many of us here on the blog who say 2012-2015 are probably going to wind up being correct.
My treasuries are by far mostly 3 month T-bills and I’m now getting into my personal precious metal buying season.
man… commodities scare the crap outta me. I tracked a few things for a couple months and, although i bought nothing, I have yet to even guess correctly about movement either way.
prices on something like platinum seem to hinge on little more than a producer’s willingness to produce.
OOPS!
Here is the link to the above article by Chris Laird:
http://www.kitco.com/ind/Laird/jul032007.html
“You could pay the mortgage with a part-time job” ($349K). Really?
http://portland.craigslist.org/mlt/rfs/367114273.html
“..open house with beer and cheetos”
yum!
But why screw around.. if you need to get them drunk, serve whiskey.
What kind or part-time job? Meth dealing? Prostitution?
Another one bites the dust…
Another one bites the dust…
July 5, 2007 6:58 P.M.ET
BULLETIN
UBS to its CEO: Buh-bye
Investment bank is removing Peter Wuffli (left) following setbacks including the blow-up of internal hedge fund. He’s to be replaced by Marcel Rohner, report says.
http://www.marketwatch.com
After UBS hedge fund trouble, executives shuffle
The investment bank announces a management shakeup following a costly hedge fund blow-up.
July 5 2007: 7:08 PM EDT
NEW YORK (CNNMoney.com) — UBS late Thursday announced it’s replacing Chief Executive Peter Wuffli with deputy CEO Marcel Rohner, among other executive management changes, following a hedge fund blow-up that proved costly for the investment bank.
Effective today, Wuffli relinquishes all of his functions at UBS. As a result, Raoul Weil will succeed Rohner as Chairman and CEO of Global Wealth Management & Business Banking, UBS said in a prepared statement.
http://money.cnn.com/2007/07/05/news/international/ubs_ceo/?postversion=2007070518
The fingerpointing frenzy is getting sweet!
“In this corner, the Hedge Hogs.
And in this corner, the Plunge Protection Team.”
Let me give the House panel a little heads up: Hedge funds playing with leverage will ultimately sink the Roaring 90s U.S. economy worse than margin loans and stock syndicates sunk the Roaring 20s economy.
Hedge fund hearing set
House panel to hear if funds pose risk to economy and financial system.
July 5 2007: 4:51 PM EDT
WASHINGTON (Reuters) — The U.S. House Financial Services Committee said Thursday it will hold a July 11 hearing into systemic risks to the economy and the financial system posed by hedge funds.
Chairman Barney Frank, a Massachusetts Democrat, said in a statement that senior officials from the Federal Reserve, the Treasury Department, the Securities and Exchange Commission and the Commodity Futures Trading Commission are scheduled to testify.
The hearing will focus on efforts to monitor hedge fund risk being carried out by members of the President’s Working Group on Financial Markets ( aka the Plunge Protection Team), an inter-agency committee within the Bush administration.
http://money.cnn.com/2007/07/05/news/hedge_hearing.reut/?postversion=2007070516
How many stupid rich investers will lose their shirts before the burning hedge funds are finally extinguished? Or was that my pension that just went up in smoke?
Braddock’s Galena mortgage hedge fund to liquidate -CEO
Thu Jul 5, 2007 5:52pm ET
NEW YORK, July 5 (Reuters) - Braddock Financial Corp., a top performing hedge fund manager, on Thursday said it will liquidate its $300 million Galena Street Fund after concerns of subprime mortgage exposure triggered investor redemptions.
http://today.reuters.com/news/articleinvesting.aspx?type=fundsFundsNews&storyID=2007-07-05T215201Z_01_N05379855_RTRIDST_0_FUNDS-SUBPRIME-BRADDOCK-URGENT.XML