A Silver Lining To The Slowdown
Some housing bubble news from Wall Street and Washington. The Star Ledger, “Just a few years ago, Hovnanian Enterprises held lotteries to sell new homes because demand for housing was white-picket-fence hot. Now, with the residential real estate slump deepening by the month, the largest New Jersey-based homebuilder is holding a fire sale at developments across the country. Prices this weekend will be slashed by up to six figures — $100,000, $149,000, in some cases $240,000.”
“Housing industry experts say the discounts being offered by Hovnanian are unprecedented. The so-called ‘Deal of the Century’ sale, which covers 19 states, begins at Friday and ends Sunday. Hovnanian VP Michael Skea said the company recognizes some recent homebuyers might feel uneasy about the sale. However, most of those buyers probably received some type of incentive as well, he said.”
“‘Those who purchased previously already chose the home and location they wanted,’ he said. ‘Those may not have been the same if they’d gotten a ‘Deal of the Century’ home.’”
The Phillyburbs. “Orleans Homebuilders lost $66.9 million this year as customers cancelled contracts and the company abandoned planned communities.”
“‘On a daily basis, we’re presented with different opinions and challenges regarding the direction of the economy, the impact of the subprime and other mortgage issues, and the recent turmoil in the credit capital markets,’ CEO Jeffrey Orleans said during a conference call.”
“‘Although we began the year with solid margins in the first quarter, things deteriorated quickly,’ said Orleans President Mike Vesey. ‘The decline reflected the softer market and the incentives we used to reduce our inventory of spec homes.’”
The Sun Times. “The problem with specializing is that when times are good in a particular market — they’re very good, but when they’re bad, they’re horrid. That’s the story of Chicago-based Corus Bankshares Inc., which concentrates in commercial real estate lending, particularly in the condo market.”
“‘There’s a pretty big fear running around Wall Street about the pricing in the residential market and condos,’ said Peyton Green of FTN Midwest Securities Corp.”
“Problems could arise if buyers walk away from condo contracts or sue to get out of them, noted Ronald Peterson, a Chicago analyst with Sterne, Agee & Leach. Peterson said it’s hard to tell what’s going to happen in the Florida market, where Corus is heavily exposed. Las Vegas is another significant market for Corus.”
The Dallas Morning News. “This year’s slowdown in homebuilding might mean better quality of construction for buyers. That’s because builders are no longer in such a hurry to finish houses.”
“‘The builders are carrying higher amounts of inventory than they have in the past,’ said Paula Sonkin, VP of the real estate and construction industries practice at J.D. Power and Associates. ‘They are delivering more homes on time and complete, so there are fewer construction problems. It’s a silver lining to the slowdown in the market.’”
“J.D. Power just completed its annual survey on the U.S. homebuilding industry. The annual ranking is closely watched by both consumers and builders.”
“‘If they are at the top of the list, they will be advertising it and telling their customers,’ said David Brown with housing analyst Metrostudy Inc. ‘In this market, anything they can do to set them apart from others is important.’”
From Reuters. “Countrywide Financial Corp, the largest U.S. mortgage lender, said it had funded $34.4 billion of mortgage loans in August, the fewest this year and down 17.3 percent from a year earlier, as it lost access to capital and tightened lending standards. Its pipeline of unclosed mortgages fell 16.8 percent from July to $51.8 billion.”
The Street.com. “JPMorgan Chase plans to stop offering certain Alt-A mortgages. The New York banking company said in an internal memo on Wednesday that all mortgage loan locks and underwriting under the ChaseFlex ‘No Doc’ or ‘No Ratio’ programs must be completed by Sept. 19.”
“‘We’re sort of moving along a continuum,’ a Chase spokesman says. ‘We’re taking a more disciplined approach and in the process reduced our risk because the borrower has more stake in the game — either their own cash, a better credit rating or proven their documented income or assets.’”
“First Horizon National Corp, the largest bank in Tennessee, said on Wednesday it plans to eliminate at least 1,500 jobs by the middle of next year as it slashes its mortgage sales force and closes branches.” “The bank also said it expected mortgage originations to decline significantly as it cuts up to 50 percent of its home loan sales staff.”
The Baltimore Sun. “In the wake of the subprime lending crisis, a state mortgage-broker trade group is taking steps to shore up the profession’s image and separate itself from unethical brokers who contribute to borrowers’ mortgage woes.”
“‘We’ve been very concerned for a number of years that within the large universe of mortgage brokers, there are a number of bad apples,’ said Thomas Shaner, the Maryland Association of Mortgage Brokers’s executive director.”
“The newly adopted code will give the association a legal means of suspending or revoking memberships, which it had no way to do in the past, even if a broker had been found by state regulators to have committed fraud, Shaner said.”
From Canada.com. “Home prices across Canada are ripe for a fall, says one bank economist. Adrienne Warren, senior economist with Scotia Economics, said a bustling market has led to housing in many regions of the country being overvalued, increasing the risk of prices dipping in the longer-term.”
“‘There is little doubt that current trends are unsustainable,’ added Warren. ‘Affordability is becoming increasingly stretched for many would-be buyers after almost a decade of rising home prices. More recently, economic risks have increased in the wake of the intensifying financial market turmoil stemming from the U.S. subprime mortgage problems.’”
The Herald. “Bank of England Governor Mervyn King warned yesterday of a ‘moral hazard’ in any move to bail out financial institutions that have engaged in ‘risky or reckless lending’ - warning this could ’sow the seeds of a future financial crisis.’”
“King says: “The moral hazard inherent in the provision of ex-post insurance to institutions that have engaged in risky or reckless lending is no abstract concept….If central banks underwrite any maturity transformation that threatens to damage the economy as a whole, it encourages the view that, as long as a bank takes the same sort of risks that other banks are taking, then it is more likely that their liquidity problems will be insured ex post by the central bank.’”
“‘The provision of large liquidity facilities penalises those financial institutions that sat out the dance, encourages herd behaviour and increases the intensity of future crises,’ King said.”"
From Bray People. “Residents of an exclusive Delgany housing estate who saw up to €100,000 wiped off the price of their homes have threatened to picket new homes being sold in the same development in order to warn prospective house buyers about what has happened.”
“‘There are a few houses left, so what we would be telling people is to hang on because in another couple of months you’ll get them for €100,000 less. Why run the risk of paying for them now,’ said resident Daithi O Maitiœ.”
“Mr O Maitiœ saw €70,000 shaved off the value of his two-bedroom property, which was bought for €550,000 just four months ago and is now valued at €480,000.”
“His neighbour, Seán O Hé, paid €675,000 for his three-bedroom house last December which is currently valued at €595,000, a drop of €80,0000.”
“‘When I first heard about this, it set alarm bells off in my head,’ said Mr. O Hé. My big concern is the negative equity in the property. ‘We’re continuing to service mortgages of up to €100,000 more than our homes are worth.’”
“The global credit crunch is spreading, adding commercial and residential property in Britain and beyond to its list of victims.”
“Such has been the force of the re-pricing of credit that properties of all sorts in many places have become markedly more difficult and expensive to finance over the past month.”
“It is also true that in many places, notably Britain and Spain, both commercial and residential property have been in a speculative bubble pretty similar to the one now unwinding so painfully in the U.S. Similar, in that property investment everywhere was fuelled by global markets with super-easy borrowing terms.”
“Similar too, in that many property markets were, in the final analysis, going up because they were going up. People were buying because they expected future gains and feared missing out.”
“‘We are forecasting falls in property values in the UK,’ said Martin Allen, who covers property at Morgan Stanley Research Europe in London.”
“‘There is risk on the downside from our central case which is a modest fall of property values. There is a relatively high probability that it is going to be worse than that,’ Allen said.”
“Allen sees it as a global phenomenon and one that won’t improve quickly even if interbank lending issues settle down. ‘The problems are systemic, there has been overlending to property and it will take years to purge from the system.’”
“Yields on British residential property are also quite a bit lower than financing costs, with many small investors subsidizing their running costs out of capital in hopes of future capital gains. If those gains, which have been massive in recent years, don’t continue, many will decide that subsidizing someone else’s monthly housing costs no longer looks like such a great deal.”
“There are a lot of reasons why Britain is different than the United States. There are a lot of reasons why Ireland and France are, as well.”
“But that is what house buyers in New York were saying about Florida not so long ago.”
“Wal-Mart Stores Inc. started a new marketing campaign focusing on low prices as a key to growth after disappointing results from last year’s push into trendier clothes and merchandise.”
So untrendy is in?
http://english.pravda.ru/news/business/12-09-2007/97070-campaign-0
Is Pravda the only site you can link to???
Pravda means “Truth.” Yeah, I trust a news source with THAT as its masthead. Of course, that old commie rag is no less disreputable than the MSM truth-makers in this country.
Walmart is not the place to go looking for real fashion.It is a discounter to by basic needs and everyone knows that.I shop there for household supplies, oil change stuff, and some groceries.Their prices are competitive but target is close and the women seem to like target better. Walmart is the new kmart really.Kmart screwed up and let their stores go downhill bigtime. I have about 8 walmarts within a 12 mile radius.They just want you to consume as much as possible.
Interestingly, and I can’t really put my finger on as to why, but I’ve liked Target better too, and I’m one of those dudes who uses the “just get what you need and leave” method of shopping. Wal-Mart to me is something you endure.
“Wal-Mart to me is something you endure.”
Amen, brothah! The one close to me shut down and moved operations to a stupor center further east where more of the “action” is. Went there one time, of necessity, to pick up an international money order payment.
One reason is that Target is owned by the same company that owns ASDA stores in the UK - Asda have their own clothing label “George” that has always made good quality, fashionable clothes at decent prices, and has original designs from Jeff Banks (a famous UK clothes designer).
When I still lived in the UK, buying clothes from Asda was often better value than buying from some of the older clothing chains like Marks & Spencer and BHS (British Home Stores).
IIRC, the George label was taken on by Target - hence the difference in quality and design over WalMart.
Actually, Wal-mart owns Asda.
http://www.asdawatch.org/incharge.asp
My Bad.
Pray you never have to return something at Target. After spending $100 on defectively manufactured crap and getting the “too bad for you” treatment I’ll never shop at Target again.
I don’t like the fact that most Wal-mart stuff is Chinese junk, but so is Target’s and I’ve never been burned on at return at Wal-mart.
The walmarts are depressing and there’s always gaggles of screaming kids running all over the place. I’ve found several times where their prices were higher than Target on the same items. Target seems to have way more current and stylish items for wardrobe and home. Besides, I’m not willing to spend my money on a corporation that is so right wing politically and anti worker.
Target has wider & lower aisles and doesn’t put displays in the middle of aisles. that plus the better lighting design means the store feels more open. they make more of an effort to keep the store clean too.
“Walmart is not the place to go looking for real fashion.”
But it is a great place to pick up chicks.
I think target is way better for meeting women. Most of them have a full set of teeth unlike walmart.
My ex and I years ago went to a Wal-Mart in west Michigan one time and we were dressed fairly casual…nothing fancy, I thought. While in line we chatted with a woman who asked where we were from, and she was asking because “we didn’t dress like we were from around there.” Guess I didn’t have any manure on my shoes.
Wal-Mart…where white trash shops. Don’t get me started on this place; the list it long indeed.
Not well-off chicks.
I think Target chicks are a bit more upscale, but since I don’t think I could get a chick in a henhouse these days, who am I to say.
Costco has good clothes. It’s just a superior store in every way.
Forget the clothes…..what about the chicks, chick???
amen tx. costco is superior. great seafood, bakery, return policy and people like working there.
The great thing about dating homeless chicks, like the sort that you meet at Wal-Mart, is that after the date you can drop ‘em off anywhere.
sammy, you need to up your standards a bit
http://en.wikipedia.org/wiki/Divine_Brown_(sex_worker)
Wal-Mart is a place to go if you need somebody to feel superior to.
Yeah, what’s with all the Pravda links lately?
(I don’t find it objectionable, just curious.)
Some times it is necessary to go outside the U.S. MSM to find an unbiased news story.
I agree about going outisde the MSM ,but Pravda is kind of tabloidy at times.
If the irony fits, type it.
“kind of tabloidy”
I was trying to be ironic there (thanks for noticing, Aladin.) I guess I am getting old, because thirty years ago, there would have been no doubt whatever about my point.
Thank God my parents made me learn 3 other languages besides English when I was growing up - FRENCH GERMAN & SPANISH. Now I can listen to news on the internet (www.publicradiofan.com - a most amazing site) in the original languages - and get real news not corporate propaganda like we get here.
Hell, Pravda is probably a more reliable source for housing info since they aren’t beholden to the realtor’s advertising for their survival.
Also, a long time ago I heard somewhere that Wal-Mart actually sells the groceries at their SuperCenters at a an overall loss in order to bring people into the stores.
It’s going to be a dark, dark Xmas… History books will describe 2008 in the same chapter as 1929… Got me a bad feeling.
Back in the 90’s I worked with a few designers at a firm in NYC who were from Romania and Russia. I asked them about their experience growing up in the communist bloc. For the most part, their comments were unanimous and they said this>>>>
“Back in ______, you knew exactly what to believe and what not to in the press. Here, you never know what to believe.”
To think the comments ocurred in the 90’s. I wonder what they’d have to say about the lyin’ leadership we have now…
Well, yeah, the people running the government, media, party, “business”, etc. told you what to believe and so you did. If you didn’t, you disappeared…
“Well, yeah, the people running the government, media, party, “business”, etc. told you what to believe and so you did. If you didn’t, you disappeared”.
Now the man owns your a$$… he wouldn’t want one of his b1tches to disappear, that’d reduce his income, so he just keeps you going and milks you for all your worth. Big improvement.
It’s unfortunate that our own government doesn’t have the same decency to look out for it’s citizens.
part of a post from 2 days ago (CA Boom or Bust)
2007-09-11 18:14:09
Would anyone like to tell this guy how you feel? (He was making the case for a gov’t bailout)
JOSE CARRASCO
Jose, here is how I feel. Since you want to bail everyone out. Let’s impose a 100% tax on all of your income (and all others who think there should be a bailout). 100% on income, investments, and any other source. Ditto for your children, parents, cousins, aunts, co-workers, uncles, church members, friends, etc. And you can tell them all you are responsible for this idea and how it will help out the greater good. As for many others, as well as myself, it is Caveat Emptor. Let the buyer beware. Nobody bailed me out when I screwed up and lost a lot of money. I worked and did without for many years to recover. All the homedebtors can do the same. I moved from CA to another state because of the housing insanity. I don’t want to pay for it with my taxes.
Need 2 leave CA
Need 2 leave CA
What’s the Matter with California
http://www.fortune3.com/rekojreed/Cashill-What_s_the_Matter_with_California_Book_.html
What early critics are saying:
Jack Cashill’s “What’s The Matter With California?” is thoroughly brave, unsparingly clear-eyed, and absolutely entertaining. Like California, it’s an exploration of the sublime and the ridiculous, a juxtaposition of the awful, the titillating, and the hopeful. Cashill covers it all with hilarious aplomb. Cashill does America a true service by exposing the decay of the country’s most dysfunctional state — and providing real solutions.
Ha! Love the cover art. That’s priceless.
“Residents of an exclusive Delgany housing estate who saw up to €100,000 wiped off the price of their homes have threatened to picket new homes being sold in the same development in order to warn prospective house buyers about what has happened.”
I’m visualizing all of these folks who bought 600,000 Euro homes walking around with picket signs all day and shouting at “scabs”.
-Gotta love the Brits, stiff upper lip and all.
Juan Sixpack would resent senior Jose buying the same house as his for 100k less. Sixpack would not spend his time ‘Warning’ new prospective buyers.
Er Irish not British!!
Give him an A for the correct approximate area. Like in school.
Don’t let the brits hear you say that Britain does not include Ireland.
Why? Britain and Ireland are two different islands. Of course Britain doesn’t include Ireland.
The United Kingdom of Great Britain and Northern Ireland does include part of Ireland, as the name says.
Ach, don’t start
Seeing as the prices are in Euros, this is the Repbulic of Ireland, not Northern Ireland (still in GBP).
Joey: the Island(s) of Ireland are, technically, part of Great Britian - or the British Isles if you like. Its a geographical boundary, not a political one.
The United Kingdom is a politcal entity, composed of England, Wales, Scotland and Northern Ireland (plus Isle of Man, etc..).
Easy enough mistake to make, especiallly if you don’t live or travel there.
BTW: not wishing to put anyone’s nose out of joint - but there’s no such thing as a ‘Brit’. You’re either English, Welsh, Scots or Northern Irish. Or Irish, if you’re south of Belfast…
Yeah, laugh it up, all you …continent-dwellers - 5 tiny countries in an archipelago the size of some mid-west ranches…;-)
It would be the same as me calling you ‘Mexican’ or ‘Canadian’, just because you all live next to each other on the same landmass.
let me correct my misstatement:
Don’t let the brits hear you say that Britain does not include Northern Ireland.
Is there still an independent country called England?
Don’t let the Irish hear your blasphemous comment, Joey.
It would be the same as me calling you ‘Mexican’ or ‘Canadian’, just because you all live next to each other on the same landmass.
As a matter of fact, there’s a thing about exactly who is American and who isn’t.
as far as my comments about britain or england or whatever kindom or empire currently exists over there on the islands just west of europe, ignore them.. for i am clueless.
Yes, joey, ireland is part of Britain, in the context that an island called ‘Ireland’ is part of the British Isles - a smallish island chain off the coast of northwestern europe.
As a political entity, “Britain” does not exist.
Well, except in the minds of Americans - who - in recent polls - show that 25% of graduates believed that ‘Australia is next to Germany.’
I rest my case.
Northern Ireland is part of Great Britain, the Republic of Ireland, proudly independent, is in the south of the island called Ireland.
Hey speedingpullet,
Americans have always referred to the English as “Brits”–check out any WW2 movie. Doesn’t matter if they’re English, Welsh, or Scots or whatever….same way Brits call Americans “Yanks”, even if they’re from Georgia.
True, very true, Spike.
I guess I just have a dose of anal retentive today.
Though I will draw the line at a “British accent”, mainly because people usually mean “Perfect BBC-Recieved English accent” - which pisses off the Scots, Welsh, Irish (of all flavours), Manx, Isle of Wighters, Cornish, Orcadians, Brummies, Mancunians and Geordies no end, to name but a few.
Thank you, Henry Higgins…
So exactly why is it that on almost any news channel now or commercials for that matter, you always find tons of people with British accents? Does marketing suggest that the accent entices people to buy or to watch? Frankly, it turns me off.
So what is the point of picketing again? They say it’s to save the unwary buyer. They intend to interfere in the commerce so that the houses stay on the market, ensuring that the (lowered) prices are STILL too high.
They are just mad at the developer. Mortgage remorse transference.
There is going to be a never-ending supply of PO’d bagholders livid about the fact that their next-door neighbor in their new development paid $150,000 less for the exact same house. I’m sure it will make people even friendlier towards their new neighbors, eh?
This ought to make for some pretty entertaining reading in the next couple weeks I would think.
The builder will be too busy with the free upgrades for the new guy to fix those minor picky problems of the old buyer
I already know people like that. Prices in one Hovnanian development north of us dropped about 18% as advertised. As actually sold, looking at the records, the drop was over 20% (since people now can buy below the sticker price).
And now HOV is announcing a mega sale? Ouch! Yet one family I know is already planning to sell and move closer to their job — ha! Not much chance of that, when their mortgage is about 80k above what a brand new house on their block will cost. And HOV still owns almost half the lots on her street! Yikes! ’twill be bad methinks.
But I keep hearing that New Jersey is “different”. My boss has friends that are dying to buy at the Jersey Shore because of the Hovnanian deals. The wife thinks it’s a “great time to buy”. They’ve lowered the prices to a miniscule $550,000. “We can’t afford not to buy.”
Where was the outrage when prices when up 20% a year? So a builder is allowed to raise prices by extraordinary amounts every year if the market let’s them do that. But if market values fall, somehow they are “cheating” previous buyers?
“Orleans Homebuilders lost $66.9 million this year as customers cancelled contracts and the company abandoned planned communities.”
There was a homebuilder named Orleans
The call no longer rising, son
Housin’ bubbles been the ruin of many a willing ploy
And they sure look like one
The Mother of all Housing Bubbles
She made it seem like a dream
Homebuilders was a gamblin’, man
Thus, the downfall of Orleans…
Now the only thing a homebuilder needs
Is land and a bunch of construction trucks
And the only time they’re satisfied
Is when they’ve overbuilt, and it’s all junk
Jose, I forgot one important part of your new 100% tax. If you have any money, please remit to the IRS to help pay the bailout. Ditto for everyone else. (why I am laughing about this. I just picture his A$$ with 50K in cc bill, and couldn’t scrape together $10 to pay for dinner - as is more than half of Americans. And the banks falling over to give him a loan 2 yrs ago, now they wouldn’t loan him the $10 for dinner). LOL
Funny, highest foreclosure rate city in the US is in Cali http://news.yahoo.com/s/afp/20070913/ts_alt_afp/useconomyproperty
“Home ownership is a great thing,” said Taylor, “But only if you can afford it.”
That’s the money quote.
“Nobody has a crystal ball, but I don’t expect to see an improvement until 2010.”
Another reality quote by the same person - First time I’ve seen the ‘010′ year put out by someone inside the industry.
Bank of America is now negative on that 2 billion dollar investment in countrywide.
Oh, and btw, if you aren’t a BoA customer and you try to use their ATM, the fee just went to $3. If you are using a Countrywide ATM card, it just jumped to $5.
http://money.cnn.com/2007/09/13/pf/bofa_atm_fees.ap/index.htm?cnn=yes
I’ll use my own financial institution’s ATM, TYVM.
BTW, a warning to all of you: Since business isn’t what it used to be, you may find fee increases from all sorts of companies that you trade with. Likewise, new fees where there weren’t any before. You may also experience the joy of continuing to be charged for something, even after the company tells you that your account was closed.
So, be careful out there. The fee-vampires are very busy these days.
This is nothing new. I remember, yes, I do thank you, the recession in the early 90s and it sucked if you weren’t a customer of the bank you chose to get money out of. Everyone and their brother fee’d everyone else to death. BofA, a couple of bucks, WF, a couple. It was so bad that when my wife finally saw the light and closed her checking account with BofA in ‘93 that the last $24 she had became only $4 when the sucked all the fees dry. On top of that they didn’t even bother with asking why she closed the account.
AS, FEE-VAMPIRE IS SO APPROPRIATE. This is another reason whay I hate banksters. I realize not all of them are like this. However, it is another reason to bank locally at your credit union or with the smaller local bank. I realize that they are smaller and probably don’t care about us either, but at least you are not helping BofA or ShittyBank to more money. As if trillions aren’t already enough for these guys! Now, we’ll start nickel and diming everyone.
imo, nickel and diming cannot be overrated.. it is the key to those trillions.
i’m waiting for some kinda petty little fee to pop up at one of my banks so i can object.. just wanna see if they care about my parking a healthy balance there, or not.
BofA will probably go under. I left them when I withdrew $27,000 via cashiers check and it bounced. Apparently, they closed the account from which the funds were drawn. I had to wait 90 days, without interest, to get the $ back, even though I had an electronic copy of the check, showing it had indeed been presented for payment with their bank stamp on it (BofA acted like I lost the check and said it was never presented for payment, only to retract that later). I should have filed a complaint with the FDIC, or, do what everyone else seems to do, sue (I would have actually had a legitimate case, unlike most suckers).
Plus, the whole credit cards to our transitory folks south of the Border irks me. Not to mention, going into a BofA in Seaside, California (near Monterey), and I had to wait to speak to a teller because the other two there on a Saturday morning only spoke Spanish and couldn’t help me.
Not to mention, going into a BofA in Seaside, California (near Monterey), and I had to wait to speak to a teller because the other two there on a Saturday morning only spoke Spanish and couldn’t help me.
Welcome to Aztlan!
Haven’t had a Bank account n 25 years. Only use credit unions…More personable, less fees, and I don’t have to fill out a deposit slip!! Plus any credit union will let me use their ATM with no charge…There’s a co-op of CU’s that share the network. Just shows that the banks could do the same thing but they need the $$ to cover all their bone headed lending.
I’ve never understood people complaining about ATM fees. Plan well and you never have a fee. Oh wait, people shouldn’t have to plan for their lives at all. I would expect the bloggers on HBB to think people that pay ATM fees deserve to pay those fees. Withdrawing money from an ATM isn’t in the constitution.
Just buy something at the grocery, and get cash back. One thing I DON”T like is them holding a day’s checks, then processing them largest-first. Legal maybe, but won’t be making friends.
Probably because an ATM transaction costs the banks involved fractions of a cent.
It’s like SMS messages, the cost of SMS on my phone just increased 300% last week. 0.15C for something that costs the phone company .001 cent to transact. Sure, that’ll only cost me about an extra 1.00 a month, but it still irks me off.
Have you ever seen what it takes to keep an ATM going? For a small bank the costs are huge. These are not cash cows. Fractions of a cent? You need to do some more research.
I figure I should elaborate.
- Purchase of ATM
- Maintenance agreement on ATM (BofA might have an in-house service dept.)
- Provider of ATM services / ATM switch
- Agreements with all ATM networks (NYCE, Visa, etc.)
- Fees to restock the cannisters (think Brinks - ATMs can hold $100,000 or more)
- Operations staff to balance and oversee ATMs
- I.T. staff to monitor ATMs
- Costs associated with fraud
That doesn’t come out to fractions of a penny for anybody, including BofA.
ATMs were implemented by banks originally to minimize and eliminate teller costs. Only after has it become an additional point of presence beyond even the brick and mortar bank.
In the olden days, way back in the 60s, banks gave 4-1/4% interest even on lowly passbook savings accounts, and inflation was low. There were no ATMs, there were tellers.
Yet they did not charge anywhere near the fees they do today, even while decreasing costs by eliminating personnel in favor of ATMs.
And did they let people that didn’t have an account at the bank walk up to the teller line and cash checks?
transaction fees are 25-35 cents
Webster Bank
In the Philippines, all the ATM’s are INSIDE the banks behind the door sentries armed with automatic rifles and shotguns. These guards also enforce the rules against using cell phones inside the bank.
i’m heart broken bofa is in the hole on their investment.Time for them to recruit some more illegals and give them suicidal credit cards laced with fees.They are trying to raise their atm fees to 3 bucks for nonusers also. Anyone go get to new walmart credit card yet? That is another suckers game too. Another excuse to screw the working poor.Anyone want to start a bank? Give people 2% on their money and then loan it back to them at 12%.
Yes, let the customers subsidize their bad decisions.
Or maybe BOA should upgrade CFC’s stock to a buy like Citi did with GM, after Citi lent GMAC $21.4 billion.
“We really want to make our ATM network convenient for our customers,” Riess said. “In order to maintain that, it is appropriate to charge people who aren’t our customers for accessing our convenience.”
If you are not a BofA customer, don not use its services. Go somewhere else. They don’t want you. They don’t like you. You are a nuisance. Excellent community relations management by BofA.
CAN’T SAY IT ENOUGH. I HATE BofA. Not so much when I have had to go in and take care of some CC transactions (Heck, I can’t complain about that 9% rate, of course they can raise it anytime, I know that). What I hate is that the CEO leeches seem to just hate the little people. For cryin’ out loud, when is enough enough? As for their Doublewide investment of 2Bil? I hope you give them more and then they go BK and you get stuck with all the PoS homes that are in foreclosure. Would serve your butts right for all the carnage you have caused.
I’m a BoA customer. Trust, me, it’s nothing personal.
They don’t like us either
BoA hedged the CFC risk the moment they made that deal. They made $800M off the top and stuck it in their pocket. No need to make bets when some desperate soul hands you an 800 million dollar bill.
They only stand to make more money via 7.25% interest on the 2B— $145M/yr that CFC stays alive. Don’t think they’re counting on it though, and I think they’d much rather watch the hollowed-out ship sink in order to rescue the servicing business.
Is it just me,or are many of the more active traders on this blog taking a wait and see approach to the market these days?
I’m really not thrilled about the idea of making any big trading decisions until after the fed rate announcement, but if there is a substantial bounce after a cut I think that will be a really nice entry for the shorts again.
I’m having a record year and I don’t want to screw it up.
My personal opinion is that if BB doesn’t cut at least 75 bp, the market will sell off. 50 bp is already baked in based off what the bonds are telling us, but I’m not sure he’ll cut even that much. Maybe 25 bp, and after his speech a couple of days ago, about “not bailing out those who made bad choices and encouraging savings,” he may not cut at all. Then, it would be Black Monday all over again. But, we’ve also seen that the FED loves to talk tough on inflation, but is content letting the USD slide into oblivion. I moved the last of my 401(k) funds into Treasuries today (gotta sell on that nice bounce).
Personally I have a small short term position that Bernanke will not lower the fed rate (or he’ll lower it a max of 25 basis points), and the market will drop on Sep 18.
Obviously I could be wrong but its not a big bet. I already have some other puts further out in the calendar though, so I could get hammered if the decision is made to inflate our way out of this mess.
Sure hope that isn’t the case…
I think the bet is wise. I don’t know for sure what BB will do. I moved a significant amount of $$ into longer term CDs at a very solvent credit union (and can withdraw them with only 3 months penalty of interest if the solvency becomes an issue) locking in at 5.48%. And, I have some invested in PMs. Both would probably do well with a cut. But, I have also moved money out of stocks because even with a cut, any gain in the market would likely be a short term event. After all, the geniuses on Wall Street are still convinced this is merely a subprime problem. When prime loans taken out by better-heeled speculators fail, then the crapola really hits the fan.
I got a few October index puts at S&P 1480 today. At 1500 - 1520, it would be low hanging fruit.
Pardon my ignorance…are you therefore betting that the S&P is going higher, at least short term??
No, she’s betting it will go lower. She has a “put” option. The right to SELL at 1480 . She buys at 1400 (say) and sells at 1480 making an 80 profit. She is Selling HIGH and Buying Low (the reverse of buy low/sell high)
Yes, but Txchick, you have big brass, um, nevermind.
I’m going to stay at cash on spec stuff until I see which way the wind blows. The way I look at it, the fed action will be the next big driver of volatility, and that’s what I need to trade on.
never-ending supply of PO’d bagholders
STINKY BAGHOLDERS FOR EVERYONE.
“‘On a daily basis, we’re presented with different opinions and challenges regarding the direction of the economy, the impact of the subprime and other mortgage issues, and the recent turmoil in the credit capital markets,’ CEO Jeffrey Orleans said during a conference call.”
Get used to it. Does anyone believe subprime is coming back?
I do. I don’t think the problem was subprimes.. higher risk vs higher reward is attractive to certain people.
The problem was the sly way of using them to water down the good stuff.. and then nobody knew how to rate the whole package.
” I don’t think the problem was subprimes.. ”
Nor I. It was the 80/20 Alt-A’s based upon over inflated, computer-generated appraisals. All of these piggybacks
were %125- %150 LTV from the onset.
Not Fixable.
We’ve been very concerned for a number of years that within the large universe of mortgage brokers, there are a number of bad apples,’ said Thomas Shaner, the Maryland Association of Mortgage Brokers’s executive director.”
Mr. Shaner. A few bad apples? Methinks there are more than a few. Why didn’t you weed them out years ago before this mess got so out of hand? Try looking in the mirror and say that.
I will repeat my story one more time. I learned about subprime in a bowling alley in Inver Grove Heights, MN from a broker that was bragging about really laying it to borrowers. That was in December 2003. A few bad apples? LMAO
“His neighbour, Seán O Hé, paid €675,000 for his three-bedroom house last December which is currently valued at €595,000, a drop of €80,0000.”
O Hé, O Hé. Buy now or pay less later!
Comment from former Federal Reserve chairman Greenspan. What a joke this guy has become!
Greenspan said he knew about questionable lending practices that were leaving subprime borrowers with adjustable rate loans vulnerable to harm from rising interest rates, but did not recognize those loans would trigger broader problems, CBS said. Such loans are extended to borrowers with poor credit.
“While I was aware a lot of these practices were going on, I had no notion of how significant they had become until very late,” Greenspan said.
“I really didn’t get it until very late in 2005 and 2006,” he added.
Another quote that immediately labels someone as either a liar or stupid (or both).
But I thought it was contained???
So much for “the Maestro.”
And this was the fool setting monetary policy for the world’s largest economy?
shamefully yes. and that is how we should all know how fvcked we are
get an arm loan ” GREENspin 04
missed the 05 peak ,but pretty close
“Get used to it. Does anyone believe subprime is coming back? ”
Maybe in 30 years. Subprime is going to be wiped out in six months and anyone with less than excellent credit can kiss owning a house goodbye unless they can pay cash or a bank really feels sorry for them (better have a good tear-jerker story here). Kiss goodbye to 401ks and stocks too since they’re tied into the derivatives market and any meltdown in derivatives will cause a HUGE plunge in your equities markets. It could even rip bullion apart too since they were pumped up along with the rest of the assets in the USA.
Yep… even though it looks good for a rate-cut bounce in the S&P Im guessing (betting) that by winter all the pain from June forward will be in the numbers from the MSM and we will see a plunge.
I just recalled that my parents got a mortgage back in the 1970s from the company my mother worked for. Of course, they had like 30% down and she was an executive of the company. Interesting, though, to be making your mortgage payment to the company you work for.
If any demands such as a bailout are to be met, I demand that the management of publicly traded builders, Wall Street enablers, NAR and other trade group execs and DC liars circa 2001-2005 do the perp walk and see jail time.
It is amazing in all this that with the blame game in full swing, nobody points the fingers at Realtors or the NAR. My thoughts are that it is the buyer’s responsibility entirely. Read the stack of papers…too busy? don’t understand? Hire an attorney or don’t be buying a house. We are out blaming “predatory” mortgage lenders…nobody put a gun to someone’s head telling them to take out a sham loan on an overpriced POS! Nobody takes responsibility for their own actions.
Look at the employees at Countrywide…suing because the stock goes down, just like homedebtors suing to stop foreclosure. If the gig worked out fine, nobody would be complaining. When you opt for the POTENTIAL of higher returns of stocks or speculative housing, be prepared for the risks that accompany them. Otherwise, you shouldn’t be buying or should have your money in CDs.
“J.D. Power just completed its annual survey on the U.S. homebuilding industry. The annual ranking is closely watched by both consumers and builders.”
drum roll………………………
Centex
Ya just can’t make this stuff up.
You didn’t make up the pop corn thing did you?
lol jk
Slim has a question about this part of the original post:
The Herald. “Bank of England Governor Mervyn King warned yesterday of a ‘moral hazard’ in any move to bail out financial institutions that have engaged in ‘risky or reckless lending’ - warning this could ’sow the seeds of a future financial crisis.’”
“King says: “The moral hazard inherent in the provision of ex-post insurance to institutions that have engaged in risky or reckless lending is no abstract concept….If central banks underwrite any maturity transformation that threatens to damage the economy as a whole, it encourages the view that, as long as a bank takes the same sort of risks that other banks are taking, then it is more likely that their liquidity problems will be insured ex post by the central bank.’”
“‘The provision of large liquidity facilities penalises those financial institutions that sat out the dance, encourages herd behaviour and increases the intensity of future crises,’ King said.””
Okay, here’s my question: Why do the English bankers understand this, and why does the American financial community seem so clueless?
Maybe because our friends across the Atlantic haven’t allowed their government to degenerate into a corrupt spin machine. This idea may be total BS (i.e., the limies are as bad as our politicians) but it doesn’t seem to be the case to me. My impression is that they at least aspire to dignity and integrity whereas here politicians are rewarded for pomp and hubris.
Well, not corrupt really, but a spin machine it is indeed! Well, was under Blair anyway. Brown is less of a spinmeister. Still, the BoE retains nominal independence, the way the Federal Reserve SHOULD. Lord King is doing a pretty decent job there of concentrating on currency stability, kudos to him, though the jury is still out, given that there were still some hawkish calls for a further increase at the last meeting (where they decided not to).
It appears that the Fed is kowtowing to popular and political opinion much more than it should be doing. Not all Fed board members are like that; some are quite hawkish. But they do have to debate and vote, so the hawks have not prevailed.
This reminds me of the pre-Euro banking systems where the Bundesbank was measured, cautious, and well run, while banks on some of the other countries gave in to pressures to help the economy, or unemployment, whatever. In the end, there are few things a bank can really affect, and it has to choose. Choosing any goal but currency stability can lead to problems in the long term.
Um, their new prime minister’s claim to fame is selling off half the UK gold reserves in a manner guaranteed to ensure he got the lowest possible price. None of which had to happen without the massive pomp and hubris to-the-power-of-arrogance factor.
I’m not sure which of our countries is in the lead this year for most and silliest political scandals, but both are definitely still in the running.
Slim — if Bernanke blinks, I’ll be very interested to see if King does, too. I hope he doesn’t, particularly since he has more vocally and specifically staked out the high road — but it would seem to bode very poorly for the US dollar.
Slim: Have you ever watch House of Commons on CSPAN? They can be brutal. I’ve seen them just thrashing Blair. They may be very polite and dressed up, but they don’t BS around. We always find ourselves asking “can you imagine if Congress did that to Bush.”
Most Americans are soft, lazy, and stupid….this includes the current crop of financial whiz-kids in the system. They do not understand pain.
We have been trained that any financial pain will be cleared up in a momments notice through methods devised by the Legislature and Central Bankers. I seem to hear the words “any financial pain will be short lived” as bankers are ready, willing, and able to provide whatever is necessary to “stem” the pain.
Problem is, the USA needs the pain, it is a learning experience.
“‘The provision of large liquidity facilities penalises those financial institutions that sat out the dance, encourages herd behaviour and increases the intensity of future crises,’ King said.””
Lenders must be allowed to fail. If they are culled from the system, trust will come back. It’s time to show your cards jokers.
amen to that, we need the pain to fluch the perpetual koolaid drinkers……mostly fraudsters anyway. let em crash.
I thought the bubble was only in the US, and only due to subprime borrowers? You mean they lied?
Some good quotes in this article…believe it or not. For some the reality of realty has set in…
http://news.yahoo.com/s/afp/20070913/ts_alt_afp/useconomyproperty
Yeah, and that cellulite ad was really catchy. I am referring, of course, to the use of Photoshop on the “after” picture.
If any demands such as a bailout are to be met, I demand that the management of publicly traded builders, Wall Street enablers, NAR and other trade group execs and DC liars circa 2001-2005 do the perp walk and see jail time. KB’s Bruce Karatz clearly acted in a criminal way and should be jailed.
totally ot, but his ex-wife, Sandra Lee, is that aberration on Food Network, who makes “semi-homemade” stuff…sounds like they both have the same approach to business.
She should be jailed for what she does to food.
She should be jailed for what she does to my nerves. Rachel Ray can be her cellmate.
Sandra the booze-hound.
sure she has her faults, but she is cute
and rachel ray the loud-mouthed rube
Hovnanian VP Michael Skea said the company recognizes some recent homebuyers might feel uneasy about the sale. However, most of those buyers probably received some type of incentive as well, he said.”
“‘Those who purchased previously already chose the home and location they wanted,’ he said. ‘Those may not have been the same if they’d gotten a ‘Deal of the Century’ home.’”
Yeh, it might not have been the same. The deal of the century house might have been right next door. That 50 foot trek across the expanse of the frontage of the property might have put you in a less than desirable neighborhood. That’s some real spinning there, Mr. Skea.
“This year’s slowdown in homebuilding might mean better quality of construction for buyers. That’s because builders are no longer in such a hurry to finish houses.””
This is a loony comment. As if the current environment for homebuilders—severe capital constraints and an imploding real estate market—-doesn’t put them under pressure to crank out their remaining construction projects as quickly and cheaply as possible (assuming it makes sense to complete them at all). The overriding pressure on homebuilders is to clean up their balance sheets by reducing inventory, including work-in-process, without delay.
Jose, one more thing. While we are on the bailout. Will you pay my mortgage off? It would be nice to be mortgage free. I will even quit paying on mine so you can pay it off, although I can and have been paying on it fine, and expect to be able to continue doing so. I think you owe me a free ride. I have worked hard and now deserve to rest. If you pay off my mortgage, I will have more money to save and spend taking care of my family.
How do European demographics vary from U.S. ? My impression is that Europe is “older” and enjoying lower fertility rates.
I imagine legal imigration might be higher there - but, really, shouldn’t real estate price growth in europe be even less sustainable than US price growth in the long term?
Or does europe’s population density play a larger role?
I realize this is kind of a simplistic question - but does anyone have any thoughts on this?
I have a guess, and it’s nothing more than that, about a component of Europe’s boom. For a long time before the EU formed and really took hold, there were a relatively hug number of multigenerational households in Europe, compared to the U.S. With the relative prosperity of recent times, the absorption of East Germany finally into a second generation (the first determined to live off welfare) and the economic success of such countries (”states”?) as Germany, it’s possible that a large number of young families found and took the opportunity to move out of mom & dad’s house, by buying their own.
What remains to be seen is how that plays out relative to the financing they obtained, the taxes they pay and continuation of the prosperity they currently enjoy.
Demgraphics? I saw more pregnant womenand small kids in a day in Krakow Poland then there is in the entire country of Germany.
And…?
I am bringing over Mike’s comment from the Florida thread, because I think it bears repeating and is a fitting eulogy for the bubble. Thanks again, Mike:
“Some advice for those who are stressed out and bordering on a mental break down because they cannot afford the mortgage, HOA fees, property tax and constant repair problems. WALK AWAY.
It’s only a pile of wood and bricks probably set on an overvalued handkerchief size piece of land. The good old days of responsibility have gone. The Fed are no longer responsible entities. The government is no longer a responsible entity. The banks are no longer responsible entities…..so why should you be responsible. Give them back their pile of bricks, wood and plaster.
There are many who will throw up their hands in horror at the suggestion that people should “walk away”. 30 years ago (when I was 40 years old) I would never have suggested it but if I was in the position that many now find themselves in, many of them young people, because of fraud, deception and outright government and Fed incompetence by allowing this to happen, I would tell them where they could stick the keys to that overpriced, badly built piece of junk.
As for your ruined credit rating? Don’t worry about it. You’re going to have a LOT of company in the next few years and there’s a bright side. For several years you will not be able to spend what you haven’t got and you might even save some money. Wow! Wouldn’t hat would be an earth shattering event. Even if you were one of the many greedy buyers who thought they were jumping on a gravy train but discovered it was a train to misery, it makes no difference. You were suckered in. Walk away, learn from it and let those that suckered you in pay the price….instead of you.”
A college girlfriend of mine walked away from a house she bought in the Bay Area. Right out of college, she and her new husband bought at the peak. They walked in 1992. They bought a new house a few years later in Las Vegas.
A friend of mine was ready to walk away in Los Angeles at that very time. He bought a house with his girlfriend (bad move). They eventually broke up, but neither could buy the other out, so they continued to live together and hated every day. Finally, they just had to sell, and they borrowed money to do so, just to sell it “clean”.
He ended up losing about one year’s take-home pay on the deal. But he figured he owed it, the deal was fair and square, and it was just his bad luck/foolishness that got him into it, no fault of the bank’s. So unlike some, he didn’t walk away; fortunately, he worked his way up through better jobs and paid the debt off in a few years. Now he lives in a place up in Palo Verde bought before this boom started.
Would you give this same advice to someone over-loaded with credit card debt? My 29 yr old brother (who lives like a rock star on $16/hr) has maxed out his credit cards and recently had his hours cut at work. If he makes minimum payments it’ll take him 50 years to pay them off. I suggested he call CCC and negotiate some sort of settlement. He was horrified and said “no way, they’ll take away my credit cards. i won’t be able to buy gas and groceries.” I rolled my eyes, and now he won’t talk to me, even though he was asking for my advice, and asked me if I could loan him “five large to tide him over to payday.” Last month he borrowed from mom to pay his rent… I think this kind of thinking is more common that most people realize. I say “walk away, take your lumps, file BK, and start over.”
My brother had a similar period, except he had a wife to help him. She tended to show frugality by using cash rather than credit. By withdrawing only $20 at a time from the ATM (with $2 fee).
“Housing industry experts say the discounts being offered by Hovnanian are unprecedented. The so-called ‘Deal of the Century’ sale, which covers 19 states, begins at Friday and ends Sunday. Hovnanian VP Michael Skea said the company recognizes some recent homebuyers might feel uneasy about the sale. However, most of those buyers probably received some type of incentive as well, he said.”
The incentive programs are becoming rather more overt.
Earlier I read that the sale ended 9pm Sunday. Just imagine what the sale might be like say around 8pm Sunday.
I haven’t seen any great specific deals around here (DC Metro), though maybe I’m just not looking hard enough at the Hovnanian ads. Some are offering the “half price options” deal that other builders were already offering during the summer, along with $15k off. Other, more expensive models, are offering $60k off a $500k house (didn’t see half price options on those). Not a real bombshell/clear-out if you ask me.
In fact, in one development I looked at, they raise the advertised base price by $5k above where it was last month before putting on the special to save you $15k!
Let’s wait till later in the autumn when the real sales promotions start. (Though if you ask me, the best sales promotions are not the advert specials for the masses but are instead the informal ones, where buyers hack the price down in private negotiation with HOV, which judging by sales records seems to be happening.)
I’m in Palm Springs area and we received a post card saying they’re giving $20K incentives including all appliances. Yeah - that will make a real difference when these oversized boxes are still selling at nearly $400K.
Oh, I forgot, they will throw in a washer and dryer if you buy this weekend in one of their Maryland developments! Yippee! Where do I sign!
This article caught my eye when I was in a local deli this morning….from the San Francisco Chronicle:
Two borrowers find that loan modifications aren’t easy to come by
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/09/13/MNLOS45BD.DTL&hw=mortgage+modification&sn=002&sc=541
Excerpt:
– One married couple bought a house in Hercules five years ago. They refinanced two years ago with Washington Mutual and now owe $535,000 - about what their house is worth. The subprime loan had an initial interest rate of 9.6 percent and is due to reset higher in March. Monthly payments are $5,100 for mortgage, taxes and insurance. If the loan is paid off before March, the prepayment penalty would be $16,000.
“This is like the day of reckoning in March,” the man said about his reset date. “I want to keep my house. If people are making their payments, there should be some concessions to accommodate those individuals to stay in their homes.”
The man earns $118,000 a year as a college administrator. He said he has made all his mortgage payments on time. But his credit score is low - about 550. He said he’s not sure why that is. The man and his wife are getting a divorce, so he hopes to make home payments on just one income instead of two.
The man read a Chronicle interview with Washington Mutual CEO Kerry Killinger. Echoing a refrain repeated by many other bank executives, Killinger said: “Our goal is to keep as many homeowners in their house as we can. It’s in theirs and our best interest to try to minimize the number of foreclosures.” Killinger said the bank has a $2 billion fund to help customers with adjustable-rate loans refinance into fixed-rate mortgages. The program is for customers who have not fallen behind.
After several calls to Washington Mutual, the man said its loan officers did not appear familiar with the plan. After several more calls, the bank told him he did not qualify for the plan and it could not offer him a loan modification.
BayQT~
Is it not possible that the “bank told him he did not qualify for the plan” because of the 550 score?
I would think he could understand such, being a college administrator.
Nobody will modify a loan for someone who has over $100k per year income, and who clearly * can * pay the loan, but simply doesn’t *want* to pay the loan.
“But his credit score is low - about 550. He said he’s not sure why that is.”
B.S. Maybe the cause is why she is leaving him.
If your credit score is 550 and you don’t know why that is, then there is something seriously wrong. Even worse he has a good salary and still dooesn’t have even an average credit score. I agree with WAMU that he doesn’t qualify for a loan modification, as I’d bet he’s going to walk as soon as things get tough. Unfortunately he should have never qualified for the loan he already has, either, which is a whole different issue.
Something came to mind. If could be that together they were able to qualify for the first loan, and then just barely for the refi (9.6% in 2005?)…3 yr fixed, reset in 2008. Perhaps, without her credit track record, he now sits with a decent salary but with a sub-subprime fico thinking that he qualifies for this mod program. How could he think that he’d be a shoe-in candidate? More and more I realize that salary levels, titles, degrees or even mature age do not equal common sense or financial savvy. And sadly, the people who obviously do not use their common sense don’t know that they are lacking in the area. They are the first ones who will look down their noses at those who haven’t followed the pack, or who haven’t required the need to keep up the facade.
This guy found his way in this mess. Let him dig his way out.
BayQT~
I think that article should put a clear end to the misconceived idea that :
SUBPRIME = POOR
SUBPRIME actually = deadbeats that could not manage credit. To bail out subprime borrowers would truly be rewarding the worst behavior. That is why I applaud (okay, how about “look the other way”) when Bush’s plan at least means-tested his limited bailout. It needs to be based on income, not credit score.
The other story was just as good. A couple makes 5,500 a month after taxes and they got an $650,000 “negative amortization” ARM two years ago.
He called Countrywide and asked,”‘Can you help me out to not lose the house and just lower my payment?”
I’ll keep saying it…..these numbers on the coasts are mind boggling!!! $535,000 house?? $5,100 PITI and going higher???
Totally out of hand.
It boggles our minds, too! And to think that the $400-600k properties are considered “starter” homes. Beyond crazy.
I’ve always thought that was a crap title (starter home) anyway. It used to be that you bought a house to live in, pay off and celebrate the final payment….having raised children and played with the grandchildren in the SAME HOUSE! There was no “starter home”…just your home, your shelter. Period. Now people play musical homes and loans and assume that in the end they will come out ahead financially. Hmmm….and that’s when people stopped saving. The “home” took on a new position in the person’s life.
And now look at what’s happening.
BayQT~
‘Former Federal Reserve Chairman Alan Greenspan acknowledges he failed to see early on that an explosion of mortgages to people with questionable credit histories could pose a danger to the economy. In an upcoming interview, Greenspan said he was aware of ’subprime’ lending practices where homebuyers got very low initial rates only to see them later jacked up, causing severe payment shock. But he said he didn’t initially realize the harm they could do.’
‘While I was aware a lot of these practices were going on, I had no notion of how significant they had become until very late,’ he said a CBS ‘60 Minutes’ interview to be broadcast Sunday. ‘I really didn’t get it until very late in 2005 and 2006,’ Greenspan said.’
The CYA strategy goes mainstream!
I’ve been waiting for this, for back many months ago it was said somewhere that AG’s book would come out in September (is that right?). Of course, this was before all the fireworks this summer.
So now he has to defend himself publicly and play the “unaware” card.
Most relevant part of the Greenspan quote: “I really didn’t get it.”
Alzheimer Greenspan. Al, for short.
sorry - did not see this. We were probably looking at it at the same time…
How is this for a ‘fun’ Greenspan quote (in a congressional hearing on Social Security:
“We can guarantee retired people a certain amount of money, but we can’t guarantee that the money will be worth anything.”
An article on the bubble and the economy in general (which could have been written by a HBBer):
http://www.smirkingchimp.com/thread/9892
Maybe our nationaly genious should just say, after leaning over to confer with counsel, “I don’t recall” to any questions about the housing bubble. It seems to have worked for others.
This was asked of John McCain in a recent debate.
Q: The FairTax would eliminate the income tax, estate tax, payroll tax and capital gains tax and replace it with a 23% sales tax. Do you support it?
A: I believe that we’ve got to simplify the tax code. But one of the first areas we’ve got to go after is the alternate minimum tax, which is going to eat in to 20 million American families if we don’t eliminate it, and very quickly. Look, when we found out that Congress could not close a single military base when we had a huge number of them, we appointed a commission and they said we would close so many bases, and Congress votes up or down. I would find [someone like former Federal Reserve Chairman] Alan Greenspan. I’d say, “Give us your recommendations.” We’ll pass a law, and we will vote on Alan Greenspan and his commission’s recommendations, yes or no, up or down. That’s the way you’re going to simplify the tax code, which now requires $140 billion of American families’ income to prepare their tax returns.
But wait, isn’t he “the wizard”? Wasn’t everyone in the media calling him a “genius” when he stepped down? Didn’t markets hang on his every word?
Now we find out that he really didn’t know wtf he was talking about?
So can we safely put Alan away in a jar of formaldehyde and never touch him again, please? He has no credibility to speak of. He presided over the what is turning into one of the biggest financial messes in America’s history — and his excuse is that he “had no notion of how significant” it all was? HOW “SIGNIFICANT”!? Isn’t the evaluation of y’know, “significant” numbers why you get to appear before congress acting smug in your supreme knowledge while moving markets with your clever little turns of phrase? (Remember, it’s not a bubble — it’s “froth”).
What a flim flam man. Greenspan is a scammer. He did the easiest of all things: He inflated the money supply, and got called a genius for the ensuing rise in markets.
Just as the markets started to turn around, he took a bow and got the hell outta dodge.
He will go down in history as a weak man.
‘I really didn’t get it until very late in 2005 and 2006,’ Greenspan said.’
Hey, they were following his advice, no wonder he didn’t get it. Idiot.
not sure if this was posted:
Greenspan: I was WRONG (or closest we’ll ever see)
http://biz.yahoo.com/ap/070913/greenspan_mortgages.html?.v=14
Doesn’t he remind you of George Burns a little?
http://www.imdb.com/gallery/mptv/1123/Mptv/1123/1001_0658.jpg?path=pgallery&path_key=Burns,%20George
BayQT~
separated at birth:
http://www.imdb.com/gallery/granitz/5792/Events/5792/LarryKing_Grani_12666908_400.jpg.html?path=pgallery&path_key=King,%20Larry%20(I)
Wow! Triplets!
BayQT~
Wanna run the Fed?
In an upcoming interview, Greenspan said he was aware of “subprime” lending practices where homebuyers got very low initial rates only to see them later jacked up, causing severe payment shock. But he said he didn’t initially realize the harm they could do.
“While I was aware a lot of these practices were going on, I had no notion of how significant they had become until very late,” he said in a CBS “60 Minutes” interview to be broadcast Sunday. “I really didn’t get it until very late in 2005 and 2006,” Greenspan said.
Wanna run the Fed?
Not sure if I could do any worse given the boatload of hurt people are in for due to this regime.
Put me in there.
September 21st.
BREAKING NEWS
With Wall Street and Jim Cramer expecting a half point to full point rate cut from the FED were completely caught off gaurd when Federal Chairman Tom McSomethingOrOther and the FED Board elected to raise the Fed Funds Rate to 6.25% point. This excerpt from the FED statement.
“We have decided that Wall Street is always expecting a bailout. We hope that this teaches them a lesson and that they should make investment decisions on merit and not on what the FED will do. We will reevaluate our stance at the next meeting. If Jim Cramer refrains from calling us nerds or telling us we know nothing, then we will not hesitate in showing Jim Cramer what he knows and what we know we can do. If inflation does not get under control, we will be forced to cut further.”
I’ll see your 6.25% and raise it to 7%.
“I really didn’t get it until very late in 2005 and 2006,” Greenspan said.
It makes it all the more disgusting that the government and the MSM continued the happy talk for another year and a half. And the sheeple are going to get led to the slaughter.
Yes slowdown talk started in MSM in mid-2006, and even then it was “soft-landing” talk all the way until Spring 2007.
amazing - you run the Fed and you have no idea how ordinary people react to market changes?
Wages stay the same - costs go up - people use up savings - people get desperate and do crazy things.
The Fed reports wages, savings rates, interest rates, so it is not like they don’t know how things are changing.
About 3 months ago, I posted about a new D.H Horton development in Oxnard, Ca. It was named “Orbela” and the brochure had glossy images of an Italian coastal area, complete with a picture of a bare footed healthy young couple wandering along the silver sands of the beach holding hands and looking as if they just won the lotto.
Okay. There are some magnificent coastal areas in the USA and some are far better than those one finds in Europe. I’ve seen many amazing coastal areas in Europe and the USA and I can say without fear of contridication that Oxnard, ca, ain’t one of ‘em.
Oxnard is/was basically an agricultural area until the developers moved in around 7 years ago. The majority of the population were latino. Wages were/are low. Many of the population were illegal immigrants who worked (hard) in the feilds. Now the area has become a hodge-podge of new ticky-tacky, side by side, stucco houses and condo developments scattered amid agriculture feilds. Mostly because the farmers missed the boat when it came to selling their strawberry feilds to developers. I think there is now a temporary moratorium on selling agricultural land. However, thousands of houses and condos are still in the process of being built in the area. And I do mean thousands.
I went to look at Orbela to see what $400,000 + to $550,000 + will buy. Actually, the places were nice and if the $400,000 properties were listed at $195,000, I would think about buying IF they were in a nicer area and IF there was no HOA. I don’t agree with buying a property and having a landlord (the HOA). I remember thinking to myself as I surveyed a sea of newly built townhouses and condos as I drove through Oxnard, “Who is going to buy all these properties.”
Well, the point of this post is because the foreclosure rate, as reported in a Ventura newspaper today (the county of Ventura being where Oxnard is located) is - wait for it and we are NOWHERE near the bottom - 780% higher than 2006 already! And they are STILL building! WTF is going on!? As they say in the tv ads, “But wait! There’s more!” These numbers are prior to the current credit squeeze which will eliminate hundreds of thousands of borrowers from those with good credit who cannot come up with 10% or 20% downpayment and who’s incomes are not big enough to buy a $400,000 property - to those with bad credit who make $20,000 a year and can no longer rely on a corrupt realtor and a corrupt broker and a bribed appraiser (all of whom have become as numerous as maggots on a rotting piece of meat in the last few years) to cook the numbers.
If anyone out there, after reading the above, thinks we are near the bottom……..stop drinking your bath water and get it tested.
There’s a lot of places like this in SoCal (all over the country, actually), that will probably never have residents. They’ve overbuilt for the population as a whole, let alone a population that can afford to buy.
It will be interesting to see what local govt does with these future ghost towns in the years to come.
‘Now the area has become a hodge-podge of new ticky-tacky, side by side, stucco houses and condo developments scattered amid agriculture feilds. Mostly because the farmers missed the boat when it came to selling their strawberry feilds to developers.”
And the farmers are better off for it, now that hosuing is imploding. which is worth more? The field or the BK condo devlopement?
Oh, that’s okay Mr. Magoo. No problem. You’ve basically flushed the dollar down the toilet, brought untold misery to thousands, been the cause of bankrupting hundreds of companies in the future because you are the “Maestro”. Now you’ve retired, you can tour the rubber chicken curcuit and tell the dummies who pay to hear you, what you did wrong and how you would avoid it in the future…..at $70,000 a speech. Jeeez.
“‘We’ve been very concerned for a number of years that within the large universe of mortgage brokers, there are a number of bad apples,’ said Thomas Shaner, the Maryland Association of Mortgage Brokers’s executive director.”
Yeah, just not concerned enough to do anything MEANINGFUL about it.