Bits Bucket And Craigslist Finds For September 25, 2007
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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It warms my heart to know that the bottom is in for homebuilders.
http://tinyurl.com/246v4f
Good morning everybody. It’s a beautiful day for a bloodbath (figurative) in New York City.
It looks like we are going to get one. Reach for the spam and head to the bunker.
“…dragging my canoe behind me.”
AP story in this AM’s BGlobe says the US economy has flat-lined-meaning the patient is dead.
Story says Helicopter Ben is planning to come to the rescue with more interest rate cuts.
Duh, Hey Ben…When people are payin’ 50% of their income to put a roof over their heads, there ain’t much discretionary income left over.
Is that so hard to figure out?
Nothing a few more rate-cuts can’t fix. BUY,BUY, BUY! Boooyaaaahhhh!!!
Yes, we all know how successful the last rate cut was. Good thing it didn’t change the LIBOR spread… I mean…
Got popcorn?
Neil
Jeez, Neil.
Aren’t you in Califonia? Did you post after you got up or before you went to sleep?
Woke up early.
Covered the pre-pre-meeting.
One week after a 50 Pt cut they are whining again for more cuts.
I think they know it won’t help the housing meltdown. I think they are trying to force people who have their money in CD’s and such back into the stock market.
When we went through this last time I vowed the rates could go to zero and I would not go into stocks. I came out better than a guy I knew who made and “lost” a bundle in the market. Investing in the stock market is no place for amateurs. It can be great for those who know the ins and outs of the “game”
Good morning to all. Yes, it’s a warm, beautiful day here in Michigan, sounds like it might be the last one, so it’s a good day to sit outside, smell the roses, watch the picket lines, and so on.
…So losing a couple of weeks production, say 160,000 vehicles, would be a plus, not a minus. Even better, GM will not have to pay its workers any of the “supplemental unemployment benefits” it would be required to shell out if it had temporarily laid off the workers to reduce inventories.
http://tinyurl.com/3bq5qn
This was my thought exactly - less vehicle production is a good thing at this point.
Sales of new cars are anemic, or worse…
And the powers that be call a strike?
Yes, this strike will last as long as GM wants it to last - and not a second longer.
Our until the UAW guys have to start making their mortgage payments on their house, cottage up north, their SUV and their boat.
Could the UAW also need the strike to “sell” the cuts to the rank and file? They have to look like they were pushed against the wall.
The balance of power of needs to come back to GM. The union costs have been astronomical for decades. One day, decades from now it will be the unions turn again. Competition from Asia requires American Auto companies to stand firm.
Perfect from the union point of view too. The union leadership and the pensioners still have pay and health care, but the next generation of workers does not.
Strike was announced as i was walking out the door to buy a large sum in GMAC corpoate bonds. I turn around at the door and call the broker to cancel. He was miffed. I’ll wait a week.
NYCB
Remember, STRESS kills the ’stressee’, not the dunces who surround him/her….
You definitely haven’t met me. I don’t let stress eat me up. I rant & rave a little and then go enjoy life. I don’t bottle anything in and let it eat at me. I’m debt-free and free as a bird. We moved to New York City on a whim. How many people can do that?
Most of em’
X-lent, Smithers.
I WAS a former stressed-out mess. I too have seen the light and do not bottle up anything! Ahh-relief…
I too have seen the light and do not bottle up anything!
Me too! I use the bottle to relieve stress.
yeehaw! Just up the meds!
Well I woke up this mornin’ and I got myself a beer.
The future’s uncertain and the end is always near.
Let it roll, baby roll.
Depending on where you’re from, it must have been quite the experience. I started working in the NY metro area in 1999 and it was an eye opener.
haha
I’ll bet it was.
I work for a firm that’s based in the West, my boss is from Utah. He can’t understand why I get into it with our reps from North Jersey. He thinks I’m supposed to roll over for them just like he does, because “they’re from New York and they act different”.
I had to explain to him that Philadelphians don’t get intimidated by North Jersey crapola. It’s like they all went to bed one night and woke up thinking they were Tony Soprano.
Speaking of stress, I’ve been in NYC for the past 20 days or so looking for a suitable place to live. Know of any apartments(possibly sublets) for someone with great references, income etc?
What part of the city are you looking? East/West/ Village in Manhattan or elsewhere?
These companies are in survival mode. Bernanke is in inflation mode. They will try and inflate their way out of this bubble. Let the war on savers commence.
“Let the war on savers
commenceescalate.”It is time for the troop surge to commence.
With (a rumored) 2.6m vacant houses dotting the U.S. landscape, the Fed ought to know better than to try to reflate the housing bubble. Vacant houses create deflationary pressure in the real economy, and respiking the punchbowl will result in more of the U.S. national wealth wasted on building more unwanted, unneeded, soon-to-be-vacant McMansions.
Did you notice that the news item on Lennar (http://biz.yahoo.com/rb/070925/lennar_results.html?.v=6) was covered, in part, by a reporter in Bangalore? I read the article multiple times to see if there was any international link but couldn’t find one!
Was it Reuters? I think they outsourced a lot of reporting to India and Pakistan — there are stories about it out there on the web.
Is this officially bottom number 124 or 125? I have lost track at this point…
9 families are suing a mortgage broker because he didn’t translate all the documents into English…
http://www.nytimes.com/2007/09/25/business/25broker.html?_r=1&hp&oref=slogin
OK, they were stupid for signing something they didn’t understand. OTOH, the law says the lender has to translate if necessary, and they didn’t.
Yep, $4K per month income and has $730K in mortgage loans. Works for me. Interestingly, it doesn’t say that the $4K is pre or after-tax!! I assume net, not gross.
I just love the bit where he says he told the broker that he couldn’t afford more than $2,500 in monthly payments! On a $4K income? What’s that, 65%? Are you nuts?? What about taxes, insurance, HOA, etc. before you get to actually living your life.
The stupidity of these people will never cease to amaze.
Holy crap. That might be a new record. 730K in MTG loans on a 48K income? I truly think we may have indeed discovered the stupidiest person in America (a hotly contested title!).
Sorry, here in Northern Ca - a strawberry picker making 25k bought a 730k house.
I thought it was 17K
Nope, I don’t think anyone’s going to beat the strawberry pickers who got a $750k loan on 15k income.
stated income?
I am assuming gross. This is the line…
“Most work in construction or as cashiers, janitors, painters and gardeners.”
How many cashiers take home $4k per month?
I’ve been a cashier. I may have handled $4k in a day, but my monthly pay never reached that level.
Lawyers go to school for an awful long time, delusions of being Darrow, and all…
And this is the reality of what those years of rote memorization gets you.
They may be losing out on one American Dream - home ownership. But they are quickly learning about the other American Dream - suing everything that moves in hopes of striking it rich. And of course participating in the new American Motto - “Not My Fault”.
And people think illegal aliens don’t assimilate? They assimilate quicker than you think.
oh puhleeze. I am going to take this time to get on my soapbox:
MAKE ENGLISH THE OFFICIAL LANGUAGE TO THE U.S.A.
English is my family’s second language. To a man, they all made money in real estate, without having the docs translated to their native tongue.
What a bunch of crap. You come to the USA, speak English, as Joey Vento says.
Joey’s hearing was postponed:
http://www.genosteaks.com/letter.html
(He attracted national attention when the city of Phila. harassed him for having a little sign in the window of his steak shop saying: You’re in America, speak English!
or words to that effect.
When in Rome, baby…
My Grandfather came here from Italy and when my Mother and Aunt were growing up he insisted that they speak English only at home. My Mother went on to get a MS in Neurochemistry and my Aunt a MA in Fine arts. My Grandfather got an engineering degree from Carnegie Tech and went to work at PPG where he was part of the research team that invented laminated glass, insulated windows, glass block and tempered glass. He had the clue.
That would be “of the USA” I think.
Languages can be tricky to master.
No, I managed to fix this error in a nanosecond, if you look at the posts.
Fyi - I am an ***awful*** typist, but don’t dog my mad English skills. The nuns would have smacked me otherwise…
Part of my family came from Germany. According to my mother, they were very intent on assimilating once they got here. So, they buckled down and learned English in a hurry.
And, guess what? It didn’t kill them, and they didn’t lose their German culture.
Amen…Pop-pop never spoke german even though he did have a bit of an accent. Became a high school teacher yet still passed on the welding and carpentry that his family taught him.So our heritage lives on. My son is named after my great uncle Wolfgang and he’s proud of it.
oh puhleeze. I am going to take this time to get on my soapbox:
MAKE ENGLISH THE OFFICIAL LANGUAGE OF THE U.S.A.
Let me have some more coffee. I think I’ll work this tick out shortly.
You cannot have an “official” language and “freedom”. That doesn’t mean that our government has to accommodate everyone either, it simply means that the government should not force other private companies or individuals to do business in English.
Ron Paul has really opened my eyes on the meaning of “life, liberty, and property”.
Agreed, but the government is forcing business to accomodate all sorts of foriegn languages and the schools in California being forced to teach in Spanish. What a joke.
“You cannot have an “official” language and “freedom”.
Say what?? English is and has always been the language of the US. Our founding fathers and our legal documents,including the Constitution, are in English. One of the means of assimilating diverse peoples into a nation has been the use of English. Are you arguing that prior to say, 1990, when government forms began to print in multiple languages, that there was “no freedom”
Want to see how divisive language can be…visit Quebec or perhaps the Balkans. Or Belgium, now threatening to tear itself apart. You want america to descend into ghettoized, ethnic outposts, where jobs are saved for the only those who speak the local language, fine, let’s head down your road.
America is already broke, why not just bust the whole idea
of a single nation, united by a common language and a common set of laws.
My wife’s former country has 70 dialects. On the International TV Channel game shows I can tell which ones don’t natively speak the dialect of the capitol area… because they pop into and out of English more than the others.
The first and biggest loan was a pay-option adjustable rate mortgage. The loan allows borrowers to pay less than the interest due, adding the difference onto the balance so more is owed with each passing month. The interest rate on the loans from Mr. Curiel was 10 percent, with a 15 percent upfront fee added to the principal balance. That loan called for borrowers to make interest-only payments and pay off the full amount in two years.
Those loan terms are horrible. And did Mr. Curiel really think that the people signing up for these loans were honestly going to be able to repay under those conditions? And what about the banks, you would think they might be moderately curious as to how these people managed to create tens of thousands of dollars out of thin air? The whole situation reeks of fraud on many levels.
I get so sick of this…everythings fine and dandy till the payments due. Three loans to buy a house? I bet they all were giggling like little school girls thinking they had get over once again in America. How easy it is to cheat in America. Just jump the border and all is yours…
to cynicalgirl-and if I gave you documents in chinese to sign for the biggest purchase in your life, would you sign?
Good morning all. I wonder if today is the day WM finally comes clean about their balance sheet and files BK (OK, disclaimer, I’m short!!).
You should start a rumor like someone tried to do with Buffett and CFC.
Or Buffett and BZH or Buffett and………………….He is the key to every lousy company’s temporary rally.
Good morning all. I wonder if today is the day WM finally comes clean about their balance sheet and files BK (OK, disclaimer, I’m short!!).
For anyone who wants to short the bank stocks, you can look into symbol SKF.
The Soros Threat To Democracy
How many people, for instance, know that James Hansen, a man billed as a lonely “NASA whistleblower” standing up to the mighty U.S. government, was really funded by Soros’ Open Society Institute , which gave him “legal and media advice”?
http://www.ibdeditorials.com/IBDArticles.aspx?id=275526219598836
We need MORE whistleblowers in this country and this is a blog about housing not politics.
Amen dukes…
Make that a double amen.
True, it’s a housing blog but isn’t this where all the off topic stuff is supposed to go?
Depends on what the whistleblower is giving up. Our government and military need to keep some things secret for national security reasons. Those secrets should have congressional oversight by select members of congress who can not divulge the information. Those members of congress should be able to intelligently disseminate what are valid national security secrets and what are violations of privacy and such. That is the way it is supposed to work. To just blast every national security secret to the press is dangerous and irresponsible.
a small crack in the Dutch bubble? After reporting another all time high for Dutch home prices yesterday, the statistics office today reports that consumer confidence (that was better than ever this summer) suddenly fell of a cliff, biggest drop ever seen. Could be subprime fallout, or maybe because of new government plans that (again) will cause declines in purchasing power for the next four years. But don’t worry, according to the Ministry of Truth Dutch consumers are still awash with cash so they will keep buying those expensive homes and other luxury items anyway.
Yeah, but the real confusion is this: how do you dutch guys keep producing such great footballers? Such a small population, such gifted athletes. How is this possible, not to mention fair?
‘Roids.
FWIW, todays footballers (worldwide) seem a lot more muscular that yesteryear’s players. This is especially evident when watching old “classic” matches from 10+ years ago.
You guys play football, I thought you just played soccer?
For the record:
“Footballers” play “soccer” (Association Football).
“Football players” play American or Canadian Football.
Eh, I’m a rugger.
OT, but is there a good website that explains the rules for Rugby football? (RugbyForDummies.com?). I have been watching a few games lately, but I haven’t been able to figure out the rules.
Rugby Rules: See “nuts”, kick “nuts”.
It’s not that much different from American football.
Roidy
I think thats what makes it confusing. I know that forward passes are not allowed, but I find the flow of play to be confusing. Do plays stop? Do they have “downs” like in American football? When is the ball kicked?
I watched a lot of rugby in New Zealand last year…
Players play both offense and defense, with no padding and lots of hitting and running back and forth up and down the field.
There is no such thing as a 385 pound lineman in rugby.
it’s a subject I know very little about, but I guess the fact that they buy/trade most of the good new players is a major factor.
Our country couldn’t muster more than 200-300% gains in real estate and we are most definitely early in the years long hangover stage of the proceedings…
European houses in the right locales went up 500-1000%, since 2000.
The bigger they fall?
Could the Northern Rock thing have something to do with it??? A similar confidence dropoff happened in Britain, if I read correctly.
Just curious, Ministry of Truth actually called???
ministry of truth = CBS (the statistics office)
yes, could have to do with the Northern Rock run - that got more exposure in the papers (although still very little for such an important issue) than the subprime crisis itself.
UK bank runners mantra…
Do you walk the Rock?
Is there really a “statistics office”? That’s awesome.
“States Rights”; NOT Just About Permitting Lynchings, Anymore!!
http://www.washingtonpost.com/wp-dyn/content/article/2007/09/24/AR2007092401563.html?hpid=sec-nation
Too bad though those crazy Californians can’t find something better to work on than this so-called global warming silliness. Such a waste of time and effort.
Those oh so silly melting polar ice caps!
I forget why i’m supposed to fear water rising by a millimeter every 10 years..
I’m not worried about global warming, we probably have a few good years yet.
actually it is closer to a cm every year in other parts of the globe - and it just might sink the Dutch housing bubble, one of the biggest bubbles worldwide.
Without serious action, within 50 years about 2/3 of Dutch housing may be under water (not only the mortgages). But I guess the realtors will finds some clever marketing to count that as an extra incentive.
I’m thinking the Dutch have survived this long, they’ll figure something out.
Even if its underwater, its still Real Estate!
http://www.ecoboot.nl/artikelen/floating_houses.php
Wish those polar bears would get themselves boats and fish for a living.
Gee, exeter, about six posts up you were just “Amen”-ing that this is a HOUSING blog, not a political blog. If you actually knew anything about science, you’d have recognized these political windbags have to have some crisis to supposedly solve or they’d all be out of a job. Most of the so-called solutions to the global warming “epidemic,” “crisis” or whatever other scare-tactic word you want to use are more likely to cause worse problems than any they might solve.
Greg, my global warming post was in response to the idiot who posted a political jab regarding Soros. For whatever reason a post indicating my intent didn’t show up. Nevertheless, lets not lose sight of the same scare tactic called turrism. Aside from that I do “actually know something about science as it is my stock in trade, thank you.
Seems like a article about transparency struck a nerve. I apologize I did not realize an article concerning Soros would offend. Mea Copa!
Exeter,
I agree there are many scare tactics (including terrorism, health care, environment, etc.), as this is how politics works in a nation of rapidly less aware populace. One has to scare people into concern, then convince them that if they only elect “you” (meaning random politician running for office), the crisis will be solved.
I have worked in meteorology and climatology for much of the last 19 years. These sciences have been a prime arena for people jumping on the bandwagon to get into the funding action, and a prime arena for crony-ism in the peer review process. Not sure of your opinion on peer review, but it’s just as fraught with crony-ism and spin as the gov’t is.
So, exeter, now it’s name calling. Way to stoop down. Political jabs are just as legitmate as your so-called global warming silliness. You want to stick to housing here, practice what you preach.
Politics comes and goes here…deal with it. Once again your type shows that diversity is ok as long as someone agrees with you.
My Fault, My Culpability = Mea Culpa.
Mea Copa is some disco that Barry Manilow sings about.
I wondered what mea copa was…. lmao.
Latin.
Bano, Actually, politics don’t come and go here. Clearly, the topic is discouraged. You’re a relative newbie here so I’m not sure where you got the idea.
mea copa is latin?
For?
Just from reading the posts, that’s all. That’s what I like about this site…by and large politics isn’t always veered into, unlike say online newspaper forums. I don’t mind veering in sometimes at all….we all say our thing, have our laughs and move on.
I like it here, politics and all. It’s so unlike the outside world, which is still clueless about credit, housing etc.
Booga booga, global warming is gonna get you! Better cough up some more dough to fund the researchers that say that there isn’t a thing that can be done to stop it. What a racket!
Speaking of rackets … how ’bout Military-Industrial? Or Pharmaceutical? Or Hedge Fundery? Or, uh, Real Eestate?
Even if global warming is a racket (and it’s not), it’s a racket dwarfed in size — measured in orders of magnitude — by many other well-established, pervasive rackets that are eating our economy alive.
Booga booga.
HAH! I never said there weren’t other rackets or that global warming is a racket. Global warming “research” is a racket, dwarfed in size by other rackets, but also a demonstration of booga booga science in action.
Are you also scared about a comet hitting the Earth? I’m sure those researchers would like more funding to say there ain’t crap we can do about it!
“Every great cause starts out as a movement, degenerates into a business, and ends up a racket.” - Eric Hoffer
Global warming “research” is a racket
Well, I guess that’s a conundrum, since the research keeps getting funded because there’s an entire class of people who refuse to believe it …
Amen!!
Even if there was some truth to this global warming issue, we have WAY more important and immediate issues in this country. Housing, the greater economy, social security debacle, is a short list. The USA propaganda machine is running full bore when “global warming” gets top press over these issues.
Eveybody should read Eric Hoffer’s “THE TRUE BELIEVER “.
“Well, I guess that’s a conundrum, since the research keeps getting funded because there’s an entire class of people who refuse to believe it …”
That is an interesting “basis” for scientific research. I had no idea that to get funding, all I had to do was demonstrate that a certain subset of humanity did not believe in something, or not take a controversial viewpoint as a universal truth?
And what class of people are to be branded as heretical non-believers, pray tell, in your rather shallow ad hominem attack?
ET-Chicago,
That “entire class of people who refuse to believe it” includes thousands of atmospheric scientists.
Also, part of the “it” many refuse to believe is that any so-called solutions will do more good than harm.
Global warming is a racket that makes the housing bubble look like kindergarten. At least most real estate types weren’t jetting around the world espousing their BS.
The more carbon I can create, the better off I’ll be.
Right, scientists have no work so they made up global warming.
That “entire class of people who refuse to believe it” includes thousands of atmospheric scientists.
Hardly.
Show me that list of “thousands.” Find me hundreds. Hell, find me a dozen with some serious academic credentials.
Well-trained atmospheric scientists who don’t believe the data behind global warming are a distinct minority. Anyone who tells you differently hasn’t spent much time in the scientific community.
For what it’s worth, I’ve taken classes with one of the more respected doubters:
http://tinyurl.com/2nfzme
It was an interesting experience, I’d do it again. I respect Prof. Michaels, and unlike most in the “global warming is hoohah” community, he can muster up some actual data and logical arguments. But, in my opinion, Michaels is still wrong … and regardless of my opinions, he’s getting payola from the coal industry to prop up their views.
And what class of people are to be branded as heretical non-believers, pray tell, in your rather shallow ad hominem attack?
I haven’t branded anyone a heretic, but I think some people need to read the science more closely. I don’t want to be more specific than that, mostly because people have a variety of reasons for not believing good science. I certainly don’t have the time or inclination to get into a religious debate with someone on a housing bubble site, for example … it’s just not worth it.
You complain that research into global warming is a scam, but have you delved into the relative merits of the data? How much more research needs to be produced to convince people (mostly non-scientists, some with a distinctly political or religious agenda)? Doubt — perversely, for the doubters — begets more scientific research, as scientists seek to shore up any inconsistencies or holes in the data. That’s what I meant in my previous post, really. Which leads us back to square one …
I haven’t posted in a while, but when I do, it’s usually anecdotal stuff about the SF bay area, not tranches or inflation indicators, etc. And that’s because I know my limitations and expertise. I am not a RE expert nor an economic savant. And I usually keep my comments positive.
But every once in a while, people who have no expertise on climate change feel it necessary to spout off about it — on both sides. And that really hurts your credibility on your other arguments. If you haven’t read the 6th IPCC report, can’t define “albedo”, don’t understand radiative forcing, couldn’t find a halocline in a paper bag, have never modeled anything, then your opinion is based solely on snippets of what other people have told you from whatever news source you favor (i.e. NOT science).
It would be as though, without reading Graham-Dodd, I tried to tell you that value investing was bullshit and that Tom Vu kicks Buffett’s ass. Don’t you see how silly that would sound?
So until you actually understand climate change and its potential drivers and being that this is a housing blog, I’d suggest that we all STFU about climate change.
And Greg, not an ad hominem attack, but I don’t know any other climate scientists here at Stanford who don’t believe that climate change is occurring. And yes, that was a blatant name drop. In our lab, we are back-testing the IPCC predictive GCMs by looking at climate during the Cenozoic if you’re interested.
MrBubble
I wrote a somewhat lengthy response that may’ve been eaten up by the WordPress Gremlins.
But Mr. Bubble said it much more cogently anyway.
just my two cents from the other side of the pond: such discussions from the US look totally ridiculous and very uneducated for the average world citizen. I don’t know of ANY credible, well-known climate scientist that doubts climate change and the serious problems it is going to cause in the near future.
The discussion in Europe and most other parts of the globe is limited to the question if/what we can do about it. Most of the political ’solutions’ that are on the table now - like CO2 tax/allotments etc. - are strongly influenced by corporate interests; they might be costly for the general public and largely ineffective. But at least we have progressed to the second step over here …
If anybody is interested in a market-driven way to reduce GHGs, please visit
http://www.climateconservancy.org
Some colleagues and I have started a non-profit company that will perform product-level life cycle analysis and combine that with an eco-label to inform consumers of a product’s GHG intensity.
I could go on, but I did say that we should STFU about climate change on this blog, so with that I STFU and stop my shameless plug.
MrBubble
I cringe at being told to shut up by the person with the longest post! It ain’t right, lol.
I so hate it where reason fails and intimidation must take over, however so polite.
Not sure where you feel that my reason failed and the intimidation began (”You’re six-foot nothin’… a hundred and nothin’!”), but your reciprocated civility is well-received. I got flamed when I inadvertently went off on another poster a while back, so I do tread lightly here.
In other economic news, what do people think about SRS? Am I an even greater fool for having doubled up my tiny psn yesterday even though I know that I’m not far from getting in the car and driving to Vegas?
You see, I really am trying to steer the conversation back to the basis of this blog!
MrBubble
Mr Bubble,
I for one have never heard of an SRS. Sounds epidemic prone. What is it?
I think it’s Social Rehabilitation Services. You know, poor people stuff.
Blue (Yo Blue!)
SRS is an ultrashort in the RE sector. I am playing w/ fire, but it’s a very small fire. Been taking a beating lately.
The taxman is coming.
http://realestate.msn.com/selling/Article_bankrate.aspx?cp-documentid=5427263>1=10431
And don’t think that selling a home at a loss will at least be offset by a deduction/adjustment in your income for tax purposes to take some of the sting out of the loss.
While capital gains from the sale of a personal residence are subject to taxation capital losses from the sale of a personal residence are not!!
Why the double standard? Because Uncle Sugar knows that RE prices can sink and the last think he wants is a disruption in his revenue stream when times are lean and people must sell at a loss awe mass, but when times are good and people sell at a profit he’ll be more than happy to help himself to a cut of the proceeds!!! The 250k/person exception was one of the few tax fairness laws to be passed in recent years and some how is getting blamed as part of why housing heated up, I say they did not go far enough and make all gains tax free, all losses are not subject to a deduction, so its just fairness!!
(Holy crap. That might be a new record. 730K in MTG loans on a 48K income? I truly think we may have indeed discovered the stupidiest person in America (a hotly contested title!)).
Perhaps the buyer was fooled by the fact that the house probably only should have sold for $150K?
Ben’s new nose
http://www.stockmania.com/2007_09_25_archive.html
Could you draw us a picture of Alan Greenspan’s nose some time?
http://www.alangreenspanpaintings.com/images/Erin_semailcard.jpg
“NEW YORK, Sept 25 (Reuters) - First Horizon National Corp which is cutting 1,500 jobs to cope with a mortgage slowdown, said on Tuesday it has agreed to sell all 34 of its First Horizon Bank branches for an undisclosed price, and use proceeds in higher-returning businesses.”
these are banking failures being wrapped in buy-outs….listen up as the music is about to stop.
Where I have lived that are RE cycles where the gas stations are bulldozed to build bank branches. Should see the turnaround going the other way soon
Canadian companies taking losses after parking their working capital in commercial paper backed by subprime! So that’s where it went? Another aspect of contagion.
http://www.bloomberg.com/apps/news?pid=20601087&sid=as9QkuEv9Wqw&refer=home#
“Baffinland ran short of funds to pay for food, fuel and drilling equipment after investing in commercial paper that borrowers couldn’t repay. Without the money, the company had to arrange an emergency line of credit before shipping lanes froze over…The Canadian cash crunch that started with defaults on subprime mortgages in Southern California and Florida has hurt more than 25 companies that invested in commercial paper, including Sun-Times Media Group Inc. and Canada Post, the nation’s mail service. Baffinland has 95 percent of its cash in Canadian commercial paper, debt that is due in 364 days or less. “
So maybe the value of the Canadian dollar surpassing the US dollar is only a temporary blip…..
Lennar losses $513M
http://money.cnn.com/2007/09/25/news/companies/lennar/index.htm?postversion=2007092506
As a result of the downturn, the company announced that it had cut its work force to date by approximately 35 percent and expected continued reductions in the fourth quarter. The staff cut was mostly sales and support personnel, as the builders generally use contractors and subcontractors to actually build its homes.
Ummm… Doesn’t a 35% cut in “support personnel” imply a 35% cut in contractors? And further cuts ahead. That must warm the state’s hearts.
Got popcorn?
Neil
you are up early!
Or late.
you are up early!
Dude, easy on the caffeine.
My mom works for a construction school in Orlando that certifies contractors. A few weeks ago she told me Lennar homes had shut down its Orlando offices. Told everyone to leave and locked the doors. Never read anything about it in the paper. I would think Orlando is a big market, right?
Orlando is a fairly substantial market, but nothing is moving, it is frozen up, like a number of real estate markets. Clearly, Lennar is in trouble. I wonder what will happen to their developments if they go out of business.
Orlando is a fairly substantial market, but nothing is moving, it is frozen up, like a number of real estate markets.
Orlando is a fairly substantial market, but nothing is moving, it is frozen up, like a number of real estate markets.
I don’t know why all the duplicate posts.
Um, it WAS a big market.
Don’t Worry, All Recessions Are Local (Minyanville)
What About California?
Inquiring minds might be saying “Who cares about Florida or the Midwest rustbelt, what about California?” That’s a good question.
Let’s take a look starting with this headline: Californians not optimistic about economy.
A mood of gloom has settled on California in the past few months, with foreclosures and tightening credit causing more residents to see bad times ahead than at any time since 2003. The sagging confidence in the economy also is influencing voters’ opinions of their elected leaders, the Public Policy Institute of California reported Thursday, with distrust in state government “near an all-time high.” Most of those polled said they think state government is run by big interests and wastes taxpayer money.
Economic pessimism jumped by 20 percentage points since the beginning of the year, the poll found, with 59 percent of residents saying they expected bad economic times in the coming year. Among “likely voters,” 62 percent were pessimists.
Two Key Ideas:
Distrust in state government is “near an all-time high.”
Worriers outnumbered optimists in every region of the state, every income bracket and among homeowners and renters alike. That is unlike typical responses during this stage of an economic downturn.
http://www.minyanville.com/articles/housing-recession-GS-foreclosures-C/index/a/14213
And when CA goes, the whole southwest will feel the pain.
Lip
What, nobody trusts the Terminator?
I said yesterday subprime was not limited to the states. The IMF agrees. From the Telegraph:
The International Monetary Fund has warned that Britain’s sub-prime mortgage system is comparable to the United States, sparking fears about the stability of the housing market.
http://tinyurl.com/33gw35
Obviously Northern Crock is the British equivalent of Countryslide or Turdburg Asset Management, etc., etc. Probably a few more Northern Crock’s in the UK.
good that we don’t use english in the Netherlands - so we don’t have subprime
before the bell
http://www.minyanville.com/articles/bp-db-mer-tgt-spx/index/a/14230
Oh Canada!
http://www.bloomberg.com/apps/news?pid=20601087&sid=as9QkuEv9Wqw&refer=home
1-800-No Comment:
“…Deutsche Bank spokesman Ted Meyer in New York declined to comment, as did Barclays spokesman Peter Truell, also in New York.”
The lights suddenly flickered…
“then everything went dark.’
test
even Case/Shiller has lots of lag- these markets are down too
The five cities where prices are still rising — Atlanta, Charlotte, N.C., Dallas, Portland and Seattle — have reported growth is slowing in the past year. Atlanta and Dallas are close to moving into negative territory
Atlanta is already down in the real world. Condos are still selling well amazingly enough, but homes are dead.
“…even Case/Shiller has lots of lag…”
It is the nature of housing market indexes which use past sales results as their raw ingredient. The numbers that come out are inherently backward-looking.
Attention, Floridians. A judge strikes the Super Exemption on property taxes from the January ballot, on the grounds that the language is too confusing.
http://blogs.orlandosentinel.com/news_politics/2007/09/judge-strikes-j.html
He’s absolutely right. I smelled a rat when they first came out with this, because I had a feeling it was a stealth way to eliminate Save Our Homes, which was a godsend to many owners during the bubble, who would otherwise be paying taxes on outrageous, speculative and in some cases fraudulent appreciation. The tax shills in Tallahassee, in putting together the Super Exemption, were acting like a bunch of perverts standing on the edge of the schoolyard holding candy. I’m glad the judge caught them with their pants down.
Hurray!!
Crist 0-2!!
Case-Shiller down 3.9 pct!
Sept. 25 (Bloomberg) — Home prices in 20 U.S. metropolitan areas fell the most on record in July, indicating the threat to consumer spending was rising even before credit markets seized up in August, a private survey showed today.
http://www.bloomberg.com/apps/news?pid=20601087&sid=abMU8kSDJHOo&refer=home
July numbers - but we all know bubblevision will imply that they account for the turbulence since then - and call yet another bottom.
I think that Bloomberg report is awfully tame in its reporting of dropping house prices. I’ve seen some drops on some house ads of 40%. Nationwide housing is down around the 5 - 10% mark given what I’m seeing in the media (just a guess on my part). If Lennar had only 56% of last year’s revenue for this year, we might be in for a ride.
Don’t Worry, All Recessions Are Local (Minyanville)
What About California?
Inquiring minds might be saying “Who cares about Florida or the Midwest rustbelt, what about California?” That’s a good question.
Let’s take a look starting with this headline: Californians not optimistic about economy.
A mood of gloom has settled on California in the past few months, with foreclosures and tightening credit causing more residents to see bad times ahead than at any time since 2003. The sagging confidence in the economy also is influencing voters’ opinions of their elected leaders, the Public Policy Institute of California reported Thursday, with distrust in state government “near an all-time high.” Most of those polled said they think state government is run by big interests and wastes taxpayer money.
Economic pessimism jumped by 20 percentage points since the beginning of the year, the poll found, with 59 percent of residents saying they expected bad economic times in the coming year. Among “likely voters,” 62 percent were pessimists.
http://www.minyanville.com/articles/housing-recession-GS-foreclosures-C/index/a/14213
And let me add, what happens in CA eventually spreads to the entire country, especially the southwestern US.
Lip
–
David Rosenberg, ML Research, 09/24/07:
“Is California already in a recession? Its unemployment rate has gapped up to 5.5% from 5.3% in July and 4.9% a year ago (the level of unemployment has surged 14% in the past twelve months to 996,000). Remember the old rule of thumb: when the unemployment rate rises more than 50 basis points from the cycle low, the odds of recession go up to 100%. Also bear in mind that the Golden State has consistently acted as a leading indicator for the nation as a whole.
“When the unemployment rate rises more than 50 basis points from the cycle low, the odds of recession go up to 100%.”
I have been saying the same for the past few weeks. SoCal is definitely in a recession and it is majority of CA’s economy. It will soon be in a deep recession by 2008Q2. The next stop on this train is depression.
Jas
“When the unemployment rate rises more than 50 basis points from the cycle low, the odds of recession go up to 100%.”
My own (independent) research confirms this. Snowballing unemployment always results in an avalanche once it reaches this threshold.
Sept. 25 (Bloomberg) — Sales of previously owned U.S. homes fell in August to a five-year low, extending a slump that threatens to stall economic growth.
Purchases declined 4.3 percent, less than forecast, to an annual rate of 5.5 million, the National Association of Realtors said in Washington. Sales dropped 13 percent compared with a year earlier and median home prices rose 0.2 percent to $224,500.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a1.psdAxTViI&refer=home
NAR price increases but case-shiller price decrease was record. That is very odd, no?
“NAR prices”, doesn’t that explain it.
The reason is Case/Shiller looks at the price changes for similar homes. NAR just looks at the median prices for homes sold. Less low end homes sold=higher median prices.
Sept. 25 (Bloomberg) — Consumer confidence in September fell more than forecast to the lowest level in almost two years, as falling home values, a deteriorating labor market and tougher borrowing standards took a toll on Americans’ spirits.
The Conference Board’s index of confidence plunged to 99.8, from a revised 105.6 in August and workers were less optimistic about job prospects, the New York-based group said today.
http://www.bloomberg.com/apps/news?pid=20601087&sid=afqDuxhGSYag&refer=home
Charlie Brown: “Hey Linus, how’s “The Great Pumpkin Patch” doing this year?”
Linus: “Well, there seems to be more “frost” on them then in years past, and Snoopy say’s that there’s a bug going around with a virus called “asset liquidity” that makes the leaves & vines kinda of sickly looking…it seems to be affecting the new “McMansion” seed brand pumpkins more than others…but the Autumn leafs are just starting to change colors, and Halloween is just 37 days away Charlie Brown, ..I guess a lot can happen between now and then, I hope that “bug” doesn’t get to Woodstock’s tree…he might have to move in the dog house with Snoopy.
How to lose $190K on a home in San Diego in just a year and a half.
http://tinyurl.com/22a6zo
Purchased in Carmel Valley in March 2006 for $1,100,000 and now listed at $910K.
I’ll bet it sold for under 400K in 1999.
From what I have seen of other sales prices around that time in the area, I think that would be pretty accurate.
Close, sold for $365k in 1998.
And I wouldn’t pay more than about 175. But that’s just me….
Two more thoughts:
Most American’s could retire quite comfortably if they had $1,000,000 in the bank. The thought of owing 1 mill is chilling.
You can buy a decent house in most of flyover country for 190K.
Actually $19k
OK, that’s a stretch. By “decent”, I meant large, well built, in a good neighborhood, and newer. Not a “handyman’s special”.
An in many places that decent house can be had for about 100K.
A duplex just sold in the motor city for $4,000…
That’s my limbo stick
Whuh? McD’s employees can pay more than $40/wk in rent …
I guess anyone who still has a job in MI is trading their car for a house (while those without job trade house for car, to get the heck out of Dodge …er … Dodge).
I’ve heard that houses are going for low teens in Youngstown, OH (the Midwest’s Hoboken, so I hear), but this is … ouch. Quite a demonstration of how bad the pain is up there.
On Thursday September 27, 2007, $24 Billion in Federal Reserve Repos come due. The Federal Reserve will roll over these repos. (The banks do not have the funds available to pay off these loans). Wall Street, which is plagued with like minded stupidity, in probability will interpret this as “new liquidity” injected by the Federal Reserve into the economy. The US stock market may react positively to the Federal Reserve action.
The Federal Reserve has become a non event. Since the Fed lowered its funds rate and discount window, long term treasuries have dropped (interest rates have gone higher), mortgage rates have gone higher (except those tied to the LIBOR), and the commercial paper market has gotten worse. Now inflation is going to really start raising its ugly head as the price of oil, food and rents becomes a factor in future CPI. November CPI may come in at 5% (4% is a given). The only reason the CPI is low is credit insolvency. Obviously there are a handful of US companies that should do well, but as more and more S&P500 companies cannot pay their notes and the Fed is not able to help, there will be an increase in corporate BKs.
40+ Billion went to the Window last night, and 10B got rolled….
the gas is runnging out.
When you say “roll over these repos,” does that mean these are notes the Fed is just going to let slide as far as being repaid to them by the banks?? Do any of us ever get that luxury??
That’s what you get for not being affiliated with the Fed.
This just in from Tucson: HomeSavers’ parent files for bankruptcy
What jumped out at me was this part of the story:
Another distressed property buyer, HomeVestors, is getting plenty of calls in Tucson, said Fred Hubbard, a local franchisee of the Dallas, Texas-based firm.
The company does not offer rent-to-own deals for its sellers because of the potential for legal complications, Hubbard said.
“There’s been a lot of abuse in lease-backs,” he said.
In the comments that follow the story, David H. said, “As for HomeVestors not doing leasebacks, that maybe true now but I know of several cases where they did exactally that. They would charge the owner/renter more than their original payment and then evict them in several months.”
On a personal note, the Fred mentioned in this story was the seller’s agent when I bought my house. That was in 2004, and Fred was so clueless that MY agent had to help him do the paperwork.
I’m getting tired of our country in debt, and buying everything made seems to be chinese products. Longing for factories humming here again fueled by solar and wind power. Dream on, but keeping my side of the street clean.
Here’s an article on America’s addiction to debt that i think might interest the forum
an excerpt:
“Consumer credit is now at scary levels almost: $2.5 trillion, and analysts are beginning to speculate that credit card debt could be the next bubble to burst. Corporate debt has reached astronomical levels through highly leveraged private equity deals, and no one knows just how how much froth is still in the system.
Central banks worldwide have reacted to the crisis by injecting over $700 billion into the global financial system. This is an astronomical level of liquidity, but it seems somehow to defy any human element. However, it has intensely human consequences that will affect each and every one of us. By pumping so much liquidity into the system, it ultimately inflates the currency. Put in human terms, everything is going to start costing us more. Even worse, this approach simply postpones the eventual reckoning.”
http://tinyurl.com/23ju35
French PM Fillon tells farmers ‘France is broke’
“I am at the head of a state that for 15 years has been in chronic deficit. I am at the head of a state that has not once passed a balanced budget in 25 years. This can’t go on.”
http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/09/24/wfra124.xml
no worry, president Sarkozy is GWB’s biggest ideological friend and (just like him) a big enemy of responsible finance. He will sure find a way to inflate France out of the problem (and maybe tear down the ECB with it).
–
Pushing Debt on households is the ONLY game that the central banks have to keep economy growing artificially. All such games come to an end. This one will end in the Greater Depression that should begin in the US during 2008-10. The dye is cast.
Jas
buying everything made seems to be chinese products.
Not so…The Motorcraft battery I just bought for my Mustang GT was made in Mexico. The new Borg-Werner labeled clutch throw-out bearing was made in Taiwan and the headlamp assembly was stamped Made in Japan.
Whatta joke.
“Tomas and Martha Hernandez said Ms. Valdovinos had convinced them that they could afford a $745,000 home in San Jose, even though Mr. Hernandez earned about $4,000 a month and told them he could pay no more than $2,500 a month.”
http://www.nytimes.com/2007/09/25/business/25broker.html?_r=1&hp=&adxnnl=1&oref=slogin&adxnnlx=1190736020-UjJWmrAcXryvs2ctAvePMw
With all this data and news today, the stock market is running in the positive. WOW!!!! It just makes you wonder if what is going on with the system?
The story is that the stock market has already priced in all past, present and future bad news the housing market has, is and will deliver (no matter how unexpectedly bad the news turns out). Da stock market is ver-wy ver-wy smart.
How the world perceives the US:
“…In America, where I would wager that not one person in a hundred could guess to within 25 per cent the exchange value of the dollar against any currency in the world, pundits and policymakers are less worried about the blow to their national pride than they are by the potentially destabilising effects of overrapid declines in the dollar’s value…
…You have only to look at what exchange rate movements have done for investments in the United States in the past year to get a sense of the danger that a falling dollar can do for global investors. The S&P 500 index is up 8 per cent from the start of the year in dollar terms. But if you’d exchanged euros for dollars to buy it in January, you would have seen no gain at all in your investment.
A full-scale run on the dollar would also be alarming because of its potential inflationary implications. The Federal Reserve’s aggressive interest-rate cut last week shows the central bank has gambled that the threat of recession is large enough to bury for a while its inflation concerns. But if the currency keeps falling, the increase in import prices could become embedded in consumer expectations and force the Fed actually to raise rates at a time of weakening domestic demand….”
Times online
http://tinyurl.com/ysefgk
“…In America, where I would wager that not one person in a hundred could guess to within 25 per cent the exchange value of the dollar against any currency in the world,…”
Let me take a stab: 1.00 US dollar = 1.00 looney.
A very large proportion of Americans living in northern tier states have a good idea of the Canadian-US exchange rate (although cross-border traffic is less convenient post 9/11). When I was a kid growing up in Washington state and travelling to Canada every year or so, I certainly did. Presumably, many of those living in Southern border states have a good idea of the Mexican-US exchange rate.
1.4 Clownbucks to the Euro
They print it in the paper every day … I guess you would have to read the paper … okay, point taken.
This article points directly to the moral hazard which faces the Fed from a PR standpoint. If they have to make a politically popular choice of which asset class to protect, it would have to be the stock market, as everyone hears on the nightly news what was the closing value of the DJIA, while almost nobody knows nor cares what happened to the value of the dollar (until it later mysteriously translates into higher prices of volatile consumer goods like food and energy).
Exhibit A: http://www.marketwatch.com/tools/marketsummary/
It took only a little kick at the very end of the day to goose up the DJIA sufficiently to justify this headline:
“BULLETIN>> U.S. STOCKS END HIGHER; APPLE, RIM, MICROSOFT AMONG LEADERS AS TECH OUTPERFORMS
Market Overview”
At least the stock market closed up.
Dollar hit as homes data show oversupply
By Krishna Guha and Eoin Callan in Washington and John Authers in New York
Published: September 25 2007 18:33 | Last updated: September 25 2007 22:32
The dollar fell to its lowest level in 15 years on Tuesday after data showed US consumer confidence fell and the overhang of unsold homes grew.
The figures intensified concerns that the strain in the credit markets was affecting the economy, although the severity is hard to gauge.
The reports also made investors more confident that the Federal Reserve – which cut interest rates by 50 basis points last week – will reduce rates further to offset economic weakness. Bond markets rallied with the yield on the two-year note falling 5 basis points to 3.99 per cent.
With yields falling, the dollar’s appeal diminished. An hour before the close in New York, the dollar fell to its lowest level against an index of major currencies since the sterling crisis of September 1992.
The Conference Board’s consumer confidence index fell to 99.8 per cent in September, from 105.6 per cent a month earlier, a sharper decline than expected.
The survey suggests that job market prospects have deteriorated, although many economists expect reasonably healthy job creation in September after August’s shock decline.
The board’s index has fallen 12 points in two months as the credit market turmoil took hold.
http://www.ft.com/cms/s/0/941d4dbe-6b8a-11dc-863b-0000779fd2ac.html
Nobody ever went broke underestimating the American public, until now.
You find me ANY country where one person in a hundred that knows ANY currency exchange rate, past or present, and I’ll give you a jillion dollars.
What dipstick wrote that article?
Russia for one.
I bet you that a minimum 20 if not 40 in 100 people between the ages of 20 and 60 know the exchange rate between the Ruble and the USD. Probably 10 in a 100 know the exchange rate between the Ruble and EUR. We have exchange kiosks everywhere in every major city and the business news on the television always closes with the exchange rates.
That was certainly true when I lived there in the 90s. Russians used dollars as an inflation hedge for their savings, and large business transactions tended to be conducted in dollars.
Ahem, sorry chilidogg, but you have no clue…..I can think of several countries where average Joe’s know the value of their currency vis-a-vis the US dollar.
The BRICS, all of the Euro nations, most of Asia can convert to their countries major trading partners currencies. It is easier for the Euro nations, converting a Zloty into a Euro. How many Americans can convert the dollar to the Ringgit? Our 12th largest trading partner.
Next bubble: Nucular energy.
Approval Is Sought to Build Two Reactors in Texas
By MATTHEW L. WALD
Published: September 25, 2007
WASHINGTON, Sept. 24 — In a bid to take the lead in the race to revive the nuclear power industry, an energy company will ask the federal Nuclear Regulatory Commission on Tuesday for permission to build two reactors in Texas.
http://www.nytimes.com/2007/09/25/washington/25nuke.html?ref=business
That would be a bubble I would welcome. It’s one thing France has done right. IMO it’s the only feasible short-term (
we’ll see about that in about 15 years, when the icecap on the Alps has disappeared and most EU rivers are no longer a reliable way of cooling a nuclear reactor. Some experts are already becoming worried about this issue - and they should be.
Then there is the little issue of what to do in the future with mountains of radioactive waste. But given U.S. govt policymakers’ very high discount rate, I don’t expect this issue to stand in the way of progress.
send it to the moon
“send it to the moon”
Using what kind of energy and how much?
This is interesting:
http://yro.slashdot.org/yro/07/09/25/1632246.shtml
“Developers Admit WordPress 2.3 Spies On Users”
I guess I should add, The Housing Bubble Blog runs on Wordpress.
Don’t know the version, however.
I’d say…
By contrast, a biased and noisy but up-to-the-minute price index is given by the median list price on your local MLS. If your zip code is covered by ziprealty.com and there are fewer than 400 homes on the market in your zip code, you can compute this in about one minute by ranking the listings in either increasing or decreasing price order and counting in to the middle.
For instance, as of this minute, there are 269 used SFRs listed on ziprealty.com for SD 92127 (Rancho Bernardo W). The median home is the 135th order statistic ( (269+1)/2 = 135), which is $1,225,000. This is $75,000 below the median as of about two weeks ago (and actually down $4,000 from the value I calculated as of 1/2 hour ago!).
The rapid decline in the median list price is prima facie evidence that a serious price avalanche is in progress. Congressional bailout proposals will be too late to stop this, and would be futile anyway, as less than three percent of San Diegans can afford $1m+ homes, anyway, and those who can are smart enough to stand clear of falling knives.
I wonder how many weeks it will be until the MSM picks up on this?
Clarification: The above was a follow-on to this earlier post –
“…even Case/Shiller has lots of lag…”
It is the nature of housing market indexes which use past sales results as their raw ingredient. The numbers that come out are inherently backward-looking.
OK, this is amazing (I had to check it twice!): The median SFR list price for 92127 as of this evening is $1,199,000 — down by $100,000 in two weeks time. The price deceleration is accelerating.
It looks like Congressional bailout measures will be too late to stop this avalanche.
ECONOMIC REPORT
Glut of unsold homes rises to 18-year high
Home prices falling at fastest pace in 16 years, Case-Shiller says
By Rex Nutting, MarketWatch
Last Update: 11:57 AM ET Sep 25, 2007
WASHINGTON (MarketWatch) — Home resales slipped for the sixth month in a row in August as the credit squeeze forced many sales to fall through, the National Association of Realtors reported Tuesday.
With sales of existing homes falling 4.3% to a five-year low seasonally adjusted annual rate of 5.50 million in August, inventories of unsold single-family homes rose to an 18-year high.
Meanwhile, a separate gauge of home prices fell for the 12th straight month, with prices falling in 15 of 20 major cities over the past year. Prices in 10 major cities are falling at the fastest pace in 16 years.
http://www.marketwatch.com/news/story/glut-unsold-homes-rises-18-year/story.aspx?guid=%7BC02E6F86%2D2D23%2D4D45%2DA83D%2DBF973D6432B9%7D&dist=sp_inthis
Avalanches are cool to watch…
From a safe distance
Just wanted to share something I heard on the radio this morning on the local Air America-ish AM station. For years now sleazy mortgage brokers have been buying airtime on there to peddle their craptastic suicide loans.
I guess they figure the silly liberals that listen to the station aren’t very good with money(after all they’re hippie commie pinko liberals who want to lick the toejam from Barbara Streissand’s feet et.c etc. insert BS liberal stereotype here).
Anyway, for the FIRST TIME ever, they had some person on something they called “the millionaire minute” sponsored by some Mortgage outfit who - get this- actually recommended that if you can afford a 20% downpayment that you should DO IT!
Of course then they went on to shill for the various other options available if you don’t mind bending over for them in the shower.
They did point out that on a 200K house that that would be 60K. 200K in seattle won’t get you a shack these days. It might get you one of those glorified apartments they call condos though.
I don’t really get paying that premium but still having to put up with apartment living.
Maybe it’s just different here(wink wink)…….
Oh well. I see more and more for sale signs. I even saw one that had a little add-on sign that touted “sale pending.” SALE PENDING? WTF?
I think these people are living back in the fantasy days when multiple offers poured in for more than asking.
So here it is, three or four weeks since the “sale pending” sign showed up. For sale sign is still there, but strangely….. no sale pending anymore.
That’s my report from the burbs of Seattle.
SR
Check this cheery little item out.
http://tinyurl.com/2emtfc
Note the “200 to 300 Trillion Derivatives in the market” comment that is about 3/4 of the way through. The whole world economy is what … about 50 trillion all told? Sounds to me like the “Amazondotcominization” of the world where all of this is priced waaaay over what it is worth or ever could be worth.
That’s not just popcorn; that little item is a serious case of “pucker” if you get my meaning.
BTW, BB and his BS rate cuts are meaningless which is also my meaning.
Jeez,
Roidy
Not all economists are anticipating a soft landing.
PAUL B. FARRELL
World’s greatest market: China or U.S.?
Jim Rogers loves Asia, while Dick Morris rages against America
By Paul B. Farrell, MarketWatch
Last Update: 7:06 PM ET Sep 24, 2007
ARROYO GRANDE, Calif. (MarketWatch) — Talk about an “odd couple:” how about a match-up between commodities guru Jim Rogers and political consultant Dick Morris? One’s touting China, the other’s doubting America.
Odd couple? Yes, but while there’s no conspiracy between them, their contrasting spirits shine a bright light on the coming global recession, on who’ll get hurt most. Let’s look.
http://www.marketwatch.com/news/story/heavyweights-square-off-worlds-top/story.aspx?guid=%7B18ADD540%2D9D88%2D4A97%2DB445%2D3170EA2D2030%7D
I think there is another tsunami just over the horizon.
What happens when the Baby Boomers start withdrawing money from their IRA instead of investing more? There goes the stock market.
Maybe that is why Bush wants to privatize Social Security. They would have to invest in the stock market . He even said for safety there would be a basket of “approved” stocks . I wonder how much it will cost a business to have their stock ” approved”? Maybe they could hire unemployed RE Appraisers to do the approving. Many of them have plenty of experience “making the numbers work”.
Another kick the garbage down the street scheme.
Expect a full frontal assault on retirement…
It’s not they are going to get do re mi from the various money trees, anymore
‘Maybe that is why Bush wants to privatize Social Security.’
Doing so would make it easier to claim, “What is good for Wall Street is good for America.”
“…He even said for safety there would be a basket of “approved” stocks”
Let me take a wild guess…Halliburton & Alcoa
Dubaiburton or HaliDubai?
Sheesh. One week after a surprise half point rate cut the drum beating has started for another rate cut.
“Consumer confidence slumped to the lowest level in almost two years and home sales weakened, threatening U.S. household spending and bolstering the case for the Federal Reserve to keep cutting interest rates.
The Conference Board’s index of consumer confidence fell more than forecast in September, to 99.8 from 105.6. The National Association of Realtors said August sales of previously owned houses dropped 4.3 percent and a separate index of home values fell the most in at least six years in July.
“These numbers will encourage the Fed to cut rates again,” said James O’Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut. “The recession in housing is continuing, home prices are still falling and that’s going to eat into housing wealth and home-equity extraction. The net result is we’ll see sluggish consumer spending into 2008.””
Bloomberg
http://tinyurl.com/34vn3u
and you should hear the deafening roar in Europe from all the ‘important economists’ and many politicians (especially the infaltionists from France and some other countries)!
Although the ‘acceptable’ limit for EUR/US$ exchange rate seems to have shifted from 1.40 to 1.45, all the pundits are demanding an ECB rate cut VERY soon, or better NOW.
Maybe this is why consumer confidence suddenly fell of a cliff in several EU countries - just a manipulated prelude to a 0.5% ECB rate cut?
Those who have no qualms about the moral hazard problem posed by ad hoc bailouts would probably argue that cigarette companies should be allowed to hand out free packs of cigarettes to fifteen-year-olds and to run adds showing people smoking in bed after sex.
They would presumably also argue the government should provide free fire insurance to folks who smoke in bed, and that insurance companies should abolish underwriting standards (the same way Wall Street abolished covenant restrictions and mortgage lenders abolished traditional borrower qualifications).
IRWIN KELLNER
Morality play
Commentary: Those complaining about the Fed should study history
By Dr. Irwin Kellner, MarketWatch
Last Update: 10:42 AM ET Sep 25, 2007
…
Indeed, you could say that the whole concept of insurance creates a moral hazard by encouraging people to take risks, for example, smoking in bed, driving recklessly or not watching one’s health.
To me this is ridiculous, but those who criticize the Fed’s monetary insurance must think the same way. They would probably let a house burn down in order to discourage smoking in bed.
http://www.marketwatch.com/news/story/those-complain-about-fed-should/story.aspx?guid=%7BE3098A1C%2D968C%2D4484%2D99B8%2D5AC169E4E303%7D
US subprime losses set to mount
By Stacy-Marie Ishmael and Saskia Scholtes in New York
Published: September 25 2007 20:44 | Last updated: September 25 2007 20:44
Losses in the US subprime mortgage market are set to escalate as falling housing prices prevent borrowers with adjustable rate mortgages from refinancing on better terms, data released on Tuesday suggest.
Housing prices in the top 20 US cities fell 3.9 per cent in July from the previous year, the worst performance this decade, according to a composite index compiled by Case Shiller.
Government data showed that sales of US homes in August fell 4.3 per cent to a five-year low.
Analysts expect house prices to decline and predict such a fall could devastate homebuyers who took out subprime mortgages in late 2005 and 2006.
Many of these borrowers took out adjustable-rate mortgages in the belief that rising housing prices would increase their home equity and enable them to refinance their loans before rates rose.
However, falling prices could leave some of these borrowers with negative equity in their homes and make it increasingly unlikely that they will qualify for new mortgages in an environment of tighter lending standards.
“If you’re a subprime borrower with no equity, or even negative equity because the value of your home has fallen, then you’re in a deep spot,” said Christopher Cagan, director of research and analytics at First American CoreLogic, a mortgage risk assessment firm.
http://www.ft.com/cms/s/0/40487dc6-6b99-11dc-863b-0000779fd2ac.html
Yet another fallacious argument which will in due time be relegated to the dustbin of failed ideas: THE RICH ASIAN SAVERS WILL SAVE THE U.S. CONSUMER ECONOMY.
The Short View: US housing market
By John Authers, Investment Editor
Published: September 24 2007 20:03 | Last updated: September 24 2007 20:03
Given the hopes and fears invested in the US housing market, Tuesday’s batch of data looks dreadful.
…
Furthermore, the Conference Board’s survey of consumer confidence was horrible – the lowest reading since the autumn of 2005, when Hurricane Katrina prompted recession fears, and much below expectations.
The problems for US housing have dragged on for two years now and homebuilders’ stocks have lost two-thirds of their value since their 2005 peak. But those problems have not had the damaging effect on consumer behaviour that many economists predicted. Thus consumer discretionary stocks, in the US and elsewhere, led last year’s global equity rally.
Yesterday’s news pushed the S&P Consumer Discretionary index down 1.6 per cent. It is down more than 10 per cent since June. This is rational: the hypothesis is that the housing contraction is likely to lead to a consumer-led slump in the US.
…
But the data did not inhibit US stocks much. These were flat at the end of the morning, thanks to continued enthusiastic buying of large multinationals.
How come? For generations, the world’s consumers of last resort have resided in the US. The stock market is now betting they have moved to fast-growing emerging markets such as India and China.
http://www.ft.com/cms/s/0/dd97b1a4-6b90-11dc-863b-0000779fd2ac.html
US dollar
Published: September 25 2007 14:29 | Last updated: September 25 2007 23:37
Can sentiment get any worse? As the dollar flirts with all-time lows on a trade-weighted basis, the smell of approaching capitulation is in the air.
Greenback blues
The bears have plenty of fodder. A need to rebalance the huge current account deficit has provided a solid long-term case for dollar weakness. The prop of higher-yielding dollars has been eroded by rising interest rates abroad and now pummelled by the Federal Reserve’s half-point cut.
Meanwhile, the US slowdown is piling on the pain. Tuesday’s horrible housing data again raise the spectre of real estate acting as a significant drag on the US economy and forcing deeper interest rate cuts.
http://www.ft.com/cms/s/1/41f0d0a2-6b6b-11dc-863b-0000779fd2ac.html
Invensys hit by concerns over US exposure
ByNeil Dennis and Robert Orr
Published: September 25 2007 09:05 | Last updated: September 25 2007 20:40
Invensys was on offer on Tuesday after a leading broker lowered forecasts because of the controls and automation group’s exposure to US consumers and housebuilders.
The shares were the worst performer in the FTSE 250, falling 8.1 per cent to a five- month low of 291½p after UBS earnings forecasts for each of the next three years were cut by 7 per cent.
One of Invensys’s biggest divisions makes components for central heating systems and washing machines and does about a third of its business in the US.
UBS said the slowdown in the US housing market, which was highlighted by weak results from Lennar Homes, could affect sales.
http://www.ft.com/cms/s/0/02ff0078-6b3c-11dc-863b-0000779fd2ac.html
I like to peek around craigslist items for sale in West Palm. I’ve seen Plasma TV’s, a lot of newish appliances including an entire Stainless Steel kitchen package from a house, TONS of NEW furniture… hmmmm
Whoooaaa! I thought it was $2,990,000 at first:
http://wyoming.craigslist.org/rfs/431883588.html
$29900000 Estate - One of a kind
Reply to: hous-431883588@craigslist.org
Date: 2007-09-25, 1:01PM MDT
Spectacular one of a kind estate reduced $8,000,000 (originally asking $38,000,000). Fully furnished with high-end furnishing custom built for this magnificent estate. This estate cannot be duplicated due to size restrictions.
Very private. Very exclusive! Very breathtaking views of the Grand Teton Mountain Range.
This is a private sale. Principals only.
Contact Justine Howard - 949-500-1376 or email: justinehoward@hotmail.com
* Location: Jackson Hole
* it’s NOT ok to contact this poster with services or other commercial interests
Bwahahahahaha!
http://pullman.craigslist.org/rfs/431160296.html