A Lot Less Room For Error In Today’s Market
The Rocky Mountain News reports from Colorado. “Colorado is on pace to see a 25 percent increase in foreclosure filings this year, with 19,460 being filed in the first six months of the year, according to a Colorado Division of Housing report released today. Zachary Urban, administrator of the Colorado Foreclosure Hotline, said there’s been no dropoff in hotline activity. ‘What concerns us the most, though, is that there is an increasing number of properties going to sale at auction,’ Urban said.”
“‘There are still plenty of adjustable-rate mortgages set to readjust, and there is plenty of inventory on the market. If you can’t make your payments, and you need to sell your house, odds are that you won’t be able to sell it quickly or easily. That’s certainly part of what’s driving the foreclosure numbers we’re seeing along the Front Range,’ said Kathi Williams, director of the Colorado Division of Housing.”
The Sun News from New Mexico. “Fewer homes sold in July than a year ago in Las Cruces. Homes, new and previously owned, are still selling at a decent clip in Las Cruces, but certainly not as fast or in the same numbers as years past.”
“C.J. Pierce of Steinborn Realty…said, there is a lot less room for error in today’s market. Houses will sit ‘if you have the wrong price, in the wrong place in a competitive market.’”
“Stacey Melzer has had her house on the market in Las Cruces for more than six months. ‘I did not think it would take this long (to sell),’ she said.”
“‘There are a lot of homes on the market giving buyers more to choose from so it’s made it more difficult to commit to a purchase,’ said Las Cruces real estate agent Karen Trujillo.”
“Real estate agent Annette West reported that 173 homes sold in July. That is off significantly from last year’s pace. West reported that 246 homes sold in July of 2006. West pointed out that the overall average price is down from $212,921 in July 2006 to $199,872.51 in July 2007.”
“Louis Sauceda, owner of the Official Mortgage Team of New Mexico in Las Cruces, said that adjustable-rate mortgages and no-down-payment loans have gone away. ‘We’re back to mortgage lending 101,’ he said. ‘People who have good credit and good jobs and incomes can still get loans.’”
The Casa Grande Valley Newspapers from Arizona. “New homes still are being built, though not at the same pace as a year or two ago. ‘(The boom of 2005 and early 2006) was almost like the perfect storm. It was bound to slow down,’ says Rick Miller, director of planning and development for the city of Casa Grande.”
“Maricopa has seen the biggest drop-off, recording just 208 sales in July at an average price of under $230,000. That’s the lowest for any month in the new city in the last two years. Early 2006 saw two months with sales of more than 500 homes, and the average purchase price during a month was as high as $281,000 in May 2006.”
“Figures from the Western Pinal Association of Realtors, which includes home resales in most of western Pinal County, show a similar trend. The most disturbing numbers, especially for anyone thinking of selling a home, are those for average time on the market.”
“Also discouraging is the fact that the average sales price on the homes that sold this June was $168,300, but the average price of the homes listed was $217,500. The average sales price was $169,200 for all of 2006, the culmination of a spike in prices for existing homes. The average selling price was $150,100 in 2005 and $112,200 in 2004.”
“If you intend to sell an existing home, even if it’s the almost-new one you bought just a year or two ago, you’ll need patience. Lots of patience. And don’t even dream of selling it for the price it would have fetched a couple of years ago - even if you paid that price for it yourself.”
The Arizona Daily Star. “Looking on the bright side of the market slowdown is getting tougher for local real estate agents. As financial problems increase for mortgage lenders across the country and lending standards tighten, several Tucson agents said they expect the number of buyers probably will shrink too.”
“‘The market’s really scary right now,’ said Pamela Young, an agent for the past 10 years. ‘There’s a lot of agents who don’t even come to the office anymore.’”
“The collapse of Tucson-based First Magnus Financial Corp., formerly the nation’s second-largest privately held mortgage lender, is inspiring some particularly strong misgivings in the local market, agents said.”
“‘I think people are really, really holding off right now, and partially because they don’t know if they can get a loan,’ said Luke Adams, an agent who deals with a lot of first-time buyers.”
“‘They have to have a good job, good credit and cash,’ said Eric Schrader, owner of Century 21 First American. ‘If they have two out of three of those categories, we can still do a deal. The lenders were just giving people loans who had no business getting loans.’”
The Explorer News from Arizona. “For First Magnus employees the news wouldn’t have been such a shock if the company had not announced just days before that everything was OK.”
“‘We’d been told a week before that our company was fine and we were going to weather the storm and come out even better,’ Brian Leahy recalled. ‘And a week later, ‘Oh, by the way we’re declaring bankruptcy and you don’t have jobs as of tomorrow.’ We didn’t think it was going to happen.’”
“Back when houses were selling in record volume and at record prices..the rush was on to get rich, and many sought the bounty of opportunities the mortgage industry promised. ‘People used to get dressed up to go to the bank (for a loan),’ said Mark Lilly, a broker with Pusch Ridge Home Loans. ‘Now you go to a restaurant and the bartender hands you a card and says he’s a (mortgage) broker.’”
“Lilly, who has been in the mortgage and real estate business in Tucson for 25 years, said the rapid increase in property values people experienced in the heat of the housing boom was unprecedented. His customers who had bought homes in Rancho Vistoso were able to double the worth of their investments in less than four years.”
“‘They made $10,000 in equity every month just sitting there,’ Lilly said. But now there are more price reductions than new listings on the MLS, Lilly said.”
“The national housing boom, which began roughly around 2001, sent the real estate market into a frenzy. Historically low interest rates only fueled the craze. ‘If you fogged a spoon, you didn’t need any money down and you didn’t need any assets (to buy a house),’ Lilly said.”
“The construction market is already having trouble with an abundance of supply, said Roger Yohem, VP of the Southern Arizona Home Builders Association. ‘We’re looking at an inventory problem,’ Yohem said. ‘There’s too much supply out there for demand.’”
“For instance, during the first seven months of 2007, there were 6,368 permits issued for new homes. During that same span in 2007, there were 3,620 new home permits issued, according to numbers from Bright Future Business Consultants.”
“‘Before the problem with the mortgage problem popped up, the communities were down 40 to 50 percent anyway,’ Yohem said.”
The Tucson Citizen from Arizona. “Thousands of former employees of First Magnus Financial Corp., which closed Aug. 16, will not get paid before other creditors, a bankruptcy judge said Wednesday.”
“‘They can stand in line with everyone else,’ said Judge James M. Marlar, who is presiding over the case.”
“Marlar questioned First Magnus’ plans to keep on retainer…members of a Miami law firm handling the bankruptcy case and a consulting firm an estimated $75,000 per month to handle administrative aspects of the process.”
“First Magnus Chief Counsel Doug Lemke argued that the in-house lawyers and other staff will ensure that the liquidation is handled by mortgage industry experts. If First Magnus simply drops everything and walks away, the assets, which include thousands of loans that will have to be sold, could lose value before they are sold, he said.”
The Gazette Journal from Nevada. “No official Northern Nevada figures for July were available Monday, but Dennis Wilson, president of the Reno-Sparks Association of Realtors, said last month’s sales and median prices of existing homes are expected to be essentially unchanged from June.”
“‘A lot of people have pulled their houses off the market. Others are simply waiting,’ Wilson said.”
“The nationwide median price of an existing home has now fallen every month for a year, not seen in Realtor records in nearly 40 years. That reflects the geographic magnitude of the housing slump, said Brian Kaiser, analyst at the University of Nevada, Reno.”
“‘It gives you a sense of how widespread this whole market correction has been,’ he said. ‘We’re probably in for another year of declining prices and longer times on the market. This is probably going to stick around for a while. I think most people are hunkered down for the rest of this year and the first half of next year until things shake out.’”
“A couple of years ago, median existing home prices in some areas of Reno were rising 30 percent to 40 percent amid the region’s white-hot real estate market. ‘It was such a dramatic upswing in prices, it was not sustainable,’ Kaiser said.”
“And even with the median sales price in Reno falling 12.1 percent in the second quarter of this year from a year earlier, it’s not catastrophic, Kaiser said. ‘Reno’s in a unique position that the rest of its economy is solid.’”
“‘My experience with sellers is if you price your home according to the market, the time on market will be less,’ Wilson said.”
‘There are about 266 fewer students in Scottsdale Unified School District classrooms compared with this time last year, an enrollment drop of about 1 percent. That translates into a financial impact of about $1 million for the district.’
‘It comes after the district reported enrollment growth for two years in a row. Superintendent John Baracy attributes most of the district drop to condominium conversions — when apartments convert to condos — and a general lack of affordable housing in Scottsdale.’
‘It’s like this silent killer for enrollment,’ Baracy said last week.’
Subprime loans face big hikes
http://news.yahoo.com/s/csm/20070830/ts_csm/asubprime;_ylt=AsxznHQqddUIZVL8lVg0oGgDW7oF
Quote “She says she has clients whose monthly income is $800 a month but whose mortgage payments have now mushroomed to $500 a month. “No one looked at the affordability factor.”
$800 a month income?? Who ever gave this low income person money to buy a house should be shot.
All the illegals leaving!
“Thousands of former employees of First Magnus Financial Corp., which closed Aug. 16, will not get paid before other creditors, a bankruptcy judge said Wednesday.”
“‘They can stand in line with everyone else,’ said Judge James M. Marlar, who is presiding over the case.”
Ouch.
I find that ruling just wrong. The lenders knew the risks when they entended their credit, the employees were merely pawns. the employees should go to the head of the line, IMO.
Bankruptcy Code doesn’t provide for that. You hang the lenders out to dry, nobody will ever be able to get financing again.
“You hang the lenders out to dry, nobody will ever be able to get financing again”
I disagree…then will always be lending…it’s just a matter of who “controls” the terms of repayment…The Gov’t or the asset collection mafia.
You can’t do business that way.
WTF? This is what Wall Street does all the time. You just need to package it. Or do you really believe they “don’t do business that way”?
Tell me how much a year they were making for their education level, what type of mortgage they are in, how much they paid down, how many expensive toys they have, and what their CC debt is and then I might feel sorry for some of them.
I can speak from personal experience when I say that Tucson’s mortgage “professionals” aren’t the brightest bulbs on the Christmas tree.
I was surprised by that as well. I thought employee wage claims had some sort of superior position to other creditors? Obviously I’m wrong but it was surprising nonetheless.
Retained employees do, terminated ones don’t.
That’s right. But, unpaid employees will indeed get paid first. If you they handed out paychecks before the swift kick then they are clean.
News Flash: Former First Magnus employees aren’t very happy.
First day hearings are always a circus in these big cases. You should have seen the General Homes case back in the olden days or the Craig Hall or Hunt cases. Damn, I’m loving this stuff!
I disagree. The whole Ponzi scheme depended on the witting involvment of the employees at every level. They would have known better than anyone what a house of cards they were building, or should have. To the back of the line!
agreed. they knew.
Many of the employees were playing the con game and now are “surprised” the game has stopped. Maybe it’s their turn to cry.
I’ve been following the comments that follow the First Magnus stories here in Tucson. (Yes, I’ll admit that I’ve become a bit of a Schadenfreude junkie on this particular story.) Quite a bit of venom directed at the company. And, amazingly enough, not a lot of love toward the employees.
Reason for my amazement: The REIC has been powerful and flying high for a long time here. Now their comeuppance is at hand. And that’s making a lot of Tucsonans very happy.
Still, I’d hire a couple of bodyguards if I were that judge.
Yo, Sammy, what ever happened with Omaha?
Got my hair cut a few weeks ago, my barber told me he left Vegas a few months ago and isn’t even going to bother trying to sell his house because “everyone’s in foreclosure”. I didn’t really press him on the issue since he was holding a razor blade close to my neck and I wanted a decent cut, but this seems like a pretty good anecdote that things are pretty bad in Vegas.
ah come on. Should have taken one for the team
As the foreclosures increase the stigma of being for closed on, for individuals, will decrease. This should make it easier, psychologically, for more FB’s to throw in the towel. After all their all victims, right? We must all consul these poor victims and let them know that there’s no shame in going into foreclosure.
That’s right and there will be a TV show about it. ‘Foreclose that house’ and it become the thing to do and a badge of honor. When in my Grandfathers time he would have hung his head in shame.
went to las vegas last week. the place was full of people. I guess they dont care about the housing market
Spending their last drops of equity extracted from homes, IMO. Remember that story from a couple of weeks ago? So many HELOC’d to get gambling $.
“‘They can stand in line with everyone else,’ said Judge James M. Marlar, who is presiding over the case.”
“Marlar questioned First Magnus’ plans to keep on retainer…members of a Miami law firm handling the bankruptcy case and a consulting firm an estimated $75,000 per month to handle administrative aspects of the process.”
“First Magnus Chief Counsel Doug Lemke argued that the in-house lawyers and other staff will ensure that the liquidation is handled by mortgage industry experts. If First Magnus simply drops everything and walks away, the assets, which include thousands of loans that will have to be sold, could lose value before they are sold, he said.”
Oh this is good! I love a good catfight in bankruptcy court. Sounds like the judge ain’t cutting the debtor any slack to pay expensive out of town professionals to bolster the interests of the remaining executives.
There was a judge like that in Dallas in the Northern District. He retired a few years ago. Whenever a case landed in his court, the NY firms boogied. He wouldn’t pay higher fees to them than local attorneys. Some of them charged $600/hr and more and this was 15-20 years ago!
Have you found any blogs yet with juicy hedge-fund BK details yet? I seem to have developed an insatiable jones for schaedenfreud.
I’m going to really start looking now that Bear Stearns has been dropped in the grease.
Um, that particular phrasing makes me uncomfortable!
Not me. It makes ME hungry.
Oh, and I also want some fries and a banana shake with my order of deep-fried Bear.
Top dog lawyer there needs to understand it’s not “the loans could lose value,” but that they already have lost value. That is, if they can be sold, since they’re probably not all loans to prime borrowers with grade A credit.
Branded like cattle, how lovely.
Wait I was just told by a sales guy at a new development that the Denver area was not going to decline like everywhere else and that I should buy now. So how can all of these foreclosures happen here? You dont think he would lie to try to sell something do you?
Its amazing how many of my co-workers have NO CLUE of what’s happening. One even told me today that “its different here”. What is especially astonishing about this is that we have a coworker who relocated out of state last year. It took him a year to sell his house in Fort Collins and he had to discount it.
Believe in a Denver RE agent is like having faith in the local weather person there,5 minutes ago the weather changed and they wouldn’t out the window?
I was also told that the Tcom/dot.bomb downturn would have zero effect on Denver area employment. I am buying my wife a house at 35% off list for Christmas this year. Be patient!
Here come the falling knife comments……
I think that a 35% haircut for metro Denver is pretty reasonable. No 500K starter homes like in SoCal, where I expect to see 70% haircuts, especially in areas like IE.
You won’t see 70% haircuts even in the IE. That would bring prices down to 1992 levels. I’m as bearish as most of the folks here when it comes to this bubble but thinking 70% is bordering on loonyville. I’m expecting 40% to 50%, that would bring prices in line with incomes and back to 2001/2002 levels.
My mom is in Victorville Ca and there is real 30% drop right now. It is only gaining momentum.
I am not familiar with the IE any more - many years since I have even thought about going there. But if the housing bubble collapses like all other bubbles collapsed (not in time but in price) then I would look for the IE to go to 1994 prices adjusted for CPI inflation and subtract 10% (the over correction). Some areas will drop as much as 80%. some will drop 15%. The reason for 1994 is that was when the Federal Reserve changed the bank reserve requirements on mortgages to get the coasts out of their previous bubble collapse. Reserve requirements were dropped to zero.
Just read on Minyanville that the judge in the Caymans (I think it was?) tossed out the bankruptcy cases for the Bear Stearns funds that failed.
Unleash the hounds! Plaintiff lawyers, that is! What fun!
Imagine the possibilities. Personal liability for BSC execs and fund managers. Big judgments or settlements that the firm might have to pay. Of course they’re insured but what if the carriers deny coverage due to executive malfeasance? I think BSC could be shorted for fun.
I hope they ass-pound these fund managers into oblivion. I’d love to see jail time.
They don’t want that. They want money, honey. Lots of money. Their greedy and stupid clients lost $500K and up in these “high yield” “low risk” funds. Of course the clients were just naive trusting [accredited] investors who didn’t know what they were getting into. Why would you think a pension fund manager would be able to evalute risk in a bond fund? Oh, this is just very very entertaining.
You’re damn right. I got nailed by Refco - I’m 95% whole so far and still waiting for the rest. When I get paid, the ass pounding can begin, not before.
I did too. Still pissed off about that.
Can they just refile somewhere else, or is that where they were incorporated??
Depends on why it was tossed. If it was for lack of jurisdiction or improper venue, yes. But the Caymans were selected for a reason, that reason being much more favorable treatment for the debtor funds. Throw em to the wolves in the S. District of New York. It could get ugly. LOL
RE: Bear Stearns Cayman Suit - From Bloomberg
Aug. 27 (Bloomberg) — A federal judge refused to grant permanent protection from U.S. lawsuits for Bear Stearns Cos.’ two bankrupt hedge funds, questioning whether the Cayman Islands should be the principal site of their liquidation.
U.S. Bankruptcy Judge Burton Lifland in New York today said he “will issue a decision in the next week to 10 days” on whether Bear Stearns picked the proper jurisdiction for the funds, whose assets are mostly located in New York. He banned any suits against the funds while he deliberates. …
Thanks. Figured that was the reason. If the plaintiffs can lift the stay and proceed, the reason for the Caymans filing goes away; in fact, it becomes a hell of a lot more expensive to fly your professionals down there every time there is a hearing.
I would have signed up for that one!
Lawyers wearing their new alligator shoes are ready for some good action. Hope some tv station picks this up as reality tv is in now!
“‘They made $10,000 in equity every month just sitting there,’ Lilly said.
Man, this guy got soooo close to logically finishing his train of thought!
I guess I’ll have to do it for him…
“And now they will be losing $10,000 a month in equity just sitting there”
The day this reality becomes common knowledge is the day the real panic starts.
BTW, for AZ posters - If you see a letter to the editor (that somehow actually gets printed) in the AZ republic with the following statement, it will be from me:
“If you are trying to sell your house now, the pricing formula is simple. Find a house that sold in your neighborhood in 2005, that is the same floorplan or a close match in size. Multiply that price by 2/3. That is your asking price. You may even get a slight bidding war, and get closer to 70% of the 2005 price, if your house is clean and updated.”
Why don’t you send the same letter to the Arizona Daily Star down here in Tucson?
Looks as though the CHIPs are down throughout New Mexico. But this can’t be; Erik Estrada researched it.
Luv,
Jen
That was good for a laugh, not only the post but the sign in name as well
Poor Erik. I saw him a couple years ago working hard signing autographs for CHIP fans at the ostrich and camel races in Virginia City, NV. He even posed with an ostrich for the kids. Talk about taking a fall from stardom. But that must have been before he got into real estate: http://www.hotspringshomesites.com/
Call Erik now!
OK folks they’ve been selling California Pines for nearly 50 years that I can remember and Erik is still trying to sell it!
My wife’s best friend, a very soft spoken and reasonable school teacher in San Diego, bought an “investment” house in Las Cruces sight unseen last year.
She still believes that it will make money because it was so cheap to buy. I think this was a phenomenon throughout the west, CA investors looking a local prices relative to CA homes and not realizing that there were fundamental reasons for those low prices (hint: what is the median income in these towns?).
I have a friend whose husband just lost his job in san diego so he’s
commuting to Evergreen, Colo to work laying tile. He was a
master audio installer.
They bought a house last year for 450K. Kids etc.
My soon to be ex Landlord just sold his condo for 349K and owes 417K. Will he have to pay taxes on the difference?
yes, he will have to pay taxes on he difference.
I wonder how many FB’s don’t realize that IRS will also be after them in the future. Nice windfall for the IRS that will be difficult to collect on.
Note how the government scalps people on both sides of the bubble, all the while crying on behalf of the people who can’t “afford” housing.
I have a friend whose husband just lost his job in san diego so he’s commuting to Evergreen, Colo to work laying tile.
OK, that’s weird. He can actually find enough work in Evergreen to pay his SD mortgage? I mean, we have illegals here too.
I think that’s hilarious. In Colorado, do you remember Denver Post business section headlines in 2003 about Denver professionals commuting to LA for work?
Did he bring money to the closing table? He owes taxes if its a short sale but if he paid the mortgage on close he’s fine.
“it’s not catastrophic, Kaiser said. ‘Reno’s in a unique position that the rest of its economy is solid.’””
Add Reno the the list of “places that are special”. I knew it was but I thought it was for the crackhouses and white trash…..
Kaiser is one of the biggest schills of all in this area!! And if I remember correctly, he works at the University.
Hey golf, we’re not all white trash and crack heads here. My husband and I both work for a Fortune 500 company and make a whole hell of a lot more than the median household of $43k. Sad thing is how many here that bought homes that should never have been given a loan. I would need my fingers and my toes to count how many Real Estate horror stories I have heard just in the last few months. It’s really quite sad how many people extended themselves, bought before selling, and just got on the band wagon just for the sake of the band wagon. I’ll keep renting until the fundamentals are back in line.
And by the way, meth is the drug of choice here, not crack. Don’t generalize unless you know what you are talking about. Now white trash, we do have plenty of that around!!
Damn you are right, it is meth in Reno. I always get those mixed up….. Sorry for the generalization but there are a whole bunch a meth heads around Reno.
Thanks
that’s better.
Has Thornburg just pulled a CFC???
http://online.wsj.com/article/SB118847099141313382.html?mod=hpp_us_whats_news
OH! At first I thought you were talking about CHRIS Thornburg
I was just in Las Vegas and could not get over the location of some of these “luxury” condo towers. For example, one condo tower could be described as “luxury living overlooking the interstate in close proximity to neighborhood amenities such as warehouses, auto body shops, and all-nude strip clubs.” Who the hell is going to give a lot of money to live in a crappy area where you can’t even go for a walk and feel safe? Listening to the radio, I number of commercials touting foreclosure and short sale specialists and pay day loans—industries that go hand in hand. With a lot of inventory still under construction or just coming online (such as the Palms, Trump, MGM Cityplace, etc.), Vegas is only going to get messier.
Brandon> Las Vegas as a city is truly a ugly place, and you are right many of the views are of roof top air conditioners and flashing police lights at 2 am. Some very nice housing are very nice behing the gates, but once you leave the area’s go down hill very quickly.
Good times or bad Vegas should be a 2 day have some fun getaway and leave the place, to live there i never could see it.
AZ Repugnent just posted transaction counts for zips in Maricopa County (PHX) for second week of August…
The one realtor that gave me an honest answer wasthat she hoped that half her pending sales would be able to close, so I was expecing 50%-ish drop. Looks pretty close!!!!
Checked my zip: 10 first week of Aug, 3 second week.
So, I started checing zips below min… Then swithced to Chandler, then Mesa, then Scottsdale:
Holy crap!!!
Glendale
85306: 10->3
85305: 6->6
85304: 14->1
85303: 13->1
85302: 14->6
85301: 14->6
85300: 0->0
85299: 0->0
85298: 42->16
85297: 36->6
85296: 32->16
85295: 26->20
Total: 207->81 == 60% drop in number of transactions.
Chandler
85243: 47->23
85242: 23->24
85241: 0->0
85240: 31->14
85239: 59->18
85238: 24->21
85237: 1->1
85236: 0->0
85235: 0->0
85234: 39->23
85233: 13->12
85232: 44->16
Total: 281->152 == 45% drop
Fell off to Pinal County on either end and no rsults yet, so limited to 9
Mesa:
85210: 15->1
85209: 26->9
85208: 19->9
85207: 26->19
85206: 19->6
85205: 14->9
85204: 14->10
85203: 7->7
85202: 7->4
85201: 14->11
Total: 161->85 == 47% drop
Scottsdale:
85260: 10->13
85259: 9->10
85258: 32->12
85257: 17->13
85256: 0->0
85255: 29->14
85254: 32->12
85253: 10->9
85252: 0->0
85251: 31->15
85250: 14->4
85249: 32->11
Total: 216->113 == 48% drop
Was anything listed for 85262 a expensive zip code just curious thanks
16 first week of Aug. 11 second week. 31% drop.
Thanks
Some of your zips are not for the right city, but the trend is clear.
85249 is south-central Chandler and should be one of the biggest price percentage drops in the whole east valley. A 66% sales volume drop, BEFORE most of the jumbo loan tightning is foreboding. I’ll bet the 3rd week of August sales are down to 3 or 4 in the whole zip.
I picked a starting zip in a city, then looked at the 10 consecutive lower zips that were non-0 transactions for the first week… Pretty hard to drop from 0.
I didn’t want to be accused of cherry picked the worst zips, so went consecutive!
Darrell, whats the link? I looked, but couldn’t find it. Lip
http://www.azcentral.com/class/marketplace/homes.php
Gracias
Just a rant, spoke with a realtor today and he said and I quote.
“the bubble was created on purpose in Florida, to increase the value of homes because everyone wants to live there”
Reminds me of Yogi Berra’s gem, “Nobody goes there anymore; it’s too crowded.”
http://www.thestreet.com/s/kass-market-turmoil-will-be-a-constant/markets/activetraderupdate/10377144.html?puc=_tsccom&
The Tucson Citizen from Arizona. “Thousands of former employees of First Magnus Financial Corp., which closed Aug. 16, will not get paid before other creditors, a bankruptcy judge said Wednesday.”
Lots of number hitter appraisers gettin’ stiffed by these deadbeats.
Boo, hoo…cry me a river.
Which makes me hope that a former neighbor (who was a crooked businessman who just HAPPENED to be an appraiser) get stiffed too.
Sorry OT, but this is too good to bury at the bottom of the bits bucket:
“Now suppose central banks….refuse to intervene in the afflicted markets. What would happen? Sellers must turn lemons into apples, pears, strawberries and all the rest. In other words, they must demonstrate the precise properties of what they are trying to offload. Where they cannot do this, they may have to hold securities to maturity. Meanwhile, vulture funds would invest in obtaining requisite knowledge. Losses will also have to be written off. How much of the market in securitised lending would survive this shake-out, I have no idea. But I do not care either. That is for the players to decide, after they realise the consequences of getting it wrong.
Burned children fear the fire. If some of the biggest and most powerful institutions in the world have been playing with fire, they need to feel the burns. It is not the central banks’ job to rescue them by creating a market in the incomprehensible. It is their job to preserve the banking system and the health of the economy. Neither seems now to be in grave danger.
Decisions made in panic are almost always bad ones. Stick to principles and let the masters of the financial system sort themselves out. They are paid enough to do so, after all.”
http://www.portfolio.com/views/blogs/market-movers/2007/08/29/martin-wolf-takes-bernanke-to-the-woodshed
OT: From TDR… I’m sure most folks have seen this already.
We’re not too keen on conspiracy theories. But two things ran across our desk this morning that gave us pause.
First, an unnamed collection of investors just placed a $900 million bet that the S&P 500 will plummet between 35-59% in the next month. In trader speak: Anonymous parties agreed to buy and sell 120,000 SPY September call options using deep-in the-money strikes ranging from 60-95.
“If you’re not options savvy,” writes Keith Fitz-Gerald, a contributing editor to Money Morning , “don’t worry. SPY — also referred to as a “spider” in trader parlance — is an exchange-traded fund (ETF) that mimics the performance of the stock market’s closely watched Standard & Poor’s 500 index (INX). These strike prices equate to a SPY trading between 600-950, or roughly 35.81-59.46% below where it was Monday.
And then we heard the blogosphere is abuzz with rumors this morning that the U.S. government is planning a major propaganda campaign for a war against Iran to commence in September. From a blog called “Informed Comment Global Affairs”:
“They [the source's institution] have ‘instructions’ (yes, that was the word used) from the Office of the Vice President to roll out a campaign for war with Iran in the week after Labor Day; it will be coordinated with the American Enterprise Institute, The Wall Street Journal, The Weekly Standard, Commentary, Fox and the usual suspects. It will be heavy sustained assault on the airwaves, designed to knock public sentiment into a position from which a war can be maintained. Evidently, they don’t think they’ll ever get majority support for this — they want something like 35-40% support, which in their book is ‘plenty.’”
These SPY plays expire Sept. 21… hmmn….
What’s one to think? Well, it’s really easy to make these kinds of associations on the Internet. But that’s also what makes following the markets with so much information available at one time such a hoot.
“Naturally,” says Fitz-Gerald, “the silence around this trade has put the conspiracy theorists on edge and set the blogosphere aflame. Most of the theories are outrageous, but there are a couple that — quite frankly — aren’t so farfetched and even make some sense. But I have to stress, once again, that nobody who’s actually a party to either end of this transaction has been identified or is talking, which makes this all the more noteworthy — and maybe even a little spooky.”
Here’s your answer. Tinfoil hats back in the closet, please.
http://www.adamsoptions.blogspot.com/
Damn, and I was looking so stylish in my Aluminum-foil designer hat.
do they come in Fedoras ?
A very nice win/win. With T-Bills paying squat and a much better use for moneys received from shorting stock.
A suspect a lot of companies will look into doing more of these. It is a lot better than paying 8.5% for 90 day moneys.
“And even with the median sales price in Reno falling 12.1 percent in the second quarter of this year from a year earlier, it’s not catastrophic, Kaiser said. ‘Reno’s in a unique position that the rest of its economy is solid.’”
It may be solid now but even the CASINOS will suffer as the nation cuts back on spending from the housing crisis. Nothing will be exempt.
Uh….correct me if this is wrong…..but, casinos are popping up all over California. Gamblers no longer need to travel over the Donner Pass to get a fix. Reno is a not so appealing town that has one anchor industry….gambling. What about this picture illustrates a “solid economy”?
A nearby lake and skiing. EVERYONE wants to go there!
Aluminum-foil hats are out. The new black in paranoid designer headgear is the metal colander bowl. Especially the heavy duty ones from the 50’s as they are thicker by design to repell ray-gun beams n’ nuclear fallout.
(ixnay on the amscray. There is a plumbers van outside right now, oh so obvious gov agents with fake sweat, fake plumbers crack, and I bet even that dogbite from next door was fake too!)
hilarious, actually
Thanks for the headgear update, I have a 50’s colander it’s made of Aluminum. Of course we all know that Aluminum pots, pans and colanders lead to Alzheimers. Just another part of the Gubmint plan to turn us all into mind numb robots followers of the grand plan.