Bits Bucket And Craigslist Finds For July 31, 2007
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Indymac earnings down 57%.
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7bAAAA3FB4-3CFA-4244-89CF-4F993C6BB738%7d&siteid=yhoo&dist=yhoo
Funny, just a few months ago - Indymac was insisting that they would not be affected by the subprime meltdown.
You might have even taken the impression that Indymac thought their subprime problems were “contained”…
Actually, the poor earnings result was not Indymac’s fault — it was all due to the negative publicity about subprime…
“Conditions in the secondary markets, which had stabilized throughout the second quarter, have worsened in recent weeks due in large part to widely publicized issues with subprime-related hedge funds and other secondary market participants, including rating agencies,”
I don’t think they are saying the media caused it. they are saying it was caused by the sub-prime info you’ve all heard about, so don’t take this as moe bad news.
Philly… Of course these stories are popping up all over and will continue to do so. What I can’t get a handle on is why someone who’s mortgage is going to go up $200.00 can’t cut that out of their budget somewhere else? You know damn well they have a cell phone, rent movies, go out to eat,have a pair of those bugeyed sunglasses, etc…
http://www.philly.com/philly/business/20070729_SPREADING_SUBPRIME_PAIN.html
I agree, these stories on resets of 10% are a joke. Oh, my mortgage went up $5. I can’t get a coffee once less time at starbucks per month, so I’m walking away. The important thing is a psychological shift on the down side of a bubble. What we’ve been saying all along when we read these stories on no doc, neg am IO loans in 2004-2006, no one wants a depreciating asset that declines faster than your “equity”! The CDO models only calculate positive HPA. What a joke.
They are walking away because they know it will continue to reset and that their house is decreasing in value while the payment increases.
Right… They bought the house as a bad deal for them, hoping to find a greater fool to dump in on for a higher price. Why keep a house that has a payment way above rent, if you are seeing depreciation instead of appreciation?
Do you really think that folks outside of CA, FL, AZ and Las Vegas are seeing large price drops?
Depreciation will only show up in an area when enough houses have sold at much lower prices than before. It will happen I just think that it has not happened yet.
A friend in Sarasota walked away from $2500 in payments for a condo to rent a nicer 2 story condo for $1100 a month. Not bad for a $1400 savings. He sure stuck it to the bank when the payments started to reset. I wonder what all those sucker hedge funds are thinking now.
And the bank will surely stick it to him with his credit rating. That’s just another reason that real estate is on for a long downfall and a slow recovery.
Oh he knows that but he doesn’t care. They can foreclose or accept a short sale. Not sure what is going to happen there. But in any case, as soon as he declares BK, he will start getting credit card offers in the mail. It’s as if it never happened.
It’s not that simple. Don’t underestimate the negative effects of a BK.
“…he will start getting credit card offers in the mail.”
At 50% APR.
“It’s as if it never happened.”
In the face of tightening credit and new BK laws? I dunno Tom.
Don’t underestimate the negative effects of paying $2500 a month for a mortgage on a place you can rent for $1100 a month.
LOL well I don’t care. I know the APR will be high. I didn’t make his stupid mistake. I will be the one buying when he is unable to.
I don’t know how it is now but a good friend of mine’s father in law used to file BK quite regularly. He used to run the bills up as high as he could before filing BK. He had a high income and used to get credit card offers in the mail right away after BK. According to his son the credit card companies knew Pops couldn’t file again for 7 years.
In regard to your friend walking away from $2500 monthly payments, it’s just another anecdote that makes me wish for debtors prisons. People like that are the same type of people who cheated in college, never use turn signals, have no regard for others, and cheat on their taxes because “everybody does it.” How ironic that America has a higher percentage of people who are into some religion than Europe, but also has a higher percentage of cheaters than Europe.
You know, you don’t even have to file BK - you can stiff your creditors and wait it out and in about 3 years have more credit cards, etc. A friend of mine did this to the tune of 60k, lost her job and just walked away (was taking care of a sick husband, that’s why the runup, then he died). She just lived within her means and didn’t use credit cards. She now has a FICA of about 600 - I think it’s been about 10 years, though. She had a house already, so didn’t need to worry about qualifying for a mortgage.
Bill, If the lenders didn’t make such stupid loans on overpriced crap, then people wouldn’t be walking away. People walking away is the ONLY thing that will restore sanity to the lending market.
Do you really think that folks outside of CA, FL, AZ and Las Vegas are seeing large price drops?
Don’t have to see price drops at all, just a lack of appreciation. The ponzi homebuyer is overwhelmingly subject to continued gains.
Exactly TJ. If they can’t go back to the well and pull another $50,000 or so out of the house atm, to buy more stuff or pay off credit cards, then consumer spending is done - as is the economy.
Right, 70 % of GDP is consumer spending.
Good points. This is what makes me angry about many/most MSM articles about foreclosures. There’s always a vague paragraph about the FB refinancing to “pay bills,” but that it wasn’t enough to save them from foreclosure.
Hey, MSM reporters, here’s your follow-up question: “What do you mean by ‘pay bills?’ Bills for what? Details, please. How did you run up such bills?”
But, of course, that might hurt the FB’s feelings and ruin their “victim” story.
– Judge Smales
“You’ll get nothing and like it”
Speaking of starbucks - I am amazed at the number of people who walk out of there with a calorie and fat filled drink that costs them over $5. I only buy a drip cup of coffee which is well under $2, however when my wife gets her latte the bill is over $5. I know some folks who go into the local starbucks 2 to 3 times a day. These folks probably spend over $200 a month at starbucks. Surely they can cut back - starbucks was not always there.
Of course you have Dunkin’ Donuts with their 1000 calorie “coffees”. I’m always amazed at the number of overweight slobs drifted from one cream and sugar to a coffee flavored gooey stew of sugar, fat and salt.
You know I was at the local casino last night and I noticed alot of people like that. I told my wife that I wonder how many people like that can’t afford health insurance to help address their weight problem. Life isn’t fair.
Coffee is free where I work. Soda is too, but I don’t drink that stuff anymore.
“Coffee is free where I work.”
And costs a nickel a cup at home. Anyone that spends $5 on seething cups of mugmoid that doesn’t taste like coffee needs their head examined.
STARBUCKS IS SO NASTY
i brew my own at home on the weekend and during the week get an excellent cup of coffee for $1.25 (16oz)
at the corner bagel store
i am with you bill no soda for me
dont buy from big corporate entities like starbucks.(walmart and the likes) where I live there are many family owned coffee shops and thats where I go. live off the grid here.
In the Pacific Northwest Starbucks is the locally owned (if not family) coffee shop. Why not support local businesses?
I used to rail against starbucks. However, I understand that they offer their employees health benefits and stock options. I would, given he choice, use a locally owned shop - but I don’t think they’re Satan either, anymore.
Coffee is like alcohol: no point in using top shelf liquors if you’re mixing it with lots of fruit juice. Heck, even the worst burned coffee tastes ok with some Half-&-Half. Stupid, lazy people (no offense to your wife; my wife does the same)
My favorite drink. 1/3 fruit juice and 2/3 tap water. juice is healthy but too much sugar. and we all need to drink lots of water.
It really bothers me that the beverage industry thinks that to make a “light” beverage they need to substitute sugar with artificial sweetener. How about less sweetener and appreciating the subtle flavors of the juice or tea or whatever.
I found that a coffee at Starbucks is cheaper than a cup at most other spots like IHop, Coco’s, Denny’s, etc. We’ll usually grab a SB drip and take it into the restaurant. Tastes much better, stronger, not watered-down Folgers or generic and actually cheaper. Restaurant never complains, but if so, I’d just let them know I prefer stronger coffee with my meal.
Mock Starbucks all you want but when I don’t have time to setup my little weird drip funnel thingy to brew my own, $1.85 for the Starbucks drip or the Seattles downstairs seems like a great deal to me. Then again, I bring my lunch into work. The lunchbag works great but there’s only so much I can carry into work each day. $1.85 for large hot coffee = good, $6.00 for crappy tuna sandwich = bad.
Mock Starbucks? How about learn to read. I’m saying it tastes better and moreover is a better deal than many restaurants.
I agree with gravity, for a buck fifty, starbucks has the best coffee around here in OC where local shops make nasty coffee, dont carry half and half ( non dairy Sh*t) and they cost about 1.25, restaurants make very light coffee.
In southern CA, we dont have the luxury of good street vendor coffee like in the NY (the best) or Dunkin donuts on the east coast, so pretty much stuck with starbucks and coffee been for a regular coffee.
OK, my 2 bits worth: get a pan of water, put on stove, boil water, dump a bunch of good ground coffee in pan (I like espresso grind, shade grown), let boil for 10 seconds, dump into cup w/ milk, drink grounds and all.
Cowboy coffee, guaranteed to curl your hair. Add whiskey and it’s called cowdog coffee - makes you howl. Who the H-E-doublehockeysticks needs Starbucks?
It is the immaturity of people. They want everything and then don’t want to really work all that hard for it anyhow. If anything short of $1,000 or $2,000 per month causes one to lose a home, there is a big problem. Maybe they shouldn’t have had a home to begin with.
That would require them to think and that’s painful for some people.
Reason is that Americans can not deprive themselves of anything.
http://biz.yahoo.com/ap/070731/earns_gm.html?.v=6
And GM claims to have made money.
Will the bulls try a run?
Of course- what else do bulls know how to do?
Stampede over the edge of a cliff?
GS, Contrary to MSM - it is not news that is impelling the market, if anything the overall market has gotten a lot weaker in the last few days.
see below 5 day graph of EuroYen (only difference is the Sharpe’s ratio is 1.21 - still good, but not great for investment)
http://tinyurl.com/3c8afm
“The greatest story never told!”
It is about the weak dollar. Income from Europe and Asia way up. Wait until the credit crunch hits the Euro and Pound and exchange rates to drop. The “profit” will again be a loss.
Looks like it. Dow futures up over 100 at 9 am EDT
http://money.cnn.com/data/premarket/
Lots of stocks at their 52 week lows. I recently picked up a few hundred shares in two large cap decades-old companies with lots ‘o cash, low debt/equity (under 0.5), P/E under 10 and yields above 4.9% and neither of them produce autos! My money market fund yields were under these yields, so why not?
This is a good one.
http://www.msnbc.msn.com/id/20044213/
Saw that in the paper this morning, and LMAO. The money quote:
“Somewhere in the U.S., a dog has gotten a loan.”
Not to mention the dog’s homeless master’s three loans to buy investment properties…
Great story. I hope the bitch and her brother get sent away for a long time. That’d be justice. Identity theft is one of the worst non-violent crimes you can do to another, IMHO. It ruins the life of the victim whose identity was stolen.
But, conditions are such that identity theft is made easy, as in those checks that the credit card companies mail to people. Also, this is part of the problem with not enforcing our laws in so many areas. People think they are entitled to commit these crimes. You can’t even have a mailbox on the street anymore, for fear someone will come by and lift your mail.
Financial companies share responsibility for identity theft.
How hard is it to create software programs that check addresses, places of employment, abnormal purchases etc. to identify questionable transactions? It’s not.
How hard is it to make a user friendly application that can alert users to large purchases made in their name? It’s not
The lady who committed identify theft should face hard time. It is the most destructive yet nonviolent crimes. But, financial companies should share some of the responsibility.
Having been victimized by this, I can tell you that cc companies are pretty cavalier in their attitude. They have insurance that covers their losses, and see it as a cost of doing business.
Even the police are totally stymied…they make the report, but do not have the manpower or resources to chase these people down. If you get hit, it’s all on you to straighten this out–and I mean it takes years, and involves getting the credit bureaus to remove erroneous info, after much letter writing with evidence, then they just slap it back in the next month. And mine was comparatively minor–just cc charges at some dept. store in Long Island. The cops did figure out how they did it–the driver’s license number–with that number , you can get the rest and the folks at motor vehicles in Manhattan were selling the numbers.
Consider http://www.lifelock.com/
“How hard is it to create software programs that check addresses, places of employment, abnormal purchases etc. to identify questionable transactions? It’s not.”
Not to be a shill, but AllTel Communciations does this and caught the first attempt that someone made to use my SS#. If it weren’t for their fraud dept., this person would have been using my id until the bills arrived. Setting up a phone account is often the first step in stealing someone’s id. The second attempt involved bottled water, which is also considered a utility. In only one case did my local police take a report. In both cases the local police where the theft occurred (Florida) were completely useless.
The brother has fled home South of the Border . . .
Has anyone else been noticing bill creep? I feel like my bills are arriving a little bit earlier in their normal cycle. For example, my cable bill is paid in advance of the month in which the service is provided. The due date has remained the same, but the bill seems to arrive a few days earlier than it used to. And I just got a renewal for a magazine subscription a full six months before the last issue is scheduled to arrive. I’m used to that starting 3 months ahead, but not barely halfway through the term of the subscription. And one of my credit cards (I only have 2) has moved the due date closer to the date the bill is mailed. If I wasn’t using on-line bill pay, I’d have to write the check (when there is anything due) within a week of the day it arrives to avoid being late - not good for people who occasionally have to travel for work.
Such a tactic can boost income in one month for the company, but there is a limit to how much you can do it. And you are robbing August to pay July.
None of those are new. What you need to watch out for are big discounts for upfront year-long or longer “bundles” for short-term services.
All the bundles I looked at had a total 5 to 10 dollars off. No thanks
I have a cash back credit card that if I don’t pay them a day or two after the statement arrives, it will probably be late. Thus far I’ve played by the rules and the CC company pays me to carry their card.
However, if they tighten up the date anymore (by requiring electronic notification) or reduce the reward (again), we’ll be going back to cash or a debit card.
Actually, we’ve noticed the exact opposite. The bill comes a day before it’s due with a late charge already added in. But like you we have automatic payments set up so their little scheme doesn’t work on us. I’m sure they get plenty of extra money from the masses though.
I got hit by a $39 late fee this month. Bill came day before I got married. When I got back from the homeymoon I waited a couple days to pay it…. only to find I was already late. The bit.. will be if they(when they) adust my 3.9% interest rate to 24%. I’ll have to move the balance again, then wait for them to send me yet another “transfer balance for 3.9% until paid off”. That will be another $100 in transfer fees. Dam it!
You do know that now all of your lenders can raise your interest rates.
I looked at some offers from Wamu, BoA etc and they all adjustable rate. It used to be that if you were late on other payments or deflauting, they’d raise your rate. Now it looks like they can raise your rate any old time.
There has to be a decent card out there somehow that just wants nice reliable gains without the trickster crap. I haven’t found one yet but then I haven’t been looking too hard. I’m the a$$hole that pays of the balance 2 days before interest calculates.
Also, it would be nice to actually talk to someone _in flipping english_ when trying to reach these offers. I hear that accent and tell them I’ve reconsidered. Asking for their supervisor doesn’t seem to help. They’re just as bad.
/rant
damn where is my coffee
I don’t believe I’ve paid even $1 of interest or fee since the 90’s…whenever the whole 0% and balance transfer thing started. I never go for anything with a transfer fee of any sort and set up automatic payments online so I don’t get caught on their late payment trigger thing. You can really crank up your credit score this way as well as keep your money making money by using their money. Can be a bit of work, though. Worthwhile, I think yes.
I like when they mail you blank checks. I then read the fine print and there is a cash advance fee plus a check fee.
I have had my credit union Visa now for 7 years and they’ve not tried to pull any “tricks” at all. Ever. There are no “tricky dicky” things they offer me except a “CU Rewards” program, of which I have earned quite a number of points. The only points I’ve ever redeemed for that was an extra 1% interest on my CDs.
Just a basic, reliable, no-fee, functional, personal platinum Visa card, that’s all it is. It’s the only CC I have (got rid of my Discover and Amex years ago.) I am sure the rate is low, but I would know since I don’t carry a balance.
Thanks. Your stories all remind me of why I use only cash.
Darrell,
I noticed a lot of my cards are not charging a flat fee of lets say 100.00 to transfer balances.They are now chargeing 3% of the balanced transferred which is no deal. Chase and citi are in on this new scam.
Got tinfoil?
Bank America charges 3% but it maxes out at $75. In addition if you call them they will waive the transfer fee.
Gorblimey, what sort of balances are you guys running where a $100 fee is OK but 3% isn’t?
I have a couple cards that I got 0% for 14 months so I put the money into a 5.4% money market.If you have to pay 3% balance transfer on 10000 it does not make sense at all.
Ah, I see.
We don’t get those sorts of deals in Australia. I have a card with a $10K limit, mostly for holidays, and pay in full each month. My normal monthly balance is a couple of hundred.
For newspapers, I’ve enjoyed ignoring them until well after the subscription period has expired, and waiting for them to send the really discounted, “please stay or our advertisers will kill this kitten” renewal notice and taking that one. One paper just keeps sending the paper (for the last 6 months now). They said they would send a renewal notice, but I’ve yet to see it.
Similar thing here. We dropped back from 7-day delivery to just Sundays. After a couple of months they were offering the other six days “free” for an unspecified period. As their subscriber base drops, the amount they can charge for ad space also drops.
Let’s see… I can either pay for delivery and worry about stopping it every time we go on a trip, or I can read the same news free on line. Hmmm, tough decision!
Now relax, and wait for a call from a collection agency. Happened to me, but got sorted out quick.
You couldn’t pay me to read the local papers around here. I used to buy a Sunday paper, but no more. Waste of a good hour.
I live in a large city in one of the reddest of the red states. Fundies everywhere. A church on every street - sometimes, every block.
I read the local paper. It gives all the details like divorce scandals (DC has nothing over this city), fraud in gov’t (again, DC …), locals caught in DUI, you name it its there in this paper. Worth a laugh a day.
My electric bill due date moved up 10 days and my cell phone bill 12 days. So I had to pay them twice one month just to get them on the new schedule with my paydays the next month.
I used to pay my bills once a month (used to get paid monthly). Now, there’s no way I could do that.
BTW, the credit cards monitor your payment history & trends. If you tend to pay off your card early or on time, they will shorten the payment cycle in a blatant attempt to trick you into paying those exhorbitant late fees.
Try calling them and requesting the date be moved back again. My CC company (Citibank) did it, but said I’d have to keep calling back periodically to move the date back again. They claim they cannot change the shrinking of the payment window.
Good luck!
UK is hosed:
http://www.bloomberg.com/apps/news?pid=20601109&sid=ajbnu9l2U8XA&refer=home
“About 2 million discounts will end during the next 18 months, the council said. The wave of refinancing threatens to slow consumer spending”
“The ratio of consumer debt to income in the U.K. is 1.62, the highest in the G-7, according to the National Institute for Economic and Social Research in London.”
I was just in London. Saw the rentals and they want over 2000 pounds a month (roughly $4000) to live in a shanty. That’s up there with NYC prices there.
I believe London has always been ranked as one of the highest priced cities in world. I’m sure the weak dollar has something to do with it, but I used to live in Tokyo and remember seeing many “most-expensive cities” lists. London, Tokyo, Osaka, New York are always at the top of the list.
New York is not at the top of the list, not even close.
http://money.cnn.com/2006/06/23/pf/expensive_cities/index.htm
I read that a nurse in London average pay is in around $35,000. In KC it’s close to $55,000.
I have relatives in the UK. Their pay is also a pittance (one is a cop and earns about 35K, others are no better off). I have no idea of how they can survive with their super high cost of living.
They dont need medical are since the state pays for it. Who needs to save for retirement?
I keep forgetting that it’s free over there. I would suspect that you get what you pay for in the qualifications of the individuals holding those positions.
Its not “free”. They pay special taxes.
Isn’t that special.
Around the city centre, that’s true, but even the commuter areas are now outrageous.
My parents bought (new) the first house I remember WAAAAAAAY out in the London suburbs back around 1960. In an exurban town actually, to the North-West near High Wycombe.
That was a semi-detached (duplex) 3/1.5 of no more than 1000sqft. (And if you think that’s impossible, you don’t know UK room sizes.) No garage at all. OK neighbourhood, but not special due to a big ex-Public Housing estate over the back fence.
On holidays back in the UK last year, we checked out the old neighbourhood. House still there, now 45 years old. We then asked a local RE Agent (friend of old family friend who knew we were emigree’s and not in the market) to guesstimate a price to satisfy our curiosity.
“275-300″, which is US$550-600K.
Massachusetts FB’s learning the hard way that their loans have been packaged up and sent off to a Wall Street netherworld.
http://www.boston.com/business/personalfinance/articles/2007/07/31/tangle_of_loans_feeds_foreclosure_crisis/
I wonder long term if this “can’t find the lender/owner” will cause serious long term blight in neighborhoods hit the hardest by foreclosures. It will be interesting to see what local governments do about it.
Also, I’m thinking that all the media attention did save off that particular foreclosure. Another set of missed payments and suspect they will lose their home.
Our neighborhood that we’re renting in Houston has been hit pretty hard in just the last 6 months, and the residents who’ve lived there long term are pretty upset. About 15-20% of the homes are for sale or rent with several standing vacant (the 18″ grass is a sure give away). Unfortunately the big problem has been that hords of illegals have moved in to fill the vacuum resulting in vehicles parked in yards, trash all over the place and rampant crime (lots of homes and vehicles getting broken into, whereas there was no crime just a year ago).
hords=hordes
Out of curiosity, in which part of Houston is this?
The subdivision is White Oak Landing just south of Cypress (NW Houston @ 290&1960).
“hordes of illegals have moved in to fill the vacuum resulting in vehicles parked in yards, trash all over the place and rampant crime (lots of homes and vehicles getting broken into, whereas there was no crime just a year ago).”
And this will be repeated in thousands of neighborhoods all over the U.S….
And this I am firmly convinced was all part of the plan. Destroy the established neighborhoods. Break down what separates the honest, middle class from the ghetto-thugs, gang-bangers, and doped up druggies. Once honest American have to come home to a ruined neighborhood with a half-dozen cars in their neighbor’s yard and trash music blaring from the party all night, much progress will have been made in destroying the middle class. Finally, once these 2-legged vermin are established here and have trashed the neighborhoods entirely, the government will say, “Well, it is too late and too costly to do anything about it.” Naturally, the wealthy will have their guarded estates, and America will end up like many other nations in the world: the rich at the top and everyone else in the sewer.
This has made me question if it will ever be worth buying a house in my area since the blight from the local city (Baltimore) will spread, and illegals are very welcome in Maryland, sadly.
If there weren’t already enough reasons not to buy - you’ve hit upon yet another. No one really knows how all this will effect the American city - they can guess and offer optimistic opinions based upon nostalgic daydreams - but they don’t know. For that reason alone it is a horrible time to consider buying - unless maybe you have a steady hand and enjoy wearing lots of Kevlar.
DD
I live in Arlington, so I’ve been looking for signs that the Texas economy catching up to the national trends. Yesterday’s Dallas Fed manufacturing report shows the regional economy beginning to tank.
http://dallasfed.org/data/outlook/2007/tmos0707.html
“The Texas Manufacturing Outlook Survey points to weakening factory activity in July. Most indexes of current activity declined from their June levels and fell into negative territory.”
Damn Davis looks like that but instead of illegals, we have students. Not sure who will trash a house faster.
(Lou waves his hand from Katy)
We’re not at 10-20% yet, but will be soon. My zip is the foreclosure king in Texas. I still am amazed at what has happened over the past 2-3 years to my neighborhood. Sometimes, and this is the God’s honest truth, I feel like I want to stand in my front yard and scream out “What the HELL were you people thinking?”
We didn’t even get the benefit of massive appreciation during this mania. We had a short run from 1999-2000 where appraisals went up 8-10%/year, but for 6 years now it has been totally flat. ZERO PERCENT appreciation. Literally! It was a nice neighborhood and now I think it’s doomed to become the next Alief, as is the whole far west exurban side from I-10 to 290, along Fry and Barker-Cypress.
I told my wife about that old Warren Buffet quote as we drove around and saw the houses that have suddenly sprouted “For Sale” “Foreclosure” and (my greatest fear) “For Rent” signs. I told her that we are seeing who has been swimming naked.
“I wonder long term if this “can’t find the lender/owner” will cause serious long term blight in neighborhoods hit the hardest by foreclosures. It will be interesting to see what local governments do about it.”
The city of St. Paul makes several attempts to contact the lender/owner, but if they can’t, they go ahead and do what they’re intending to do with/to the property. In some cases, that is demolishing the home. They’re taking an aggressive stance on abandoned foreclosures.
I hope more municipalities take similarly agressive positions, because that may be the spur the lenders need to move faster on unloading their foreclosed properties. Sell it fast and cheap - or the city may bring in a wrecking ball, demolish the house, and send you the bill.
I suspect that it won’t be all that bad. After all, when you look at the 600 fico, 100% LTV, neg-am loans out there, NOBODY thought that there wouldn’t be any foreclosures. So the paperwork is probably pretty clear on what corporation owns the loan. The problem is, they also didn’t think that there would be nearly as many foreclsoures as we’re seeing. The workload for those guys in the foreclosure and liquidation dept has skyrocketed. Imagine them going to the CEOs and saying “We need to hire more people and spend more money so that we can realize losses.” Let’s face it, the answer is almost always going to be: “come back next quarter, so I can get one last bonus/option/stock sale.”
There’s another reason why “it’s different this time”: there probably will be very few workouts. Just foreclosures, and eventually auctions.
That’s why I’m surprised the homeowner vacancy rate went down.
If you owe way more than your income can support what’s to workout. You can’t get blood out of a turnip.
Not just MA.
A CNY property owner, Chase Home Finance is who we pay our mortgage to now. I had also assumed they had bought out the previous mortgage holder.
That was about a year ago. That last mortgage holder (CCO Mortgage) had bought the loan from the group we signed papers with. It all happened in 4 years time.
So an unidentified private equity group is holding the mortgage on my home, huh? Is the fact that we are legally obligated to an unknown entity legal?
Another reason to get out and rent.
You are legally obligated to pay principal and interest on the mortgage you own.
I wasn’t questioning that but who is my contract with? Shouldn’t I know?
“get out” = “sell”
My daughter’s home loan was sold 3 times in the first 6 months she owned her home. Each time double payments were demanded. Countrywide was sending her default notices FedEx 1 day service a couple of times a week. The whole thing would have drove me crazy. Countrywide’s problems make her very happy.
I just paid my mortgage off and the same place held it all of the 15 years we had it. However the bank changed names at least 5 times with buyouts. But we still made payments at the same bank branch. Almost unheard of now.
It is sad that their son is in need of such care. But what is really sad is that he has stupid greedy parents. I can see refinancing once - but three times! And they wanted to go for round four. Every time these folks refinance I bet the closing costs are just added to the loan. They may have dodged foreclosure now, but it will come back and get them as things get worse.
It sounds very much (to me at least) like they did the refis to try to keep their son out of a nursing home, and to pay his medical bills. One catastrophic illness or injury would be enough to send a lot of us into bankruptcy, no matter how careful with money we are and no matter how good our health insurance.
It’s also quite possible, given the son’s age, that he was uninsured at the time of his injury.
Marathon plans new subprime fund
Hedge fund firm readies new vehicle to buy distressed mortgage assets
http://tinyurl.com/2s6za6
SAN FRANCISCO (MarketWatch) — Marathon Asset Management LLC, a $9 billion hedge fund firm focused on debt markets, is planning a new fund that will buy distressed mortgage-related assets to take advantage of “carnage” in the subprime home loan business.
The new fund, the Marathon Distressed Sub-Prime Fund, will begin taking commitments from investors in August, according to a letter sent to clients by Marathon President Bruce Richards.
“The meltdown in the subprime mortgage market has been absolutely stunning, and given this significant opportunity, Marathon has decided to roll out this fund,” Richards wrote in the letter, a copy of which was obtained by MarketWatch.
The subprime mortgage business, which caters to less creditworthy home buyers, has been hit hard by a jump in delinquencies this year. Hedge funds have been big players in the market for securities that are backed by subprime home loans. Some have generated huge returns betting against the market, while others have collapsed.
Marathon’s Structured Finance Fund, which has invested in asset-backed securities including some backed by subprime mortgages, has generated a positive return so far this year, Richards wrote in the letter to clients.
The fund’s subprime positions have been marked down “significantly,” resulting in a loss, but that’s been more than offset by gains in the rest of the portfolio, Richards explained. The Marathon Structured Finance Fund uses other investment strategies such as commercial real estate lending, asset-based lending and leasing to companies and collateralized loan obligations, he noted.
Investors in the Structured Finance fund will also get a chance to invest in the distressed subprime assets that the new Sub-Prime fund will pursue, Richards added.
The new Distressed Sub-Prime fund will have some unusual features, including a defined investment period that ends in roughly two years. It will also take 20% of any profit, but Marathon will only get that fee once the investor gets the principal back, Richards explained. (Hedge funds usually charge so-called 20% performance fees every year).
“There is a significant investment opportunity unfolding,” Richards said. The Distressed Sub-Prime fund “has been established to capitalize from the fallout and carnage in the sub-prime mortgage market with a core investment strategy to opportunistically purchase distressed mortgage-related and sub-prime assets.”
Marathon has already stepped into the subprime mortgage business, although it’s not clear how well that foray has gone so far.
In late June, American Home Mortgage Investment Corp. (AHM 10.47, 0.00, 0.0%) said it sold $125 million of convertible trust preferred securities to Marathon. The securities, paying a dividend of 9.75% a year, are convertible into the company’s common stock at an initial conversion price of $25.57 a share.
I waiting for a new rental reit to buy these toxic loans with direct intent to foreclosure and seize the property for rent. I don’t think the carnage is deep enough yet. Maybe when these next round of sub-prime believers goes up in smoke.
FOOLS
Another one going under.
http://www.boston.com/business/globe/articles/2007/07/31/hub_hedge_fund_will_wind_down/
I suggest another name for the fund:
Marathon Enhanced Leverage Subprime Schadenfreude Fund
And their slogan -
“The Marathon Fund: Investment returns in only 26.2 years.”
How about MELSSF. Maybe leave the L and F off and just use MESS.
The crash that could come
http://tinyurl.com/37gtkr
HISTORICALLY, October has been the month for big financial busts. But this year, October could come early.
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Sign up for: Globe Headlines e-mail | Breaking News Alerts Investors and ordinary citizens have good reason to worry about a perfect economic storm: a deepening loss of confidence in the dollar leading to higher interest rates; the higher rates bringing a crashing end to a hedge-fund, private equity, and merger binge that has depended heavily on cheap borrowed money; the boom in bait-and-switch mortgages ending in a morning-after of rising defaults and sinking housing values; inflationary pressures in food, oil, and other commodities leading to still higher interest rates — all unsettling stock and credit markets and putting a new squeeze on consumers borrowed to the hilt.
Ben, Could you edit the above and remove all the fluff
I meant to copy the first paragraph.
http://money.cnn.com/2007/07/31/real_estate/bc.usa.economy.foreclosures.reut/index.htm?cnn=yes
Foreclosure filings skyrocket
Filings jump 58% in first half of the year and could surpass 2 million this year as the housing market weakens, according to a report.
So I went to see the Simpson’s Movie yesterday and while waiting for the movie to start Cinemark was running these pre-previews and they ran an ad for TLC and a show called “property ladder” supposedly about both people that make money and lose money.
They had a marathon of Property Ladder on last Saturday. Some made some money, some clearly were losing. Big change from a couple seasons ago when no matter how badly the flipper screwed the pooch, the updraft saved them. Now, they’re more likely to be underwater than flying high.
as a sensitive type, could we drop the screw the pooch analogy? Thanks.
Okay, as long as we can keep doing it in real life.
Where in Utah are you? I am watching in amazement the still going boom in Park City. Two years ago those ten thousand sf homes behind Snyderville were started, now there are three dozen and all obviously occupied by families with kids. ?? I am not even talking about the third home enclaves.
I’m actually in W. Colorado, ready to flee to Utah ASAP and hideout - LOL. Was in Park city not too long ago - it will see the same fate as the Colo. ski areas, where things are starting to slow. I get the Telluride papers and they all have reduced price and motivated ads.
My landlord is one of those ex ski bums turned realtors, of which there are a great number here. He is absolutely clueless when it comes to anything regarding building, cannot even fix a clogged drain. But he is doing great so far selling the million dollar per acre lots which are destroying the whole landscape. It seems everyone is still riding on the ‘PC is special’ wave, and I hear that close to a hundred thousand new homes have been approved. I do not know if this is true, but even if it is half that, for a town of 8K, strange. (We have 1100 realtors, so that is basically everyone you meet. With some of them, I have addressed the topic of solar panels, and when I did, none of them had an opinion.) Yes and I also am going to head out, as my book is finished. I came here for the trails. Did I say there was no snow in January, and 10 degrees warmer than ususal in March? 10 degrees above normal in June/July? You post in FDL?
I’m not sure what FDL is…
I’m heading towards the Henrys or La Sals here in a week or so, will go lower when it cools off. Was in PC around march - I like the Sniderville area, but too pricey. It, too, will fall. Sleepless in Seattle has spent some time in PC snowboarding, had some interesting comments.
I suppose dead cat bounce is out too? I had someone screaming at me for using the term.
Well, no problem there, cause the cat’s dead. LOL
OK we’ll start saying “screw the dead pooch”. Sound good? LOL
OK, better. LOL
I could not believe the shody work and the stuff they kept covering up and saying, “Well I’m not going to live here.”
That’s been on for a couple years now. They do show both sides of people either losing or making a profit.
I post this for the PPT militia, you know who you are.
http://tinyurl.com/2xnoqr
Got Black Choppers?
Instead, Treasury Secretary Hank Paulson, who reportedly has reactivated the President’s Working Group, was dispatched to calm financial markets on Friday, saying the subprime mortgage mess did not “pose a threat to the overall economy.”
Did he mention that “subprime is contained”?
I have no idea if PPT is truly an active group or not. But I do feel strongly that the Government ‘cooks’ their data reports so that they affect the economic system. I would consider this just about as bad as a PPT. Inflation is moderating, GDP up big, blawwww…. Up until last week this type of manipulation had been working, and this week we are seeing a full court press with the PR movement.
“Anyone who can’t prove that the PPT doesn’t exist is immediately dismissed as a pawn of the government or a part of the cabal. Yours truly has been accused of both by the conspiracy theorists (CTs).”
The Bloomberg writer is obviously either a pawn of the government or a part of the cabal.
GS, As you know, I am not a believer or disbeliever in the PPT; however I do happen to like Carolyn’s writing. She is the most responsible of the Bloomberg opinion writers. Of all their writers, she has been the most critical of the bubble market formations. I certainly recommend her new book “Just what I said”.
Some writings from her new book.
http://tinyurl.com/2b8mxr
I like her “proof” the PPT does not exist:
1) The conspiracy theorists say there is a secret government cabal that makes sure the stock market always goes up.
2) The market sold off last Thursday and Friday.
3) If there were a PPT, then the stock market would never sell off, as the PPT would (by definition) have complete control over the behavior of all participants in the global financial market.
4) Therefore the PPT does not exist, and the conspiracy theorists who suggest its existence are a bunch of kooks.
“GS, As you know, I am not a believer or disbeliever in the PPT…”
Some of my posts might suggest otherwise, but I concur with you on this. Unless you work in the inner circle of the Fed and/or Treasury, arguing about the nature and existence of the PPT is a religious debate.
I try to remain agnostic on the whole debate but there is a growing case to be made that there has been repeated intervention in many markets. Certainly the point that intervention wasn’t there for a 600pt drop or that Heller isn’t involved in the PPT isn’t a very compelling argument against it’s existence, at least to me.
That being said, here is a quote from a Bloomberg piece from last week. So much for accuracy from the media.
July 23 (Bloomberg) — Contrasts between the Federal Reserve and the European Central Bank are striking, and not just because the ECB has raised interest rates five times in the past year while the Fed has been on hold.
Last week, for instance, Fed Chairman Ben S. Bernanke was questioned at two hearings by dozens of members of Congress who, should they choose, have the power to give him and his colleagues marching orders on monetary policy. The Fed, after all, is part of the congressional branch of the U.S. government…”
Congression Branch of the gov’t? Things that make you go Hmmm.
Peter Schiff on CNBC at 5:20 am PST alluded to certain market flucuations that are occuring/about to occur and the talking heads called him a conspiracy theorist… and he was only describing bond rates and the cheap easy cash flowing in from China that’s about to end, and that Bernanke is under reporting the inflation numbers.
It’s become more and more difficult to watch CNBC and listen to these Fed shills; and to see them in anything but cheerleader sweaters and pleated skirts, waving pom pons.
The Fed, after all, is part of the congressional branch of the U.S. government…”
When did this happen? Did someone notify the private shareholders of the Fed? Were they bought out, and if so, at what price?
Bloomberg let this be printed?? What gives?
It’s really a silly argument. SOMEBODY is supporting the market through manipulation. That can easily be seen by the huge futures orders that came in to put in the bottoms of the last year or so. Huge orders to catch the falling knife. IMO, it’s likely to be the I-bankers’ prop trading desks looking for a short squeeze and also helping to keep the revenue-producing bubble alive.
They may be less able to do that now. With so much capital tied up in these hung-up LBOs, they cannot afford to commit as much to the equity markets. The Wall Street firms are now leveraged 25-30x their tangible book value so there’s not much room to lever up further to do more of the same. That’s what makes the stock market so dangerous right now.
“IMO, it’s likely to be the I-bankers’ prop trading desks looking for a short squeeze and also helping to keep the revenue-producing bubble alive.”
IMO, the real debate is not about the technical details of what props up the market, but to what extent the props come from a centralized and concerted effort to “supply liquidity to the markets” on the first sign of weakness, versus private and independent efforts. The hypothesis that the Fed and Treasury may be overstepping traditional limits on the degree of influence they exert in the stock and bond markets can easily enough be turned into a straw man characterization of conspiracy theorists claiming that a cabal behind the curtain is pulling all the levers which make the global financial markets hum. Such is the nature of journalism.
OK — now that the stock market has tanked three days out of four, I am ready to convert to a new faith:
I fervently believe there is no PPT, and only private market forces drive the U.S. stock market up and down…
http://www.marketwatch.com/tools/marketsummary/
THE FED
Fed won’t ride to rescue of markets: Poole
By Greg Robb, MarketWatch
Last Update: 1:52 PM ET Jul 31, 2007
WASHINGTON (MarketWatch) - Financial markets understand that the Federal Reserve won’t respond quickly to a typical market upset such as last week’s sharp stock sell-off, St. Louis Fed President William Poole said Tuesday.
The Fed should only act “in due time” if evidence accumulates that the market drops could undo price stability or low unemployment, or when financial market developments threaten market processes themselves, Poole said.
Last week’s cumulative drop was the worst in four years for the Dow Jones Industrial Average. At the same time, trading in credit markets and Treasurys led to concerns about a possible credit crunch.
http://www.marketwatch.com/news/story/fed-wont-ride-rescue-upset/story.aspx?guid=%7B265C021C%2D7EA7%2D401D%2DA60A%2D724EA859E758%7D
Whoa, surprise here. Fed says inflation is tame.
http://money.cnn.com/2007/07/31/news/economy/income_spending/index.htm?postversion=2007073108
I also love their “personal income is up x%”. Who the heck is getting raises?
Senators and congressmen.
Some gubment workers received raises last year. What’s interesting is that the raises were from 02/03 and 03/04 that have just now made it through the system. Raise for the 07-08 fiscal year? Now anywhere I know of.
Lawyers at big law firms got huge raises this year.
It seems like the headline and some of the reactions are distorted. The Fed said that the inflation index they pay attention to is 0.1 away from indicating a need to react which is where numbers that analysts originally predicted would have put things. Is 0.1 on the index that we didn’t expect to see keeping us from having to react really a sign that all is well?
I’m sure the true owners of foreclosed property will appear when the town seizes the property for unpaid taxes. Some enterprising town is going to figure out how to shellack the hedge funds by charging fines of $10,000/inch for grass over 10 inches and seizing the property if the money doesn’t show up in five days.
I was the neighbor of foreclosed property in MA. I wouldn’t be expecting the towns to be that adept.
Sounds like the money raising option for the next recession, since cigarettes are already used up and not every suburb can have a casino. That would tend to limit the ability of the bagholders to keep property off the market to prevent a downturn.
Here, I think, is the way out. No bailout for existing loans. Foreclosure, auctions, and new loans at lower prices.
For the small percent of FBs who are legitimate naiive overpayers, rather than flippers, fraudsters, or HELOCers, the holder of the old mortgage would have every incentive to ignore the hit to their credit rating in order to get the property to move. So you’ll get everything re-sold at affordable prices, with a 20% to 40% write-down of the property value.
It doesn’t help places with overbuilding (Texas), or places with big economic problems (Michigan), or places with both (Miami). But it is a solution for places where price is the main problem (California, Northeast Corridor).
Hrm, that’s a good idea to stick it to the hedge fund. I’m going to write my city manager and the mayor.
I’m posting up the Dear GF letter from Sowood Capital again for Palmetto. So Long Sowood. Warning PDF.
http://online.wsj.com/public/resources/documents/Sowoodletter-20070730.pdf
Thanks, Popper. Wow, I don’t even know what to say about that. I love Larson’s line about “We understand this may be a difficult moment for you”. There’s an understatement.
Easy come, easy go. No big whoop. Of course, they always strive to do the best for their investors, don’t they? Hedge Fraud Managers. THE WORST. CROOKS. EVER.
“We understand this may be a difficult moment for you”
Did somebody die?
Harvard’s endowment was a major investor in Sowood. Be interesting to know how much they lost.
With a $29 billion endowment, Harvard probably won’t be taking too much of a hit even if Sowood tanks completely.
Wasn’t Larson responsible for managing much of that endowment and helping it to reach $29 billion?
He seems like he’s acting “early” to control the damage - while some hedgies are definitely going to be acting “later.”
This reminds me…
Hey - all you hedgies and banker Pig Men: “How’s your model lookin’ today?!”
Very telling that they managed to blow up ZERO subprime exposure. The reaction of the Feds and the I-banks to the credit crunch reminds of Marty Feldman in Young Frankenstein: “What hump?”
blow up with ZERO subprime
And they shift it from shoulder to shoulder to keep you guessing too.
yeah, problems were “contained” to subprime like the Mississippi was “contained” by the levees. What we have now is the early, confuesed reports of levee breaks. By next summer we’ll see what the Superdome looks like.
“After the transaction with Citadel, the Net Asset Value (NAV) of Sowood Alpha Fund Ltd. and Sowood Alpha Fund LP will have declined approximately 57% and 53% month to date respectively.”
This is what happens when hedge funds gamble in risky securities with other peoples’ money.
There’s some chatter that the TXU deal is falling apart with a refererence to Bloomberg. Anybody have anything on this as I can’t find it?
Faber on CNBC says pure fiction. Heard direct from Citi that was rumored to be paying breakup fee to get out of buyout agreement funding deal.
Who you gonna believe your lying eyes (see below) or the pump jockeys on CNBC?
You mean:
TXU Lenders May Pull Out LBO, Pay Breakup Fee, Thomson Says
July 31 (Bloomberg) — Banks led by Citigroup Inc. are considering pulling out of financing a buyout of TXU Corp. and paying a $1 billion fee to break up the deal, Thomson Financial reported.
The lenders want to avoid being stuck with $37.2 billion in debt to fund the purchase of the biggest Texas power producer by Kohlberg Kravis Roberts & Co. and TPG, Thomson said, citing unnamed sources. The banks would pay the fee on behalf of the buyers.
I found it by entering TXU in the quote box at bloomberg.com and clicked on news….
Thanks!!
i am very curious to see if the carlyle/manor care deal will be impacted. if anyone hears anything please post.
it is suppose to close Q4.
There is no question that the proposed takeover has not been funded by CLO debt. KKR is holding the underwriters hostage to the commitment terms which is about 2 points below current market rates. That is a big loss for a bank to swallow. Ergo sell the underwriting banks, the biggest problem with the proposed TXU buyout is that Franklin Templeton is opposed to the buyout. Which is what the underwriters are hoping will happen - the shareholders will vote against the buyout. The lead underwriter is also asking for regulatory approval which is not perfunctory.
KKR may have problems with Harman and First Data, too, according to WSJ on Friday (so it maybe old news here).
They are also one of the lead buyers in the $20 bil UK deal for Alliance Boots that just hung fire.
Banks have committed to $400B in unfunded stock buybacks, Buyouts and Takeovers. Citigroup was the lead underwriter for KKR’s takeunder of TXU. KKR is saying fund, Citigroup is trying to get out by either paying the penalty due TXU ($1B). Should the deal go through as penciled, Citigroup stands to lose $4B. KKR’s is holding banks to commitments on First Data ($34B)
Blackstone seems to be willing to renegotiate the terms of its commitments, but then the Hilton deal - which seemed stratospheric to start - becomes ridiculous. There is not enough EBITDA .
The banks are $30 bil deep with LBO debt they can’t sell. Of course they’re going to consider paying the breakup fee rather than go thorugh with the deal. Unless the junk funding window opens up again, they will lose a lot of money trying to place the bonds.
Currency bill reveals U.S. protectionism, risking Sino-US ties: experts
“Although the dominant position of the U.S. dollar will not weaken easily, the currency bill has unveiled a strong political hint that the American politicians want other countries to dance to their tune,” she said.
The legislation allows U.S. companies to seek anti-dumping duties on goods from any country that maintains what the U.S. government calls a “fundamentally misaligned” exchange rate.
U.S. consumers and multinationals would stand to lose rather than benefit, because more than 60 percent of the total growth in Chinese exports originated from “foreign-invested enterprises”, both Roach and Tan warned.
“By putting pressure on the RMB-dollar cross rate,” Roach said, “Washington is unwittingly squeezing the efficiency solution of U.S. multinationals and imposing the functional equivalent of a tax hike on American consumers.”…
… Roach said the worst-case scenario would be an escalation of retaliatory trade actions between the U.S. and China, which would have devastating implications for U.S. consumers and Chinese producers alike.
“I am hopeful that the political leadership in both the U.S. and China might come to their senses before sliding down what could be a very slippery slope,” he said.
People’s Daily
http://tinyurl.com/2qhqxv
Who gets hurt worse when the trade war starts the US or China or is it mutual destruction?
wal-mart
I bought some workout shorts at Walmart for $6 that were made in Jordan. China is not the only cheap labor country out there, just the biggest.
If US-China trade stops, we buy elsewhere and they have another revolution when those 300 million factory workers have nothing to do, or eat.
Yup, my socks were made in Pakistan. Sayonara, China, and as GetStucco says, we hardly knew ya (I hope).
The U.S. buys a lot of textiles from Lesotho.
The horror! We will have make our own sneakers and T-Shirts (or buy it somwhere else).
IMHO, there is a lot of pushing for the NAU and the Amero because in the long term they are planning on having Mexico, and eventually all of Latin America, replace China as our source of cheap consumer goods.
“…Wachovia Securities is of the view that risks have increased, especially with firms tied to housing and motor vehicle manufacturing. The credit spreads of these industries have widened, but they have not gone out of proportion, which reduced the probability of a recession. Financing is still available in the credit markets, but at more expensive terms than earlier. …”
RTT Financial news
July 31, 2007
You know its bad when Jim Cramer says. “If I owned a home in the Inland Empire I would burn it down and collect the insurance”.
LOL!
He better be careful what he says because I’m sure that will happen in the future and some one could tell the judge, “kramer advised it”.
He also said that he could see the Chinese buying the likes of Bank America, Wachovia etc. to keep the game going. If the Fed would reduce rates by one percent Countrywide would go back to $45. per share if someone didn’t buy them out.
Consumer Confidence Hits 6-Year High
That is either plain old BS or the sheeple are really in denial. I cannot believe that many realtors were very confident about their future. Or wait a minute maybe thats the people that were in the survey?
I saw that and called foul too. Just like the latest GDP, it’s all a sham.
“Based on a representative sample of thousands of mail-in surveys, the Conference Board index has the largest pooling sample of any U.S. measure of consumer confidence. Consumer Confidence levels are generally linked with consumer spending. For instance, when consumer confidence is on the rise consumer spending tends to increase.”
Not a sham, but look at how it is measured “mail in survey” and the caveat “generally linked” , The consumer confidence measures 5000 households. It is always going to show an upward bias up when the stock markets are doing well. It will show a downward bias when the markets are doing poorly. It is no longer as effective a tool as in the past, there is more information available from other sources - faster.
They’re only counting the people who didn’t slam down the phone in disgust.
Vacation is over and its back to Moscow in about an hour for the P’cola Popper. Keep the faith!!
Don’t go buying any real estate over there, P’cola. Bon voyage.
Johnson and Johnson is cutting 4% of its workforce.
In Moscow?
LOL
More on the Bauman home purchase. This is a followup to the story about the mentally challenged couple who bought a house for $86K even though he is a grocery bagger and she receives a monthly disability check.
http://www.postgazette.com/pg/07212/805638-85.stm
The next chunk of tax dollars will be to build more prisons for all these crooks. There’s probably hundreds of thousands of them out there.
Last year I mentioned that Phoenix wouldn’t be officially distressed until foreclosures reached 2500 per month. At COB today, we declare the Maricopa County market to be officially distressed. Look for this rate to double in the next 12 months, and Phoenix will officially be toast:
Jan 06 726
Feb 06 687
Mar 06 790
Apr 06 638
May 06 764
Jun 06 797
Jul 06 851
Aug 06 1019
Sep 06 1114
Oct 06 1238
Nov 06 1493
Dec 06 1407
Jan 07 1624
Feb 07 1577
Mar 07 1720
Apr 07 1709
May 07 2007
Jun 07 2325
Jul 07 2381 thru 7/30
Fred, astounding numbers. What is COB? and what do you use to track the foreclosure numbers. I want to do the same thing for the Sacramento Valley.
COB = Close of Business, I believe.
Here are some URLs: http://www.foreclosure.com; http://realestate.yahoo.com; http://www.realtytrac.com
Looks like volatility has returned to lots of different arenas- including consumer sentiment!
AP
Consumer Confidence Hits 6-Year High
Tuesday July 31, 11:39 am ET
By Anne D’Innocenzio, AP Business Writer
Consumer Confidence Rebounds in July to 6-Year High Amid Healthy Employment Outlook
NEW YORK (AP) — Consumer confidence hit a six-year high in July, a widely watched gauge of sentiment showed on Tuesday, as Americans shrugged off falling home prices to focus on a healthy jobs market, instead.
The New York-based Conference Board said that its Consumer Confidence Index, rebounded to 112.6, its highest level since August 2001 when it recorded a 114.0 reading.
Is this complete baloney?
I’m not a huge believer in government manipulation of these kind of statistics, but now this is telling us that we have the highest consumer confidence since before 9/11 occurred?
Who did they survey - only bankruptcy lawyers?
Exactly how do they calculate this figure? Ask the three tables closest to them at lunch at their club? This seems to be more smoke and mirrors to me.
Weak dollar gives Opec little incentive to raise outputPublished: Friday, 27 July, 2007, 01:20 AM Doha Time
LONDON/DUBAI: A plunging US dollar gives Opec’s key Middle East members little incentive to pump more crude to ease high prices amid rising concerns about the impact of the weak greenback on their economies.
“The only way to compensate for the weaker dollar is a higher oil price,” says Shokri Ghanem, head of Libya’s state-run National Oil Co, Africa’s largest holder of oil reserves.
The Organisation of Petroleum Exporting Countries, producer of about 40% of the world’s crude, is quietly content to see oil prices flirt with record highs to compensate for the declining dollar, the benchmark currency for trading crude.
The dollar’s value has tumbled 35% against Europe’s 13-nation currency over the last five years, pushing up the cost of imports for Opec’s largest producers in the Gulf like Saudi Arabia, the UAE and Kuwait
http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=163379&version=1&template_id=57&parent_id=56
Jim Cramer video on the housing bust. . .even if you don’t like him you should watch this as he (now) realizes how bad it is and is going to get. He thinks that the ‘bears’ prediction of 50% of 2/28s defaulting is TOO LOW.
http://www.bullnotbull.com/bull/node/15
“it’s better to walk away…if your home declines 20% in value”
LOL
Jim Cramer 9/26/2006
“The stocks are saying that the inventory is being worked off right now and not enough inventory is being added. The stocks are saying that, miracle of miracles, the homebuilders are at last aware of their own problems….That’s a mistake you can still correct. Don’t be fooled by the doomsayers. This one’s going right now, not wrong.”
http://tinyurl.com/2aeagz
I am always amazed that any credibility is given to one word uttered or written by Mr. Cramer.
I just checked the website that tracked all of Cramers picks and it’s been taken down. Last time I looked, Cramer was picking 50% winners, 50% losers.
Perhaps I missed the screaming headlines but a couple of important pieces of housing info have been released in the last few days. Home ownership rates have fallen pretty significantly - 68.2% vs 69%+ through the height of the bubble. Just a confirmation of what most here already know but a shock to the ‘ownership society’ advocates:
(PDF, PDF, PDF)
http://www.census.gov/hhes/www/housing/hvs/qtr207/q207press.pdf
Also the NAR’s own affordability index for June hit its lowest level in a year. Higher rates and the usual seasonal rise in median price:
(another PDF)
http://www.realtor.org/Research.nsf/files/REL0706A.pdf/FILE/REL0706A.pdf
I probably just missed them in all the excitement but just in case…
http://losangeles.craigslist.org/wst/rfs/383815229.html
So much for “it can’t happen in the South Bay” part of LA.
Who in hell would “take over payments” when even the owner states that they owe more than the list price?!?!
Holy smokes, 5100/month for that. I will continue to rent at 40% of that cost here 4 mi from work with my wife home with kids, no debt, the ability to move when I want, no hassles of home ownership, and saving 600/month.
Insanity, oh the insanity.
If you didn’t get it yet, I think I’ll just pass on that one.
Don’t forget taxes at $917/mo. So make that $6,066/mo for North Redondo.
Oh, that’s also $530/sq.ft.
I’m waiting for $350-400 max. Basically 2002 prices before I’ll even consider another purchase.
This poor fellows pic belongs in the Phrase Dictionary under ‘FB’
agree with OC dan, when I was reading the CL ad, I thought the remaining balance was the second mortgage…LOL.
one mil for 1700 sf, no thanks, gracias.
Once you lose your job the 6k a month mortgage+other living expenses will quickly wipe you out. Anyone smart does NOT make payments on a upside down home.
All these layoffs from AHM and realtors, brokers who dont make 50% of thier former salary are going to have a huge impact. HUGE!
“..2nd mtg is $234,000 loan..”
and that’s near what it should be selling for.
What contagion? There is no stinking contagion:
July 31 (Bloomberg) — Jeremy Grantham, the money manager who oversees $150 billion as chairman of Grantham, Mayo, Van Otterloo & Co. LLC, said a credit crisis may force as many as half of hedge funds worldwide to close in the next five years.
The loss of investors’ appetite for risk also may cause at least one global bank and “one or two” of the largest private- equity firms to go out of business….
“Probably the most stretched silly credit that ever walked the face of the earth was subprime, and that was the start of it,” Grantham said. “And then you started to see more of the fixed-income market getting contagion.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aZdtk8hhjZr4&refer=home
This article is important.
Grantham is one of the 3%; Vanguard, among others, entrusts its entire global fund to GMO (fees on top of fees). His risk aversion is wonderful as is GMO’s annual return. His March report on the markets played out in July. GMO’s minimum investment for individuals is 10M.
Grantham would have a little more credibility if he were less of a perma-bear. From the article:
Dubbed a “perma-bear” by some colleagues for his dour view on U.S. equities for more than a decade, Grantham said he has never been so bearish. In April, he wrote a quarterly letter to investors saying the world is in the midst of a “global bubble.”
Talked to a buddy last night on the phone. This guy has been a big RE proponent for years, luckily making $50,000 on a home he bought in 2000, and then turned around and bought a 4/3/2 McMansion in summer 2005. The neighboring homes are selling for $50,000 less than he paid, wiping out his earnings from the earlier transaction. He is completely convinced the market is going to turn around and has been on my case to buy since 2003. I have my reasons for renting but I guess they don’t matter, according to him I’d be better off buying and selling for the same price in 2010 than renting, and that is a strong assumption that I would even be able to sell for the same price.
He has been prodding me to buy the neighboring house that has been on the market for a year. My buddy says “the guy put $50k down on the house, so he’s only losing $10k by selling at current asking price”, and I responded “Isn’t he losing $60k then?”. I think the amount of losses that are to be seen just cannot be comprehended. Never mind this subdivision is 40 miles from town, and an hour commute each way. I feel bad for the guy - but lucky for him, he doesn’t need to sell and probably won’t sell for many, many years.
Of course he wants you to buy. Despite his bullishness, misery loves comapny and of course he wants you to keep the neighborhood comps up. Of course his wanting you to buy is a thinly veiled attempt at hiding his own vested interest.
Agreed. If he were an investment banker I’d say he was talking up his book.
Was there any discussion of the NAR’s affordability index for June of the Census Bureau’s 2Q home ownership dive?
Stock market going down again, maybe i was wrong and the FED can’t or won’t pump money into their favorite banks. Deflation around the corner as easy credit goes away? I have about 35% net worth in stocks but can and will pare this down if I think its a crash.
Kinda looks like a crash though…………
Daffy Duck’s…. DDD index:
Dow 13,211.99
Down -146.32 (1.10%)
Done!
NYSE Volume 4,185,274,000
Time to get that in cash before the crash. Except maybe it already started.
cactus - 35%? And you want to cut more? I’m 48 and I keep 60% or more into equities, mostly in retirement. I don’t want to miss those “12 up days” in the next dozen years. It’s worth going through the 15 down days to get those up days. At least my 18 year history of investing shows it.
Hi Bill I know and you’re right about the up days. Retirement 100% in equities. Thats my 35% . The other is my RE money I will someday buy RE with again. When its real cheap
Can’t seem to invest that part in stocks yet what with an inverted yeild curve and RE slow motion train wreck. If it gets cheap enough I’ll add to my equities outside of my retirement account. Some big boys are going to get blown up this year I think I will just step aside for right now. Inflation would be my biggest downfall and I don’t know what the FED plans to do about this “bubble” . All this debt should be deflationary right? Well lets see and if the market tanks another 500 points I’ll buy you a coffee this October. Cheers!
http://www.boston.com/business/personalfinance/articles/2007/07/31/tangle_of_loans_feeds_foreclosure_crisis/
If no one has referenced this yet, a very sad story of a couple who may lose their home. Yes, they re-fi’d — partially to pay for improvements so they would not have to put their disabled son in a nursing home. They could not even figure out who owns their mortgage! (Friends say this is really common now.)
The latest graph of Phoenix Notices of Trustee’s Sales is up. Here it is.
AHeM…
http://www.marketwatch.com/tools/quotes/intchart.asp?symb=AHM&time=20&freq=1&comp=&compidx=aaaaa%7E0&compind=&uf=0&ma=&maval=&lf=1&lf2=&lf3=&type=2&size=1&txtstyle=&style=&submitted=true&intflavor=basic&origurl=%2Ftools%2Fquotes%2Fintchart.asp
How often do individual stocks drop by over 90% in one day???
Yawn…
Macquarie Bank plunges 9.8% after warning of fund losses
By Chris Oliver
Last Update: 1:29 AM ET Aug 1, 2007
HONG KONG (MarketWatch) — Shares of Macquarie Bank Ltd. fell as much as 9.8% to A$74.46 in Sydney trading Wednesday, a day after the bank warned some of its high-yield funds could see sharp losses owing to the continuing fallout in U.S. credit markets. Macquarie said in a statement Tuesday investors in its Fortress Investment Ltd.’s high-yield fund could face losses of up to 25% from current valuations. “The portfolio continues to be adversely impacted by price volatility in the U.S. credit markets,” the statement said. The average price of loans in the portfolio of senior loans underlying Fortress Notes may decline 20 to 25 U.S. cents from current levels, the statement said. The average price of loans in the portfolio have already declined about 4% from valuations calculated on June 29, the statement said.
http://www.marketwatch.com/news/story/macquarie-bank-plunges-98-after/story.aspx?guid=%7BDFDCA31F%2D2C08%2D4078%2DBFEA%2D69CC4DC3B43F%7D