Bits Bucket And Craigslist Finds For October 8, 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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“The dollar is in a quasi-sweet spot,” says Joseph Quinlan, chief market strategist at Bank of America Corp. in Charlotte, North Carolina. “It’s dropped enough that it’s creating an earnings upside for U.S. multinationals, while I expect many foreign companies to hold the line on prices they charge U.S. consumers.”
http://www.bloomberg.com/apps/news?pid=20601109&sid=acan_4u7wIJI&refer=home
Were I to draw a parallel between the gooblydgook that comes out of our financial “leaders” at this point in time, vs the wishful thinking of the fuhrer… circa April 1945
It seems eerily similar.
The advantage to a weaker Dollar, as far as exports go, is completely squashed by the fact that we import 16 tons more than the 1 ton we send back, and what does that get?
Another day older and deeper in debt…
No, as imports get more expensive, America will import less. Individuals will purchase things made domestically or do without. Manufacturers will find domestic sources of material and build plants in the US rather than abroad.
So, if today we import 16 tons for every ton we send back, in a year, that number may fall to 15 tons for every ton we send back.
BTW using weight is a little erroneous. My employer exports a 100 pound machine that costs as much as a 2000 pound luxury car.
We have exported most industries out of our country that made “stuff”…
Weighty issue, I know
http://www.youtube.com/watch?v=6aO45IxvYgo
I’ve already seen people cutting back on their spending in the form of automobiles. I can just look at our parking lot and see the vehicles are getting smaller from the days of SUVs, Trucks and Minivans all over the place. New drivers are buying subcompact and compact cars because of the price of gasoline and because they can’t afford $25K and up vehicles. If the younger generation can figure that out, then maybe they can figure out that they should be spending ridiculous amounts of money on houses.
ever wonder why the new toyota tundra is having inventory problems?
And they can’t keep Corollas on the lot. When I bought my Corolla, the mechanics told me they were planning to introduce a hydbrid Corolla in 2009. I told him: you better plan to make a lot of them.
Don’t worry, global warming will get rid of the Tundra.
I think that the new Taurus has a lot of potential. Nice high riding position, good mileage and the biggest trunk I’ve ever seen in a car. When my wife dinged our GM vehicle, the body shop said that the taillight assembly would be in the next day, but that if it had been an import, we’d have had to wait 3 weeks. Throw in the falling dollar relative to imported parts — all those little things add up.
“BTW using weight is a little erroneous. My employer exports a 100 pound machine that costs as much as a 2000 pound luxury car. ”
About the only one that fits that description is an early Lotus Elise. Most “luxury” cars imported fall in the range of 3,900 to 4,800 pounds (think BMW range) and can easily go to 6,000, yes 6,000 pounds for a Rolls Royce or Bentley (not the Continental GT). So, uh, I guess that “helps” LIL’s argument.
European policy makers are signaling growing alarm as the strengthening euro threatens to undermine growth in the 13- nation bloc that shares it.
What does this mean? You can’t have your cake and eat it too?
EU policy makers have always been trying to keep the euro down, nothing new. They are strongly in favor of inflationary ECB policy (which in fact has been the policy right from the start, with M3 growth always around 10% or more). Now that the euro is (just) making new highs against the dollar, they are challenging the officially independent status of the ECB. With strong supporters of inflationary policy like Sarkozy on board, the ECB is in a bad position and will likely follow the FED by doing nothing or maybe even decreasing rates (despite a still surging credit/debt/housing bubble and inflation that is above official limit).
I imagine that what they are strongly in favor of is being able to price whatever it is the EU manufactures and exports these days competitively.
Joey- the EU actually is doing pretty well in terms of exports. A lot of German companies kept their high value-add manufacturing in house, plus a decent share of the outsourcing that did happen went to eastern Europe instead of China. If you are interested, take a look at How We Compete by Berger et al - it’s a fascinating look at globalization and manufacturing.
they are doing well for now.. some might have reason to fear that the euro’s supposed safe-haven status may not last forever..
EU Worries About Weak US Dollar
Europe is starting to feel the bite as the U.S. dollar plummets, making French wine, Italian fashion and German cars expensive purchases for the EU’s main export market in the U.S.
we had a little discussion the other day about how the USA’s purchasing power is not a driving force behind several foreign economies.. perhaps the EU can simply court Russian consumers?
http://tinyurl.com/2gl3pu
i turned my volume down due to the annoying advert..
I think the noise from EU dumbocrats about uncompetitive export because of a strong euro is nonsense, and strongly colored by some big companies (like Airbus) that are supporting them. Most of the export of EU companies is within the EU, and if I remember correctly, EU export to Asia is even bigger than to the US.
Besides, I think a lot of the luxury sales from Europe to the US (like expensive German cars) are an anomaly that was tied to the housing/credit bubble. The really rich won’t give a damn about higher exchange rates if they really want some status symbol; they probably don’t save their monies in US dollars either. Those who care about the higher cost are the ones who pay their German car from the 120% mortgage; they may have some trouble lately to buy more and opt for another Hummer.
uncompetitive export because of a strong euro is nonsense
nonsense? I hope you don’t mean to say that the relative strength between currencies has no real world effect on the EU export market..
i think you’re saying that the US market is not all that important to the EU.. which is still debatable, imo.. but at least that argument makes some sense..
joey…
You do realize that we Americans only account for 5% of the population, in the world.
The average one of us, is in debt up to our eyeballs and credit is contracting, not expanding.
amazing isn’t it .. a single country that has only 5% of the world’s population produces about 33% of the world’s GDP.
The EU also produces about the same amount, but it has a larger population and is made up of several countries..
but i fail to see what population numbers have to do with this thread.
I think we are talking about whether or not the EU will suffer and if so, to what degree, without having the USA as a customer for it’s exports.
They are going to hold the line on the price of oil as the dollar sinks? Thanks, saudis!
Here’s one for you, a glass cutter making $9 per hour gets a 100% loan from Washington Mutual to buy a $615,000 house in Santa Ana. In default, of course: http://latimesblogs.latimes.com/laland/2007/10/foreclosure-in-.html
no problemo.. those two loans were placed into the transporter and beamed out (maximum spread pattern) and the tiny particles are now imbedded across a huge field of thousands of CDOs.. the owners of which will hardly notice a thing.
An exploration of the Katy Texas McMansion market. A blend of Phil Hendrie, Styx, McMansions, cheap real estate foreclosures and at least one Hummer.
http://tinyurl.com/ys83m3
Good job…
Jay Santos, would be my favorite Phil character~
For the uninitiated
http://www.philhendrieshow.com/
Bobbie Dooley, head of the HOA
Oh it’s gotta be Ted Bell, owner of Ted Bell’s Steakhouse of Beverly Hills, whose restaurant’s sing-song motto is “We want to put our meat in your mouth!”
Inventor of the serrated knife, I might add.
I’m Doug Dannger from the Orange County Courier and I’m a Gay Man and a Gay Journalist.
You, sir, owe me a new keyboard!
That was one of the funniest things I’ve seen all year.
Very funny, but I wanted more than just one “Hummer”.
Roidy
That was awesome. You should send that into John Stewart and get your own segment as the ‘Real Estate Lady’.
Lou,
On the HGTV site, there has been a long dicussion about the idiot who won the Dreamhome in 05 in Tyler, TX not being able to sell it. Apparently the development went bust.
Here LOU… this should get your rocks off !!!
Betrayed by the builder, in California
http://www.mercurynews.com/news/ci_7116307
“This isn’t Kansas, Toto,” Cantrell responded. “This is America. This is real time, Manteca, California.”
I’m not sure whether to laugh or cry. Sorry, Kansas, you aren’t in America anymore. Take your abundant wheat crop to Canada or France or something. We’re from Manteca. Did you hear that? MANTECA. That’s in California!
Job Number Swill
http://www.stockmania.com/2007_10_08_archive.html
Bloomberg, “Investors are paying the most ever to protect against a drop in the Standard & Poor’s 500 Index, data compiled by Morgan Stanley show. The gap between the price of so-called put options on the benchmark for U.S. equity and the cost to wager on further gains has averaged about 8 percentage points since August. That’s more than the previous high in July 2001, before the index dropped 34 percent and fell to the lowest this decade.”
http://www.bloomberg.com/apps/news?pid=20601109&sid=aKIRaKrHXSLI&refer=home
“…The Aussie has climbed 9.7 percent since August, the biggest gain among the 17 most-active currencies and was little changed today to 89.73 U.S. cents as of 8:58 a.m. in New York. The currency will reach parity with the U.S. dollar by the end of 2008, a gain of 11 percent, Toronto-based TD Securities Ltd., a unit of Toronto-Dominion Bank, said last week. Canada’s dollar reached that milestone for the first time since 1976 on Sept. 20. The Canadian currency is nicknamed the loonie after the image of the national bird on the one-dollar coin….”
Bloomberg
The 1st time I was in Aussie in 1981, it cost me around $1.05 U.S. for a Fair Dinkum Dollar…
The US currency is nicknamed the “dollar” from the German word ‘Tal’ meaning ‘Valley to steep to climb out of’ and the Anglo-Norman word ‘Larcin’ meaning theft of value.
(just kidding)
Hoz, you funny
Take it from a Bohemian’s Bohemian…
Joachimsthal is the root word
I guess not everyone believes that Goldilocks’ life support system will sustain her until she eventually snaps out of her coma?
NEW YORK (Reuters) - JPMorgan Chase and Bank of America are expected to disclose losses of about $3 billion in mortgage securities and leveraged loans when they report earnings this month, the Financial Times reported, citing an analyst.
http://www.reuters.com/article/ousiv/idUSN0828016420071008
hmm.. $3 billion. Seems like the plan is to spread it out as thinly as possible over a period of years..
Surely you have room for a wafer thin mint.
Neil
“A Billion dollars isn’t what it used to be”
Nelson Bunker Hunt
From now on I will look at your popcorn tagline in a whole new light.
Does that mean the economy is about to explode like Mr. Creosote?
Great observation, Joey! That $3b write-down figure keeps popping up again and again…
$3b loss, you say? ‘Tis a mere flesh wound. And the share prices are sure to rally now that these banks have thrown the kitchen sink into their financials.
kitch’n synch
http://tinyurl.com/2tdzv4
But its suppose to be different in DC!!
“The price is very reasonable,” said Won-Ki Choi, a federal government worker. Then he turned to a Ryland employee. “Don’t you think the price is okay?”
LOL. What can I say. Your government at work.
(* Inserts tasteless joke about Won-ki reasoning. *)
He might be a Policy Won-ki.
bwhahahahaha! From the article;
“This is your lucky day,” Jerie Wolicki, a company receptionist, told him amid applause.”
you go sheeple!
Reminds me of the rock star treatment early purchasers of iPhones got. They don’t look dumb either, do they?
at least early iphone purchasers got a rebate, somehow I don’t think this guy’s getting any money back…
Today is their lucky day.
It will be a tomorrow in the future that will be their unlucky day when those places are going for something in the 300k range and life circumstances force them to sell.
“In fact, 52 percent of builders surveyed in August reported lowering sales prices, unheard of a few years ago, said Gopal Ahluwalia, staff vice president of research for the National Association of Home Builders.”
Does anyone believe there are still 48% of builders reporting to the National Assoc. that haven’t cut their price? Give me their location where they are building because I guess people are still buying houses at full pop according to this dribble. Another crap statistic reported by the media.
The other 48% provided “free upgrades”.
“They are using probably whatever techniques and methods to try to sell those houses any way they can,” John McClain, senior fellow at the Center for Regional Analysis at George Mason University, said of the builders.”
John, you’re a senior fellow at the prestigious (right) Center for Regional Analysis at GMU, why did you send to NVAR a report just three years ago where you gave stats and charts to give evidence that the housing supply situation was getting worse and worse?
Oh that’s right. You’re a freakin shill.
08/25/2004
THE HOUSING SUPPLY SITUATION JUST GETS WORSE AND WORSE
By John McClain
http://www.nvar.com/newsdetail.lasso?articleno=nvarn100455
George Mason U and it’s squad of jokesters have distinguished themselves among tough competition to earn the title, Dumbest Mofos in the RE game. Despite the best efforts of yun, gin, and that old dog appleton-young, only the dolts at Harvard, led by broken-backed Retsinas, have been as willfully misleading, uninformed and just plain dumb as a box of rocks.
“George Mason U and it’s squad of jokesters have distinguished themselves among tough competition to earn the title, Dumbest Mofos in the RE game.”
Shoot. I was rooting for University of Central Florida…
And for a take on the existing home market in DC:
http://www.washingtonpost.com/wp-dyn/content/article/2007/10/02/AR2007100201368.html
Actually, this is a comedy piece from the Sunday paper, but I don’t doubt that it is very true to the market. And he has some lovely zingers for the poor, lonely realtors.
“The agent is upbeat, sunny, borderline thrilled to have the opportunity to show you, or even your dog, this sparkling little bungalow that with some love and attention might not be a tear-down. Having any live organism walk through the door beats standing alone in an empty and unloved home that, in a just universe, would be swallowed by a sinkhole and ooze completely out of sight.”
Thanks Polly I missed that article.
Very good anecdotal observations that irrationality still reigns in the pre-existing home seller camp. HBs get it and are addressing the main issue of concern in our modern housing market, PRICE!!! I.e. affordability.
It will take continued years of HB price cuts combined with FBs getting fed up with the hassles of renting and all the negative cash flow they suffer in carrying the home empty to get the pre-existing home market to become rational. If you can get a brand new home in a good area for less than a pre-existing (USED) home then why buy USED?
And lets not forget about all the foreclosures that will flood the market when all the toxic waste adjusts and is purged out of the market, 09 or maybe 10?
Why buy now and catch the falling knife of an FB? Buy new at a huge discount or rent, those are the best options right now. We’ve got another 20% minimum in real terms before you want to even consider a purchase, otherwise your life savings and flexibility will just go down the drain and you’ll be both the Greater Fool and the Next generation of FBs!!
The best reason to stick with older houses is location. Especially for SFH’s that are walking distance to the metro.
Condo’s near the metro are easy to find, but I wouldn’t want to guess who is going to end up in those once the flippers are flushed out.
I stopped by an open house this weekend while giving a friend a lift home. A 3/1 by Walter Reed, price reduced from 7-something to $619K. When I noticed that the flyer also said the house was for rent for $3100, I said that it looks like the homeowner is getting desperate. The realtor agreed and said that the home was being rented before… so I wondered aloud if the new-ish carpet that had some stains and rips was actually new before the renters moved in. I won’t go into the details of the cheap kitchen remodel, but suffice to say that someone put in at most 50K worth of renovations and is trying to sell for twice what they should get… The house would likely rent for $1800-$2100… even less once WR closes. The realtor tried to get me to give her contact info, but I said it was way too early to be seriously looking… not before ‘08 and that prices will probably fall another 20%. She just looked a bit tired… and if I had to work with FBs who won’t seriously move on price, I would be too.
Thinking back on it, I should have corrected my self… it’s not just that I think prices will fall 20%, I think that they should fall that much… probably more. In today’s market a 3/1 is really a starter home, thus they should be priced accordingly.
Every realtor I’ve spoke to in the last 6 mos has that same super-tired, depressed look. After to talking to a very sellers, I almost feel sorry for them.
Almost only counts in horseshoes & hand grenades.
I do not feel sorry for them, they rode this bubble up to its peak raving all the way about RE to the buyers. Now those buyers are sellers and they are getting a rant back in spades.
Its called justice
DC is different all right:
From Sunday’s Washington Post (print edition)
Cathedral Heights $499K
Open By Appointment
Classic Doorman Building
Great value in this classic doorman building, 24-hour front desk, outdoor pool, indoor garage space, This spacious two bedroom two bath unit is just waiting for your touch, easy to renovate. Come see the light in this unit, large windows throughout! Three HUGE walk-in closets for storage. Also rent at $2500/mo. Section 8 applicants accepted.
Nancy Itteilag
202-321-0110
Long & Foster
202-363-1800
$2500 a month and Section 8? Wow, what does Sect 8 pay now?
Homebuilders bite the bullet.
http://www.msnbc.msn.com/id/21151323/
“Homeowners are almost always slower than builders to bite the bullet and cut their asking prices. That’s why prices on sales for existing homes haven’t dropped as precipitously as prices for new homes. ”
The unfortunate thing for existing homeowners who refuse to give away their homes to young people at a price they can afford is that by the time the homebuilders finish capitulation, mortgage holders for foreclosed homes will follow, dumping the houses at marking rather than “buying them” at market for mortgage value.
Perhaps the foreclosure bloodbath awaits a few quarters or write offs. In other words, rather than take one big loss that threatens solvency, the mortgage servicers (which often hold the first-loss tranche) take losses little by little, offsetting them against income elsewhere. Once they are finished their write offs, the auction the houses and then inform the holders of the higher tranches what their investments are really worth.
A previously stalled 30 house development in the Central Valley, that went absolutely nowhere, stalled out, for a year…
Is now being built with a vengeance, to add to the pile of nearly 5,000 unsold homes in the city, in question~
It’s all so very wrong, what these corporate homebuilders are doing~
Shame on you!
And it is the existing housing market house owners who are the most delusional about the state of the market. They all insist they’re sitting on a million dollar lottery ticket and any dispute of that fantasy is akin to getting between a junkie and his fix. The beauty in their delusion is that they are the last ones to the banquet and the kitchen shutdown hours ago.
“The resale market will eventually have to realign — meaning homeowners will have to cut their prices — before the slump can end.”
This is the sticky part. Many homeowners can’t cut prices without owing money to the lenders. So their choices are to either hang on and hope the market comes back someday, bring a check to closing, or just walk away.
Those who can afford to hang on, will bitterly do so, because what choice do they have? Others will just walk away. I doubt many will bring a check to closing.
They couldn’t save for a downpayment when they were renting. What makes anyone think they can save for the financial equivalent of that downpayment when the first ARM adjustment is sending them into a financial black hole?
Polly — what keeps me totally cynical about the MSM no-show in this game is that they never ask that question.
But even homeowners who bought in the 1990’s and didn’t refinance (okay, not many) are refusing to lower prices out of pride. They know that their neighbor got $500k, and their house is of course “much nicer”, so why “give it away.”
I know a several owners myself who are renting out their homes at a loss because they refuse to accept the current market value, and plan to sell “when the market picks back up.” Unfortunately for these fools, when the market “picks back up” prices will be half of current value.
They are all buying into the current r.e. selling points b.s.
I had a real estate agent tell me yesterday that a $475,000 home could be gotten with only a $2,000 month payment and I could rent it out with negative cashflow - and it would still be a good investment as it would appreciate shortly and I would recoup all my money. She was driving a new Volvo SUV, so she must be an expert. LOL
“She was driving a new Volvo SUV, so she must be an expert.”
Ahh yes… The usual suspects. $5 coffee in a $50k piece of eurotrash junk. I fail to understand the fascination of anything overpriced let alone a vehicle that vaguely sounds like female anatomy.
i like the sunday paper.. lots of cartoons.. pic of stuff on sale at Target and Mervin’s , etc.
During a quick flip through the news sections (i warn you that there’s nothing in there but lots of words and other boring stuff) i noticed nary a peep about the housing market, much less some sort of problem with it.
…didn’t bother with the reaal estate sections.. they are subheaded with “advertising section” and can be bypassed.
So, all in all, i think Sunday was just another relaxing, comfortable, reassuring news day as far as home sellers are concerned.
Florida auction of foreclosed homes. I think some are Fannie Mae, since I’m familiar with one of the homes they’re auctioning. It was on the Fannie Mae REO website for almost a year and just recently disappeared from the listings and now I see it is part of this batch of homes being auctioned.
http://www.hudsonandmarshall.com/auctionInfo.asp?auctionName=Over+400+Homes+throughout+Florida%21%21&auctionID=371
“When future historians look back on our way of curing inflation, they’ll probably compare it to bloodletting in the Middle Ages.”
Nelson Bunker Hunt
38 million illegals in the U.S., not the 12 million claimed by the government?
http://www.chron.com/disp/story.mpl/metropolitan/mason/5189638.html
I thought this was interesting, too. I am against the death penalty, but this business of the chimpster dictating state law and deciding when he does and doesn’t want to go along with international courts is ridiculous. We are being occupied, on our own dime. Pull all benefits from illegals and their anchor babies and we’ll have much less of a problem.
http://www.usatoday.com/news/washington/judicial/2007-10-07-texasexecution_N.htm
Every word, every decision is fraught with moral hazard with the clown. It’s ok for millions of hispanics to be here but muslims are excluded. Personally I want none of them here but he see’s fit to pick and choose.
All part of the plan to lower our standard of living…
“I am super-excited for this upcoming election, and I really feel like this time we are going to make a difference,” Crash said.
“Difference” and “change” are the two political buzzwords I hate the most. Blowing up a building makes a “difference” in the neighborhood. Allowing 38 million illegals into the country certainly is a “change”. These words are always used as if they are inherently positive. But of course they are not. This topic gets more disgusting all the time. I think it’s time for change. How can I make a difference? Oyyyy!!!!
Support any candidate willing to swear off supply side enslavement.
You mean Ron Paul then.
…..Yes.
Kudzu was originally imported as an ornamental. Noticing how quickly it spread and how hardy it is, the CCC planted it all over for erosion control..
History is clever and can repeat itself in many odd configurations.
Scared of which Joey?
Well, I thought it was interesting that in the Barnicle story they use the word “anarchy” several times. Of course the two political extreames are anarchy and tyrany, not the left-right garbage we always hear. What better excuse to go totalitarian, than to create an anarchy situation with illegal immigration?
“What better excuse to go totalitarian, than to create an anarchy situation with illegal immigration?”
That’s what I’ve been thinking.
I’ve been thinking (for about a year now) that the scenario would happen at some point.
Just the “event” we’d need.
txchick
Hurry send them to California to buy houses !!! TODAY
Off topic but worthy….
I have a part time assistant here at work I’ve been bantering with about the economy, RE etc. He’s a very intelligent, kind, gentle jewish guy who retired and got called back on a consulting basis. He could do my job better than I can but he’s on the gravy train with nothing to prove. After a few weeks of me making disparaging remarks about RE sales people, he disclosed his wife is one. I did feel like a cad as I wish this man or his family no harm. To the contrary, his wife is quite ill. But even this man, in spite of all his years experience and intelligence speaks with hope and intellect that real estate will rebound. I don’t engage him at all as it isn’t worth abandoning our working relationship and my admiration of him. People first.
You are right, exeter. It isn’t worth it. I had to bite my tongue a few weeks ago when a friend had someone sort of semi start a negotiation on her house and she didn’t even engage the person. I think she is going to get stuck in a hellish communte for many years. And this is a person who sees the writing on the wall. Sometimes you engage, sometimes you don’t.
Being right is more important than being acknowledged right.
Well, maybe she is one of the fabled ‘good and decent’ realtors, instead of the lying, moronic, oily, feculent, spiritually decrepit realtors that are so very easily discovered.
It could be. There has to be at least one of the former. I heard about one, from this one guy who knows someone who knows one.
That’s pretty funny.
OT- Olympiagal, thanks for the beer-brewing advice… I bought a kit and have some ale perc’ing at home. It was a great idea!! I posted on another thread but you may not see it.
I have finished the hbb’s copy of Peter Schiff’s “Crash Proof” and am ready to forward it to the next interested blogger. This is the book hbb-ers are signing with the intention of presenting to our blogs creator, Ben Jones.
It’s a really easy read. I got through it in 2 days. And it filled in some gray areas I hadn’t yet digested in my blog readings.
I’ll get it out in the mail to the first person I hear from at missgredenko@hotmail.com
CarrieAnn-
I am a huge fan of Peter Schiff, having invested using his point of view, and have done well. He’s a straight shooter, and I respect him immensely.
How was the book?
Thanks for the input awaiting.
I felt positive but mixed about it. I think the biggest difference between his book and this blog is he seems pretty positive that Asia will be stronger once it is relieved from supporting the American economy. I felt most bloggers believe we’d be experiencing a worldwide recession/depression.
Also he suggests one should invest in European housing which should experience strong growth. I felt most bloggers felt the housing bubble was really a credit bubble and was being experienced worldwide.
I did appreciate his explanation of why we weren’t going to be feeling the real impact of our inflation until those dollars came back home.
Although I may not jump on exact recommendations, I will be following his advice closely.
yeah, funnie how some of these bears like Schiff suggest to invest in EU real estate that is generally far more overvalued than US RE at the top of the boom …
Miss Gredenko, are you safe?
We were at a policy meeting, discussing new ways of cheating . . .
That tune takes me back a ways. 1983 or thereabouts?
Are you safe, Miss Gredenko?
Don’t tell the director I said so.
CarrieAnn, Miss Gredenko is one of my favorite Sting songs!
Hate to break it to you - it was written by Stewart Copeland.
Mine too Arizona!
For those that aren’t old enough…It’s from the Police’s last album: Synchronicity.
Listen to the lyrics if you’ve got a copy. They explain how I feel about living in a material/plastic world (watching from the sidelines….)
Your uniform don’t seem to fit.
You’re much to alive in it.
You’ve been letting your feelings show.
Are you safe Miss Gredenko?
Miss Gredenko are you safe?
The refrain reflects my feelings before finding the Ben Jones sight:
Is anybody alive in here?
Is anybody alive in here?
Is anybody at all in here?
Nobody but us in here
Nobody but us.
Nod and adulation to Sting (btw I’ve always wanted to know who inspired that song if anyone should know)
Damn! You’re right, Left Behind. Sorry SC!
Good Lord, I hope there isn’t anyone on here too young to remember a Police album. Could it be??
LOL — how about way too OLD to remember a Police album?
christmas comes early for the voz……
Kiwi Krumbles…
“Housing price slide could kill wealth effect”
“Economists are beginning to wonder if housing - the driver behind a consumer spending splurge in the last few years - could soon become the economy’s Achilles heel.”
http://www.nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=10468497
Trust me on this one; you’re picking the worst day in years to look for krumbling kiwi articles in a NZ paper’s business section.
A friend of mine works as a securities analyst at Fannie Mae.
Long story short: He provides analysis which is used to justify increasing Fannies portfolio…. but
Q: Where does he keep his money lately?
A: He recently sold all his stock and parked his money in money market accounts.
Other People’s Money. An example of how they will spend your money (clients, taxpayers, etc) so differently than they spend their own money.
What goes around comes around. Some money markets aren’t safe - unless he’s in treasuries he may get a suprise. Serve him right…
money market accounts are safe.. FDIC insured.
money market funds aren’t.
Gotcha.
“A: He recently sold all his stock and parked his money in money market accounts.”
BwaHaHaHAAA! What a vote of confidence for FNM!!!
“securities analyst at Fannie Mae” I always take my financial advice from someone who makes MORE money than me. An economist on the government dole is like taken employmnet advice from someone on welfare.
Fannie Mae is a private (for-profit) NYSE-listed corporation, not a government agency.
http://www.marketwatch.com/tools/quotes/intchart.asp?symb=FNM&time=20&freq=1&comp=&compidx=aaaaa%7E0&compind=&uf=0&ma=&maval=&lf=1&lf2=&lf3=&type=2&size=1&txtstyle=&style=&submitted=true&intflavor=basic&origurl=%2Ftools%2Fquotes%2Fintchart.asp
Hudson Marshall had a large auction of Northern Virginia REO, or BORE (Bank Owned Real Estate) as someone here put it a while back. Went to see what was going on.
Held at a nice hotel in the Tyson’s Corner area. Probably 300-400 people in attendance including a news crew with a camera. In the hallway were two booths, one was a ’stated assets/stated income’ lender there to finance the winners. The other was a local realtor who could not have looked more bored collecting business cards for a raffle.
Ground rules were that every house had an opening bid of about 170K. All bidding was subject to the ‘approval’ of the bank so this wasn’t really an auction, just a way to generate offers. I’m sure that every ‘winning’ bid is going to get a counter-offer from the bank. Handful of Realtors there to see what their properties fetched.
Inside the room was about 300-400 people. I’ve never been to an auction before so it was sometimes a little hard to follow the action. Every house sold but there was almost no ‘deal heat’. Auctioneers were struggling to get an extra $1,000 or $500 from people. Only saw one or two houses of the 30 I stayed for get any sort of competition on it. From the opening bid of $170K most sold for about $180K-$190K.
Here are three random picks from the notes I took. (No idea what the wishing price was as I couldn’t find the MLS listings)
http://www.zillow.com/HomeDetails.htm?zprop=51913977
Sold 11/24/2004: $399,000
Sold 01/22/2001: $165,000
Sold @ Auction $270K - 32% off last sale
http://www.zillow.com/HomeDetails.htm?zprop=12382681
Sold 05/17/2007: $432,000
Sold 11/02/2005: $540,000
Sold @ Auction $280K - 35% off last sale
http://www.zillow.com/HomeDetails.htm?zprop=12383323
Sold 08/10/2007: $401,485
Sold 10/25/2005: $474,900
Sold @ Auction $255K - 36% off last sale.
The kicker was the last two sales. Houses are one same street, one apart, and appear from the photos to be identical new builds. First one has 1934 sq ft and went for $210K the second other was 2,800 sq ft. (Maybe a finished basement or something) and went for $212.5K. That’s $2,500 for 866 additional sq ft. That means that the first buyer saw his comps get killed in less than 120 seconds.
Fiancée and I got up and left after seeing that. On the way to the parking lot got to talking about places to eat with two ladies that were also leaving. Mentioned the weirdness of the last two sales and it turns out that one of them is the listing agent for one of the houses. She says ‘Can you believe those prices’, I said “no’ and that when I realized that she thought the price was two low and I thought it too high. It was a real ah-hah moment.
Other interesting thing. All the houses were from outside the core of DC. Manassas, Sterling, Reston, Woodbridge, Dale City. The correction, at least at this auction, doesn’t seem to have moved into the core cities of Arlington, McLean, Alexandria – but its coming.
I planned to take a look at the auction, but didn’t make it. Thank you for the great info, NOVA.
“She says ‘Can you believe those prices’, I said “no’ and that when I realized that she thought the price was two low and I thought it too high. It was a real ah-hah moment.”
Real estate agents are the first to drink the koolaid and the last to figure out what was in it. LOL
I was there for the whole event….I wrote down every selling price if anybody is intrested …… Nice place in Vienna with 1.5+ acres went for 815k, 1Mil asking……down down down I hope. We checked that one out very nice (would not pay over 500k for it however)..Terms were draconian, 5% down NONREFUNDABLE under any circumstances….What happends if the bank does not take your ‘bid’. Some houses were absolute, others subjected to approval, from my count it was like 40/60 but do not know for sure. A 4k sqf house in a ‘nicer’ area of Mannasas went for 271. What is that in $/sqf oh 67.75$ you say..but wait SFH in Mannasas wil never drop less than 150$/sqf again?!!? AHHAHAHAHAHHA
That’s interesting, about H&M setting a minimum price on every house and making sales subject to bank approval. Palmetto’s link above is to this company’s big upcoming auction(s) in Florida. Doesn’t sound like it’s worth the gallon of gas it would take to attend.
I watched a little bit of the NBC news yesterday before the football game and there was a piece about retailers getting into Christmas shopping early. Except that buyers aren’t biting. The show sort of hinted at buyers are seeing things on sale now and thinking that they will be even cheaper as Christmas approaches.
Last year @ the nearest costco, xmas displays showed up in late August…
At the local Sam’s Club (N. Scottsdale), the holiday decorations have been up since about late August as well. Pretty sick what we have turned the season into.
Especially when one considers that not too many decades ago the Christmas “season” started on…. Christmas Day. The weeks before Christmas are known as “Advent” which could perhaps best be described ats Christmas’ Lent.
i’m nothing close to a shopaholic, but i don’t think i’ve ever seen that.. ever.
Price declines as Christmas approaches? that would be huge .. hmm.. i gotta say no way.. things arent moving that quickly .. but if it happens, it’d make it undeniable that recession has arrived, imo.
I guess they want to sell out the Christmas stuff before more bad news hits.
Years ago, when my mother and father and I were walking the boardwalk in some eastern seaboard town, my father noted how many stores were having sales. Then he said that the merchandise was marked down to just three times more than it was worth.
Needless to say, we kept our money in our pockets.
There have been a lot of ads for HDTV’s with dire overtones about the regular broadcast signal going away in 2009. They don’t dare start using jingle bells and a red and green color scheme this far before Christmas, but it is clear what the target it.
The Stratford Festival in Canada is very dependent on US tourists and they are going to start selling tickets in mid-October this year instead of early December as in the past. This is for the April 2008 to November 2008 season. I’m sure they are going for some combo of accessing the Christmas gift market and giving people time to adjust to the idea of having to pay one US $ for each CA $. Big adjustment for many long time patrons.
“Ten Lost Years” by Barry Broadfoot is a great read, consisting of individual Canadians memories of the Great Depression, ala Studs Terkel, but better stories, in my opinion…
One of the tales, was a church that had white gift xmas, where each of the flock would bring a gift wrapped in white paper for the less fortunate. One year 1/2 of the gifts had nothing in them, save a rock or piece of wood.
We ain’t seen nothin’ yet…
“One of the tales, was a church that had white gift xmas, where each of the flock would bring a gift wrapped in white paper for the less fortunate. One year 1/2 of the gifts had nothing in them, save a rock or piece of wood.”
Reminds me of “buy nothing day”- there is a group that sponsors it, and it is led by a preacher, from the “church of buy nothing”
http://en.wikipedia.org/wiki/Buy_Nothing_Day
Only problem to using the “they are taking the signal away in 20XX” is that it keeps getting pushed back. I remember when it was going away in 2003, then 2004, then 2005….and so on. HD tvs do not have the market share to support such a move. Hell most channels cant even do HD yet.
wow.. it just dawned on me ..
i learned about it in 1998 or so? At a State fair. had a big flatscreen HD demo TV set up.. said it’d be law in a couple years.
they sure have been pushing it back.. i thought my memory was toasted. thanks.
Even my sports news has become housing bubble news:
“The mortgage crisis you’ve heard about is playing a part in the Cavs’ failure to re-sign regulars Sasha Pavlovic and Anderson Varejao. Cavs owner Dan Gilbert is heavily into the mortgage business as the owner of Quicken Loans. LeBron James is not pleased with the situation. ..”
I might not be current on local news, but I think this is why DG has delayed deciding on moving the Quicken/Rock headquarters here from the ‘burbs to downtown Detroit, despite the heavy schmoozing by Mayor Kwame and all the press it was getting. The way the papers read it was supposedly all but a done deal back in the spring when the Pistons were still making their playoff run, but in the last couple months things have gotten reaaaallllll quiet. Even their commercials seemed to be cut way back until recently. Would like to hear if anyone has more current info.
Oct. 8 (Bloomberg) — St. Joe Co., Florida’s largest private landowner, plans to eliminate 760 jobs, sell about 100,000 acres of land and scrap its dividend to contend with the worst housing slump in 16 years.
…
“This is not a fire sale,” Chief Executive Officer Peter Rummell said today on a conference call….
The job cuts at St. Joe amount to more than 75 percent of the company’s 938 employees as of Feb. 1….
http://www.bloomberg.com/apps/news?pid=20601087&sid=azK8QFx7PSQo&refer=home
The 750 employees laid off will receive a burial size St Joseph statue, as a parting gift…
St Joe Company: Paper just wasn’t sexy enough. They actually made stuff here in America. Now they don’t make anything. Towns? You have GOT to be kidding. If you can’t sell houses, then you can’t make towns. Don’t people live in houses in towns? Or am I missing something?
Roidy
P.S. I have a book to say about St Joe and their crap.
I had a very nice short sale on that in the summer of ‘05. I think I got more than $20 share on the downside (can’t remember exactly) but that seemed a nobrainer at the time. Cramer loved the company as I recall . . . that’s as good a short signal as there is.
I still have Jan 09 puts at 30. Have doing ok but am being greedy.
Nice anecdotal info…
“About 1,800 homeless families were in Massachusetts shelters last week - up from 1,400 in June 2006 and just under 1,200 in June 2005, according to state figures. There are more families in shelters now than at any time since the inception of the state’s family shelter program in 1983, according to the Massachusetts Coalition for the Homeless.”
“Massachusetts is one of the few states that keep government records of the number of homeless families in shelters because state law requires the government to shelter any family that meets income and other guidelines. The state keeps a daily count to show how many beds it needs, said Robyn Frost, executive director of the Massachusetts Coalition for the Homeless.”
http://english.pravda.ru/society/08-10-2007/98356-homeless_families-0
The New England Farm Workers Council, a private nonprofit agency contracted by the state, is helping Rivera look for permanent housing. She has an income of just over $1,400 (EUR 990) a month, all from government aid, including payments she receives for her 9-year-old who suffers from epilepsy.
The agency requires that families spend no more that 50 percent of their income in rent, a figure designed to make it more likely that families won’t get behind on those payments.
But rents for a three-bedroom apartment in the greater Springfield area range from about $800 to $1,300 (EUR 565 to EUR 920) a month without utilities, said Tom Salter, the vice president of the agency’s shelter and housing division.
“A minimum wage job for 40 hours a week is just not going to pay the rent in any area,” he said. “It just isn’t.”
The story doesn’t say but I wonder if she is here legally?
“The story doesn’t say but I wonder if she is here legally?”
It doesn’t matter. We have an open border policy as a means to provide cheap laborer for the wealthy elite and Wall St.
Truly unbelievable. So, how many hardworking people does it take to support this fully propped bozo? 40? 50? You know that she also gets med benes for her epileptic son too, right? And why does she need a 3 bedroom place? I seem to remember plenty of “efficiency” apartments here in Omaha (mostly torn down now). What would be the problem with one of those?
“Kehoe attributes the increase in Massachusetts to a convergence of low wages, high housing costs, an increase in housing foreclosures and cuts in federal and state housing assistance programs.”
Low unemployment and such wonderful jobs make for a booming economy.
Number of homeless families rises
http://seattlepi.nwsource.com/national/1110AP_Homeless_Families.html
“I think what we are seeing here is a perfect storm,” she said. “Until we have some investment in affordable housing, and some flexibility in using our resources, we’re not going to see a leveling off of these numbers.”
Interesting coincidence: The number of vacant homes is rising at the very same time as the number of homeless families.
“…Data from the U.S. Department of Housing and Urban Development suggests there about 750,000 homeless in the nation on any given night, with about 40 percent of those members of homeless families, said Philip Mangano, director of the U.S. Interagency Council on Homelessness.
The overall number of homeless people is up from a few years ago, he said, but nobody can pinpoint an exact number of families because reporting requirements vary widely from state to state….”
Ohio mortgage ‘cop’ is targeting East Coast mortgage lending kingpins. Jerry Brown, take a hint!
A New Mortgage ‘Cop’
By Aaron Lucchetti
Word Count: 1,233 | Companies Featured in This Article: New Century Financial, McGraw-Hill, Moody’s, Fimalac, Time Warner, Fannie Mae, UnitedHealth Group, News Corp.
One of the sharpest attacks on Wall Street these days is coming from the Midwest. That is where Ohio Attorney General Marc Dann assigns much of the blame for the state’s record mortgage-foreclosure rate — a mess he calls “the largest financial scam in American history.”
The 45-year-old Democrat has pursued several mortgage cases closer to home, delaying foreclosures involving New Century Financial Corp., a home lender now operating under bankruptcy-court protection. He has sued more than a dozen lenders and brokers for allegedly inflating home appraisals and engaging in other practices that misled troubled homeowners.
http://online.wsj.com/article/SB119180486673551828.html?mod=todays_us_nonsub_money_and_investing
It has been a while since I last was in the market for a mortgage. I may have the opportunity to purchase a house at a substanial discount to 2005 (30+%, if not more). Anyhow I would like to get pre-approved,as opposed to pre-qualified. What is the best way to do this, so I do not have to many inquiries on my credit report etc? Thanks in advance for yoru thoughts.
Do a search for mortgare broker rate sheets. Then figure out on your own where you stand, credit-wise and debt ratio-wise. Once you have a full understanding of these things, then look for a referral in your area and go from there. By doing your own homework first, you will be sure that the lender/mortgage broker doesn’t try to mess you over in any way. Good luck.
I’d try working with a bank that you have a long relationship with - 10 years or more if possible - and one one that has been your primary checking account and received your work check deposits for that time. That way, the bank has a lot more information to work with than just your credit score. They have a picture of how responsible you are with your money.
Won’t help much if their policy is to sell all loans and they can’t do that, but it is probably the best shot you have.
Buy a Texas Instruments BA-II Plus calculator and figure out the payment.
This bull appears to have achieved what no bull before has achieved: immortality!
There is only one slight problem: Once market behavior creates a widely-held perception that prices can only go up, investers pile in and drive up prices to a fundamentally-overvalued level where a crash is in the bag.
Stockmarkets
Bad-news bulls
Oct 4th 2007
From The Economist print edition
Stockmarkets are breaking records again as if the credit crisis were ancient history. If only it were
Reuters
THE news seems to go from bad to worse. In late September figures showed that the American housing market was in free fall, with both sales and prices plunging. On October 1st Citigroup and UBS, two of the world’s biggest banks, said they were writing down $9.3 billion of debt between them because of the credit crunch.
Global stockmarkets have reacted not with dismay but with euphoria. Wall Street marked the Citigroup write-downs by driving the Dow Jones Industrial Average to a record high (see chart). The MSCI emerging-markets index has soared to new highs. This summer’s turmoil seems to have been completely forgotten.
What explains this apparent insouciance? It seems that investors reckon they cannot lose. “Take your pick,” says Gerard Minack, a strategist at Morgan Stanley: “Equity markets are either behaving as if the worst is over for credit and housing problems or they remain convinced that the [Federal Reserve] can offset whatever bad news may unfold.” In other words, bad economic news means the Fed will cut interest rates and good news means recession will be avoided.
http://economist.com/finance/displaystory.cfm?story_id=9912520
One of the fundamental tenets of communism is a central bank.
The invisible hand defeated communism (at least the Soviet Union version, which relied too heavily on central planning) and it will also defeat any other institutional efforts to permanently suppress it.
Don’t fight the invisible hand!
MARKET MOVERS
Some Warning Flags Fly
As Stocks Continue to Soar
Indicators Like Gold,
Transportation Suggest
Skepticism, Weakness
By PETER A. MCKAY
October 8, 2007; Page C1
The major stock-market indexes set records last week, making up for their late-summer swoon. But other financial indicators are behaving quite differently than they did in July, when the market last peaked, which is fueling some analysts’ concerns that the stock market is primed for a drop.
http://online.wsj.com/article/SB119179414704951537.html?mod=hpp_us_whats_news
Just like housing prices, stock prices always go up, in the long run.
Buttonwood
To infinity and beyond
Oct 4th 2007
From The Economist print edition
Contrary to popular belief, stocks do not always go up
IF AMERICAN investors have learned any lesson in the last 25 years, it is to buy shares on the dips. The slide in 2000-02 may have been longer and deeper than they were used to but normal service was eventually resumed, driving the Dow Jones Industrial Average to a record high on October 1st.
Among American financial commentators, it is almost universally accepted that shares always rise over the long run.
…
If investors want a simple parallel with share prices, they need only turn to the American housing market. Back in 2005, Ben Bernanke, then an economic adviser to the president, was asked about the possibility of a decline in house prices on CNBC, a financial-television channel. He said, “We’ve never had a decline in housing prices on a nationwide basis. What I think is more likely is that house prices will slow, maybe stabilise.”
Lots of people took the same view and were willing to borrow (and lend) on a vast scale on the grounds that higher house prices would always bail them out. They are now counting their losses. Investors in equities should beware of overcommitting themselves on the basis of a similar belief. Just ask the Japanese.
http://economist.com/finance/displaystory.cfm?story_id=9912566
HERB GREENBERG
What Citigroup didn’t say
Commentary: investors need to go beyond company spin
By Herb Greenberg, MarketWatch
Last Update: 8:11 PM ET Oct 7, 2007
This column first was published in the weekend edition of The Wall Street Journal.
SAN DIEGO (MarketWatch) — When companies issue news releases, sometimes what counts isn’t what is said, but what isn’t.
With its warning last Monday that third-quarter results will be abysmal relative to expectations, thanks largely to the mortgage meltdown, Citigroup (C: Last: 48.02-0.28-0.58% 11:26am 10/08/2007) illustrates the point as well as any company.
Rather than go down, which would be expected when a company says that earnings will be 60% lower than a year earlier, Citigroup’s stock went up. Investors appear to have been reassured by Chief Executive Charles Prince’s comment that he expects “a return to a normal earnings environment in the fourth quarter.”
Citigroup is hardly alone and in fact led a parade of similar warnings culminating Friday with nasty news from Washington Mutual (WM: Last: 35.76-0.31-0.85% 11:26am 10/08/2007) and Merrill Lynch & Co. (MER: Last: 74.63-2.04-2.66% 11:26am 10/08/2007) As with Citigroup, their stocks went up. This is investor and public relations at its best or worst, depending on your perspective.
http://www.marketwatch.com/news/story/citigroup-didnt-say/story.aspx?guid=%7BDAB55C1C%2DE832%2D410C%2DA4CA%2D34713D0C61EE%7D&dist=SecMostRead
In other words, bad economic news means the Fed will cut interest rates and good news means recession will be avoided.
Hedge bets always soon good on paper.
Plunge protection alert…
http://www.marketwatch.com/tools/marketsummary/
Click on that marketsummary link quickly, and you will witness one of the rare moments when two graphs on the same page are out of sink. The one on the right side of the page shows the NASDAQ already plunging, while the one on the top left suggests it is in rally mode.
sinksynch (need more caffeine!)Does the PPT take a holiday on Columus Day?
Everyone can relax! The PPT is back from their coffee break, and stock prices are only going up again.
PPT is back on the job, it seems. What made all the headline U.S. stock market indexes start to drop like a rock at 11am EST (just before divine intervention kicked in)?
It appears the Bernanke put has a current DJIA strike price of around 14,020.
“Greenspan also said in an interview on CNN’s “Late Edition with Wolf Blitzer” that the turmoil caused by the subprime mortgage crisis was easing and financial markets were beginning to go back to normal.”
Words calculated to catch everyone, may catch no one…
Adlai E. Stevenson, Jr.
Reality hits Fortune cookie market:
from the New York Times
“…Today is a disastrous day. If you can’t beat ’em, join ’em,” reads one fortune showing up around the country….Mr. Chow characterized the new fortunes as “cautious” rather than negative, and said he had received complaints about only two messages so far. One was the “disastrous day” note. The other said: “Your luck is just not there. Attend to practical matters today.”…
I really like the picture of Wonton’s Fortune
“Your problem just got bigger.
Think, what have you done?”
http://tinyurl.com/2p7h4a
ASIA MARKETS
Records fall in Shanghai, Sydney
Mumbai falters; further room to run in Hong Kong?
By V. Phani Kumar
Last Update: 7:08 AM ET Oct 8, 2007
HONG KONG (MarketWatch) — Asian markets ended mixed Monday, with indexes in Sydney, Shanghai and Karachi setting record highs as investors cued off U.S. payrolls data from late last week.
Reopening after a weeklong national holiday, China’s Shanghai Composite soared 2.5%.
http://www.marketwatch.com/news/story/shanghai-sydney-establish-new-records/story.aspx?guid=%7B3DD69E51%2D36A8%2D4801%2DB264%2DA09192E91C97%7D
Take a look at the chart that accompanies this article to quickly convince yourself the Chinese bull is in the parabolic bubble blowout phase, aided and abetted by Wall Street analyst calls.
China’s stockmarkets
Rush hour
Oct 4th 2007 | HONG KONG
From The Economist print edition
Share prices in China have taken on a life of their own
TRAFFIC jams were not only to be found on the streets of Hong Kong this week. Share-trading systems were also clogged up as investors piled in after a holiday to mark the founding of the People’s Republic of China. Mainland markets were closed for the Golden Week, which only seemed to drive more money to Hong Kong. On October 2nd the Hang Seng index closed above 28,000 for the first time, rising 3.9% in one day. Shares of mainland Chinese firms climbed even higher amid talk of heavy buying by institutions in China able to invest in Hong Kong.
…
The bull market should make life sweet for securities analysts—at times, too sweet. Citigroup, for example, put a strong buy recommendation on China Resources Land, a property company, in mid-September, saying the share price could appreciate by 20%. Two weeks later, it had. Next big idea?
http://economist.com/finance/displaystory.cfm?story_id=9912504
The hangover from the China market is going to be severe. Watch out after the olympics are over and the hype dies down. I expect that is when they will come knocking on our door to collect on all our debt.
Too bad the debt is denominated in devaluing dollars.
By way of an update, here is the latest on my quest to right the wrong perpetrated by Team National (an MLM) on one of my neighbors. She is 86, and just signed up for a lifetime membership in this outfit.
I complained to the Better Business Bureau of Tucson, and here’s what they had to say:
We have received your complaint against Team National and a copy was sent to the company. We believe it is important to bring this matter to the attention of the company’s owner and/or manager.
We have considered the points you raise and understand your frustration; however, barring any new developments or receipt of information not already available, the Better Business Bureau is closing this complaint. The complaint will remain on file for three years.
Thank you for contacting the Better Business Bureau and feel free to contact us again if we can assist you in the future with any complaint or inquiry about a business or charity.
To which I say, “Thanks for nothing, BBB.”
I should add that over the weekend, I got one of those phone messages from someone I don’t know. Just a first name and last name and a phone number. An Team National cultist who’s unhappy that I’m on to them? I don’t know. I didn’t return the call.
I don’t know about you, but when I’m making a weekend call to for someone *I* don’t know, I state my first and last name, the purpose of the call, how I was referred to the person I’m calling, then last but not least, my phone number.
The BBB is generally full of crap. They generally don’t go after dues-paying members and when they do, its only after numerous complaints. Sorry to hear about your neighbor’s situation. Its just another example of the fact that our country is dying financially and instead of people taking the minimum wage job at McDonald’s, they would rather scam an old lady out of her money.
Thanks for confirming what I’ve long thought about the BBB, Chris. They did help me on a couple of matters relating to my business, but I’ve never figured that it was worth my while to join them.
At least you tried, Slim. I think that’s great. There’s no helping some people, and bad and/or stupid and/or wasteful things happen all over the place, but good people do what they can, because that’s what you do. There’s nothing else for it.
I don’t recall if previously you had spoken to her directly, but if you did, she then signed up anyways?? Forgive me my Alzheimer’s on the subject. And how much is a “lifetime” membership for someone who is 86??
The morning after the meeting, I was trying to contact her directly, but her ISP bounced my e-mail back at me. Said the content was objectionable, even though I didn’t use such spam filter-trigger expressions as MLM.
So, I e-mailed her next-door neighbor, who attended the same meeting, but did not join Team National. The neighbor told me that she thought the whole thing sounded too good to be true.
The neighbor also informed me that my warning had come too late. Reason: My 86-year-old friend had already signed up for a lifetime membership in Team National.
This site pops up first when you Google “Team National:”
http://www.gurubusters.com/Not_Recommended/Team_National.html
BBB - another worthless government entity.
As for advice, have your neighbor contact her bank/credit card company to refute the withdrawl/charge, and/or contact a lawyer (could be some class-action firms taking Team National on)and go after the TV station (or medium - more than one even better) that presented the product.
I’ve contacted the Arizona Attorney General’s Office in Tucson. Spoke to the police officer who handles their elder fraud reports. He said he’d do some checking and get back to me.
Oh, and the neighbor and my friend were driven to this meeting by (you’re gonna love this) a local real estate agent and her live-in boyfriend. That fellow has been involved in local condo conversions, and, when that went game ker-flooey, house-flipping. He’s not doing too well at flipping thing either.
http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/MarketHackersRunningOutOfAmmo.aspx?page=all
Contrarian Chronicles10/8/2007 12:01 AM ET
Market hackers running out of ammo
Computer-driven quantitative hedge funds have altered market behavior quite dramatically. But a day of reckoning isn’t far away.
By Bill Fleckenstein
“Obviously, no group of operators can change the market’s ultimate direction. But they certainly can distort it for a time.”
Moreover, the ability to distort the market’s temporary direction also leads far more lemmings to their deaths than when the market is more responsive to fundamental reality.
“…Inexplicably, these funds trade at premiums of better than 50% to net asset value….”
“…He went so far as to suggest that when this unwinds, some big Wall Street firm will essentially go out of business and that the building it occupies will be, in his choice word, depopulated. When I responded by saying, wow, you’re more bearish than I am, he replied: No, it’s not about being bearish. It’s just a fact….”
So much for efficient market theories. 50% premium to NAV! Closed end funds are a possible buy when trading 25% below NAV. But when DuPont bought Christiana Securities in the early ’70s, DuPont paid a 25% premium. (Christiana owned 29% of DuPont stock). What an incredible short - nothing but air.
like depopulated in an instance? wow, I hope they install enough webcams outside the windows to give us a glimpse of the party.
got popcorn?
from Satyajit Das
(author of Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives (2006, FT-Prentice Hall), an insider’s account of derivatives trading and the financial products business)
“Risk Management” is a beautiful lie. Beautiful lies are lies that we know are not true but desperately want to believe in. Risk Management is also a true lie – something that is inherently false but strangely contains a kernel of truth.
The role of risk management is poorly defined. Risk is misunderstood. Form rather than substance dominates. Risk models are flawed, sometimes fatally. Activity and achievement are frequently confused in modern times. In risk management, there is frenetic activity. It will be interesting to see whether in the crucible of reversing markets, there is achievement.
Perhaps it is best to heed Mark Twain’s advice: “Don’t part with your illusions. When they are gone you may still exist, but you have ceased to live.”
19 page pdf:
“Perfect Storms” Beautiful and True Lies in Risk Management
http://tinyurl.com/yt6r7r
Published: Sunday, October 7, 2007
Builders hit hard by housing slowdown
By Jeff Switzer
Herald Writer
Snohomish County’s housing boom is over.
Builders are laying off workers, houses are staying on the market longer, and the overall number of permit applications has dropped by hundreds compared to last year.
“Nearly every developer has or is contemplating layoffs, and it’s because of the slowdown in the market,” said Mike Pattison of the Master Builders Association of King and Snohomish Counties.
Now, Snohomish County plans to cut at least 20 vacant positions from its building department; no one will get a pink slip. At the same time, the county expects to collect $12 million less in permit revenues and real estate taxes next year.
That’s after what many call the largest building boom the county has ever seen, marked by bidding wars and rabid pre-sales of homes. During that boom, a 5,000-square-foot vacant lot went for as high as $247,000.
“The housing peak is over,” said Todd Britsch, president of Bothell-based New Home Trends, which tracks new construction. “These type of frenzies come around every 20 years.”
Instead, the region will see a normal and healthy housing market, Britsch said.
“The market is going into — and homebuyers need to understand this — a normal, sustainable, healthy housing market, and we’ll see an average appreciation of 3 percent a year for the next three or four years. Then we’ll start this cycle all over again. In five years, we may reach 10 percent a year.”
CLICK!
http://heraldnet.com/article/20071007/NEWS01/710070060/-1/news01
All of which means only one thing:
There’s never been a better time to buy!
Holy crap! They were right!
MSN Headline
“INFLATION FRAUD- WHY DOES THE GOVT. PRETEND PRICES AREN’T RISING”
http://extra.msn.com/perspectives.aspx
———————————————————-
When what was formerly considered conspiritorial by the masses becomes obvious to the masters of the obvious, prepare for change.
Have to share this story with the HBB’ers… I’m surfing this morning and listening in on two guys babble in the water. Turns out Surfer A is a mortgage broker and Surfer B is trying to buy a house. Surfer B complains because he cant get a loan for a house in the 400-500 range. Surfer A explains that he can “hook him up, and that all we have to do is put that you make 150k a year on the loan docs”
BAMM another sucker into a house! We havent learned a thing yet.
Serf’s Up
Foreclosed homes a new blight
Daphne Sashin | Sentinel Staff Writer
October 8, 2007
Dianna Cotter and her husband were tired of looking at their neighbor’s weed-infested yard, which had become home to snakes and other pests. So they gathered their lawn tools, walked across the street and went to work.
There was no one else to do it. The three-bedroom house in Cotter’s Ocoee gated community had been abandoned six months earlier and would eventually go into foreclosure.
Like Cotter’s neighbors, countless homeowners overwhelmed by their mortgages are taking off and leaving behind algae-filled swimming pools and knee-high weeds in communities where upkeep has seldom been a problem.
Lenders often are reluctant to take responsibility until the foreclosure is complete, which can take months. Even then, some banks won’t get involved. While the homes sit in limbo, neighbors throughout the region take matters into their own hands.
“We take pride in the neighborhood, and it wasn’t looking real nice. So we just went over and did what needed to be done,” said Cotter, 41, a mother of two boys and a home-school teacher. “It’s just a nice, neighborly thing to do.”
http://www.orlandosentinel.com/orl-codeissues0807oct08,0,2447657.story?coll=orl-news-headlines-state
Don’t need no spiders or snakes, or other leftover FB mistakes…
Sorry if this article was previously posted… The story is altogether current, though.
WAYNE COUNTY
Foreclosures have grass springing up in yards around vacant houses
Cities take on job of cutting lawns
September 23, 2007
BY CECIL ANGEL
FREE PRESS STAFF WRITER
The number of home foreclosures in Wayne County has caused a flood of complaints from residents about high grass at vacant homes and forced some communities to contract with landscape companies to keep the lawns cut.
“It’s a new problem to Canton,” said Tim Faas, director of Canton Municipal Services.
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In Garden City, Jack Barnes, director of the Department of Public Services, said that up through May alone, they had 125 complaints about tall grass. For all of 2006, they only had 70, he said.
“We’ve been able to keep up with it ourselves,” he said.
But some larger communities have needed extra help because they don’t want to tie up too many city workers with lawn cutting.
Canton had to hire contractors to tackle tall grass. The township began its program in May and has paid a contractor $6,800 to cut grass, Faas said, for about a couple of dozen properties out of the city’s 35,000 dwellings.
“It affects property values,” Faas said.
http://www.freep.com/apps/pbcs.dll/article?AID=/20070923/NEWS02/709230615/1001
Understand what just happened with the big round of writedowns on Friday. $5.5 billion from Merrill and a bit under $1 billion each from WaMu and Alcoa. S&P consensus earnings were for minus 0.4% growth this quarter before those came out.
Since the total S&P earnings are roughly $200 billion per quarter, the additional losses of $5+ billion (after tax) takes the consensus to below negative 3%. Maybe they sandbag and report flat. But the S&P is currently trading at over 18x GAAP earnings. Who in their right mind pays 18x P/E for flat to down earnings?
The assumption appears to be that we have a one-time event and then back to double digit earnings growth. Of course, that is absurd. My best guess for what will trigger a return to fear is once the financial services companies actually report. They will either have to give guidance for 4Q or suspend guidance. Unless they mostly issue guidance that matches the pre-credit crunch rates of profitability, their stocks should suffer.
A reasonable expectation.
IMHO the bad news is just starting and I am shorting or have shorted financial institutions today. The risk/reward ratios are finally favorable.
This is not suitable for any and or all investors this fits my investment objectives and is suitable for me, myself and I.
I don’t play stocks, but if I was a player, i’d be playing as well…
“IMHO the bad news is just starting and I am shorting or have shorted financial institutions today. The risk/reward ratios are finally favorable.
This is not suitable for any and or all investors this fits my investment objectives and is suitable for me, myself and I. ”
Hoz, I am in the same boat, SKF is one of our largest positions (of hundreds of positions) and we are heavily underweight in the financials. The banks are working overtime with the smoke and mirrors, but the fundamentals are quite bad. I see very little upside throughout the financial sector.
George Bernard Shaw “You have to choose between trusting to the natural stability of gold and the natural stability of the honesty and intelligence of the members of the Government. And, with due respect for these gentlemen, I advise you, as long as the Capitalist system lasts, to vote for gold.”
here, here…
Here’s an article about the Detroit market. Third highest crime rate in the country, but if you dig drive-by shootings you can scoop yourself up a nice house at the prices we should all be paying in the first place- cheap houses under $50K, custom-designed, well built houses for $250K or so.
http://news.yahoo.com/s/nm/20071007/us_nm/detroit_housing_dc
I didn’t make it to that auction, but I’d love to hear if these guys actually bought anything, with reserves and all. The last paragraph sounded like a couple flippers good at finding willing knife catchers.
And that Indian Village house that would fetch hundreds of thousands elsewhere but “only” went for 116K….somebody overpaid and apparently won’t mind either not making a dime for years or arming themselves to go for a walk in the evening.
Greenie is describing a fine Swiss watch, not the eCONomy
“Greenspan added that he thought there was not much that lawmakers and the Federal Reserve should be doing to avoid a downturn.”
“I doubt very much if there is anything that can or should be done. Because remember, we have a very complex, self-calibrating, self-adjusting economy,” he said.”
just watched BBC television about the British ’subprime house of cards’. It has FRAUD written all over it, probably even more than the US situation. And despite the problems in the US, nothing has changed in the UK and the FSA (regulating authority) turns a blind eye towards all the massive fraud that is rewarding their pals handsomely. How does a 100% 15x income subprime (bad credit) loan sound? Or a building where 80 out of 84 units are repossed because most (or all) buyers are fake and there are no mortgage payments? Probably the real owners of the mortgages still have no idea what is going on there. Fortunately, UK house prices are still rising - they better keep doing that, because otherwise the shock will be a lot more than just some naked swimming people.
Northern Crock
“Granite, the immense, £50bn synthetic financial structure upon which the the stricken mortgage bank is perched, is itself balanced on a charity, the Down’s Syndrome Association North East (UK).
That will come as a surprise to many - and it certainly has to the Down’s Syndrome Association North East (UK), a family support group run by about 300 parent volunteers. The charity’s trustees have issued a statement:
In connection with the current problems of Northern Rock, we would like to assure our members and supporters that Down’s Syndrome North East (DSNE) has not been knowingly involved in any misuse of money. We are investigating why our charity appears to have been named as a beneficiary of a Trust without our consent. We have definitely not received any money from Northern Rock or affiliated companies, except for a one-off donation from a staff collection in 2001. Currently we have not received notification that any funds are being raised or collected by Northern Rock or affiliated companies on our behalf.”
FT
http://tinyurl.com/37c434
I get the impression that a lot of hedgefunds and other sharks in the City of London are posing as charities, probably because it gives them a lot more room to play. Some of them even make (tiny) donations to charity and use it for their PR machine.
Test
And for the hardcore HBBer’s who want to get down and dirty into the mind boggling structure of these financing vehicles this guy has prepared an analysis of Northern Crock/Granite.
Warning: Proceed with caution. High risk to the sanity of individuals not familiar with complex corporate and financial structures.
Tax Research UK
http://tinyurl.com/339oj7
This is insanity. It’s a box in someone’s backyard. Sweet deal.
$11,999 Personal Home Office
http://sacramento.craigslist.org/rfs/442233560.html
“Justice does exist in the world, whether people choose to practice it or not. The men of ability are being avenged. The avenger is reality. Its weapon is slow, silent, invisible, and men perceive it only by its consequences - by the gutted ruins and the moans of agony it leaves in its wake. The name of the weapon is: *inflation*.”
Ayn Rand
Chinese bank in landmark US investment
By Sundeep Tucker in Hong Kong
Published: October 8 2007 16:45 | Last updated: October 8 2007 16:45
China Minsheng Banking Corp is set to become the first mainland institution to invest in a US bank after striking a deal to acquire 9.9 per cent of San Francisco-based UCB Holdings for more than $200m.
http://www.ft.com/cms/s/0/9713c338-75b0-11dc-b7cb-0000779fd2ac.html
With the option to increase to 20%, this becomes a very important test of the US willingness to allow foreign investment.
Market insight: Moral hazard encourages weak dollar
By Alan Ruskin
Published: October 8 2007 17:44 | Last updated: October 8 2007 17:44
The slide in the actively traded dollar index to its record low makes a final mockery of the US Treasury’s mantra that “a strong dollar is in the US’s interests”.
…
Central banks have spoken voluminously about moral hazard but one of the greatest moral hazard problems lies in their midst. The US has been tolerant of dollar weakness, and neglected building reserves, precisely because it knows that its trading partners could suffer more than the US from a dollar collapse and would do something about it.
http://www.ft.com/cms/s/1/0d57808c-75bd-11dc-b7cb-0000779fd2ac.html
Prof Stuckoo:
havent called you out in some time.
BUT THIS ARTICLE IS SPOT ON!!!!!
Lotsa big brains on this blog, I find it fascinating when I share my fears of the highest level, and the liquidity actions suddenly dissapear.
I see big money gettin hurt.
big money is the nick name I gave to the American consumer.
More Business news
Lady luck turns on Las Vegas’ once-hot home market
By Adam Tanner
REUTERS
5:03 a.m. October 8, 2007
LAS VEGAS – People trying to sell their homes in Las Vegas – one of America’s hottest job and property markets over the past decade – have seen their luck turn dramatically worse this year.
Dana Fillmore was like many of the thousands arriving to the casino capital every month when she moved from Minnesota in 2004 with her husband and two children. In her mid 40s, Fillmore had hoped the find a warmer climate, a house with a swimming pool and place where she could eventually retire.
With no money down, she landed a house with a pool for a $2,100 monthly mortgage. But her marriage collapsed soon after, and her husband, who works in real estate development, had trouble with support payments as his industry slumped, she said, so she is now trying to sell her house.
A Web site designer, Fillmore bought the place in Henderson next to Las Vegas for $329,000 in July 2005, around the peak of the boom. Since listing the house at $317,000 a few months ago, she has dropped the price to $289,000 and is still hoping for her luck to change as she cannot afford to pay the mortgage on an annual salary of $42,000.
“My parents retired to Las Vegas. It’s always been a dream of a lot of people in the northern states to move to a southern state,” she said wistfully. “I wish now that I never moved.”
The promise of a new start and quick riches has made Las Vegas one of America’s fastest growing cities for years. Some did become fabulously wealthy from real estate, and in recent years others thought they too could translate rising prices and easy credit into fast bucks.
But no dice for those who bought a few years ago.
“Say they paid half a million. They might be able to sell in the low $400,000s, maybe,” said Rita DeSimone, a broker working with Fillmore.
DeSimone said her income is down by half from last year. ”Come May, the phone just stopped ringing,” she said.
http://www.signonsandiego.com/news/business/20071008-0503-usa-housing-vegas.html
The elephant under the living room rug is getting more and more difficult to hide…
New Proposed Ordinance Would Change Foreclosure Notifications
POSTED: 12:40 pm PDT October 8, 2007
SAN DIEGO — Financial institutions would be required to notify San Diego’s Neighborhood Code Compliance Department about homes that are in foreclosure under an ordinance proposed Monday by two council members.
The measure introduced by Councilmen Brian Maienschein and Tony Young would also mandate the upkeep of vacant homes in the city.
“Abandoned homes left in disrepair are more than an eyesore. They are a welcome mat for crime, gangs, drugs, graffiti, fire and mosquitoes,” Maienschein said at a news conference.
According to Young, there are now more than 8,000 homes in some stage of foreclosure in San Diego County.
“Not only do the abandoned homes have an economic impact by devaluing homes, they also affect the safety and quality of life of their neighbors,” the councilman said.
http://www.10news.com/news/14294405/detail.html
Tijuana is looking like a better option than Tijuana-adjacent…
October 8, 2007, 5:13 PM
“Strange And Sad And Worrying”
Posted by John Blackstone
John Blackstone is a CBS News correspondent based in San Francisco.
(AP)
What I witnessed on the steps of the County Courthouse in Stockton, California struck me as strange and sad and worrying…particularly if you think the worst is over in America’s mortgage meltdown.
An agent for lenders stood on the courthouse steps, his hands full of official documents. He was preparing to auction several houses with mortgages in default. He’s there almost every day at 10 AM. On this day, at least, he had a lonely job: there was nobody there but me…and I wasn’t there to buy.
Still, the agent read aloud what he was legally required to read and declared the bidding open. The first house up had an opening bid set at $465,000. Less than two years earlier a buyer had paid $620,000 for the same house. But now, even with a $155,000 discount, nobody was interested.
Houses that nobody wants are now all too common in recently built subdivisions in California’s central valley. These are upscale developments, often built just within the last four years. Houses that sold briskly as recently as a year ago for $400,000 to $600,000 now sit empty and abandoned. And there are lots of them.
http://www.cbsnews.com/blogs/2007/10/08/couricandco/entry3344736.shtml
“particularly if you think the worst is over in America’s mortgage meltdown.”
Who would be so witless as to think that. The October resets are just getting started. We are at the top of the first inning.
Sounds like there’s a way for prospective buyers to know in advance what the minimum bids will be.
Redemptions suspended at two hedge funds. Are things about to get cranking again?
“Ellington Management Group LLC, the Old Greenwich, Connecticut-based hedge-fund firm that focuses on mortgage securities, suspended client redemptions from two funds because it’s too hard to value their assets.
Investors won’t be able to withdraw money from New Ellington Credit Overseas Ltd. and New Ellington Credit Partners LP, according to a copy of the letter posted on the Internet blog nakedshorts.com. There’s been little or no trading in some low-rated or unrated securities backed by subprime home loans, making valuations difficult, the Sept. 30 letter said.”
Bloomberg
http://tinyurl.com/2vy8vo
Even three-headed dogs occasionally suffer from indigestion.
OCTOBER 15, 2007
Chart: Housing Blues
Subprime Woes At Cerberus
By Dawn Kopecki
It bit off a big hunk of risky loans when it bought GMAC
General Motors took some flak when it sold a 51% stake of General Motors Acceptance Corp. (GM), then the carmaker’s most profitable unit, to Cerberus Capital Management and others in late 2006. Most figured the private equity firm got a good deal from the beleaguered carmaker, paying $7.4 billion for the auto and mortgage lender. That investment isn’t doing so well now that GMAC’s mortgage business, ResCap, is losing money. Owing to that drag, GMAC reported a $12 million loss for the first half of the year, compared with profits of $1.3 billion in the same period of 2006.
http://www.businessweek.com/magazine/content/07_42/b4054043.htm?campaign_id=yhoo
Such a pity! Leveraged loans were going off at around 8% by the time that deal got completed - let’s just say 7.5% was the price set earlier for the sake of arguement. That would mean their financing cost was $555 million annually on the $7.4 billion. And for that they get 51% of a $12 million loss! Hahaha.
Not quite as brilliant as the Citadel guys buying 6% of Beazer at about twice today’s closing price but still brilliant. At least GMAC isn’t filing lawsuits to stave of BK.
“GMAC reported a $12 million loss for the first half of the year, compared with profits of $1.3 billion in the same period of 2006.”
This is from the article I just posted regarding Cerberus’ ingestion of an indigestible chunk of GMAC. TOO BAD THE FIRST HALF OF 2007 WAS THE BETTER HALF
Astounding Greenspan quote of the day:
“America should eliminate the borders and import skilled workers from overseas. The reason for this is to put pressure on wages for skilled workers in the downward direction. This will be good becuase by lower wages for skilled workers we will help income inequality in the US”
What a guy!
http://transcripts.cnn.com/TRANSCRIPTS/0710/07/le.01.html