Buyers Are Asking For The Moon In California
The Wall Street Journal reports on California. “Many builders never expected the housing market to fall this far. Now they’re struggling with empty land, too few buyers and an inventory of finished homes that have been sitting empty for months, and some are growing desperate to free the cash locked up in their real estate by enticing the dwindling number of buyers.”
“And those incentives are growing bigger. In California’s San Diego County, real-estate agent Chris Heller says that until about 18 months ago, builders had little reason to offer incentives. Today, he says, ‘buyers are asking for the moon, and they’re often getting it.’”
“Mr. Heller says that on houses in the $700,000 range, his clients are typically scoring multiple concessions totaling as much as $80,000. Generally, that includes a price reduction, an agreement to pay closing costs or upgraded flooring or appliances, or a combination of all three.”
“Incentives alone often aren’t enough to close a sale, however. Rowena Emmett, an independent Realtor in La Canada, Calif., says that during Southern California’s last downturn, a client offered home buyers a new Porsche, ‘but that didn’t work.’”
The Orange County Business Journal. “Newport Beach homebuilder William Lyon Homes Inc. reported a pre-tax loss of $77.8 million in the second quarter on Wednesday.”
“The loss included $84.4 million in write-downs for land the homebuilder owns, to account for softening market conditions and slow sales.”
“The company builds in California, Arizona and Nevada. In the second quarter, William Lyon home deliveries dropped 29% compared to a year ago, while home orders fell 11%.”
The LA Times. “Over the last six years, Los Angeles has approved more than 14,000 condos and apartments for construction in the San Fernando Valley, according to city records, nearly three times the number of single-family residences. It’s a trend that is mirrored throughout the region, and it is expected to intensify.”
“Ellen Vukovich, a board member of the Sherman Oaks Homeowners Assn., said plenty of people still want to live in quiet single-family neighborhoods and worry that their ability to do so will be reduced as more condos are built.”
“‘They’ve all bought into this idea that people are going to want to live in New York in Southern California,’ she said.”
The Voice of San Diego. “2,033 San Diegans went into default on their mortgages in July. This is up 19 percent from June and up 157 percent from July 2006.”
“Even adjusting for regional growth, the rate of default absolutely dwarfs anything we saw during the early-1990s recession and housing bust.”
The Daily Press. “A look at San Bernardino-area homes in the planning stages shows the Victor Valley far outpacing its neighboring communities, according to San Diego-based MarketPointe realty consultants.”
“The glut is not necessarily bad news for the Victor Valley, said Russ Valone, MaketPointe’s CEO, because it means there will be predictable inventory and appreciation as opposed to huge spikes in home values.”
“‘You’re growing your business base, so a significant supply in housing is going to keep that housing stay affordable, and it will be easier for businesses to bring people here,’ Valone said.”
“For existing homeowners, however, the news may not be so good. ‘There’s a lot of ways to interpret the numbers,’ Valone said. ‘A lot of supply means we’re not going to experience rapid price increases. It’s nice to realize appreciation, but stable prices are better for long-term economic stability.’”
The Desert Sun. “Home sales across the Coachella Valley fell 36 percent in June compared with the same month a year ago, a new report shows. The overall median price dipped 5 percent to $380,000, according to DataQuick.”
“New-home sales led the decline as 50 percent fewer homes were sold compared with June 2006. The median price for new homes in the valley fell 11 percent to $373,500, according to DataQuick. Sales of condos fell 16 percent with the median price falling 10 percent to $317,500.”
“The 36 percent decline in home sales is at least partly due to tighter mortgage standards that pose an increasing challenge for first-time home buyers, said Greg Berkemer, executive VP of the California Desert Association of Realtors.”
“And prices that are still out of reach for many valley household budgets, he said.”
“The California Association of Realtors’ numbers vary slightly…(but) both reports put the total home sales decline at 36 to 38 percent, which still was better than for all of Riverside County, which saw a 47 percent drop. In San Bernardino County, home sales fell 50 percent from a year ago.”
“The slowdown in sales has forced dramatic downsizing among area builders, some of whom are trying to renegotiate land deals that were made in recent years, said Fred Bell, executive director of Southern California Builders Industry Association’s desert chapter.”
“When home purchasing reached a fevered pitch in 2004 and 2005, construction companies converged and multiplied. Now many are struggling. ‘If this doesn’t improve, we won’t be able to keep people working,’ Bell said.”
“The trickle-down effect has hit local escrow and title companies, financial institutions, furniture stores and other companies with close ties to the real estate industry, bankers and real estate professionals said.”
“A surge in defaults and foreclosures has muddied the picture, with 6,648 default notices going out in Riverside County in the second quarter and 5,141 in San Bernardino County, according to DataQuick. That was a 191 percent increase in Riverside County compared to the second quarter 2006, and a 180 percent jump for San Bernardino County.”
“‘The latest forecast from Ben Bartolotto, research director for the Burbank-based California Industry Research Board (July 30) calls for 133,500 housing permits to be pulled statewide this year, down 18.7 percent from 2006,’ said Bell.”
“‘It would be the lowest annual total since 1998’s 125,707. Adjusted for inflation and stated in 2006 dollars, new residential building is forecast at $25.091 billion in 2007, down 20.6 percent from last year,’ he said.”
“‘Everybody knows it’s tough for sellers right now, and whatever they can learn about what buyers are looking for will be an advantage,’ said Bill Clawson, a Realtor (in) Indian Wells.”
“The Riverside/San Bernardino area continues to account for nearly 50 percent of the decline this year in single-family housing production, said Alan Nevin, chief economist for the California Building Industry Association.”
“As production levels continue to taper off, it could be a good time for homebuyers, he said. ‘Developers are anxious to reduce their inventories of unsold homes and have hesitated to start new projects.’”
“‘Why aren’t buyers jumping in with prices, in some instances, the lowest in five years and the largest inventory in a long time?’ asked Emily DiSimone, president of the California Desert Association of Realtors. ‘Buyers are still trying to time the market, and timing the market is more about being lucky as being good.’”
‘New federal stats out today show that nationwide the housing slump continues to hurt real estate and financial workers. In the second quarter, 259 companies in real estate, construction or finance laid off 30,921 workers for 30 days or more — a 24 percent annual increase in mass layoffs in these property-related industries.’
‘These industries made up 13% of all mass U.S. layoffs in the second quarter vs. 9.4% a year ago. These federal stats show that 89 SoCal bosses in all industries cut 13,423 workers in the second quarter in layoffs involving 50 or more workers. That’s up 2 percent from the year-ago period in 2006. (No industry breakouts are made.)’
‘In the year ended in June, SoCal bosses cut 42,335 folks in major layoffs — the highest yearly rate since fourth quarter 2003.’
“The subprime tsunami has come to the beach, as it were, to the safest of the safe,” Epstein said. Money Market One is a San Francisco-based broker-dealer of short-term securities.
Is that music I am hearing?
Taps?
“Requiem for the Masses”
“Carmina Burana by Carl Orff”
Better known as the background music for ‘Conan the Barbarian.’
Got popcorn?
Neil
You mean “O Fortuna” from Carmina Burana?
Screwed up the cite. Translation by David Parlett.
I sit corrected.
My uh, “friend” in the lending business tells me that the REAL layoffs will start taking place later this year.
It’s only the beginning! Loan programs are eliminated and then the layoffs follow a few months later.
“Loan programs are eliminated and then the layoffs follow a few months later.”
What do the brokers do in the meantime? Twiddle their thumbs? Or look for jobs?
If they are smart they’ll re-direct their focus on the business a downturn brings.
thank you.
loan servicing, and getting “non-performing” back to “performing” is a GROWTH business.
With the bigger lenders, there is usually some lag-time. Just the way it is.
Bone up on their customer service skills. For example, “Would you like fries with that…”
e.g., “Put the money on the dresser.”
How ’bout, “Fred Garvin, male prostitute”?
They could always improve their skills and become dirtbags. It would be a step up.
Who is this jerk off Valone? He better hide ’cause the guys in the white suits and nets are climbing the fence looking for him.
Hey Mr. Vincent,
Saw my first REO auction home sign yesterday. It was just off millionaire row in Pasadena. Looks like the other shoe is finally dropping in the San Gabriel Valley. It’s about ime!
Trishyla
That should be “about time”
What street/area do you call millionaire row in Pasadena?
Orange Grove Avenue in Pasadena. If you ‘ve ever watched the Rose Parade and seen all of the real “mansions”, such as the old Wrigley house(now the Rose Parade headquarters) then you’ve seen part of millionaire’s row. This is one of the areas that was supposed to be “immune” to the downturn in prices.
Trishyla
I’ll try this again, implosion. Millionaire’s Row is the street you see when they telecast the Rose Parade every year. It has pre 1930 mansions, such as the Wrigley House (now the Rose Parade headquarters) the Busch house, as well as many historic Greene and Greene mansions. It’s mostly on Orange Grove Ave. South of the 210 fwy. It was one of the areas that was supposed to be “immune” to a dowtrun.
Trishyla
“immune”
I do not think that word means what you think it means.
(Not you Trishyla, I’m directing my comment at the housing bulls.)
Got popcorn?
Neil
Neil,
Inconceivable!
my name is enrique montoya
Vizzini (the Realtor): You only think I guessed wrong! That’s what’s so funny! I switched glasses when your back was turned! Ha ha! You fool! You fell victim to one of the classic blunders! The most famous is never get involved in a land war in Asia, but only slightly less well-known is this: never go in against a Sicilian when death is on the line! Ha ha ha ha ha ha ha! Ha ha ha ha ha ha ha! Ha ha ha…
thud (goes the market)
Not to be a d-bag, but I think that it’s “Inigo Montoya”.
Housing recovery in 2008? As you wiiiiiiiish….
Count
RugenRealtor: [Inigo stands up after getting stabbed by a knife thrown by Count Rugen] Good heavens. Are you still trying to win? Real estate always goes up[Inigo falls back against the wall]
Count
RugenRealtor: You’ve got an overdeveloped sense of vengeance. It’s going to get you into trouble somedayCount
RugenRealtor: [Inigo falls back against the wall] You’ve got an overdeveloped sense ofvengeancethe market. It’s going to get you into trouble someday.Count
RugenRealtor: [Rugen draws his sword and lunges at Inigo who then forces the blade to his left shoulder. Again Rugen lunges at Inigo and the blade is deflected to Inigo's right arm]Inigo Montoya: [Rugen swings his sword but Inigo blocks it and then begins advancing] Hello. My name is Inigo Montoya. You killed
my fatherthe market prepare to die.Inigo Montoya: [He falls on a table. Rugen attacks and Inigo blocks four times before he continues to advance on Rugen]
Inigo Montoya: Hello. My name is Inigo Montoya. You killed
my fatherthe market prepare to die.Count
RugenRealtor: [Now Rugen attacks five times and Inigo blocks every single one]Inigo Montoya: [Louder] Hello. My name is Inigo Montoya. You killed
my fatherthe market prepare to die.Count
RugenRealtor: Stop saying that!Inigo Montoya: [Rugen attacks and Inigo blocks it and then stabs Rugen in the shoulder. Then Rugen swings his sword. Inigo ducks and stabs Rugen in the other shoulder. Then he advances quickly and they fight] Hello! My name is Inigo Montoya! You killed
my fatherthe market prepare to die!Count
RugenRealtor: [Rugen gets his sword knocked away and Inigo slices his cheek] No!Inigo Montoya: Offer me money
Count Rugen: Yes
Inigo Montoya: Power too promise that! and a McMansion!
[he slices Rugen's other cheek]
Count Rugen: All that I have and more. Please. a good option ARM loan
Inigo Montoya: Offer me everything I ask for.
Inigo Montoya: Anything you want.
Count
RugenRealtor: [Rugen attacks but Inigo grabs his arm and stabs Rugen in the stomach]Inigo Montoya: I want
my father backreasonable home prices you son of a bitch.[Inigo plunches the sword into Rugen's gut and he falls down dead]
(Obviously, I added the words in italics and stole the notes from: http://www.imdb.com/title/tt0093779/quotes)
I was trying to think along those lines, but you did a better job.
Westley: Where am I?
The Albino: [raspy voice] The Pit of Despair! Don’t even think…
[clears throat]
The Albino: … don’t even think about trying to read your loan. The pages are far too thick. Don’t dream of FSBO, either; the only way in is secret. Only the Prince, the Count, and I [the Realtor] know how to get in and out.
Enrique Montoya was the orange picker who bought 5 700k+ homes in the IE on a BofA account with creative financing.
Paul
LOL. I looked that up. Caught me like a fish!
Where do you get your fix of Iocane in Pasadena? On millionares row?
Trish
The place near mine that fell out of escrow is still for sale.
They wont lower their price and they already moved out….LOL.
this is a repost:
dont know if anyone posted this before, but someone came up with a website to save the housing market(ya right).
let me know what you think, could be a weekend topic (get some laughs)
http://www.savetheamericanhome.com/
It may not make you feel better, however it might give you guidance going foreard-
“The Twilight of American Culture” by Morris Berman.
I am not attempting to make you feel better, but one person’s beliefs and this will all play out.
Lostcontrol
Oh, definitely worth a read.
(from the website): ”Property values sore in many areas . . .”
i need more cowbell
“Mr. Heller says that on houses in the $700,000 range, his clients are typically scoring multiple concessions totaling as much as $80,000. Generally, that includes a price reduction, an agreement to pay closing costs or upgraded flooring or appliances, or a combination of all three.”
And the seller, be it a construction company or a homeowner who bought at pre-2004 prices, is still laughing at the sucker who paid that much for a house that’s worth maybe $350k.
Did he mention if buyers were also scoring any construction defects or chagas disease?
Heller by day:
“Mr. Heller says that on houses in the $700,000 range, his clients are typically scoring multiple concessions totaling as much as $80,000.”
Heller by night:
“Hey there big guy come on score one for the little lady 3 balls for a $1″
That was my sentiments as well, 80k off a 700k deal….whooopty freaking doooo!! I will start to give the understanding nod and smile when I see these 700k Mc Mansions selling off in 280-350k ranges then I will say welcome to reality island.
Fraud in lending if your getting over 10% in concessions .Kickbacks of flooring and upgraded appliances are still the same as a cash kickback and it clear that they draw these up as allowances ,so they end up being cash-back deals anyway . i think with alot of these deals you would find that the house is already upgraded and these consessions are bogus .Back away lenders , the industry can’t be trusted .
Hey, I just want to send a big shout-out to all the builders who built all those squats for us to live in during the coming depression. Thanks a heap, pals! You guys are the greatest!
We may starve, but hey, with all these houses, homelessness shouldn’t be a problem. A family in every squat! Even the illegals will get to spread out! No more 4 families to a house.
There wont be any starving in places like the OC. You may have heard of the rat infestation at Angel Stadium. So if you are squatting in N.B., Irvine, RSM, Coto, etc, you can just use some of the sobflooring for kindling and catch a rat and make shishkabob. Then a few days later, you can make some broth with the leftover…
cabron
Hilarity of the day:
http://ventura.craigslist.org/rfs/392718007.html
Notice the first picture. The keys are already on the counter!
When did they start doing the travel trailer pop-outs on homes?
lets play, “Can you Spot the Addition?”
Actually, i was also going to say, can you spot the flip? Like on the tv shows … at least from the pictures it look good - though not $700k good
I remember when you could get that house in that area for the low 3s it wasn’t that long ago either.
But at least it’s a halfway attractive-looking house - in a race to the bottom between it and a 2500 sq ft. McS$it box on a cul-de-sac in the middle of a new development somewhere in nowheresville also currently listed at $700K I think know which will win.
It seems overpriced but at least it seemed nice. And it’s got a nice sized lot. Knock 50% off and I would think about that one. Okay, knock 65% off and I will think about it. Then again, maybe not.
Old house and I seem to remember somthing about cracking slabs because no re-bar was used in the foundation of certain homes in Old TO. Is this house between Camino Arboles and Flores , hwy 23 and Moorpark rd?
Agreed. Places like the Inland Empire will be toast soon.
Let’s see…
Three years ago my brother paid $650k for a monster McMansion in Thousand Oaks (well built, surprisingly. I personally inspected it almost every weekend… builder hated us. But my brother isn’t “mechanical,” so I was happy to help. His wife was the Tiger to make sure things went right. She would talk to the builder waving beer bottles picked up on the site.). So $700k, sans view, for a home 40% of the size, but on a decent size lot? I don’t think so!
Someone tell her that the jumbo market just seized up! 2006/2005 prices? Ancient history.
Realtors ™ hate 2008?
Got popcorn?
Neil
“…The keys are already on the counter!”
Hello? That’s called “staging.” Duh-uh.
Jen Bones,
Your name sounds vaguely familiar …….Hmmmmm….just can’t place it. lol
ben laid off in the industry?
I think it needs another (#362) coat of paint….how bout you
Fugly house - worth $250k max.
A great rental that will make for $2000/month.
San Diego: “..the rate of default absolutely dwarfs anything we saw during the early-1990s recession and housing bust.”
San Diego was one of the first places to have a bubble. What happens there, eventually will happen just about everywhere else.
I just spoke with a real estate agent for Indymac’s foreclosures in San Diego yesterday. He told me there are a lot of REOs over there, but when I asked how many, he said “about 100″. Am I missing something? Maybe he was just talking about Indymac foreclosures, not city/county wide.
he said “about 100″.
That’s today’s count.
lmfao!
He’s probably right Indymac is one of the more difficult places to get a loan even during the runup they had (ahem) standards. If I were you I would focus on WMC, Option One, New Century, if you can find out where their paper went.
Definitely WMC. During the past few years, everyone knew you could count on WMC to fraud, err, push your deal through…
“if you can find out where their paper went”
That’s the problem, Indymac and Countrywide are so easy because their REOs are right there on the website, when you look up WMC, nothing.
LAIG, the keyword is dataquick
Oh, thanks.
LMAO! Lead headline on NBC Nightly New, “Huge Selloff on Wall Street as Credit Worries Spread Across the Globe”. 387 point plunge! Ooh, Cramer’s talking, blaming the US homeowners, walking away from their homes. Says Federal Reserve needs to cut. Boo-YAH!
Of course, even as Cramer blamed the homeowners, he says this is all about “saving the American homeowner”. Boo-YAH!
Saving them from themselves perhaps?
Someone wrote here about two weeks ago: “a system in decline will experience survival of the unfit” - this proves it.
ironically enough. The most unfit walk the earliest and start starting over.
The fit linger. Cartoon character-style full-stride over the chasm. You only fall when your legs stop churning and your arms stop pumping and you look down.
lit finger..
when you cant burn down your own house.
The lost unfit stalk the earliest and start warting over.
Cramer’s talking, blaming the US homeowners, walking away from their homes.
Hold on a minute. Isn’t this the exact same tactic Cramer himself was encouraging during one of his recent rants?
Yep, I think so. When you think about it, Cramer is the perfect metaphor for what the markets have become.
Let’s just keep it short and sweet.
Cramer is scum.
LOL, you’re so right! And seeing as how he had a meltdown recently, …
Yes.
Now MSNBC has to put a extra disclaimer on the screen right after Cramer says anything . Also Cramer told the public that he rents ,so apparently that means that he didn’t have a hidden agenda with his recent rants ,(we all know better ).
Can you imagine what kind of a show Cramer would have in a down bear market . How could he even recommend stocks under those circumstances . People would grow tired of him and his show would go off the air .
Ah, how can you not love Cramer? Those droopy sad puppy dog eyes that look ready to burst into tears at the thought of any stock decreasing in price. His propensity to break or violently displace every non-fixed object in a room. The way he contradicts himself every other day. How his shiny bald head turns all red as he runs erratically around shouting “Bernake”. He is the funny little sad money destructor guy.
Cramer is saying the exact opposite of what he said earlier . First he said in essence that homeowners should walk and than he cried for a bail-out . Now he is saying in essence that it’s the homeowners fault .
All those guys/girls on those business shows that are cheerleaders for stocks or anything else are just self-serving in the final analysis . There are a few of those stock reporters guys that are really honest ,but they are usually out numbered 3 to 1.
I just find it hard to believe that it wasn’t clear 2 years ago that real estate loss was a given based on affordability and the extreme reduction in sales . Why did it take so long for some of the truth to come out in the wash like it has lately ? It has just been lately that the lending is getting tight ,and the secondary markets are refusing to be bagholders anymore for overrated junk paper.
What value do any of you receive from Mr. Cramer?
He is not serious about any investments.
He has no comprehension of current financial markets.
His track record is worse than Casey’s.
I do not understand why anyone discusses a non entity.
He ranks with Paris Hilton and other entertainers.
The last I will ever comment on Mr. Cramer
Hoz, while I often disagree with you, I don’t here.
What is it with all the Cramer fascination anyway? The guy didn’t know what he was talking about six months ago and he doesn’t today.
“Newport Beach homebuilder William Lyon Homes Inc. reported a pre-tax loss of $77.8 million in the second quarter on Wednesday.”
“The loss included $84.4 million in write-downs for land the homebuilder owns, to account for softening market conditions and slow sales.”
“The company builds in California, Arizona and Nevada. In the second quarter, William Lyon home deliveries dropped 29% compared to a year ago, while home orders fell 11%.”
Yes!!! William Lyon is the company that just converted some lousy early 1970s apartments into condos around here. I knew there were problems when they offered the units as “buy them upgraded or not.”
I’m Surprised Lyons reported their losses, they went private last year at at $109 share…..Right at the peak….
somebody sold that just right.
thanks for coming out.
Latest score for this builder….. Lyons zero……(Housing) Bears 100!!
can anyone explain to me why Lyon’s stock went up 5% with this piece of news?
‘Buyers are still trying to time the market, and timing the market is more about being lucky as being good.’”
Okay Emily, it’s your turn on the Joshua tree. What complete nonsense. This ain’t about luck or timing you stupid beaatch! Buyers are finally becoming INFORMED. They know it’s a bubble, they’re starting to understand what a healthy market can sustain, and until they see things begin to align themselves with tried and proven fundamentals they’re not going to do squat.
Oh yes, she is a prime contestant for “Iron Auger!” (I’m having fun with this on my blog, only a lame 1st episode so far, but I’ll do more.)
Well Emily… for the near term future, luck will only be improving for the buyers! My company is seriously looking to move workers to lower cost of living areas (not many… but enough.)
So how’s the view from the Joshua tree?
When will they learn that the remaining QUALIFIED buyers cannot be taunted into buying? What kind of children use taunting as a sales tactic? I’m guessing it worked for the last few years… (ugh)
Lance school of blogging?
(couldn’t resist)
Got popcorn?
Neil
“‘Why aren’t buyers jumping in with prices, in some instances, the lowest in five years and the largest inventory in a long time?’ asked Emily DiSimone, president of the California Desert Association of Realtors. ‘Buyers are still trying to time the market, and timing the market is more about being lucky as being good.’”
No, dumbA$$….would be buyers just watched the trained monkey pulled the cork out of the constipated elephants A$$ and are already on high ground… The 40ft brown wave you see rapidly approaching ain’t chocolate pudding… suggest you start paddling….
Oh man… that’s funny
Any post that has someone or something pulling a cork out of an elephants winker is gonna be a winner, no question about it.
That one was too good.
Thankfully, I look away from the computer now when I take a sip from my drink.
Damn I love this board.
ditto…
…not to be confused with “dittoheads”. Rush Limbaugh and Ann Coulter should be hung up by their balls ’til they die.
Don’t be absurd, Rush has no balls.
Idiot alert!
Grab a snorkel! LOL
‘Buyers are still trying to time the market, and timing the market is more about being lucky as being good.’
No Emily, buyers are waiting until houses become affordable again, and buying makes more sense than renting. Lenders are also no longer tossing out loans like candy at a 4th of July parade.
The MBS market is toast. Nobody trusts the bonds that are out there now. Who knows what kind of time bombs in the MBS bonds out there. The only thing that’s going to restore confidence in the MBS bond market is stricter lending standards. New issues containing highly verified mortgages will be the standard that investors will demand. Lenders that want to write and sell mortgages will have to originate much higher quality paper.
The FED can lower rates, but investors appetites for blindly buying any crap MBS presented to them is gone. It’s all about quality now. The scam is unraveling . The investor attitude towards MBS bonds is permanently changed. Fool me once, shame on you. Foll me twice shame on me.
“The FED can lower rates,”
I wish the FED would raise every time Cramer opens his mouth.
Anyway, vmaxer, confidence is completely shot all over the place. No confidence in gov, none in the markets, none in housing, none in the food we eat, the products we buy, the pharmaceuticals we use, etc., etc. From Pennsylvania Ave., to Wall Street to Main Street, lying, spinning and shilling became the operating basis. I think people have been burned so bad, they won’t believe anything anymore. I sure don’t, with rare exceptions like this blog.
Palmetto, you sound as burned out as I am. I appreciate your insightful comments on this blog. And, like you, I like this blog, mainly due to the high level of cynicism contained therein. The last few months, I’ve started watching King of the Hill and MASH reruns after work instead of CNN and MSNBC like I used to. It finally dawned on me that no matter how much I cared about this country’s and my children’s future, I was not gonna change anything by watching the news and getting pissed off while sitting on my couch. And I’m damn sure not gonna give up my anonimity and private life to actually run for an office. But Margaret Mead once said, “Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.” Some of us are gonna have to step up to the plate if our democracy is to survive.
“Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.”
Awesome, sweeny, I completely agree with you on this. That said, I like the idea of reviving the Continental Congress in communities all over the country. Small, local committees meeting in village, towns, cities and rural areas. Reviewing the Constitution, the pre-FED monetary systems, etc. We need to start talking. Washington deserves to go the way of the dinosaur. They’ve got nuthin’ but misery for the citizens. Most of the candidates, whenever I see them, I just want to slap them silly. Ron Paul excepted.
Benjamin Franklin, after signing the Constitution proclaimed ” A Republic if you can keep it.”
How far we have strayed. The country’s founding fathers never intended for us to be a democracy at all. They must be rolling in their graves right now. The first step would be to acknowledge this fundamental distinction. A Republic stands for inalienable rights of its citizens even if they are in the minority. A Democracy is rule by majority, and yet the term is thrown around so frequently, as if this is what we and the rest of the world should live and aspire to.
Do kids in grade school still say the pledge of allegiance in the morning? I don’t have kids so I wouldn’t know. I do remember, hand placed over the heart ” and to the REBUBLIC for which it stands………
What would it take to do this? I want in!
“by the people and for the people” has become “by the corporation and for the corporation”.
Simply put, the path we are on as a nation is unsustainable.
Article V of the Constitution of the United States provides that “on the application of the Legislatures of two thirds of the several States, [Congress] shall call a Convention for proposing Amendments…”.
http://www.foavc.org/
then I suggest we all vote for Ron Paul
Garrett, I think we all should vote for Ron Paul. I hear some people saying they like him, but they won’t vote because they don’t think he can win. I think he can, if everyone who does support his views votes for him. I wish I’d voted my conscience back in 2000. I didn’t and so I’m one of the slugs responsible for the loser on Pennsylvania Ave.
I take back all my previous compliments, you slug you.
Just kidding… But I don’t forgive you if you voted for him in ‘04! “That, I cannot forgive”.
I listened to Ron Paul question Bernanke at some hearings regarding all the mortgage problems, I was so incredibly impressed with his understanding of economics and of the MBS situation, I was shocked that he was actually a politician.
That about sums up “The Collapse of the Complex Society” and i am totally with you on that one in spades. And this is just starting, hate to think what things may be like in 3 or 5 years from now. Forget bottms, they are just bare axxes.
Agreed.
Palmetto,
I agree - everything’s a scam now, all image and very little substance. This country needs a return to basic principles - if we don’t do so soon we’ll go down in flames.
I think that in the next few years getting anyone to buy a load of BS for any reason will be very difficult. Sales, marketing, politics, “consulting”, liar loans, investment scams, gambling - it will all be much harder, if people wake up and realize that the last 15 years have been a crock ‘o shite and nothing was what it was promised to be.
i got a feeling MBS will bottom out WAY before something as massive as properties themselves.. wake me up when the shoeshine boys say MBS is a black hole.
I have a revolutionary idea. Before buying MBS hire an auditor that will actually go through, at the very least, a sampling of the loans to verify their quality. Don’t take the word of some 24 year old prick driving a Lamborghini that all of the loans are “top of the line, China dude”.
“Don’t take the word of some 24 year old prick…”
Couldn’t have said it any better myself!
I know some mortgage companies have filed BK, but what set of “bonds” have not paid their coupon? I haven’t read any yet that have missed an interest payment.
“No longer tossing out loans like candy” is an understatement. Even the rich with high FICO scores are getting hit with new lending standards. So buyers are also waiting until they can get a loan approved.
Dang, I missed out on the “loan bubble”.
Come to think of it, was it really a “housing bubble” or a “loan bubble” Which was the chicken and which was the egg? Right?
Loan bubble, loan bubble is first. First, money is created. Then the rest of the stuff happens.
It was a credit liquidity bubble spurred on by the Greedspan to stave off recession after the dot.com bust.
which was caused by the need to recover from the 90 - 92 housing bust
Don’t forget about bailing out Mexico in ‘94 and Russia defaulting 98!
Everyone chant, “2, 4, 6, 8 when in doubt just inflate!”
forgot to add in the ‘87 crash. As you said, 2,4, 6, 8……
“Terrorist attacks” anyone?
gold ? por que’
I would think the “injections” woud boost it some
Re gold, silver, and the mining shares in general - what is going on is that with the theatre on fire, the normal “safe haven” exits (such as precious metals) are bombed so that the J6P’s of the world do not flee to them, but rather they turn right back into the fire.
The total net short position in silver is 154 days of global mine production. In gold, it is 45 days. In copper, only 10, and in crude oil, only 1.5. Gold and silver have been ruthlessly suppressed for 10 years in order to feed and sustain the bubbles in equities and real estate.
All they have done is coil a massive spring. I’m perfectly content to wait a little longer until it lets go. It is a done deal; there is no turning back. You cannot unwind such fradulent, blatantly illegal, concentrated short positions without the prices going to the moon.
The silver bugs are even more intense than the gold bugs. You can get a hold of some pretty well written articles that believe silver would be $50 per ounce if it wasn’t artificially suppressed. The problem is that nobody really knows who is suppressing it. But there is some reason to believe that silver could do even better than gold if these entities are forced to unwind short positions.
I have my calendar marked for August 15th. That is when hedge funds have to report for July. There will be some serious crying in my neighborhood. I am sure to some some, “will arbitrage for food” signs on our street.
Read Ted Butler’s commentaries at Investment Rarities
He has done extensive research into the silver short position.
As far as I know, Butler is the INVENTOR of that whole story about decades-long manipulation of the silver price. I’m totally in love with silver as an investment, but be careful about taking Butler at face value. This isn’t the place for a detailed argument, so suffice it to say, after doing a lot of my own research, and filtering out the effects of Butler on every other “analyst”, I think Butler is extremely biased.
Most of the problem is the MASSIVE GLOBAL MARGIN CALL we are seeing now. This is causing people to liquidate other assets. Stocks are getting hammered. Precious metals will probably too. When you need to raise cash to feed the debt monster, everything must go.
OT - almost 400 pts off dji. don’t think there will be a dead cat bounce tomorrow either. if free-fall, sellers will be completely shut down because nobody will buy their ppty….we need stable
OT also, Nikkei 225 down 376 6 minutes after open.
Seperate sub-topic. BOJ and Australia’s central bank are injecting cash. Nikki down. Anyone have a good Oz stock index?
http://www.forbes.com/business/feeds/afx/2007/08/09/afx4006578.html
http://www.businessweek.com/ap/financialnews/D8QTRGOG1.htm
Hey, A trillion yen is a nice round number.
Got popcorn?
Neil
Nikkei down 393 points right now.
Over 400 points…
http://finance.yahoo.com/q?s=%5EN225
down 413…
small downslope to flat.
Have a look at the Seoul Composite. Down 3.98%. Ouch.
http://finance.yahoo.com/q?s=%5EKS11
Got popcorn?
Neil
Let the global selloff games begin!
Fed Reserve/BOJ/Various CBs:
“All units……..IRENE……I say again……..IRENE!!!!!!!”
Copter Pilot 1: “Eye-reeeene!!!!!!!”
Copter Pilot 2: “F#####g Irene!!”
Nikki down 377 to 16,793. (-2.2%)
Seoul composite off 3.83%
Ouch!
More on the AIG stuff.
Their delinquincies are at 2.5%
http://money.cnn.com/2007/08/09/news/economy/bc.aig.subprime.reut/?postversion=2007080909
“‘Everybody knows it’s tough for sellers right now, and whatever they can learn about what buyers are looking for will be an advantage,’ said Bill Clawson, a Realtor (in) Indian Wells.”
Here is a hint….pssssttt…..LOWER THE FRIGGEN PRICE DONKEY! If the house was a whopping 280k in 2003 and now you are asking 695k guess what it is all crap you bubble loving freaks! When a house goes from 250 to 280 in three years, then jumps to 700k in 3 more years you must revert to the true mean to sell these houses. You bought to high, too bad walk away then and let the market reset, you are just slowly hemorrhaging now nothing more.
Let’s say, instead, it’s over five years.
(700/280)^(1/5)-1 = 20% annual gain
Your freakin’ house… is then typified as “frothy”.
Many thanks Alan Greenspan and the “Do Nothing” Fed!
“LOWER THE FRIGGEN PRICE DONKEY”
LMAO … I had a vision of Shrek saying this to Eddie Murphy’s donkey.
I would guess someone has posted this earlier today:
http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/08/09/MN3IREG2E.DTL
“Mortgage crunch…”
In big, fat letters across the front page print edition of today’s SF Chronicle.
Hey, it’s about time - they’ve begun to accurately record what’s going on in the housing market, perhaps only five years too late.
In the “suddenly everyone’s an expert” category, is a choice quote, with Ken Rosen calling it as if it were the summer of 2003:
“Ken Rosen, UC Berkeley economics professor, questioned whether those consumers should have been able to get mortgages over the past several years.
‘If you have to get a loan with a low down payment, if you have to stretch, you shouldn’t buy a house. Stay a renter,’ he said. ‘These loans allowed people to stretch and get loans they shouldn’t have.’”
And in the “near capitulation” category, this gem:
“With the mortgage situation changing day by day, it’s hard to say what’s best for consumers. One thing all experts agree on: If you don’t have to be in the market right now, it might be best to wait this crisis out.”
I wonder how many of the Alt-A Bay Area’s members of the REIC choked on their breakfast this morning after they read that line?
I should add that the adage “real estate is local”… the mantra that serves the local REIC so well - will soon be repeated again and again by them. Have no doubt.
The problem is… as some here have pointed out, is that “financing is international”.
So, since crazy ass financing drove up house prices - now it’s time for the same to perhaps bring them closer to reality.
BREAKING NEWS!
WSJ - CFC: Countrywide Facing Massive Disruptions.
Just heard on CNBC.
Talk about a credibility crisis.
You can’t say things are fine and then a week or less have it turn out not to be fine. Especially when it comes from the CEO.
For more evidence, here is AIG saying everything is fine.
I bet a week from now they will be screwed.
http://biz.yahoo.com/ap/070809/aig_subprime_exposure.html?.v=11
AIG Reassures Investors About Subprime
Thursday August 9, 6:11 pm ET
By Lauren Villagran, AP Business Writer
American International Group Reassures Investors About Subprime Holdings
NEW YORK (AP) — American International Group on Thursday told investors the housing market would have to spiral to Depression-era levels before the insurer would be harmed by its exposure to the residential mortgage market.
The world’s largest insurer has exposure to subprime loans — those made to people with tainted credit — as a lender, investor in mortgage-backed securities and supplier of mortgage insurance. But AIG characterized its exposure as minimal and said it would take declines of 30 percent to 40 percent in home values to dent the market for mortgages with stronger ratings, where most of its holdings lie.
AIG said delinquencies on first-lien mortgages were on the rise at its mortgage insurance group. But the company also reassured investors that it has ample cash and “doesn’t need to liquidate any of its investment securities in a chaotic market.”
Didn’t Orangzillo at Countrywide say the same thing?
“NEW YORK (AP) — American International Group on Thursday told investors the housing market would have to spiral to Depression-era levels before the insurer would be harmed by its exposure to the residential mortgage market.”
One Depression-era death spiral coming up…
Could be one of the quotes for the ages!!
“We believe that it would take declines in housing values to reach Depression proportions — along with default frequencies never experienced — before our AAA and AA investments would be impaired,” said Chief Risk Officer Bob Lewis, in a conference call with analysts on Thursday. “AAA”- and “AA”-rated investments are considered to be those of highest credit quality.”
What does a Chief Risk Officer do exactly??
He looks for a new job ASAP.
I really hope that isn’t a quote for the ages. If it is, we can joke in the bread lines.
Neil, I get the sinking feeling that this will be no joke come tomorrow morning.
Tomorrow morning! Wow, and I thought I was out on a limb in predicting a crash before Octorber.
Also, wouldn’t it be cool if there WAS a month called “Octorber”?
Orangzillo sells shares.
http://biz.yahoo.com/ap/070809/countrywide_ceo_insider_transactions.html?.v=1
Countrywide CEO Exercises Options
Thursday August 9, 1:05 pm ET
Countrywide Financial Chief Executive Angelo R. Mozilo Exercises Options for 92,000 Shares
NEW YORK (AP) — The chairman and chief executive of mortgage lender Countrywide Financial Corp. exercised options for 92,000 shares of common stock under a prearranged trading plan, according to a Securities and Exchange Commission filing Wednesday
In a Form 4 filed with the SEC, Angelo R. Mozilo reported he exercised the options for shares on Wednesday for $14.69 apiece and then sold all of them the same day for $28.74 apiece.
Funny that he exercies them on the day right before they announce (via the WSJ) that they are screwed.
Oops, mean he excercises them the day before.
awww…
The last $900k of profit. How can he live off such paltry sums? That won’t even buy a Bugatti. Why, he’ll have to downgrade to a Bentley or Massaratti.
But it sure buys a lot of tanning oil.
Got popcorn?
Neil
a fork,
hell, stick a a spork in that pig.
Orangzillo sells shares.
Where’s Txchic? This is one of her favorite guys!….She may have an “Orange crush” on him.
Just kidding!
Wasn’t he the son of a former butcher?
there will be orange jumpsuits, spilled in the crisis.
Orangzillo.
LOL!
Here is the WSJ article (teaser).
http://online.wsj.com/article/SB118670096225293580.html?mod=hpp_us_whats_news
Countrywide Hit by Credit Market Woes
By James R. Hagerty
Word Count: 284 | Companies Featured in This Article: Countrywide Financial
Countrywide Financial Corp. faces “unprecedented disruptions” in debt and mortgage-finance markets that could hurt earnings and the company’s financial condition, the Calabasas, Calif., lender said in a regulatory filing.
The company, the largest U.S. home mortgage lender in terms of loan volume, said reduced demand from investors is prompting it to retain more of its loans rather …
No one can do what Countrywide can.
Here’s the full, free link…
http://online.wsj.com/article/SB118670096225293580.html?mod=googlenews_wsj
2nd mortgages? OUCH. Might as well write those suckers off.
“Retain as investment”, this means you are so upside down on a trade that the only choice you have is to put it aside and hope that somewhere down the road it might be worth something.
Are there any actual professionals working at Countrywide? Do they not know the difference between a trade and an investment? Sticking your head in the sand isn’t going to help in the long run.
pack your desk.
find something, in say transportation or perhaps telecom.
“No one can do what Countrywide can.”
This is so true. I think that if there is a single lender that can cause a watershed moment it is Countrywide.
Last I heard they have been holding thier own paper on 40% of the business they wrote. If they run into a wall then in one swell foop the home lending industry will come to a standstill. You’ll be able to hear crickets chirping in the background.
Also of note, what’s with the timing of this release? It’s almost like they let it go REALLY late hoping to slide it under the noses of the marketeers.
I’m pretty happy I got back into my shorts this am. Tomorrow should be an interesting time (old chinese curse).
1000 point downs are coming.
I thought I was late to the party when I bought more CFC January 25 puts on Tuesday. Guess not…
Yesteday the CEO executed options that netted him $1.3 million… so yeah.. today would be a good day for bad news. I see a 10K filed today. I don’t see anything way out of whack… but the thing is 106 pages long…. Profits are down, but still healthy at $.80 a share. Of course, we all know it is fiction based on incorrect “fair value” of holdings, but no real red flags from this 10K that I can see in a 10 min glance.
Maybe the insider selling caused the shares to drop ;-)…
Nahhhh
Not today, but you can bet ass tommorrow will be a different story. I was almost about to give up on my shorts. All this stock market talk on here I had to roll the dice on a couple.
haha, Cha-ching!
They’re still looking for a hearse big enough for CFC’s carcass. 1×30 on 20% of loans.
“Ladies and Gentlemen, what you see before you is a briefcase filled with 1.8 billion dollars. Tonight, before your very eyes, without any help from assistant hedge funds, I will attempt to make it… Disappear.”
*gasp from the audience*
xlf is almost free money:
“investment includes companies from the following industries: banks, diversified financials, insurance and real estate. The fund will normally invest at least 95% of its total assets in common stocks that comprise the relevant Select Sector Index. This fund has adopted a policy that requires it to provide shareholders with at least 60 days notice prior to any significant material change in its policy or its underlying index. It is nondiversified”
the question:
WHAT’S NORMAL?
Countrywide Hit by Credit Market Woes
By JAMES R. HAGERTY
August 9, 2007 7:31 p.m.
Countrywide Financial Corp. faces “unprecedented disruptions” in debt and mortgage-finance markets that could hurt earnings and the company’s financial condition, the Calabasas, Calif., lender said in a regulatory filing. (Read the SEC filing)
The company, the largest U.S. home mortgage lender in terms of loan volume, said reduced demand from investors is prompting it to retain more of its loans rather than selling them. The company also has been shoring up its finances. “While we believe we have adequate funding liquidity,” it said in a quarterly filing with the Securities and Exchange Commission, “the situation is rapidly evolving and the impact on the company is unknown.”
See the SEC filing from Countrywide Financial.
Payments were at least 30 days late on about 20% of “nonprime” mortgages serviced by Countrywide as of June 30, up from 14% a year earlier. Nonprime includes loans to people with weak credit records and high debt in relation to their income, as well as to people who don’t document their income or assets. On prime home equity loans, the delinquency rate was 3.7%, up from 1.5% a year before. For all loans, the rate was 5%, up from 3.9%.
In a sign of the growing difficulty in selling loans, Countrywide said that it transferred $1 billion of nonprime mortgages from its “held for sale” category to “held for investment” in the first half. Countrywide marked the value of those loans down to $800 million. It also decided to retain as investments, rather than sell, $700 million of prime home equity loans, marking them down to $600 million. Countrywide has said many of those home equity loans were second-lien mortgages used by people who put little or no money down in buying a house.
I’ve had a couple of loans with Countrywide over the years. They always held mine, didn’t sell it on. Wonder why? Could it be that they considered me a good credit risk?
Yep, the mortgage market has been one big hot potato. Button, button, who’s got the button? Markit to market to buy a fat hen. Sheesh, I’m gettin’ silly this evening.
They might be holding loans but the one thing they are selling off is stock. Orangzillo got out ahead of the curve and announcement :-).
tough to beat those cards.
Holy $hit. CFC is down 13% after hours. Look for another awful day for the market tomorrow. Maybe the homebuilder short squeeze will subside.
BZH and HOV will get sold off tomorrow. Who is going to buy their junk if they can’t get financing?
NYCB,
Mets or Yankees? The Yanks are looking good, a good fight will always bring a team together, and they should be getting real good after their latest series.
Lip
I hate the Yankees. I’ve been to half a dozen games this year and it pains me to go up to that toilet. All the tickets were free. I like the Mets better but I hate taking the 7 train to get to Shea.
I’m excited for the Jets this year. With Thomas Jones and a good O-Line they could be exciting.
The Bills will roll over the Jets. They always do. Even if they can’t beat another team, they will stomp the Jets.
Chargers FTW!
The Bills will roll over the Jets. They always do. Even if they can’t beat another team, they will stomp the Jets.
You must remember the Bill’s 1-12-1 season in 1968. Their one win was against Namath and the Jets, 37-35.
Just when you think something is obvious… it bounces noonish.
But here’s an interesting tip. I glance at brokeroutpost.com every once in awhile just because the “Whose you’re goto lender?” topic is an eerily accurate predictor of who will show up on ml-implode the next week. And tonight I saw this little exchange:
————————–
Subject: Bear Stearns / Encore
tkish:
I have reason to believe they are closing doors very soon, does anybody have any info either way?
Jurs21:
Say it aint so..
have a loan there now..
they have been great in the wake of Fremont and New Century closing
——————————
now to me that is curious.
CNBC just had a news release the Countrywide released saying that they are in big trouble.
I didn’t get the details because I was cooking dinner but the CNBC reporter was stuttering.
Here we go y’all. I hope this bodes well for SRS!
I only caught part of it, and it seems that countrywide claims they have marked down assets by 20% and may be “significantly” impaired etc.. tomorrow should be very interesting.
Didn’t Countrywide just issue a statement recently, like within the past 2 weeks, that they can survive this okay? Jeez, I really don’t believe anything I hear anymore.
Yes but Orangzillo just sold a bunch of shares so the bad news can come out now.
I beat you to it : )
And you did a better job of reporting!! Good job Tom.
Only by 23 seconds
time is
“Super 6-4 is going down, we’re going down, … Blackhawk down.”
“Super 6-4 is going down, we’re going down, … Blackhawk down.”
Probably the common refrain coming out of all the Street’s squak boxes these days….
”
Countrywide Financial Corp. (NYSE:CFC) has filed its 10-Q quarterly report with the SEC, and the stock has gotten hammered in after-hours trading with a drop of more than 10%. Investors should understand that many of these comments may have been included in prior filings and may have already been telegraphed by the company. But right now in our credit crunch and liquidity squeeze Wall Street is just shooting first. It isn’t even that they will ask questions later, because right now it’s just a status of shooting and walking away. ”
http://www.247wallst.com/2007/08/countrywide-pun.html
Can anybody spell “systemic risk”?
I can spell “septic tank”
Do you think Mozillo sold off his tanning bed?
yes…and I can also spell Jan 08 $25 puts…thanks again Tangelo
srs:
“The investment seeks to track the price and yield performance, before fees and expenses, which correspond to the twice the inverse of the daily performance of the Dow Jones U.S. Real Estate Index. The fund will invest at least 80% of assets in securities that, in combination, have economic characteristics twice the inverse of the daily return of the index. It will employ leveraged investment techniques to achieve the objective. The fund is nondiversified.”
a hedge fund
Is this free money?
I realize this will not be popular, but Mr. Mozillo did say over a year ago
“I’ve never seen a soft-landing in 53 years, so we have a ways to go before this levels out. I have to prepare the company for the worst that can happen.”
I am sorry, I honestly believe that he did everything that was humanly possible.
I do not blame him, any single company can allow and price correctly for a 5% default. We have not even had a 5% default on loans yet! Ergo there is a problem with the risk/modeling programs used by trading houses and hedge funds.
CFC may go under (I do not know), but it shows that the derivative markets (improperly used) destroyed the economy. Greed kills.
Today AZ Republic reprinted an AP story about interest rates (for conforming) drop .03% or some other such silliness as if it will end the crash… Someone says it ain’t stopping until prices are affordable.
Some BOZO jumps in with…. 2 people making $12.50 at burger king, that is $50K a year. Work 50 hours a week instead, at it jusmps to $70K, and that can afford a $250K house…. Therefore, houses are affordable.
$12.50 working fast food? PUUUUHHHHHHLLLEEEASSEEEEE!!!!!!!!!
What a bafoon.
12.50 in arizona!!!! you must have an MBA to make that much in kingman. fast food pays federal min wage. right to starve state.
Two of the bulls out there said this is a small credit bubble popping and that there should be a bailout.
How can you have it both ways? Geez..
This was on CNBC.
You can’t! My question has been the same, why do people borrow money? To buy things and invest in some cases, so if you clamp down on borrowing and increase the money supply where does it go? Cut out the lower tier of borrowers? OK, so what happens next?
All the upper tier buy all the homes and rent them out to all the lower income people. They tear up the houses, and the investors get screwed and Cramer cries for a bailout.
OT wmbz, you once siad you were near Cola, SC, true? I used to live in Hopkins (Ft Jackson) back in my snake eater days.
Absolutely no bail out!!! Why is it that we have to bail out someone when they get in trouble? When prices were going up the greedy bastards took everthing they could get and we are suppose to feel sorry for them on the way back down. I don’t think so. Let the markets sort this out even if we have a tempory run on banks and other instutions. No Pain ,No Gain.
“And those incentives are growing bigger. In California’s San Diego County, real-estate agent Chris Heller says that until about 18 months ago, builders had little reason to offer incentives. Today, he says, ‘buyers are asking for the moon, and they’re often getting it.’”
And if the housing bubble bursts, thunder turns to fear
You price it right and no one seems to care
And if the builders are beginning to behave like goons
I’ll see you on the dark side of the moon…
“Today, he says, ‘buyers are asking for the moon,…’ ”
Dear Santa,
How are you? I’m fine. I left you cookies. I hope you like them. Here is my list of things I want for Christmas:
* four bedrooms (not three, and the fourth one can’t be just a loft)
* travertine
* the moon
* seller to pay all closing costs
Please share the cookies with Rudolph, et al!
Luv,
Jen
What? No granite or Bold Look Of Kohler in the bath?
Hi again Santa,
Forgot to mention — please don’t give me granite. You gave me granite last year. (See, Jen’s List–2006 Flip). Granite is so last year. Please don’t give me Kohler. You gave me Kohler in 2005. (See, Jen’s List–2005 Flip). Kohler is so year before last.
Thank you Santa.
Luv,
Jen
p.s. Please give Jay granite and Kohler for Christmas this year. (He’s in Mayland — third house from the corner, brown brick chimney, can’t miss it). He’s been very good this year, even though he is living in the past.
Sorry, I forgot to add stainless to my list, can you shoot Santa an update for me, thanks!
JB:
I think you have the best handle yet. It makes me laugh out loud every time.
The only one that topped that on another blog was “Screaming Dustbuster.” It struck me as very funny because although dustbusters are useful they do grate on the nerves as if they almost scream. Like chalk on a chalkboard, you can’t stand it for long.
Since when did David Lereah change his name to Santa? LOL
Goldman Sachs last week said their Hedge Fund Rumors were unfounded. Categorically Denied it. Looks like they were wrong. Either these executives have no clue what is going on with their firms (scary) or they are outright lying and being deceptive (criminal). Either way, it ruins confidence in the financial system.
Look at this news.
http://biz.yahoo.com/rb/070809/goldman_alphafund.html?.v=2
Goldman pounded by hedge fund losses
Thursday August 9, 7:10 pm ET
By Joseph A. Giannone
NEW YORK (Reuters) - Goldman Sachs Group shares fell nearly 6 percent on Thursday after another of its hedge funds posted losses and reportedly sold positions.
North American Equity Opportunities, which started the year with about $767 million in assets, was down more than 15 percent this year through July 27, a person familiar with the situation said.
Declines at that fund follow a 12 percent drop in the last two weeks at Global Alpha, Goldman’s flagship $9 billion macro hedge fund. That fund is down 16 percent for the year and traders have said the fund is selling parts of its portfolio.
Goldman denied talk on Wednesday it was liquidating the fund and declined further comment. On Thursday, the bank declined to comment on the North American Equity Opportunities fund.
Equity Opportunities is a market neutral stock fund that takes long and short bets. The smaller fund, like Global Alpha, relies on computer-driven “quantitative” trading models.
“Goldman denied talk on Wednesday it was liquidating the fund”
In other words, you bet your bippy they’re liquidating. Fast as they can.
The North American Equity fund (what is left of it) is shutting down!
North American Equity Opportunities, which started the year with about $767 million in assets, was down more than 15 percent this year through July 27, a person familiar with the situation said.
Wonder what stocks this will kill tomorrow. They don’t see growth in North America I guess. The Alpha fund has some very serious problems too. We knew Hedge Funds would blow up. It went unregulated. Derivatives and the Carry Trade are next. Go ahead, drop rate Bernanke. Because if he does, Gold and Oil are up, Dollar is down, Carry trade causes a sell off of dollars and massive defaults. Interest Rates (not those under control by the FED) explode because foreign investors will demand returns for all the risk. That is even if they want to lend here anymore.
Hedge funds morph into “wedge” funds
No wonder Cramer was losing it.
Now he’s claiming it was J6P he was worried about.
Cramer is the common man.
Not.
He may be soon.
“Interest Rates (not those under control by the FED) explode because foreign investors will demand returns for all the risk. That is even if they want to lend here anymore.”
Fantastic! Credit has been the bane of this country’s existence for at least a couple of decades, anyway. Now, if houses were on a cash basis, what do you think the real value of a $100,000 house would be? $10,000? Deflation, deflation, deflation. The lesser of the two evils. Time to get back on the gold standard. What’s wrong with that?
> “Because if he does, Gold and Oil are up”
There’s nothing that can possibly be done in this world to keep oil from skyrocketing to unforseen heights. We are (unfortunately) years away from viable alternative energy, and the dollar is about to take the worst beating in its history. The central banks can try to keep the lid on gold, but at a certain point that victory becomes Pyrrhic.
Thus far we’ve witnessed the strange lockstep of oil and gold with the rest of the market. But that can’t last forever. At some point the decoupling *must* happen.
My bet is oil, gold, silver — in that sequential order.
I would think if we’re looking at a big recession coming on here, demand for oil would probably fall.
But how far can oil demand really fall? Everything is made from oil. Plastics, fertilizers, home products, gasoline, etc. And what if the Arabs say, “no more dollars”? This could get ugly beyond belief. Read up on what those ba$tards did in the ’70s. They know they have a weapon and they will use it.
I believe in saving the environment, but can’t we drill the Gulf, Alaska etc… and more refiners?
We could, but the oil companies wouldn’t make as much profit. Can’t have that.
Get real. The USA would burn through ANWR in 1 month!
Hey!
All you hedgies and banker Pig Men:
“How’s your model lookin’ today?!”
Like Rosie O’Donnell with a wicked case of diarrhea.
Get that trained monkey over here with a cork!
My wife is giving me a very odd look as I start laughing again!
The reason why Merrill, Goldman and others couldn’t bail out BS hedge funds is because their own funds are underwater.
http://biz.yahoo.com/ap/070809/aig_subprime_exposure.html?.v=11
“But AIG characterized its exposure as minimal and said it would take declines of 30 percent to 40 percent in home values to dent the market for mortgages with stronger ratings, where most of its holdings lie.”
Me thinks AIG is in trouble.
No kidding Darrell - that’s just taking 2005’s “appreciation” out around Phoenix. -30% from late 2005/early 2006 prices is in the bag already.
–
‘Buyers are still trying to time the market, and timing the market is more about being lucky as being good.’
Buyers in stocks and homes always time the market — They by the most when prices are going up a lot and are high than when prices are falling and are low.
I believe in Pricing the market. There is a good price to buy and there is a bad price not to buy even if it means waiting for years not just months.
Jas
Seems obvious but I think you made a profound statement there sir!
Absolutely, I’m waiting until prices are “rightsized,” however long that takes. Time is on my side.
Brokeroutpost posters predicting Government Bailout.
http://forum.brokeroutpost.com/loans/forum/2/151890.htm
They can predict all they want. With this kind of meltdown, it is just “too big to bail”.
It should read:
Brokeroutpost praying for government bailout so they can sell more loans and collect more commissions b/c the blew them all during the bubble.
Question: what do you do with a mortgage broker’s resume now?
I bet they lie on their resume and say they were doing something else all along. It’s their way of doing things after all.
Jeezum Crow dude, I’m not usually a spelling Nazi, but my god those guys over there at the Broken Outpost write like lobotomized monkeys.
how about bailing out the 40percent of our kids who live in poverty? maybe bailing out our vets who have substandard hospitals to take care of their war traumas? what about bailing out the millions of Americans who don’t have health care? sorry, it just ticks me off that we bail out those with so much, why not take care of the less fortunate?
How about we all just take responsibility for ourselves regardless of our circumstances. What a concept.
‘How about we all just take responsibility for ourselves regardless of our circumstances. What a concept’
yes i’ve heard the concept many times. And i think it rather hard hearted. I happen to believe in looking out for the next guy. especially the young and those wounded in war, they certainly deserve much better than what they’re getting.
I’ll agree regarding taking care of wounded soldiers.
Dalrymple’s Maxim: Misery increases to meet the means available for its alleviation.
Asian stocks tumble at open…
Asian stocks tumbled across the board on Friday following a rout in global markets as credit jitters flared up, after a major French bank froze three funds that invested in U.S. subprime mortgages.
Financial stocks were among the hardest hit amid the credit fears, with Australia’s Macquarie Bank down 6.4 percent and South Korea’s Shinhan Financial Group sliding 4.6 percent.
France’s biggest listed bank, BNP Paribas , froze $2.2 billion worth of funds on Thursday, citing the U.S. subprime mortgage sector woes…
The flight to safety also knocked down prices of industrial metals and oil, which in turn hit resource issues such as mining giant BHP Billiton .
http://www.nytimes.com/reuters/business/business-markets-asia.html?_r=1&oref=slogin
How embarrassing, the US must be looking like a Third World country to the rest of the world right now. A global meltdown because we can’t pay cash for our mcmansions and hummers.
“the US must be looking like a Third World country”
More like a turd world country.
now that was funny!!
la:
They have their bubble too and from what I read, it’s much worse in terms of government help and creative financing than here. They will have to look in the mirror soon too.
Don’t tell me that, I’m partly using Swiss Francs and New Zealand Dollars to hide out.
Just following NHZ - got popcorn, it seems much worse there to me but I could be wrong.
I’m betting on the Yen.
I’ve followed this blog for over two years now and although Ben put this together before everyone else, it’s shocking to see it happen. Although I thought it might be possible for this breakdown to be systemic it still seems unreal what’s going on. It’s the first real time crash due to the alternative media (blogs.) Based on recent history there may be more dead cat bounces but for the first time I don’t think there will be any. It’s shocking to see it happen in real time.
novasold
It is not embarrassing, it is sad.
I think it’s neat - we’re witnessing history as it unfolds, and we have popcorn! And in a few years after the dust settles, we’ll swoop in like vultures and pick the carcasses clean.
Oh why is Oil crashing? I thought fundamentals and demand were going to take it to $100 and that hedge funds and others weren’t manipulating prices?
Oil’s demand is down now because we’re finding out that blood is a better lube than petroleum jelly. There’s a lot of bleeding starfish tonight created by today’s revelations…
Funds must meet margin calls and the only items that show a profit are gold, oil and other commodities. Selling to meet margins.
If the economy tanks, who can afford to drive? $1.50 gas with no job offers in sight is a lot more Expensive then $3.50 gas and you getting 10 hours of OT this week!
“If the economy tanks, who can afford to drive?”
China.
Even in the depths of the great depression, unemployment never exceeded 25%. So if you’re not in the bottom quartile of the population, you should be OK.
Got to sell “stuff” people want in order to raise cash for margin calls. Oil, gold, silver go down then up after the margin calls
Hmm, with the mortgage borrowing slowed, those dollars of debt which were counted as assets by lenders no longer flow. With the multiplier effect of the fractional reserve finances, there’s a giant drain of money out of the system. The big lenders and investors are raising cash. Cash is king, everything else tending to deflate?
the nikkei is down 440+
These guys on SDCIA are so screwed.
http://www.websitetoolbox.com/tool/post/sdcia/vpost?id=2076310
Some of the posts.
“I need to refi about 2 or 3 properties, otherwise payments will increase several hundreds of dollars a month in the next 24-30 months. I have one property that is positive over $400 a month, however if I refi to a 30 year loan, perhaps at 7.5-8.5% I am going to just break even. I can easily go from $500-600 positive a month to negative $100 or break even if I refi these 3 properties to 30 year loans.”
another
“You’re in better shape than I am.
I need to refi 4 houses, all the loans have already adjusted and I’m pretty negative on every one.
If I refi, I will go from an average of $400/month negative, to around $200/month negative.
Back in 04 I got all 2-year and 3-year ARMs, thinking that I would sell several of them by this point. As it turned out, even though these homes are in Texas, it was not easy to sell them due to just about every problem known in real estate!
Now I’m sitting on a bunch of adjustable loans that keep inching up and hitting me pretty hard in the wallet.
I’d like to sell all 4 homes, but will be stuck with at least 2 until summer of 08.
I’m not sure what to do because the closing costs may + higher rates now may not even make it worth it for me to refinance.”
another
“My view is this is the end of a long line of bubbles that are all just symptoms of a massive debt/monetary inflation bubble. It just appears it can’t end well. Debt and money is something that needs to be pushed and it’s getting harder to push. This is all setting up for money supply contraction which can only lead to a recession maybe worse.
It’s just a great setup for a stock market crash on top of the imploding RE market. The stock market is not in anyway overvalued looking at conservative guidelines for p/e, etc. But this is exactly the time it happens … when it shouldn’t. What is the trigger? My guess is forced selling.
Look if you are one of the 5000 hedge funds reporting to your investors in the next week that they lost some double digit % return in the last month you need to raise cash? (they also report to their lenders looking for better collateral) Since you can’t sell the AAA rated CDOs, MBSs, and other toxic waist you hold what do you do? You sell what you can to raise cash and that is your gold and stocks … since those are still liquid. Add to that the yen appreciation scaring the carry trade guys to cover and there are multiple currents conspiring. If boj raises at this point that will cause an adverse reation.
I honestly am amazed that coment after coment from managers about not being able to sell a AAA rated bond. It just should not be that way.”
This one made me laugh LOL
“I’ve got to believe that the current turmoil in the lending markets will have some impact on the general economy. But it will probably be hard to figure out more specificly what the results will be.
First, I think the current turmoil will subside rather quickly. The interest rates on more risky loans will be increased some. And the loans for lower-credit-score mortgage borrowers will be difficult to get and much higher interest rates. The better-credit-score mortgage borrowers will have fewer choices and somewhat higher rates.
But there will be a calming down in a few months. There is unlikely to a major disruption in the overall economy. The growth of GDP may be reduced some, perhaps 0.1 to 0.3%. I doubt that the Fed will reduce interest rates before the end of the year. And likely not next year either.
Real estate prices will moderate some. There may some acceleration of the decline of prices in lower-income areas, where the sub-prime borrowers were major buyers.
However, in markets with strong demand, such as the San Francisco Bay Area and much of Southern California, there won’t be much visible change in the housing markets compared to now. The new house market will remain depressed, the used housing market will continue to be slow. The existing trend of increasing foreclosures will continue to go up some for a while. Prices will tend down.
It will be harder for investors to get loans. The interest rates will be worse. This will make it harder to be a long-term property owner.
As far as the stock market goes? Probably will go up some because of people moving from investing in real estate to stocks. Lower divident rates, higher price/earnings ratios. Stocks will remain a poor investment, in my view. At least compared to the returns for positive cash flow long-term residential rentals.”
“Some media are finally talking about an economic impact. Main problem with media is they’re in the business of selling advertising and CNBC doesn’t sell ads to investors, they sell ads to brokers and companies who want to sell to investors and therefore do not benefit from saying the economy is about to get slapped. CNBC is the worst offender imo. Watch any show on a down day, like today. They always say, “The market is down…but there’s a silver lining. [insert-obscure-company-name-here] is up.”
If you can block-out the sales hype and just look at the numbers (real, trends, historical) it’s obvious, at least to me, that the defecation has indeed become impaled on the fan. Foreclosure sales are over 40% of NOD filings which is up from 10% a year ago. Double the number of filings and quadruple the number going to sale in 1 year. Is that an elephant I see in the room?
Does the inability to refinance for the 7th time just to pay the credit card bills have an affect on a persons ability to buy another SUV or Big Screen TV for the new addition? Will finance companies suffer from the huge debt this country is carrying and can’t pay?”
Thanks for that post: we haven’t heard about those weenies since Taco Bell Jeff barfed in his shower.
watch youtube video on how federal reserve has destroyed the purchasing power of dollar causing transfer of wealth from wage earners and savers -
http://www.financialsense.com/fsu/editorials/nystrom/2007/0807.html
Heck of a job, Greenie!
I just received this e-mail from a mortgage broker I used a few years ago, first it explains the credit situation, and then gives this handy advice - I especially liked the last piece of advice, not to panic:
What Should You Do (if anything)?
There is no general cure-all for what ails the mortgage market – nor will its cures come in the next few days or weeks. As a general matter:
Have a very good idea what your house is worth (whether you intend to sell it in the near term or not) – be aware of what houses in your neighborhood are actually selling for and, above all, be realistic in your assessment – it is now a buyer’s market.
If you have a mortgage with a remaining fixed rate or payment period of three or more years, you may do well to simply sit tight.
No one can predict where the real estate and mortgage markets will be in three or more years, and the current market woes will likely evolve into a calmer market during this period.
If you have demonstrable equity in your home, and you are subject to an upward payment adjustment in the next year or two, call me to investigate whether today’s mortgage rates (yes, even the higher rates now being quoted by many lenders) can save you money.
If you are in the market for a new home or if you want to refinance an existing mortgage (or mortgages), be proactive, call me to discuss currents rates and programs. I’m always available to go over your financial situation to give you confidence that you will be able to afford the mortgage you are seeking.
Finally, don’t panic. Even with the upheaval in the mortgage markets, there are thousands of lenders still in play, and a variety of products from which you can choose. What will be different is the scrutiny of lenders, the amount you can borrow relative to the value of your home, and the price you will pay for your new loan.
From Sheila Bair (FDIC chairwoman) via CNN website:
http://money.cnn.com/2007/08/09/news/companies/fdic_banks.reut/index.htm?postversion=2007080918
“She said about 85 percent of borrowers with subprime hybrid adjustable rate mortgages making payments on starter interest rates - rates fixed for the first two or three years - are current on their monthly payments.
“If we can get those loans restructured to continue those starter rates, they can stay in those loans, they can stay in homes,” she said.
TRANSLATION: 15% of subprime borrowers have defaulted before their teaser rates even reset. Things are going to get very interesting this fall.
Yeh, I’m sure that MBS investors would have no problem just having homeowners switch into a 30 year fixed at the teaser rate. They would only be giving up more than HALF of the loan income stream after all… And I’m sure it would be no problem rounding up all of the MBS and CDO owners who hold slices of each particular mortgage and getting them all to agree to a restructuring.
Stop talking shite Sheila!
What was the teaser rate? 1%? Good luck. You aren’t going to keep them at that rate. They aren’t paying principle and their house is worthless. They will just walk away after they trash the place.
Right ……Wait until they find out how many of those loans are currently on vacant houses .Some of those loans are so bad the borrower would want the lender to pay them to stay in the home and they did with some of those cash back deals .
Maybe Fannie/Freddie should promise these borrower a car if they refinance for a 2% fixed rate on the most massive attempt to get a new bagholder for this junk paper . Freddie/Fannie =taxpapers bailout .
I have said all along that some of those marginal loans can be saved ,so let the lender of record save them . It doesn’t serve any purpose to rewrite bad loans that will default unless the RE market goes up .I just think its BS that Wall Street/bagholder lenders can’t restructure their own loans ,or know where their loans stand .. They had a department in charge of people paying off the loan if the customer sold the house or if there was a big pre-payment they wanted to collect . They must of had a clause in the contracts with the investors of ability to manage the loans .
I just don’t believe them .
I am more shocked that she leads the FDIC. We are a nation with idiot leaders, of course bush did say he wasn’t for a bailout.
Thats what I was thinking no way it can be done in time.
From Yahoo.
Very interesting article about what caused this fiasco, here’s just a piece…
In April 2005, Greenspan said:
“Innovation has brought about a multitude of new products, such as sub-prime loans and niche credit programs for immigrants… With these advances in technology, lenders have taken advantage of credit scoring models and other techniques for efficiently extending credit to a broader spectrum of consumers… Where once more marginal applicants would simply have been denied credit, lenders are now able to quite efficiently judge the risk posed by individual applicants and to price that risk appropriately. These improvements have led to rapid growth in sub-prime mortgage lending… fostering constructive innovation that is both responsive to market demand and beneficial to consumers.”
check it out………
http://www.marketoracle.co.uk/Article566.html
It is pretty much a given that whenever somebody pulls out that “creative” and “innovative” crap they are scamming.
“‘Why aren’t buyers jumping in with prices, in some instances, the lowest in five years and the largest inventory in a long time?’ asked Emily DiSimone, president of the California Desert Association of Realtors. ‘Buyers are still trying to time the market, and timing the market is more about being lucky as being good.’”
Hey, Em. First of all it’s “bing lucky THAN good” you ignoramus. Second, I’ve got a story or you that may help to explain your situation. I’ve just copied the end but you’ll recognize it. It’s in the parlance of our times…
Kisses,
MrBubble.
“…A child, however, who had no important job and could only see things as his eyes showed them to him, went up to the carriage.
“The Emperor is naked,” he said.
“Fool!” his father reprimanded, running after him. “Don’t talk nonsense!” He grabbed his child and took him away. But the boy’s remark, which had been heard by the bystanders, was repeated over and over again until everyone cried:
“The boy is right! The Emperor is naked! It’s true!”
The Emperor realized that the people were right but could not admit to that. He though it better to continue the procession under the illusion that anyone who couldn’t see his clothes was either stupid or incompetent. And he stood stiffly on his carriage, while behind him a page held his imaginary mantle.”
For so long I’ve felt like the kid in “Institutionalized”. “I’m not crazy! You’re the one who’s crazy!” But today at work, I was asked if I had seen the front page of the San Fran Comical. I smiled and shook my head. No need. I’ve got the HBB.
bing = being
With the Nikkei crashing the BOJ just injected 8.5 billion to help the market.
Tomorrow is going to be very bad.
Oh yeah. I guess that is to keep the Carry Trade from unwinding? God knows that if it did, we would be screwed here and they would be screwed there (from defaults). Oh well, it’s a matter of “IF” not “WHEN”.
Yen still rallied on the dollar. That has to hurt.
WOW……..
Hang Seng: -767 -3.42%
NIKKEI: -448 -2.61%
ALL ORDS (Aust): -171 -2.78%
“Buyers Are Asking For The Moon In California”
We’re gonna get it too!.
Shanghai copper down 2.3 pct, subprime rattles LME.
By Nick Trevethan SINGAPORE, Aug 10 (Reuters) - Shanghai copper futures fell
by 2.3 percent on Friday, under pressure after a decline in
London futures and from financial market jitters on fears that
U.S. subprime mortgage problems are spreading. Financial markets, including commodities, came under
pressure on Thursday after France’s biggest listed bank, BNP
Paribas (BNPP.PA: Quote, Profile, Research), said it had suspended three of its funds
owing to difficulties in the high-risk home loan sector
[ID:nL09811295]. “Two weeks ago commodities appeared fairly immune to some
of the turmoil in other financial markets, but that is no
longer the case,” MF Global analyst Edward Meir said.
Would somebody please contain this!!!!!!!!!!
It is contained,….. to Planet Earth.
LOL. ….But really isn’t it a good thing that the stock market didn’t rally up for weeks and than crash on the news that was bound to come out about weakness in the market .
Remember how the Realtors/NAR were trying to get or keep a rally in real estate going to keep the party going and the lenders kept making bad loan for another 2 years ?
I was expecting what we are seeing now 11/2 years ago ,but it didn’t happen .
And it will be that much worse.
No problems here on Mars…. Houston….over
Ready for this Home Depot news?
http://biz.yahoo.com/ap/070809/home_depot_hd_supply_sale.html?.v=8
Home Depot May Lower Price of HD Supply
Thursday August 9, 6:20 pm ET
By Harry R. Weber, AP Business Writer
Home Depot May Agree to Lower Price of Its Wholesale Distribution Unit
ATLANTA (AP) — The Home Depot Inc. sent its already battered shares into a tailspin Thursday when it issued a double dose of bad news that it may get less than expected for its wholesale distribution unit and it is lowering how much it will pay to buy back a portion of its stock.
While the world’s largest home improvement store chain said it is committed to getting the most value from the sale of its HD Supply unit and completing its plan to repurchase up to $22.5 billion in company stock, analysts warned there could be more bumps along the way.
“With Home Depot being such a bellwether stock, restructuring the Supply financing sends a very negative message to the rest of the market,” Deutsche Bank Securities Inc. analyst Mike Baker wrote in a research note.
Baker said that in addition “it’s entirely possible that stock buybacks planned for subsequent to Supply’s sale could be pushed back.”
Home Depot has said it would fund the share repurchase plan in part with the proceeds from the sale of Home Depot Supply.
They are sure cleaning up Robert Nardelli’s mess who happens to be the guy at the helm of Chrysler. WTF are these private equity people thinking?
Well it looks pretty bad just like predicted on this BB. I think I’ll have a drink and toast the RE bubble. HAHA to all who thought I was crazy to sell CA RE and move to Phoenix and rent. They can now kiss my ass. Thanks to all here who kept the faith when so many didn’t want to hear the truth.
Did anyone catch the Cramer piece on the Colbert report?
Stucco said something like “we’ll know were at the bottom when Cramer and the meltdown are on the Colbert Report”. I did I remember that right?
Anyways, this was on last night with a rerun this evening. It’s classic.
http://tinyurl.com/2dq4dc
That was great! Only colbert could distract cramer from his game.
It was a good point though– what’s the difference between trickle-down and helicopter drops? Which brings up another interesting point– the whole dilemma of liquidity crisis is that injecting money into banks that have stopped lending is pointless. The wise hoard in such a situation. Which is why you have to helicopter drop to people dumb enough to spend still (according to BB)…
So why the ECB + Fed injections this morning?
Post on brokeroutpost about who to place blame on:
I found this quote about a Broker mad at her homebuilder.
jwillmott78 says,
“i blame the builders,they kept building and building and building and raising their prices from 2004 when they had 5 million people on their stupid waiting lists and people were waiting for days in line to get into a home and for what those homes arent worth what they paid for them 3 years ago,it used to be when you bought in 1st phase you got the best price and now i bought a beazer home here is vegas in 2nd phase aug of 06 and was told from the builder they were not going to drop their prices and what happend 5 months later, they lowered the prices 50k.No one is making these builders responsable for anything,they collect their money and run and they make up their own rules and the government isnt doing anything to them,but its all our fault for putting people into 2 and 3 yr arms and now they cant afford the home because the rates are adjusting,but the builder can put someone in a home and 6 months later lower the prices and screw everyone who bought.
sorry just ranting
about the big shaft i am taking in the rear from beazer”
Calm down jwillmott76…I too was looking to buy my PERSONAL residence in 2004 in las vegas…..but the total insanity of it all made me decide this is NOT the time to buy…so…maybe I can buy your ‘investment gone bad’ soon for less than what you paid….sorry chump!
Rumor is that Deutsche Bank is pulling out of the US mortgage market?
http://ml-implode.com/imploded.html#lender_DeutscheBankCorrespondentLendingGroup(CLG)_2007-08-09
That would be startling, since they made over 800M last quarter by shorting the US housing market. However since Germany seems to have caused this precipitous collapse (IKB), it may be a fair punishment.
from Motley fool
“The interesting story in Deutsche’s results, though, comes from the subprime mortgage market. While investors in other investment banks such as Goldman Sachs (NYSE: GS) and Bear Stearns (NYSE: BSC) are trying to figure out how much they could potentially lose from subprime exposure, Deutsche investors are wondering how much the bank might ultimately make from correctly playing the subprime fallout.”
It would be a shame if a well run bank gets slammed because of crap done by others.
I believe they were getting out of making loans. At least for the time being. That’s about as short as you can be.
Ben,
How about another thread about the possibility of a bailout? The mortgage market is frozen. Hedge funds are going belly up every day. Central Banks are injecting money to keep liquidity flowing.
Are the stakes too high to let the market just correct on its own? Or are the numbers too huge to make a bailout a realistic possibility?
It seems the choice at hand is to either bail out the FB’s and their irresponsible lenders, and future homebuyers are stuck with these insanely high prices. Or, you let the FB’s go under, and future buyers have a shot at making a responsible home purchase at lower prices.
We have elections next year. I’m starting to worry again about a bailout.
And I love the banks crying about the secondary market vanishing. Gee wiz, if they really want to make a loan, they can keep it on their books, like they used to. But then, hardly anyone qualifies under those standards.
‘We have elections next year. I’m starting to worry again about a bailout.’
Effectively about 15 months to get voters eager for the bailout candidate. Yikes, that is not very far away! The ball will need to get rolling by Christmas.
I can see it now..
Hillary Clinton to the rescue!
Of all the candidates, she is most familiar with unscrupulous real estate developers.. the difficulties of paying off loans.. and with federal bailouts of failed banks.. hmm..what was it called.. Madison i believe.
Got Whitewater?
Countrywide Hit by Credit Market Woes
By JAMES R. HAGERTY
August 9, 2007 7:31 p.m.
Countrywide Financial Corp. faces “unprecedented disruptions” in debt and mortgage-finance markets that could hurt earnings and the company’s financial condition, the Calabasas, Calif., lender said in a regulatory filing. (Read the SEC filing)
The company, the largest U.S. home mortgage lender in terms of loan volume, said reduced demand from investors is prompting it to retain more of its loans rather than selling them. The company also has been shoring up its finances. “While we believe we have adequate funding liquidity,” it said in a quarterly filing with the Securities and Exchange Commission, “the situation is rapidly evolving and the impact on the company is unknown.”
See the SEC filing from Countrywide Financial.Payments were at least 30 days late on about 20% of “nonprime” mortgages serviced by Countrywide as of June 30, up from 14% a year earlier. Nonprime includes loans to people with weak credit records and high debt in relation to their income, as well as to people who don’t document their income or assets. On prime home equity loans, the delinquency rate was 3.7%, up from 1.5% a year before. For all loans, the rate was 5%, up from 3.9%.
In a sign of the growing difficulty in selling loans, Countrywide said that it transferred $1 billion of nonprime mortgages from its “held for sale” category to “held for investment” in the first half. Countrywide marked the value of those loans down to $800 million. It also decided to retain as investments, rather than sell, $700 million of prime home equity loans, marking them down to $600 million. Countrywide has said many of those home equity loans were second-lien mortgages used by people who put little or no money down in buying a house.
“Many builders never expected the housing market to fall this far. Now they’re struggling with empty land, too few buyers and an inventory of finished homes that have been sitting empty for months, and some are growing desperate to free the cash locked up in their real estate by enticing the dwindling number of buyers.”
Jeepers! What do you know — according to the WSJ, I have not been imagining all those empty brand new San Diego homes I see every morning on my drive to work…
Any ideas as to why SRS (the ultrashort RE ETF) has been getting hammered lately? (It’s kinda like saying why IYR would be soaring.)
- Short covering on the REITs?
- Flight to perceived quality?
- Expectations of a looming rate cut?
I was expecting better performance out of SRS lately, what with all the hits the rest of the market’s been taking. But in the last few days, my SRS holding got hit, along with my long positions in big caps. (Though I’m still up, having bought SRS at 88 and change…)
Home-a-loan:
I figure it’s mostly option number one. I have the minimum invested there and am hoping they can deliver on what they promised. It has been a very volitile fund and that’s part of the risk with any of the proshares fund. Yesterday it bounced around up to 103. We shall see.