Home Sellers Are Slashing Prices And Kicking In Everything
A report from the Arizona Republic. “Banks are becoming stricter with lending and foreclosures are on the rise, placing many Valley homeowners in dire straights, struggling to stay afloat. Monique Walker of Intero Real Estate estimates 25 percent of housing inventory are short sales. ‘We, as realtors talk to the bank and the bank at times allows the seller to sell the house for lower than they actually owe on the mortgage,’ said Walker.”
“Gov. Napolitano said, as Governor, she can’t turn the housing market around, but is focusing her efforts on lessening the harm done to people caught in the down cycle. She cited a bill she signed last year making it a crime for lenders to mislead buyers.”
“She said she wants to avoid a situation like the one in Silicone Valley where people can only afford a home if they are millionaires.”
The Arizona Daily Star. “First Magnus Financial Corp. announced this morning that it would substantially cut its workforce, after announcing to its employees late Wednesday that it would stop writing loans today. Employees at the Tucson-based mortgage firm were leaving this morning with packed boxes, many with downtrodden faces and some uncertain about what to do next.”
“In an e-mail sent out early Thursday morning, senior First Magnus executives said the nationwide credit crunch forced the company to stop writing or funding new mortgage loans and lay off workers.”
“‘Despite our efforts to continue normal operations, we have come to a point when we must substantially reduce our workforce. What this means for most of our employees is that Thursday, August 16, 2007 will be your last day of employment.’”
“Home sales are still sliding, and prices are also slipping, according to a monthly report released today by the Tucson Association of Realtors.”
“The number of homes sold in July fell 10.51 compared to the same month a year ago, according to information compiled from the Tucson Association of Realtors MLS. The median price fell 2.78 percent to $218,750.”
The Rocky Mountain News from Colorado. “Denver-area home sellers from Firestone to Castle Rock are slashing prices and kicking in everything from free plasma TVs to paying homeowner association dues to entice people to buy.”
“In recent years, home builders have constructed too many houses in areas that have gone from hot to cold, saddling them with huge supplies of inventory. National home builders, such as Beazer and D.R. Horton in Denver, are offering about $100,000 in price reductions on some hard-to-sell homes.”
“In one case, D.R. Horton knocked down the sales price of a 3,201-square- foot home in Firestone to $299,990 from $394,720, or 24 percent.”
“Housing consultant S. Robert August doesn’t like the practice of builders slashing prices. ‘It devalues the homes of previous buyers,’ which contributes to the record foreclosure numbers, when a homeowner who bought a house in the same subdivision for a higher price has to sell, August said.”
“Still, some sellers, especially in suburban Denver, are offering incentives themselves. Broker Chad Corbett is listing a two-bedroom condo in Aurora at $125,000, which is $15,000 below the assessed value. The owner also is tossing in a ‘brand-spanking-new,’ 42-inch plasma TV.”
“‘Mostly, people are just getting a big price reduction,’ said John Fritzel of Paragon Real Estate and Development. ‘There are some infill homes on the market for $2.5 million, and the offers are coming in at $200,000 or $300,000 under that, and there’s not a lot of counteroffers. Nobody seems to be married to a specific house.’”
“In other words, they’re willing to walk away from one house to shop for a better deal.”
“What the slow market cycle will do is weed out the ‘ma and pa guys and the doctors who had a couple of extra hundred thousand dollars’ and thought they could make a killing tearing down a small house and replacing it with fancy townhomes or a large single-family home, he said.”
“‘Usually, these people make some pretty expensive mistakes, and it is pretty easy for their interest carrying costs to get to $10,000, $15,000 or $20,000 a month,’ he said, forcing the owners to throw in the towel.”
The Denver Post from Colorado. “Colorado reported the highest foreclosure rate of any state in 2006, according to RealtyTrac. But other states have since passed it. Foreclosure filings rose 11 percent in the Denver-Aurora area, which ranked sixth among metro areas.”
“For those caught in the slump, the losses can be significant. Denver real estate analyst Gary Bauer said he has a friend who purchased a Las Vegas home for $250,000 a few years ago after a job transfer. He is being called back to Denver, but the move will cost him.”
“‘He will be lucky to sell the home for $190,000. It may be $175,000,’ Bauer said. ‘He is crying his woes.’”
The Review Journal from Nevada. “U.S. Bankruptcy Court Judge Bruce Markell postponed a motion Wednesday for summary judgment against Tower Homes, developer of Spanish View Towers in the southwest Las Vegas Valley.”
“Las Vegas law firm Marquis & Aurbach filed a lawsuit in May to recover deposits for buyers at Spanish View Towers. Managing Partner Terry Coffing said Rod Yanke, principal of Tower Homes, took the Fifth Amendment during a deposition in which he was asked where the money went.”
“Yanke had claimed to have 90 sales, but they were actually nonbinding reservations. Coffing said only 20 reservations were converted to ‘hard contract,’ or sales.”
“Larry Shiffman said the luxury condo project with its slickly produced advertisements looked like a good investment two years ago. Now he’s resigned that his $168,000 deposit is gone.”
“‘It’s a nightmare. Unbelievable,’ Shiffman said. ‘There’s a lot of fraud involved. They don’t expect there’ll be five cents left for us, but they hope to get insurance money.’”
“Shiffman said he received an e-mail from Yanke a month ago promising he would never give up on building Spanish Towers. ‘This guy is great. He can convince you of anything. He should sell used cars,’ Shiffman said.”
The Deseret News from Utah. “Presenters at a Wednesday morning symposium on the state of Utah’s real estate market also painted a fairly rosy picture of the state’s commercial, industrial, retail and residential markets. Of course, there are, as one presenter said, some ’storm clouds on the horizon.’”
“‘In life there’s not always all good news,’ said Gary Wright, a consultant for one of Utah’s largest homebuilders. ‘There’s good news and there’s bad news. And so it is in Utah’s residential housing market.’”
“Utah’s housing market remains one of the strongest in the nation, Wright said, but it has shown ‘definite signs of weakness’ in the past six months. Single family building permits, for example, have decreased 20 percent since January 2006.”
“The biggest threat to Utah’s market, analysts agree, is affordability. House prices in the state are increasing at least twice as fast as incomes.”
“The average price of a house in Salt Lake County is nearing $300,000, a $110,000 increase over the past four years, according to a recent Wells Fargo analysis. At the same time, Wright said, land prices have gone up 250 percent.”
“Kelly Matthews, executive vice president and economist at Wells Fargo in Salt Lake City, agreed. ‘At the moment, we just simply can’t afford the homes that are being offered for sale vs. the income levels of our people.’”
“Another blemish on the national housing picture, which has plenty of implications in Utah, is the meltdown in the subprime mortgage market. The subprime market meltdown is ‘having a large effect on the housing market both nationally and in Utah,’ Wright said.”
“When Josh and Summer Adams moved to Utah earlier this summer, they hoped to buy a house for their growing family, but…the couple realized that all signs were pointing toward only one option: a subprime mortgage.”
“‘My wife and I realized that the only way we’d be able to get into a house is to do something similar to what everybody else is now paying for,’ Adams said.”
“The couple opted to rent a house in Utah County until the volatile housing market settles into a more predictable pattern.”
“‘It’s hard to throw away the money each month for rent, but I’d rather throw my money away for a year … than to get into something and a year or two from now I’m upset because I acted off emotion,’ Adams said.”
“Home lenders have tightened standards across the board for all types of borrowers, whether they live in hard-hit areas such as Phoenix and Las Vegas, or in Utah, which has, so far, escaped much of the trauma gripping other parts of the nation.”
“‘The bubble was not as big here as it was in other places,’ said Kelly Matthews, economist at Wells Fargo in Salt Lake City.”
“While no one is saying that Utahns will escape the crisis completely unscathed, the extent of the impact is still unknown. ‘I think everybody’s kind of holding their breath and waiting to see what happens,’ said John Norman, executive director of the Utah Mortgage Lenders Association.”
“In 2005, approximately 14 percent of all loans offered in Utah were subprime loans, according to numbers kept by the Mortgage Bankers Association. The year before that, 18 percent, or 24,928 loans, were subprime.”
“According to the National Association of Mortgage Brokers, 13 percent of all loans offered nationally in 2006 were subprime.”
“The majority of the subprime loans offered last year were in the form of adjustable-rate mortgages. ‘They shouldn’t have been able to get a loan, really, based on their income, and they were getting more than 100 percent in some cases,’ Matthews said. ‘It’s just a disaster waiting to happen.’”
“Tightened lending standards will mean new standards for all homebuyers, regardless of their credit situation.”
“‘The homebuyer here in Utah is likely going to have to have a larger down payment than they had to have six months ago, (and) they’re likely going to have to be in a better financial position than they were,’ said Norman with the Utah Mortgage Lenders Association. ‘If you’ve got blemished credit or are a subprime borrower, it’s going to cost you quite a bit more.’”
“Which is why Josh and Summer Adams have decided to delay home ownership until the markets stabilize and they have some time to work on their own financial situation. By then, Josh Adams said, ‘we (will) be in a position where we wouldn’t have to do any kind of creative financing.’”
‘Real estate sales in Pitkin County dropped by half this June, compared with June of 2006. The June decline in dollar volume in Pitkin County is partially due to a $48.5 million transaction posted in June 2006. However, the number of transactions also declined by more than 50 percent over last June, and the dollar volume was less than it was in June 2005. It was the first time this year that dollar volume has dropped below 2005 levels.’
‘Sarah McAlister Woelfle, a broker associate with Aspen Land and Homes, doesn’t believe the June drop is any indication of a trend or should cause any worry that Aspen is subject to the national housing market downturn. Woelfle also said that so much property changed hands in 2006 that it’s only natural things are slowing down a bit in 2007.’
‘Suburban casino giants Station Casinos and Boyd Gaming Corp. increased their profits in the second quarter, suggesting that the local gambling economy isn’t faring as badly as expected from the slump in the housing market, which has earned Nevada the distinction as the state with the highest rate of foreclosures.’
‘The troubled housing market has probably has had some effect on gambling budgets, even among those who are gainfully employed or retired with a healthy nest egg. It’s no secret that gamblers, before home values headed south, tapped into home equity for cash. Now that home values have fallen, analysts say, homeowners are feeling less flush.’
is ASPEN the final frontier of “it’s different here ?
Yes, them and Utah. And Seattle.
Looks like Seattle is going to get a rude awakening as easy mortgages disappear. We might actually end worse off because the building boom has continued and condo starts are everywhere.
uptown, what you say is very true. In February I came up to interview at UW for school. One of the landmarks I used to find the Burke-Gilman trail up to the U was a 7-11. I recently moved to Ravenna, about a block from the 7-11, only… it’s not there. I’m scratching my head, I KNOW there was one right there. Turns out they’ve leveled the entire block to make room for condos. Keep building, you bastards.
You’re leaving out Orange County, Los Angeles, and San Diego. Ask them, they’ll tell you that “it’s different here.”
Interesting how the sentiment shifts; first, “it’s different here”, then “things are getting back to normal” (now being heard in Utah and Alberta), and then . . . well, anybody who’s followed this blog knows what’s next.
Ben, any idea how pockets like Scottsdale and PV are holding up relative to Phoenix in general? Any trends starting?
Scottsdale is, and has been tanking for the past 12 months or so. Really getting hit hard in the last month or so. I reported previously that I had gone into a new home development with homes priced around $700 to $800K. On this particular Saturday, there were a handful of builder agents on hand and 4 furniture salesladies who wer trying to pimp “a beautiful dining room table” to me and anyone else who seemed interested. It was the first time I had come across furniture salespeople in the model home. Times are definitely getting tough.
Pimping furniture in Scottsdale…. lovely.
Thanks for the field report.
By the way, from a rental investment standpoint, most stuff needs to fall at least 40% from current wishing prices. Further, nothing in Scottsdale is even close to being affordable per FNMA/FHLMC loan guidelines as based upon median AGI’s per zipe code.
zipe = zip
Yesx, of course, things are fine, just ask a broker associate!
It amuses me also the use of the term “gambling budget”. Oxymoron. And it was no secret that people tapped into home equity to gamble? Hellooooooo! Big, big problem there!! Total uncontrollability of behavior! Ridiculous!
This is a very interesting blog. We live in a 3,000 square foot castle block home on Bedford Street in Cumberland, MD that my wife bought for $16,000 cash five years ago. (that’s 16K and not 160K, the total price including the lawyers fees). We’ve almost always worked online (employed via internet) so commuting is never a problem. We put about $15-$20K more into it and did electric and plumbing updates ourselves and our insurance appraised it’s replacement value at a cheap price of $425,000. Our property taxes are a total of $350 per year. I know that the places that you all speak of must be absolutely wonderful but we never planned on buying because we could not afford it five years ago until we found this little city on the south east in a ways from the coast. Many people come to this city from all over (tourists) and give the little area a financial boost. I look at everyone’s prices on the board and almost have hear failure. I don’t know how you do it! Cumberland’s housing costs are 42% of national average.
with all the articles and comments I am starting to have enough time to read them all…..I guess we are well on our way to the bottom.
Interesting that you should mention bottoms… Cumberland, MD is or just was at the real estate bottom already. I bought another little house with an acre of land for $2,600 two years ago from the city. (that is less than 3K) and put about 15K into the place (sanded down the hardwood floors, sheetrocked the walls, updated plumbing and electric). I work online so commuting does not matter. I mentioned above that we have lots of tourists that come in the spring, summer and fall supporting hospitality jobs in addition to several manufacturing firms. As I mentioned before, I also bought a castle block home for 16K. While these unbelievable bargains are getting rarer, brand new condos are available in the 100Ks as well and neat old renovatables (1900s) for about 1/3 to 1/2 this. If someone wants a neat place to call home and doesn’t have the drag of a brick n morter job…. invest in Cumberland. Lots of bang for the buck! We got high speed internet and lots of college students in IT to work your business.
should of been “not enough time”
““Housing consultant S. Robert August doesn’t like the practice of builders slashing prices. ‘It devalues the homes of previous buyers,’ which contributes to the record foreclosure numbers, when a homeowner who bought a house in the same subdivision for a higher price has to sell, August said.”
LOL What a riot… do these people know what competition is?
Hey you cant slash prices on goods and services… that would insult yesterdays buyers. BAHAHAHAHAH
They sound like communists.
I know, it’s weird. In a bull market, everyone’s defending a market thats “unfair” (to first time homebuyers) because it’s a free market and that’s business.
On the way down, they become communists.
Mr. August seems to have the minimum qualification to be a consultant; that is, he has gotten some business cards printed which tell people that he’s a consultant …
I myself am a consultant, so I know that of which I speak.
Hey, Ya friggin dolt! The builder isn’t lowering prices for kicks, he is trying to discover what price will actually move his inventory. It is likely that the actual sales price will be considerably lower as well. No buyers exist at the old price level! Get it? It is a friggin mirage and the whole nation just took a big price cut. It’s just the sellers are making it official.
I don’t like the practice of stocks declining in price, as it devalues the shares I already own. It can even trigger margin calls for people who overextended themselves. But tough cookies, that’s what investing is all about. Risk.
–
“Tightened lending standards will mean new standards for all homebuyers, regardless of their credit situation.”
Four years too late. Bernanke Fed will be blamed for the Greater Depression because that is why we have the Fed. The Wall Streeters will go home free for their role in the bubbles.
Jas
Wall Streeters might go home free for a short while, until those homes are burnt down by enraged FBs. Hell hath no fury like the former middle class waiting in bread lines.
–
“Hell hath no fury like the former middle class waiting in bread lines.”
Yes, that is probable. I think that there will be lot of violence including some directed at minority groups. My Anglo friend says that, Jas, watch out when white guys riot (in response to the LA riots few years ago). I am afraid that he is right.
Jas
I’m trying to think of the last time white guys rioted…the civil war riots in NYC? Other than strikes that turn ugly, any examples?
I doubt if these scenarios will happen. Times will be tough, but no tougher than the 1970s, I think.
I was just talking lastnight with an asshat from Prudential who thinks Greenspan is a genius. This guy from Pru went on and on letting me know how long he’s worked for Pru, his credentials, how much he makes blah blah, and doesn’t even understand the mess that Greenspan made. Just because Joe Blow the certified financial advisor made some cash in RE the past few years because he listened to Al doesn’t mean that what Al did was good for the economy. He said what Greenspan did was brilliant and that everyone should have taken advantage of the situation and made money and then gotten out when Al made his ‘prediction’ last year that RE would take a fall and that everyone should sell or lock in. First off, coming from a financial advisor is just unreal. I wanted to ask this rich loser how everyone was either going to sell or lock-in a rate when the new rate would be much higher than the teaser rate and they were qualified for the teaser rate. I also wanted to ask him how if everyone should have bought and now everyone should sell, who the hell are they going to sell to, and I also wanted to ask him how any of this inflationary bubble policy would create any real wealth. I wanted to ask him all this stuff but this blowhard never shut his flapper. I guess he figured if he impressed me enough that I’d want to give him my money because he’s such a pro. What a blowhard. I was referred to this JO from the helpdesk at Pru and I only wanted to know what my options were as far as moving my wife’s money into US treasuries via Pru. He kept trying to hard sell me on some Pru product that had a guaranteed return of 6.17% and it was guaranteed somehow, in some way he keep skirting around. He just keep saying something like Pru is worth 100s of billions and there’s no way she’d lose her money because it’s guaranteed flapping on about something or other name Cipro or something. Still, he couldn’t explain how it was guaranteed money and everytime I questioned him on it he’d arrogantly cut me off. Kept saying shite like he does millions of dollars a day and demeaning me for only having $20,000 of my wifes money to move around for her, but made it sound like he was doing me some big favor. If her $20,000 was chickenshit to this guy, why spend 45 minutes on the phone with me trying to impress me what a top performer he is. Total insanity.
I’m not sure I want to ask how the conversation even got on Greenspan.
Others believe in the trickle down effect or in Reganomics, I am not sure that paying Americans with tax dollar in a defense bubble was necessarily healthy either. It was great for Cali for a little bit, then….not so good. The hangovers from these little bubble economies eclipse the good times easily.
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You didn’t fully get the scoop, or the other side, on the Trickle Down — The Trickle Down Poverty!
Jas
Any active bankruptcy lawyers reading this blog? Is there a blog somewhere where these cases are being discussed in detail? I almost can’t stand it, I must read about them! The hedge fund cases especially.
I’m guessing the bankruptcy lawyers are all too overloaded with work to spare any time blogging, or even reading blogs …
Word!
Plus their not privy to share it anyway. Client confidentiality!
Does client confidentiality still pertain after the client has declared bankruptcy and been liquidated?
And since when did confidentiality ever stop people from spreading gossip, even if it is anecdotal, third-hand, and involving unnamed people or organizations?
Well, I just made too many assumptions. I thought she meant cases in progress, and a very high level of detail. The lawyers I know gossip much less than we do here. They CYA more than accountants, and they KNOW their IP address can be traced, caught, sued for slander etc.
That is what I meant. The cases vis a vis the legal issues and various theories, etc.
“She said she wants to avoid a situation like the one in Silicone Valley where people can only afford a home if they are millionaires.”
Silicone Valley? Maybe parts of Scottsdale - and that’s not such a bad thing
But I can say that nothing’s been “slashed” in Arizona yet - most of the neighborhoods I”m looking at are all still priced at 2005 levels. When I see good 25% to 40% reductions on some of these properties then I’ll get serious. I’m willing to sell my house at a reasonable 2003/2004 price - but only when I can buy at a 2003/2004 price. It was 2005 that really damaged the market around here.
Right, the state showed no concern as most of the people were priced out by the run up, even though all they had to do was clamp down on the crazy lending/fraud, and release some of the MILLIONS of acres all around us.
Remember the local TV news? Back then we were the “new California” with instant millionaire home owners in west Mesa still driving around in 1986 Chevy Impalas. I remember one radio broadcast in particular - maybe September 2005 where they announced almost 40% appreciation for the year, and the radio host was almost yelling. It was a mania that everyone thought was real.
As far as the land - all the open (non-reservation) land is 30-50 miles away from the job centers. You CAN buy a house for peanuts in Queen Creek now, if you don’t mind spending 15-20 hours a week in your car.
If most of the people were priced out of the [real estate] market, most of the people did not get caught in the bubble. If most of the people did not get caught in the bubble, the bloggers here the last 4 weeks would not have whipped themselves in this doom and gloom frenzy that exists now.
So which is it?
If SV has so many millionairs …
Why is the Avg Salary only 85K?
Why were majority of homes purchased using ARM I/O
and other risky loans?
Why are so many leaving, majority of baby boomers, those who have nice retirement savings. have sold
their homes and left the state?
At the end, these kinds of generalizations will be uncovered
as more media hype and scam from no one other than realtors.
Many are in fact new to the area and are clueless about economics and and finance. Its amazing how much press access –carte blance — they get from the media.
Shh you don’t want to scare the silicone in silicon valley.
I sold my house in AZ in September 2006 for $325k. Comps were at $410k at the peak in 2005. It is currently on the market at $270k as a short sale. Been about a week so we’ll see if it sells. That’s a 35% haircut if it does. Nothing is moving in that subdivision.
http://biz.yahoo.com/ap/070816/wall_street.html?.v=60
PPT coming up short today.
“WE NEED MORE POWER SCOTTY” “treasury needs to fire the presses up to WARP 2″
Cap’n, Running a wee bit short on de-riskium crystals…
Wrong! PPT buying big…going for a green close from 350 down! Booya!
The new mania… Incessantly watching the market and attributing its every move upside (or lack thereof) to a secret financial cabal that doesn’t exist.
It’s not secret. Or maybe it was you buying the market from -350 to green in the last hour?
It was shorts getting caught in a squeeze play by the big firms painting the tape. End of story.
I call BS on that opinion. The shorts could not get the day’s closing level up on the green and close to the hole with near the frequency that we see on an ongoing basis.
Fair enough… I’ll agree to disagree if you will. Got a problem with that?!
Ten percent of NYSE and Amex stocks hit the 52-week low today and far more stocks declined than advanced. Eighty percent of Amex stocks declined.
“A group of 40 of the world’s largest banks lent Countrywide Financial Corp. $11.5 billion this week under credit agreements that they committed to as far back as 2006.”
http://tinyurl.com/yr62jv
Miraculously, although Countrywide traded even lower, almost all the lending banks saw healthy gains in their stock prices - even when the Dow was tanking. The rapid advances of these bank stocks began or increased significantly at 1 p.m. and followed the Dow.
I cannot think of a reason why lending money to a bankrupt company would drive up the stock price. I naively believed that buying BAC short at $50 was a good thing, but the Fed saw to it to reward friends. Oh well, I can wait.
Bob, are you a member of the PPT?
No, I’m a member of a much more elusive and secretive cabal… Those who know how and when to short equities.
These upside squeezes are so predictable they hurt to watch sometimes, and it’s not the fault of anyone except the people getting caught in them.
So you are saying the longterm trend is down?
I’m not saying jack in that respect, because I gave up trying to give people finanical suggestions when a friend of mine dumped his entire inheritence into a NASDAQ 100 fund at the top of its peak, against my advice. He’s now bitter, broke, and divorced, not necessarily in that order.
I will say that for various reasons, shorting is a hell of a lot harder to do successfully than going long, which obviously isn’t that easy itself. I’ll also say that no one has anyone to blame for their market losses in either direction except themselves, and blame certainly does not ever lie with secret boogeyman entities.
In a nutshell, conspiracies don’t truly exist, because without exception, people cannot keep secrets. Their fun to talk about, though, if you like speaking sheeple.
Actually, there is no secret about the PPT. In the last two weeks they have firmly shown their hand. It is called the FED.
What is sad is that is took what, almost 80 billion, to keep this economy from cratering to depression-like depths.
And here I thought I lived in a capitalistic society. I guess the WS boyz need the pseudo-socialcapitalcommunism to keep all their toys.
As for Front Range, enough with “no one has anyone to blame for their market losses…except themselves.” While i agree in principle, it is a little condescending when you have seen what the feds can do to the market by injecting cash.
What is even sadder is that they help their buddies, but they made a mess of the mortgage industry by allowing this all to happen AND THEY AIN’T GONNA PRINT MONEY TO BAIL OUT FBs!
Get a clue.
I have to say Bob - you are one naive dude.
Okay, you guys got me. I’m totally naive… There really is a secret government cabal manipulating the markets. My bad.
I’ve worked in and around the investment world for 30 years. If you spent just a few minutes with brokers and traders you’d know its impossible to keep secrets and that some kind of ONGOING manipulation is ludicrous.
Can market conditions come up where someone, strategically located, jerk a chain and have a big (temporary) impact? Sure. But when an event like that happens EVERYONE ON THE STREET works to find out who did what, why and how. Then they keep an eye on them to exploit a similar event in the future.
If there was a PPT why didn’t they save the market in 2001? Why didn’t they jerk it up to help Bush get re-elected in 06?
I’m with Front Range Bob here. Feel free to call me a naive dope too.
really? Even though Gearge Stephanopoulos admitted to there being PPT discussion at the White House while he was there?
That’s not good enough for you?
First, a conspiracy is something done illegally or immorally, between more than one person. If you don’t think that people make deals for illegal actions, then I suppose I can’t argue with your logic.
As for keeping secrets, folks who don’t believe a secret can be kept, have never been in a need to know position. That is why they are secrets. Those who don’t have a need to know, don’t know. Like Rumsfeld said, there are known unknowns, and unkown unknowns. Those unknown unknowns is simply him saying there are secrets that he knows he is not privy.
If a secret is to be kept, the consequences for leaking simply have to be greater than the benefits for leaking. It isn’t that tough. It is the basis of human action. People act to maximize their satisfaction.
How does a business keep secrets? Or are there no secrets in business? How does the military keep secrets, or are there no secrets in the military? How did there even become a word like secret, if they can’t be kept? It is what Kerry answered to Oblerman when asked about the secrets of the skull and bones. He basically said, that is why it is a secret.
Front Range Bob, if there are no secrets than what’s the secret ingredient in Classic Coke? For that matter, just give me the outright recipe for Classic Coke and I’ll make up several hundred thousand batches and call it Andy’s Classic Coca Cola Tasting Cola. Actually, don’t bother Bob, Coke’s recipe and secret ingredient are just that, a trade secret. Why, because if they patented it it would expire and then anyone could make a Classic Coke and compete. In the meantime, the Coca Cola Co. has been able to keep the Classic Coke recipe secret for 100+ years.
“The new mania… Incessantly watching the market and attributing its every move upside (or lack thereof) to a secret financial cabal that doesn’t exist.”
Bob, go back to the last thread and read the response to this. Proof.
Dow finishes up for the day …
Plunge Protection Team or Dead Cat Bounce?
Do you mean up from the low, or in positive from yesterday? ‘Cause it is not positive from yesterday.
Up from the low.
Who’s betting on the selloff resuming in full force tomorrow?
Me, and probably TXChick
Yeah, more selloff to cover and then the FEDs will inject more cash. How freakin’ sad, our economy has no life without the FED. Guess we have truly turned into a communist system. Only the FED keeps it chugging along. Oh well, I guess some of our finer industrial companies will produce something of value that we can all afford without 35% interest, as well as, ship overseas to see to it that everything will turn out AOK!
Nope. Not me. I think we’ll rally for awhile.
” Federal Reserve Bank of Philadelphia said its general economic index dropped to zero…”
Umm, doesn’t this mean that there’s NO MONEY IN THE BANK? No growth? Is that hyper-inflation I’m seeing on the (immediate!) Horizon?
FED, PPT, who the hell cares what it’s called??
All I know is $17B more was added to the system today to try to keep it goin’. That, you can’t deny.
Not PPT. Options expire tomorrow. They sell hard, then sell their put options to people that think the stocks are going to continue down, then buy back the shares pushing prices up, knowing the people that bought the put options today won’t be making them eat a loss tomorrow.
Look at what went back up today! It wasn’t the market as a whole. It was a targeted ralley in the financials and other heavily short sold stocks.
Classic short squeeze.
Big boys can do that kind of market manip. If you’re trading the market these days and have less than $1 billion to control, you’re swimming with sharks, and there is blood in the water.
I’m 100% in treasuries.
“Gov. Napolitano said, as Governor, she can’t turn the housing market around, but is focusing her efforts on lessening the harm done to people caught in the down cycle. She cited a bill she signed last year making it a crime for lenders to mislead buyers. She said she wants to avoid a situation like the one in Silicone Valley where people can only afford a home if they are millionaires.”
Love how the halfwit waits until after the horse has fled through the open barn door.
Additionally, you’re talking about a lower class 115 degree oven hell hole. Unless we get massive hyperinflation - that transfers into HIGHER WAGES - there is no need to worry about only ‘millionaires’ being able to afford housing.
crisrose,
I barely know where to start. You sound like a SoCal dude, which is cool, but you need to start laying off the caffeine or something. You are way off base in this instance.
1. The Governor, a Democrat, signed this bill into law last year, way before the dodo hit the fan. I’m sure the bill is a bunch of BS, but aren’t they all?
2. The Gov isn’t a halfwit, even though sounding like a good liberal might make you think she is one. She’s actually very deft in a political sense and she has a habit of making the right decisions at the right time. I hear our state has it’s budget balanced, with a rainy day fund on the side, and that’s something CA will never be able to say.
3. “you’re talking about a lower class 115 degree oven hell hole”.
Dude, I realize how people from SoCal see our lovely state, but lower class? Give me a frickin break?
Please don’t mess with my Gov or my state,
Lip
Lip,
1) Did you mean dodo, as in big extinct bird or doodoo as in excrement?
2) We elected the Governator, nuff said.
3) Don’t you know how much superior CA is? A lower class 115 degree hellhole in Cali costs 3 times as much as it does in your state.
Doodoo as in excrement of course
Since I lived in SoCal for a while I can appreciate the benefits and I’m fully aware of the costs. In Anaheim Hills/Yorba Linda they’re trying to sell $600K entry level homes. These are 40 year old fixer uppers with 1200 sq ft of space. I cannot tell you how many of my friends have been buying this crap, but hey, at least I tried to tell them.
As for the lower class hellhole, this is what you get in my area for $600K. Yes I know it’s a stucco POS, but let me tell you, I know which one I’d rather live in.
http://homes.realtor.com/search/listingdetail.aspx?zp=85086&ml=3&mnp=32&mxp=31&bd=5&typ=1&sid=971d17ef093f40418f9ad80e6ea0aef8&pg=3&lid=1080963200&lsn=22&srcnt=56#Detail
Last time I was in Anaheim Hills, it was 120 degrees in the shade. As for Anthem, we’ll see foreclosures there, too.
I lived in Arizona for 10 years, still have family in the area, and regularly visit. Barring certain parts of the Valley, it is - as are many parts of California - a lower class trash pit.
Crisrose,
OK, I see it different because I travel all over the state. There are plenty of lower class trash pits for sure, but I really like it where I live, and I might as well think that way because I bought my house and there’s a good chance I’ll be living here for a while.
Heck we can’t all live in Paradise, CA!
Maybe the state ought to pick up one of those outsized REOs in a year or two, and Arizona will finally have an official residence for its governor.
You WAY miss the point….
She is:
1) Admitting it is all down hill. Her comments about millionairs being able to buy is introduction to her comment that she’s looking forward to where anyone can buy.
It is the bright side of the boom ending to perry any assault that the crash is bad. What is bad for some is good for others.
2) Has no intention of doing anything to try to stop the crash. She knows it is a massive boulder rolling downhill, that any attempt to stop it would fail horridly, and that it is best to just stay out of the way.
Compare to places like Cali or Boston or other places where they’re talking about throwing millions of dollars at trying to stop the crash.
She may not have acted to stop the bubble, as if there was anything she could have done, but at least she’s not compounding the problem by trying to stop it.
“The average price of a house in Salt Lake County is nearing $300,000…”
The same can be said about the average price in most of California, only it’s coming from the other direction.
“It’s hard to throw away the money each month for rent…”
Even for the few people why do it right, they still don’t get why. One is not throwing away money in rent when one will have the same house a year later, plus $100k in the bank (or at least not in mortgage principal), and have a loan that WILL NOT ATTACK HIM.
It is incredible to see the effects of the success of the RE industry when you hear quotes like the above…from someone who even made the right choice.
this is my second year as an investor, so i’m just a beginner. made 170% return since the beginning of the year. but i’m so scared for what might come (a depression in my view is likely) that i cannot celebrate. i’m scared not for my portfolio but for our near future as a society.
is anybody of you guys stressed/scared/worried like me? maybe i’m just paranoic.
my husband is very happy though, as i promised to aim for a 30% return for 2007.
You don’t have any return until you take it. I’d refrain from breaking your neck patting yourself on the back until you’ve got about 10 years of “170%” returns in the bag. The markets, no matter which kind, have a way of taking back lucky profits.
geeze I did not read her comment as gloating…. and wasn’t it you who told us you had 100,000 shares of sunw and 100,000 shares of xxx etc?
If you’ve been here long enough, you might remember TX’s posts about hating women.
going on a couple of years now…
that’s funny.. cause i didn’t read txchick’s comment as anything but factual and practical.. a word or two to the wise.
breaking your neck patting yourself on the back when all Julia was doing was stating returns… just seemed a bit harsh coming from someone broadcasting share counts in their own posts.
someone broadcasting percentage gains to someone who broadcasted share counts.. sounds like a match made in heaven.
Next thing you know, they’ll be snogging.. I’d stay out of their way.
She’s just telling it like she sees it, which is why we love her so much. Which gives the chance to address a previous post.
TXC, regarding Hillary. Man, the negatives that gal is gonna drive might make it impossible for her to win the Presidency. I have thought for years that she’d be the first female President, but every time I hear her speak it’s like my ex-wife is screaming at me and I’ve never been divorced! Therefore you might be right concerning what you said the other day.
Peace to all.
Man what’s the deal today. Is this another of those days when people are throwing stones at each other???
xxx? Is that a porn company?
Right. Buffett has averaged about 22% per year, for forty years. If the rest of us do half as good, we will be in pretty good shape.
Very scared. Nice work. I’m a newbie too and up about 100% in a year. Still, both of us a hell of a lot better than what the market thinks is a decent return. Truth is, if you want to get rich you NEED 50% - 300% returns, not this market average 8% crap.
One of the greatest living investors, Warren Buffett, is happy to beat the S&P 500 by a few percentage points a year. Happy. Happy. Happy. After decades of managing money he’s worth billions.
To get 50%-300% for more than a brief period you might as well try your luck in Vegas. You simply WON’T get rich unless you are extremely lucky.
My brother-in-law bragged on and on about his 25% returns on tech stocks in the late 90s…then whined about giving it all back and more a couple years later.
life must be good when the future of the world is one’s primary concern.
Life will get not-so-good here shortly precisely due to the fact that most people could give a shit about our future. They just want to be rich NOW, since they’ll be dead and gone in 100 years. Screw the middle class, screw the environment, screw our constitution - just please make the stock market do what I want.
Thank you Sweeny! That is the problem. See, for all the winners, i.e. really rich people, there have to be losers, the poor. As I see it, this, combined with the need to have it all at 25, is the reason why we are in the shape we are.
I mean, who am I to argue with Buffet. Even if Hathaway owns other companies and invests in them, what exactly does Buffet or even I, for that matter produce that is tangible?
See, we want it all and we want it now and we don’t want to make something useful or valuable to do it. This, in my opinion has destroyed the economy (def. related to all the debt and materialism/greed we see). Buffet is a genius investor. No question. However, Geico and his other insurance companies, just like all insurance, is nothing more than legalized gambling. Now, if Buffet came up with the cure for cancer or I did or any of us, now you are on to something.
It’s not like Buffet or other mega-rich investors are harvesting enough food to feed the world’s starving or providing jobs and homes for all the world’s poor. i mean come on. This whole stock market gambling and investing, as well as, service/knowledge-based society is alotta crap, which, as I see it, has no real good ending.
I guess what I am trying to say is that just pushing paper around and hitting keys on a computer keyboard is no way to run a 13+Trillion dollar economy like the US and now we are paying for it BIG TIME!
Amen, Brother!
“See, for all the winners, i.e. really rich people, there have to be losers, the poor”
Capitalism isn’t zero sum. When you walk into the donut shop you give away cash and the donut guy gives away donuts because you both benefit.
In a sense you’re right. If I’m a millionaire and someone is a billionaire then I’m relatively poor. I’m not saying our economy isn’t sick and due for a correction but I haven’t given up on capitalism just yet.
KirkH,
I agree with you in that Capitalism may be the best system in the world, I just hope that one day we get back to it.
Recent evidence of our socialist government:
FED bailing out rich people, err, banks (over the last week).
Fed and Government refusing to publish M3.
IRs and FBI refusing to investigate and prosecute for r.e. fraud (evidence that rich don’t go to jail)
Ameriquest head being appointed as an Ambassador (after buying it as a result of his company’s r.e. fraud)
Americans not being allowed to fly after 91, but Saudi relatives of Osama Bin Laden allowed to leave the country.
U.S. bailout of airlines after 911.
Ongoing proof of socialist government:
welfare
unemployment
farm subsidies
This is obviously just a quick off the cuff list. But I helps to remind us why many people are fed up with the state of things in this once great nation. Hopefully we can stand up and demand that our country go back to moral values and get back to what it could and should be.
rant off
Thank you Sweeny! That is the problem. See, for all the winners, i.e. really rich people, there have to be losers, the poor.
Completely wrong. Wealth is not a zero sum game. Wealth is created. 50,000 years ago man considered himself wealthy if he had fire to keep himself warm and a good hunting ground. Lifespans were 20 to 30 years. The quest for wealth is what brought millions of people out fromt he caves. The poorest American is richer than the average person in many nations.
julia,
You have to be kidding.
7 minutes to go. DOW down only 21 points. NYSE lifts trading curbs again.
LOL this is funny to watch. DOW is going to end up unchanged for the day IMO.
Washington Mutual and Bear Stearns up big time. Bear Stearns announced a layoff of 240 people at their mortgage unit and the stock is way UP!
MARKET JUST WENT POSITIVE and Maria Bartoromo almost had an Orgasm on the air.
It’s funny, when it was down over 300 points she says “THE FED MUST DO SOMETHING!!!!” and as soon as it turned positive she was all happy. All was well I guess.
The Fed did something.
Free markets. LOL
Me too. I love the smell of frying shorts who were shorting at the bottom. The time to do that was last week.
Bingo… Thank you, thank you, thank you for making a rational observation here.
Ok Einstein, then why does the NYSE implement trading curbs? Hmmm?
To maintain order and that is a valid reason. Panic in the volumes we have in the market now would lead to something none of us want to deal with.
Front Range Bob = FRB
Nice handle Ben.
How amusing. Okay, I’ll play in the conspiracy sandbox for a bit…
Trading curbs (occasionally referred to as “collars”) were implemented to prevent a recurrence of the market crash that occurred on Monday, October 19, 1987. The NYSE’s trading curbs apply whenever the NYA declines or advances 190 points, and they remain in place until the NYA moves to within 90 points of the previous close. Their purpose is to prevent automated trades from running amok via a positive feedback loop to the downside or upside.
Did you catch the part were curbs apply to the upside as well as the downside? Must be a secret organization out there that’s trying to limit gains.
LOL
Everything looks like a conspiracy to people who don’t understand human psychology. But since we have so many bloggers who claim to understand exactly how the conspiracy operates, I’m assuming we have a lot of very wealthy traders. (BTW, Chick, I think you know I ain’t talking to you here.)
The constant, absurd references to the PPT make this blog, for all its positives, a bit of a laughing stock, I’m sure.
“How amusing.”
FRB = Not amusing — just amazingly coincidental — kind of like headline stockmarket indexes that behave as though attached by bungee chords to the opening bell level. Isn’t it possible to hide manipulation a bit more effectively than that?
“Everything looks like a conspiracy to people who don’t understand human psychology.”
Closing bell levels too close too often to the opening bell levels don’t look like manipulation to those who don’t understand probability theory.
“The constant, absurd references to the PPT make this blog, for all its positives, a bit of a laughing stock, I’m sure.”
Posters who assume away conspiracy theories out of hand without reference to the evidence definitely make this blog a laughing stock. They are a bit like the economist who does not believe his friend’s claim to have found a $20 bill on the sidewalk because it is impossible — any $20 dropped on the sidewalk would have been picked up already by the time said friend strolled past.
Well don’t you think the trading curbs should be as a result of a percentge rather than the points?
I can see what they mean by “Never argue with a good conspiracy theory.” Personally, I never argue with Occam’s razor.
PB - I’ve taught probability theory, just like you perhaps do. In fact I developed a course from first principles and taught it when I was a faculty member at Appalachian State U. in N.C. Just because prices in stock markets may not be distributed normally or like the distribution of prime numbers does not win you any support for your silly theories.
As far as reversion to mean: (1) your evidence is anecdotal, (2) if it’s true, who’s doing it? (3) why aren’t you trading it on it? (4) why is it that the people with the least experience are the ones who embrace the PPT?
Why isn’t there a Wall Street tell-all book?
“Trading curbs (occasionally referred to as “collars”) were implemented to prevent a recurrence of the market crash that occurred on Monday, October 19, 1987. ”
To all of us who think trading curbs and manipulation are “consipracy theory”:
Paul and Bob apparently think that we who believe this are making our blog look like a bit of a “laughing stock”. What they do not understand is that this is an obstruction of our free will. I seem to remember a couple of years ago we had an awful lot of trollers here who told us that we had no creditbility and looked like a laughing stock because of our theories of a housing market bubble. Well here’s a tidbit for who apparenlty “understand human psychology”. If you tell me I can’t sell my stock, or buy some stock, or can’t pull my money out of your hedge fund until after you pull all of yours out, etc, etc, then F you, i will never do business with you again. Think we’re the only one’s who think this way???
I obstruct your free will by making an argument? Get f*****.
Response to Prof Bear,
IMO they don’t want to hide the manipulation…but they are not going to admit to it openly either. Since the cash injections aren’t working they are sending the not-so-subtle message that the market will not be permitted to collapse. Traders short at their peril.
Tom, trading curbs are on a % basis.
And Professor Bear, I am nothing like the economist you describe.
Paul, the trading curbs are an obstruction. Sorry.
But Front Range Bob said, “The NYSE’s trading curbs apply whenever the NYA declines or advances 190 points, and they remain in place until the NYA moves to within 90 points of the previous close.”
My argument has nothing to do with trading curbs.
Don’t put words in my mouth, Chad… I didn’t say anyone on this board was a “laughing stock.”
I think trading curbs and the like are an impediment to the free market, which I happen to strongly believe in as a libertarian. However, I can and will learn about such devices and use them in an objective manner for the benefit of me and mine.
I play the game; I don’t let it play me.
But it did have something to do with us being a laughing stock for believing in a conspiracy, a conspiracy which we’ve proven, multiple times, aww forget it. Agree to disagree, didn’t mean to upset you that much.
Trading curbs. In other words, at the very least, acknowledge we don’t have a truly free market, then. And for the FED to inject money. Give me a break. Also, I love how you could buy, but couldn’t sell for a while. What a crock of crap this market is. The FED also ain’t injecting any money into my accounts or my friends’ accounts. What a joke. Let the whole thing fly and see what happens.
Oh we can’t stomach a depression. Well, if you didn’t realize it we are already broke. National debt is almost 70% of GDP.
WAKE UP PEOPLE! The country is toast. The whole thing is smoke and mirrors. For every winner on WS or on this board, there is a loser.
K
exactly. I’ve been saying that forever to the “PPT” moaners. If you know it’s there and what they’re going to do . . . . why not follow along and make a few bucks?
Gees, how hard is this?
txchick,
You think you can make money playing a rigged game? Well maybe…some gamblers win at Vegas, some of the time. The point is that it is still a rigged game; you might make a little $ flipping condos or buying financial stocks on ‘the dip’ but the big boys make much more off derivatives, packaged CDO’s, etc., and the damage to the economy is much greater than any profits little people make. Then when things go bad the banks get bailouts, cash injections…has the Fed dumped any money in your account to keep you solvent? Did you make record profits last year, hundreds of percent as did the I-banks? Managed to keep your gains from being inflated away by a declining dollar? I doubt it. So call me a ‘moaner’ if you like. Just don’t tell me there are free markets and expect me not to disagree.
We only know after they do it, for the most part. And, the predictability of a market increase, even short lived after an injection is soooo easy to ride, who says I’m not making money off of it? Just not gloating. . .
“..Trading curbs. In other words, at the very least, acknowledge we don’t have a truly free market,..”
as i see it, trading curbs exist because we are a proven danger to ourselves.. and our sense of self preservation makes them, while somewhat obnoxious, acceptable.
Amen Watcher!
Occam’s razor - Front Range Bob brought it up - I’m a fan of that too. It blasts away conspiracy theories. Some people have too much time on their hands and need scapegoats, hence conspiracy theories.
Ah yes….free market capitalism…is it not wonderful….
/biggest bunch of welfare queens on Wall Street assembled….we waaaannnntttt the Fed to rescue us…..waaaaaannnn!!!!
/sarcasm off
You’d think this kind of thing would really make the masses think about our “free markets.” But then again…
LOL! Not just an orgasm, but an Orgasm!
Tom,
I love how you capitalized “Orgasm”. Don’t know why, it just made me laugh.
You know, the Big ‘O’
DJIA UP 21 with a few minutes to go.
Whiskey Tango Foxtrot?
Has anyone ever seen such a volatile market? Links?
Volume is neither low nor high… Hmmm…
Got popcorn?
Neil
The fix is in Neil….
Stock up on popcorn….
Bugs: “eh Daffy who struck the gavel at the exchange today?”
Daffy: “Elmo…and I can’t him to stop laughing Bugs….Hahahahehehahahhehehahahahheheeeeeeeeeeee…Helllllllllllllllp!”
Financials went up like a rocket. Bear Stearns announces layoffs, stock goes up 12%. Your tax $ at work…welfare for bankers.
a company announces it’s taking measures to plug holes and straighten things out.. stock goes up.. very suspicious.. not.
From a web search
http://www.reuters.com/article/mergersNews/idUSN1645973920070816
The New York investment bank employs about 15,100 people worldwide and said the cuts would not affect Wall Street jobs.
No wonder the stock shot up. No wall street job losses!
Who’s the man behind the curtain?
Front Range Bob
Maybe Paul in Jax. Oops, I might offend him again.
I can’t figure out why he told you to “Get frozen pizza!” I think that’s what it was, anyway…
LOL, good one Bob, thanks.
I wonder how far behind the ticker is? I’m watching Google’s DJIA ticker and it is still moving at 1:06 PDT. It looks like the close may be negative after all …
Dead Cat Bounce.
A loss of around 15 points.
TXCHIC says short covering. I guess option contracts expire tomorrow which could trigger a broader sell off? Or was it Monday that we would see a selloff.
Isn’t short covering in a broadly down market a variation on a Dead Cat Bounce?
sorry if it sounds too unrelated, i shorted home builders, lenders and the like, like there’s no tomorrow on Feb/March. Also convinced husband not to buy in Manhattan until all this unravels on 2005, just save and invest while renting. So this blog helped me a lot! Thank you all, you helped me not to become a homeowner facing bankruptcy.
Sounds pretty spot on to me.
Yeah, totally… Unfortunately, I didn’t have the cajones or brains to short the lenders, thinking HeliBen would prop them up as his predecessor would have. Oh well.
Home Sellers Are Slashing Prices And Kicking In Everything
Jake: [fakes accent] How much for the little girl? How much for the women?
Father: What?
Jake: Your women. I want to buy your women. The little girl, your daughters… sell them to me. Sell me your children.
Please tell that the title of this thread didn’t remind just me of this scene from the Blues Brothers.
Got popcorn?
Neil
txchick57: i took most of it. but what you say is exactly true.
Cash is King right now - going to be some bargains in the future.
I have a catchphrase for Ben’s Blog, in the vain of Bear Grylls Man vs Wild.
“Read, invest, survive”
“She said she wants to avoid a situation like the one in Silicone Valley where people can only afford a home if they are millionaires.”
Of course, an ample number of the millionaires in the Valley are Silicon implants.
Luv,
Jen
Palmetto (R U out there?)
I have a story for you. Remember yesterday when you were welcoming deflation and I mentioned wages were subject to those same forces? Well a contractor where my husband works met w/her rep today. Her territory was just doubled so she was expecting a raise. They told her the contracting company was losing money in upstate NY. They cut her pay in half. How’s that for a shocker?
They seemed surprised she mentioned she would be forced to look for other work. I wonder how the parent company will react to that. In the past they’ve come to other contractors’ rescue when this contracting middleman got too “slash and burn” w/their contractors’ pay structures.
I’m here, Carrie Ann. Yes, I would welcome inflation and having been in the sales rep game in the past, I’ve seen people get their commissions cut or territories expanded in the best and worst of times, it can happen for a number of reasons, sometimes just a managment whim. Let me just say, I’d like to see wages more in line with prices of essentials out there and I’d prefer to see that happen by deflation. Frankly, my major preference is to see the FED abolished. Period.
By the way, I was on the road in Tampa today with a buddy who wanted to make a major purchase. He likes to use his credit card and then immediately pays it off after he transfers some money to his checking acct. So his card usually has a zero balance. BofA card. It was declined. I was joshing him about it, calling him a deadbeat and he got on his cell and called the 800 number and had me listen to the automated account information. Sure enough, no blance, and a nice limit, double what he wanted to charge. The salesperson tried to put the card through twice again. No dice. He tried to call BofA and get a live customer service rep on the line. Long wait and then he was disconnected. Salesperson said this had happened to another customer that day. Anyone hear anything? Kinda creepy. Like me, he doesn’t believe in debit cards.
” I would welcome inflation ”
I meant DEflation. Sheesh, get a grip, palmetto. Musta been the late afternoon drive.
I’m new to the blog. It has been frustrating for a renter like me reading stories of price declines in USA when prices here keep going up and up.
Check out prices for Fort McMurray:
Single Family $605,495
Mobile Home with Land $385,854
Who would have thought a town of 60,000 people at the end of a 300-mile two-lane highway would make Chicago and Phoenix look cheap? A town with one Wal-mart rivaling San Francisco?
Yes people earn good money here. But why if you had $600,000 would you not just buy a $250,000 house in Orlando and live off the $350,000 difference?
Any thoughts?
They have that ding dong David Bach on CNBC giving investment advice. He said all the smart guys work at Goldmans and Morgan Stanley and that’s were you should put your $$$ - with the smart people. Ok David just like we should invest in real estate too. What a dip.
Like those smart guys running the Goldman quant funds?
LOL
“the Goldman quant funds”
I’m realizing that the quant funds do great as long as the future is like the past (or at least like the past period that you feed into the models). Any deviation from the past, and wango, with the added pain of extreme leverage.
If they are smart all of your money should wind up the their pockets.
Just so everyone knows. I am not attacking Front Range Bob or the guy in Jax. Just nice banter : ) And calling him Eintstein was a complement. Good explanation but some other people clarified some things.
compliment.
Me too. I guess I should not name anyone in posts anymore. Don’t take such offense!
I’ve made an amateur study of differing theories (I promise not to use the “c” word again) regarding certain pivotal events in U.S. history, and it’s surprising how emotional people can get arguing their sides. Got caught up in myself, I guess.
Did you know there once was a fairly prominent group of individuals arguing that the U.S. government intentionally allowed the Japanese to bomb Pearl Harbor? That makes our PPT discussions pale in comparison!
Or the Government caused 9/11.
Why did the 90 day TB go to 4%? What does that that have to to do with hedgefunds and CDO’s?
“What the slow market cycle will do is weed out the ‘ma and pa guys . . . who thought they could make a killing tearing down a small house and replacing it with a . . . large single-family home,…”
Jed: Mr. Drysdale down at the bank says we can’t git that fancy loan after all.
Ellie Mae: Can’t you do somethin’, pa? The swimmin’ pool’s a leakin’ somethin’ awful, and I done outgrown it, anyway.
Jed: I reckon’ not, sweet pea.
Granny: Jethro, go fetch Mr. Drysdale. I’m fixin’ to give him the whoopin’ of his life.
Miss Hathaway: Can I watch?
I almost spit on my keyboard. good one.
Swimming pool=cement pond….:)
Swimming Pool=Ceement Pond
A lot of people on this blog don’t believe that the PPT exists. In 1987, after the market crash, president Reagan formed the “Presidents working committee on markets”. Their stated function was to prevent another crash. They have come to be known as the PPT or the plunge protection team. Its members include the secretary of the treasury and the fed chairman. It’s real, look it up.
I don’t doubt that the Fed does things behind the scenes to prevent short term panic but won’t fundamentals eventually correct overvaluation?
Or is the contention that the PPT can lift the market value of Countrywide for 5 years even though they’re insolvent?
PPT exists by executive order, as GetStucco proved. But they don’t call themselves PPT. I don’t think its existence is inherently good, but I don’t think its existence is conspiratorial either. It exists for good intentions. It’s a band-aid for Milton Friedman’s Monetarism failings.
In case you didn’t know, I’m a fan of Austrian economics, although I thin Milton Friedman did a lot of good for the U.S. Milt’s monetary policies have done far better than Keynesianism.
Watching this financial tsunami race around the globe is actually quite fascinating. It takes on a life of its own, similar to a hurricane or tornado, just a million times worse.
I guess having all my money in safety and being completely prepared for what comes next has a lot to do with it.
Well, gotta go for today… This thread was fun, but I like to debate on the outgunned side, and I’m probably the only one here who thinks it wasn’t like pulling teeth.
Any chance of having a PPT thread someday, or did you all hash that one out before?
“Any chance of having a PPT thread someday, or did you all hash that one out before?”
For me, it gets boring. Yes, it has been debated in the past, but the the debate usually goes nowhere.
I suppose I’d have to agree with resting it. It is quite interesting how a housing blog got to this point!
“Housing consultant S. Robert August doesn’t like the practice of builders slashing prices. ‘It devalues the homes of previous buyers,’ which contributes to the record foreclosure numbers, when a homeowner who bought a house in the same subdivision for a higher price has to sell, August said.”
This is the every day capitalism, why do you complain ?
I posted on here yesterday about the Utah housing market. Thanks to all of the posters you gave me advice. Now i need some more. In Utah it is common to sell a new home with an unfinished basement, but they like to include the unfinished part in the total square footage. What is the appropriate way to value this space since it obviously requires more money to be able to use this space?
The way to value a house is the same, finsihed basement or not.
Find similar properties that are rentals and multiply by 100-125. There is your price range.
Well, IMO, and here in Iowa, we don’t count unfinished in total sf, so it makes the calculations for price per sf easier for us hicks, yee haw. What would it cost to build a new place? If you can build for $100sf, then use that as a high point, and go down from there for older homes that might need repairs, etc. But, Darrell’s calculation is VERY good as well.
from the Sun Sentinel
Builder wants to erect 14,000 new homes in Okeechobee
Ok, I give up, no one can read or do math anymore. I think the few floridians with sense should take over a key and really declare independence.
Cramer is trying to translate what these stocks are trying to say.
Do you think it will be because of shorts covering?
Of course not. Saying prudent lenders deserve to go up today.
“prudent lenders ”
Is that an oxymoron these days, or do they still exist?
One big thing the real estate agents don’t want to talk about is contingencies in life. For many folks having money in the bank is more valuable than owning a house via a mortgage. Just ask the folks packing their boxes. With no reserves they can’t keep the house, and the odds state that the most likely time to lose a job is when lots of folks are losing a job. Generally, house prices are weakest when lots of folks have lost their jobs. Owning a house is something to do after you’ve landed a stable job and a have a very large bank account. Renting is superior until that time. Any other strategy is gambling, and the slot machines have a far lower barrier to entry.
“slot machines have a far lower barrier to entry.”
Not for those who’ve HELOC’d to get gamblin’ money!
Another RE article out of Utah today —
http://www.sltrib.com/ci_6636084?source=rss
“The Wasatch Front’s red-hot real estate market is losing steam - and few are feeling the pain as much as those trying to sell houses for more than $500,000.
Just look at the numbers.
There is now a more than six-month supply of existing homes for sale in Salt Lake, Utah and Davis counties in all price ranges, putting the area on the cusp of becoming a buyer’s market.
The situation is worse for those selling higher-priced homes. In the three-county area, more than 2,600 houses priced at more than $500,000 are listed for sale on the Wasatch Front Regional Multiple Listing Service (MLS). The problem is that only 140 houses in that price range sold in the past 30 days.”
“Many anxious sellers are now wondering whether Utah’s home-sale market will suffer as much as markets in Arizona and Nevada, which are in a pronounced slump.
Moody’s Economy.com, an economic forecasting enterprise, says Utah’s home-sale boom probably ended late last year. It is predicting a 4 percent drop in median selling prices by the end of this year or early next. That’s just an average. Some areas may see prices hold steady, while others will see larger drops.”
So much for immunity.
“In the three-county area, more than 2,600 houses priced at more than $500,000 are listed for sale on the Wasatch Front Regional Multiple Listing Service (MLS). The problem is that only 140 houses in that price range sold in the past 30 days.”
And the past 30 days are part of the selling season, before the credit crunch fully hit. Within a couple of months there will be a 4+ year supply of $500k homes on the market. And once the $500k homes start selling for $400k, the $400k homes start to drop, etc…
Quick kudos to the blogger on here that called the Amgen problems:
“Amgen slashes jobs
Biotech giant Amgen (AMGN, news, msgs) said late Wednesday it is cutting up to 14% of its work force in a move to help reduce costs.
The job cuts — 2,600 of them — will be the first in the company’s 27-year history. Amgen said last week it was starting to look at different cost-cutting scenarios due to weak sales of anemia drugs Aranesp and Epogen.
Video: More on Amgen’s job cuts
Shares of the stock were down 2.3% to $49.41.”
“In one case, D.R. Horton knocked down the sales price of a 3,201-square- foot home in Firestone to $299,990 from $394,720, or 24 percent.”
400K houses in Firestone? The place is a Denver exurb (actually its more like a suburb of that Pearl of the Midwest, Greeley). Its in the middle of nowhere. Why would anyone pay 400K for a 3000 sq foot house in Firestone, when you can get one for less in metro Denver? Even at 300K they are overpriced.
I agree with you about Firestone. It is far from everything and it is just about like Greeley or Fort Lupton. The plug was that if you could not afford Boulder, Louisville, Longmont, you could afford a home here. I am sure with the increase in gas prices, it is really not more affordable because you have to commute to everything.
I agree with you about Firestone. It is far from everything and it is just about like Greeley or Fort Lupton. The plug was that if you could not afford Boulder, Louisville, Longmont, you could afford a home here. I am sure with the increase in gas prices, it is really not more affordable because you have to commute to everything.
A report from the Arizona Republic. “Banks are becoming stricter with lending and foreclosures are on the rise, placing many Valley homeowners in dire straights, struggling to stay afloat. Monique Walker of Intero Real Estate estimates 25 percent of housing inventory are short sales. ‘We, as realtors talk to the bank and the bank at times allows the seller to sell the house for lower than they actually owe on the mortgage,’ said Walker.”
NOOooooo….say it ain’t sooooo!
WTF! Novel idea…banks staying SEMI-solvent…and FB’s not foreclosing. Jeez…who’da thunk. Shaking head (need to stop this for it may just fall off shoulders).
I talked to a couple of people this week who are very close to the Utah housing industry and KNOW what they are talking about.
Highlights-
A builder who is not paying their subs because they need to sell houses to pay them and they are not selling.
The houses that are selling are being bought by “investors” i.e. clueless dopes.
The majority of the younger generation and a good part of those a little older that are buying houses are “faking it” i.e. they are stretched to the max making payments on houses, furniture, cars.
A large furniture store that advertises all the time is one of the biggest lenders (to allow customers to buy their furniture) in the state.
This is going to develop very badly in Utah. If more people got a clue it might not be so bad but as we keep seeing, few will.