Bits Bucket And Craigslist Finds For October 17, 2007
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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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running for the exits?
Japan and China led a record withdrawl of foreign funds from the United States in August, heightening fears of a fresh slide in the dollar and a spike in US bond yields.
Data from the US Treasury showed outflows of $163bn (£80bn) from all forms of US investments. “These numbers are absolutely stunning,” said Marc Ostwald, an economist at Insinger de Beaufort.
Asian investors dumped $52bn worth of US Treasury bonds alone, led by Japan ($23bn), China ($14.2bn) and Taiwan ($5bn). It is the first time since 1998 that foreigners have, on balance, sold Treasuries.
http://tinyurl.com/36s7bq
We showed what we were holding in this poker game of life, to the outside world, and for some reason they weren’t impressed with our one of a kind 7 times, including busted straights and no potential of a flush.
Apparently, the “flush” is in.
A bit OT but everyone should take a look at this Hillary hit piece. If I find one on the Rep. candidates I’ll be sure to post that as well. This one is an eye opener.
http://www.prisonplanet.com/articles/october2007/161007_b_Hillary.htm
Please don’t tell me you support that cast-iron bitch.
I think you can assume that I don’t. I’m a Ron Paul supporter. You may want to take a look at that piece I posted. Very chilling.
nomorebushclintonbushclintonplease.
I am going to vote for the first time since 1984 if that piece of trash is nominated. Not that it will matter in Texas, she has no chance of winning here, but I feel that strongly about it.
I’m 29, have never voted for a President, but next year i will be standing up to be counted. I’ve never felt so overwhelmingly ignored in my entire life. This last year has made a mockery of the US political system.
COLBERT ‘08
(It’s official)
I’m no fan of Hillary but that’s a pretty dumb campaign contibution “hit piece” by a bitter ex-con. There’s plenty of crap that’s going on everywhere today and stuff like the housing bubble blowing up the economy are going to have a much larger affect on people.
What I want to know is which of you guys is putting up the bandit Ron Paul signs all over Point Loma and La Jolla
I find Precedents boring…
I am announcing that I plan on running in 2008 (or at least a brisk walk)
Emperor Norton II, of the Inland Empire
Wanted: CIC candidates who will not work to the sole benefit of the top 1% and sell the rest of the U.S. down the river.
There is also a RON PAUL sign over the bridge on the 15, by the stadium. I have also seen an older Volvo driving around north county (on the 15) with a very large RON PAUL sign on the side door panels, kinda like the realtors use, except much bigger!
Another rather important development FYI. Did we really think these Asshats would listen to their constituents? Text from a grassroots group.
I’ve just received stunning news that amnesty Senators are ready
to make yet another run at passing the Dream Act as soon as
late today or tomorrow!
Three weeks ago we warned this would happen, and here we go.
According to our sources, the Dream Act will again be offered
as an amendment to the Labor, Health and Human Services
Appropriations bill (H.R. 3043) on the Senate floor.
this news is breaking right now–meaning
Senate staffers don’t even have the text of the amendment!
But here is what we expect:
==Dream Act will grant amnesty to illegals who entered
the U.S. before the age of 16. Those granted amnesty
are likely to have the opportunity to petition the DHS
to grant their parents legal status. In other words-it
will become a massive amnesty program, and your
tax dollars will be expected to cover it!
==There will be no caps on numbers or age limitations.
==Resident status will be extended indefinitely and
provide for retroactive benefits.
==We expect the amendment will authorize “in-state”
tuition benefits to illegals.
Since they couldn’t get the comprehensive amnesty, they are going for the piecemeal version.
One advantage to the Feds of granting citizenship is that the IRS can tax their income, even if they go back to Mexico.
Which they won’t (go back).
i always hear that we might as well make ‘em legal so we can tax ‘em but i’m not so sure about that b/c isn’t there a poverty threshold? what’s the poverty line and how many are above it?
Go easy on my subject matter, please.
Emperor Norton II, Emperor of the Inland Empire and Protector of Mexico
No one ever explains why having them here is such an outrage. What damage are they doing?
Okay, how can I start?
They suck up TONS of governmental resources that should be going to our needy first. They get free medical care, food stamps, education everything…that WE have to pay for. I am sick and tired of seeing pregnant Mexicans having baby after baby when WE have to pay for it. They are taking advantage of our generosity while at the same time, disrespecting us, not learning English, staying separate and having allegiance to Mexico first.
I’ll stop there with that even though there is MORE. Not to mention all the good Americans being denied a job because they are not Latino. We are truly abandoning our workers because we are too weak to speak up.
I work for DHS, and I have seen the rap sheets for many illegals. Mind you NOT ALL have one, but there are MANY who have extensive and even violent criminal histories. Spousal abuse and DUI are the most common charges I have seen. If the government pushes through an amnesty bill, it should, at the very least, include provisions for criminal background checks on ALL who apply.
RE: I think you can assume that I don’t. I’m a Ron Paul supporter. You may want to take a look at that piece I posted. Very chilling.
The WSJ ran a 39 installment series of articles tracing the evolution of the Clinton’s climb to the Presidency from the crooked land deals in AK to Billy’s pardon’s of con-men financiers.
The fact that they are where they are, speaks volumes about
the brain dead nature of this electorate.
Wall Street Electorate
Hillary is Wall Street’s favorite, just like bush was in 2000.
Do we really need to show up at the polls this time? Sounds like everything has already been arranged.
so if they dump US obligations and the bond rates spike, won’t they then come back in later and buy them up when the rates are much higher?
I read a commentary that the more the US $ drops in value, the higher the US stock market indices (multinational companies) will go. However the valuations are pegged to a lower $. So the columnist said it’s better to buy precious metals and mining stocks.
This article suggests otherwise. Do you recall what happened to the Asian Tigers? The devaluations caused foreign capital to leave their shores en masse.
Don’t you remember in August how the bonds rallied and everybody on the street and some on the HBB called it a flight to quality?
They sold at or near the top. The average sale price at the time was yielding 4.45 - 4.65% on 10 yr treasuries.
Well, I think a 25 pt. gap on the nasdaq futures is worth shorting too, at least for a scalp.
LOL,
You go young lady.
Yo mama. Having a great day!
“…so if they dump US obligations and the bond rates spike,…”
Long bond rates appear contained. Pundits have worried about the scenario described above (foreign creditors sell off / long term Treasury yields spike) since the mid-1980s, and it has never happened. Therefore I suspect it cannot happen.
Central banking trick: Balance inflation fears with recession fears to keep a lid on l-t T-bond risk premiums.
Bond yields fall as US recession fears grow
By Michael Mackenzie and Saskia Scholtes in New York and Eoin Callan in Washington
Published: October 17 2007 15:29 | Last updated: October 17 2007 21:24
Bond yields staged their biggest decline in more than a month on Wednesday as fears grew that weakness in the US housing sector would lead the nation into recession.
http://www.ft.com/cms/s/d3a57448-7cb5-11dc-aee2-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fd3a57448-7cb5-11dc-aee2-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus
if this keeps up there’s some hope that Treasury yields won’t suck forever..
hear, hear!
unfortunately, I think there is still more selling in the offing …
So, will BB continue cutting rates? Recent developments suggest otherwise. Does anyone remember the Asian Crisis and the Thai baht?
Yes, and this is why deflation will not happen. Deflationists talk about wealth destruction but there are trillions of dollars waiting to pour back into the US in the form of Treasury redemtions. Fed will have no choice but to monetize debt and inflation will rage out of control. No deflation!
“Fed will have no choice but to monetize debt and inflation will rage out of control. No deflation!”
Do you include housing in that statement?
No. Housing is bought with borrowed money, so it is a leveraged bet and IMO leveraged bets will do badly because credit will tighten. Housing will revert to the mean while other things (food, fuel, precious metals) inflate.
CPI is up again, no inflation we have to cut rates.
Saw an article this morning that metals trader is one of the hottest job markets on wall street. Much as i love to hold the yellow stuff in my hand, I can’t agree with you that it is a market without significant “leverage”. Like houses, gold is in the long run a depreciating asset. It doesn’t have the carrying cost of a house, but there is some cost to get it, hold it and trade it. Hot money only goes into it expecting a speculative gain, not a long term return. I personally have no visibility of how much leverage there is in metals, but so many speculators are talking about it I have a gut feeling there is a lot. I also wonder how everyone can agree that assets are in a general bubble and not think the super-commodity is immune.
“not think” = think
Asset pricing (capital with yield, which is what watcher is basically talking about) is completely different from consumable pricing. Remember in the 1970’s we had high consumer price inflation but a terrible bear market in stocks. But house prices kept up with inflation because wages did too. Not this time.
“But house prices kept up with inflation because wages did too. Not this time.”
The U.S. economy is missing those union contracts with negotiated COLAs.
Right, there will be no wage inflation.
Oh, there is wage inflation–they’ve been reporting on it since year–but only on the upper income levels, professions that were highly compensated already.
It seems, however, that inflation of luxuries has been running apace or even higher.
So the income statement affluent may be spending it faster than it comes in.
My favorite FB (gf’s father) was forced to take a 15% pay cut, in Euros, though of course the dollar went down 20%. Which may help him pay his mortgage but means he will get slammed on everything else (plane tickets, clothing, food, cab fare, phone calls, and the high consumption lifestyle at home).
This clown wants his 18 yo son to go into investment banking and pay off his mortgage. Btw, there was no college fund (on 200K US a year!!), so he is going to a local community college in the Southeast. Ummm … good luck with that.
wait a minute.. it’s early and my brain is still fogged..
But if some Japanese guy buys a Treasury, it costs him cash. If he then redeems the note, the cash goes from the US back to Japan. Japan would then have the excess cash, not the US, and the US economy would have less cash money circulating than before.
But if he wants to spend the money in Japan he has to sell the dollars he receives and buy yen. Selling dollars to buy yen/yuan will pressure the dollar.
there are trillions of dollars waiting to pour back into the US in the form of Treasury redemtions.
what did you mean by that? Is the $$ trillions coming from the exchange rate?
And who is selling dollars. People are lending money to the US when they buy Treasuries. When people redeem them, they “call” the loan and the US repays the money.
cripesallmighty, it gives me a headache just to see people trying to figure out the moves and the consequences. No wonder the current finacial system is a joke.
All I know is, buy low, sell high.
Palmetto,
The art of this is to determine the derivatives or dirrection.
LOL, James, I know, I just don’t understand it. Never have. All I want to know is, if I’m trying to leverage elephant turds against Cuban cigars, if the sun shines out of the elephant’s a$$ when it drops the turds, does that mean a double top will form and I should go long cigars?
Kudos to those who understand the game. I just don’t like the idea of my money evaporating if some trader in Japan farts.
Everyone loves the smell of their own money, cashed out.
LMAO, a buddy of mine once said if he had enough money, he could clean up the drug dealing in the slums. He gave me a scenario where a dealer comes sidling up to the car saying “What can I get you, man?” He’d sit there and ask for a pallet rack or some such mundane item and hold up some money. He said he thought that within a week or two he could have all the drug dealers running around looking for pallett racks and trading pallet racks with each other, not to mention stealing them off job sites and then eventually making pallet racks for re-sale.
Oh, forgot to mention one important point of his scheme: he’d pay more for pallet racks than anyone was paying for drugs, thereby taking the profit motive out of drug dealing.
And there would be turf wars for pallets, including drive by shootings at the local Home Depot.
We would have to appoint a Pallet Czar to clean the mess up. There would be committee hearings on the hill. Bu$h would hold a press conference to discuss programs created to keep kids off pallets. We would then have to go back to the neighborhood and offer big bucks for drugs so that the “pallet sub-culture” would get stopped.
On Hwy 99 in lonely Pixley, Ca. there used to be a 24/7 Pallet store that bought and sold them, Pallets being of importance during harvesting season.
I always wondered what sort of person would get a hankering to do some pallet horsetrading, @ 3 a.m.?
Pixley, is “Green Acres”
“We would then have to go back to the neighborhood and offer big bucks for drugs so that the “pallet sub-culture” would get stopped. ”
The “War on Pallet Racks” is unwinnable and is a violation of our civil liberties. Vote Ron Paul
Legalize medicinal Pallets. Have some compassion for the afflicted!
and to top it all off, you can’t even get high on pallet racks….
> LMAO, a buddy of mine once said if he had enough money, he could clean up the drug dealing in the slums.
Kinky Friedman’s “5 Mexican Generals” plan to stop illegal immigration via Mexico:
That plan, you’ll remember, called for giving Mexican officials large sums of money and taking back some every time someone illegally crossed the border into the United States.
http://www.mysanantonio.com/news/metro/stories/MYSA070605.01A.kinky_gov.3dfc3aa4.html
BB shouldn’t have cut rates the first time, but he did.
He’s using the exact same language this time as he did last time. He remains “ready to act”, or whatever. That implies that he’ll do the same thing. Consistency in language = consistency in action.
That said, I was wrong about him last time, so I’m probably wrong this time too.
Hat tip to Aladinsane, Hoz (even though he shoots cats), and the other gold bugs who had this pegged.
Bond market miracle: The yield curve is dropping in tandem across the full duration spectrum…
http://www.bloomberg.com/markets/rates/index.html
“What I want to know is which of you guys is putting up the bandit Ron Paul signs all over Point Loma and La Jolla.”
i’m seeing them all over East County too. In fact, I’m seeing more Ron Paul signs and bumper stickers than anything else.
Except for my vehicle which has a Stewart/Colbert 2008 sticker on it.
Funny that…
Tijuana-adjacent becoming fiscally fit.
Colbert/Stewart. The debate at the UN with Ahmadinejad would be funnier.
Cascade…
http://online.wsj.com/article/SB119258727851561561.html?mod=todays_us_page_one
It’s very difficult to feel any sympathy/empathy for anyone in that story. The borrower was just an idiot but the Morgan Keegan guy was a greedy fool who deserved what he got.
“Late this summer, Mr. Rodriguez sat on a courthouse bench after his bankruptcy hearing. “I’m under a lot of depression to tell you the truth,” he said a day earlier, tears brimming in his eyes. A worried Mrs. Rodriguez said she feared her husband was suicidal.
Soon afterwards, the couple had vacated their home of 22 years and moved into a low-income apartment in northwest Denver.”
And so it goes….
Very sad story, despite the bad moves, I can’t help but feeling some compassion for the guy. Hopefully he will recognize that getting out from under this mortgage is probably one of the best things that could ever have happened to him.
This is the hill that nudged the brake that rolled the trailer that hit the car that lost the job that defaulted the loan that trashed the fund that was backed on the house that Jack built..
Oct. 17 (Bloomberg) — CIT Group Inc., the largest independent commercial finance company in the U.S., reported a third-quarter loss of $38.8 million, dragged down by costs of closing its subprime home-loan unit.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aktFBjp_Ykoc
He11, even with only $ 1800 a month take-home he shoulda been able to make a $ 700 /month note in order to keep his home of 22 years….it costs that much to rent a decent place. Now, they say he’s living in shame in some apartment somewhere ??
I don’t get it. If he can pay the local rents he should be able to pay a $700.00 monthly nut in order to keep his home.
He filed BK and most certainly got alot of his debts rescheduled or written off….with an $1800 / month income he surely passed the Means Test.
Even without filing BK he coulda still said frick the credit cards for awhile, done a “debt management”, turn the keys to the unpaid-for-car into the bank, got a $ 1000 car and marched onward while maintaining his roof over his head….
$ 700.00 a month for housing shouldn’t drive anyone to BK and foreclosure. I have been paying that and more for rents / mortgages since I was in college.
I was talking to a realtor last night about how the housing market is going in Prince William County, VA. She stated things are getting worse by the day. She has attended several seminars on how to deal with foreclosed homes and the banks who own them. She also stated that the banks are rewriting on how houses are to be shown. For example all the utilities are shut off, using different lock boxes that realtors can’t access. Making demands at the closing table to the buyers asking for more money. She stated this is new territory everyone is facing. She told me a story of a couple who moved from Rhode Island and renting a townhouse and on the second day that the couple was living there the house was foreclosed on and they had to find another place to live (the couple lost their deposit on the first rental).
I have two questions for everyone.
Are the banks making up rules on selling foreclosed homes?
Is it legal for the banks not to follow standard MSL listing rules for each state?
” Making demands at the closing table to the buyers asking for more money.”
This is how legal systems and business systems break down. If that happened back in the days of the Wild West, the body of the bank representative would be kicked into the street through the swinging double doors of the saloon.
Actually, attempted shakedowns by the lender at the closing table were a fairly routine tactic here during the 80s recession/housing meltdown. Some people I knew cried, called relatives, and came up with the cash. Other people I knew cried, cursed, and walked. But that’s a really brutal decision to be forced to make after you’ve given up your previous housing because you _thought_ you were gonna be moving into your next home.
I do think pulling out the Colt and plugging the shakedown merchant between the eyes would have more of a deterrent effect than crying.
Luckily, this time there is ample supply. A good “fuck you”, counter offer with $10K less, and sweep out the door like Queen Beryl (or Jadis), dragging confusing GF behind me would do it…
Exactly - when they try it, your offer goes down by 2x the proposed increase. They’ll learn fast.
And do not give up your current housing before closing in a market like this, unless you’re prepared for a long-term hotel stay.
they did house closings in saloons in the bad old days?? LOL. actually, in the 1920s, only 2% of houses in the US had mortgages. It was brave new territory for the banks. Prior to that, very few private mortgages, people could build their own houses very cheap, they could buy lumber from a local sawmill or purchase it for very little, no building codes or inspectors, etc. Everyone built their own home, for the most part (hired local workers who were not specialists, or had faily help). AT least that’s how it was out here in the West, can’t really speak for other places.
faily = family
It’s true that mortgages were not used as much through the 20s, but then they also did not lose half their income to the government.
It’s not just bigger houses and more amenities that makes housing less affordable- it’s also the terrible impact of extremely high taxes on personal income.
It’s also that they give you a tax kickback for taking on the mortgage.
Btw, people didn’t get rich under the low tax system. They were being ruined regularly by bank runs, stock market panics, robbers, downturns, disabling injuries, deaths in the family, and so on.
Even in mid-20th century, many midwesterners/farmers still built their own house. You need permits out the wazoo now. Fortunately, I know a recently graduated mechanical engineer and an architecture student. Heh heh.
“Are the banks making up rules on selling foreclosed homes?”
Why not? They made up the rules for selling housing in the boom. The rules are: there are no rules anymore.
I’ve noticed. Looks like “markets are poised for a rebound” today. Good grief, Charlie Brown.
The markets are always poised for a rebound the day after a 100pt selloff on the DJIA. Dead cat bounce effect, ya know?
To be fair, the Intel/Yahoo numbers after the bell yesterday were pretty good, especially the Intel forecast and especially especially their non-US prospects.
“…Intel/Yahoo numbers after the bell yesterday were pretty good…”
But completely irrelevant. What minuscule share of the cap value of U.S. Inc. do these two companies represent?
That is what I said to her. They were one of many who started this messs
I’m a former realtor in OH and banks can make up any rules they want. If they list in the MLS they do not have to use a standard lockbox, they can refuse showings, they have their own contracts, etc. Sometimes they’ll wait a month to even give you an answer back on a foreclosure offer. Anyone buying a foreclosure would have to pay to turn on all the utilities and then pay to have everything re-winterized and turned off again, just to get a home inspection. I always discouraged my buyers from buying foreclosures, because basically you don’t know what the h*ll you’re getting. There’s scary, scary things buried behind those walls, in that basement and on that lot. Banks do not have to give any disclosures, so it’s buyer beware. Mostly it’s buyer get screwed. You think you’re getting a real bargain until you find out that to repair the hidden problem it’s going to cost you $50k. Had a house up the street from me 5 years ago that went into foreclosure. It sat empty for 15 months. The walls were covered with mold. The septic had to be replaced by county standards…cost $20k. None of that was ever told to the buyers. Everyone be careful out there with foreclosures. They are definitely the lowest of the substandard housing. Most problems come from them sitting vacant for up to a couple years. Believe me, houses deteriorate fast when no one lives in them. Banks just want to unload them and buyers get left holding the bag.
Same here up north of you……no disclosures, no utilities on, no nothing. Buyer beware big time. And then they even demand that the earnest money be held by their realtor. I’ve always thought that to be outrageous and don’t even bother with bank repos just because of that.
Not so much here in the Tampa Bay area. There’s an excellent group of realtors that concentrate on bank repos here. They dislcose anything and everything, because they depend on repeat business from investors. Very decent folks, but they’ve been doing this for years.
They need to come here to NVA to give some lesson learn tutoring.
Investment value of a foreclosure without disclosure = land value minus cost to raze the structure. Anything else is speculative.
I say let the foreclosures rot while on the banks’ books. There will be so much desperation between the homebuilders and sellelrs that need to get out of their mortgage why even deal with the banks. Let THEM eat cake!
That type of stuff is why repos typically should sell at a big discount. The thought of them selling anywhere near the ‘normal’ market price is silly.
if i owned a zillion houses for sale, i’d sure make the rules.. banning Realtors might be one of them.. and maybe people with tattoos as well.
I think it shows there are idiots everywhere, including the banks’ repo departments. Unless they invited dopers to live in those houses, the banks couldn’t pick a strategy to more rapidly lower the value of the places they’re stuck with. I’m guessing they still believe a recovery is just around the corner, and/or their properties are “special” so they’re not going to give them away.
The foreclosure we bought here in 2005 was definitely down at the heels, but the utilities were on and realtor had access. We paid for a home inspection before we ever made an offer. The inspection turned up no show-stoppers so we bought the house.
My advice is don’t overlook a house just because it’s a foreclosure. But only buy one if it’s well below the price of similar properties, and you can get a home inspection before you make an offer. Oh, and whatever you think your fix-up cost is going to be, double it.
Good advice, Bill. Folks can drink as much “free market/private sector efficiency” Kool-Aid as they want, but, banks are beauraucracies just like any other. They can be very slow and difficult to negotiate with for that reason.
The good news is that they tend to let go at the absolute bottom. I suspect all their shady practices actually contribute to it - they play hardball until they wind up on their knees, kissing our collective a$$es for pennies on the dollar.
If a bank doesn’t want to cooperate with buyers by giving them access to the property and allowing a valid inspection process, fine. Maybe a fool will stumble along and bite.
This is the same old story; if you don’t (or aren’t ALLOWED) to do reasonable and thorough “due dilligence” on an property (or any other investment for that matter) you’re crazy if you think you’re doing anything else than simple blind speculation.
Geez, you’d think the expression “buyer beware” is some kind of closely held secret!
RE: Are the banks making up rules on selling foreclosed homes?
Make no bones about it…these bank work-out department rep’s are the mean-azz, pit-bulls of the lending world.
It’s dog eat dog, and these boys are gonna get whatever meat is left on the bones of the corpse.
Many of the dudes I used to work foreclosure assignments with all carried concealed guns.
Quite a shock to all the namby-pamby, Pollyanna Soccer Mommy’s and their emasculated SO’s who are just accustomed to dealing with the well-coiffed and attired who are the smiling faces in front of the collection curtain.
hey, as a long time reader (since March ‘06) I know i have read about this happening to tenants before, my question is, how can the renters protect themselves?
Are there any links to contracts, or articles that I can send along to a few friends that rent homes in what I believe are sketchy bubble markets like IE, SF and the likes.
Much thanks!!
Celeste
Celeste it be,
Friends don’t let friends rent in the Empire…
Emperor Norton II, of the Inland Empire
1. Have your deposit put in an escrow account allowing you to protest before any attempt to withdraw it.
2. Make sure there are no NOD, NOT, or other such notices on the property before you move in, and check monthly to make sure none are filed - if they are, figure out what to do with the LL right away, and don’t assume you’ll get a dime from them from that day forward, no matter what they say.
3. Insert in the Agreement that in the event of foreclosure, you will be awarded liquidated damages of 5x monthly rent to compensate you for the cost of forced moving and other things, and add an indemnity for any costs of collection, so if nothing else, you can give it to a collection agent and they will hound the LL for eternity trying to collect your LDs.
The easiest answer is probably don’t rent a place if you can’t get info on the financial/mortgage situation of the owner. If there’s anything that bothers you, either don’t rent it or see if the owner will agree to put the deposit in an escrow account. You’d still be taking a risk of getting kicked out in foreclosure, but at least your deposit would still be there.
try number two: my post seems to have been swallowed:
Sean brings up a very good question:
I have quite a few friends who are renting in the IE, near Perris, and Bay Area, and I was wondering if anyone has any good information or links to ways thay can help protect themselves from this kind of forclosure happening to those renting homes?
any help would be greatly appreciated.
I have been reading since March of ‘06, when this blog “saved” me from buying a condo for which I nearly put money down.
Celeste, it varies from state to state, locality to locality. There are no national laws or regulations that govern this issue. I will bet a baloney sandwich that in a place like San Fransisco, there are ordinances that favor renters. A lease is like any other contract - it doesn’t matter who owns the property - if a bank forecloses they have to honor a rental lease just as they are liable for any back taxes at time of foreclosure.
In, say, Orange County, it’s probably the opposite. Renters do not have constitutional rights in places that are “conservative.”
conservative politics or not, I think the numbers on San Francisco are 60% renters and 30% owners.. I forget what the missing 10% is.
Politics could conceivably have nothing at all to do with it.
SF’s laws heavily favor renters.. no need to mention rent control for the last 25 years or so..
Thanks guys, Sweet advice!
now I’m just waiting ’till about 2014 to buy again, keep up the informative posts
Celeste
- one more question, where is the best place to look up NOD’s and such? is it for each county?
Best thing: month-to-month rental agreement with a small deposit, say $300. That way you don’t have to deal with an escrow account which in CA is in the hands of the LL.
~Misstrial
Don’t you have a signed contract the day of the closing? If the buyer doesn’t keep their end (unless for a reason in the contract) the buyer loses their earnest money. If the bank doesn’t keep the contract, especially if you are out costs like closing and inspection fees and a moving company, seems like you have great grounds for a lawsuit.
Sit there very calmly. Tell them the original legal document will be honored or your attorney will file a lawsuit for damages. Why people sign loan docs that are different then they expect or pay more than agreed upon is beyond me. You have rights. Especially the right to be a pain in the a$$ to the bank. Use them!
Oct. 17 (Bloomberg) — MGIC Investment Corp., the mortgage insurer that abandoned a bid last month for rival Radian Group Inc., posted its first quarterly loss after writing down a joint venture that invested in subprime home loans. MGIC said it won’t be profitable in the fourth quarter and all of 2008.
Record U.S. foreclosures and rising defaults drove up claims at MGIC, the largest publicly traded U.S. mortgage insurer, which hadn’t reported a loss in 16 years…. “They got stuck selling assets at highly depressed prices,” KBW Inc. analyst Geoffrey Dunn said before the announcement….
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aHlhtFJ79Pzo
Shorted them 3 months ago. Didn’t look so great for awhile. Ahh a bright ray of sunshine.
Goldman…
http://www.321gold.com/editorials/supkis/supkis101607.html
“If everyone from top to bottom lies, the system collapses because everyone is cheating each other. This usually happens when the con men take over the banking systems and end rules set up in response to previous collapses.”
Thanks, wmbz. I was going to make a simply one phrase post this AM: “Impeach Henry Paulson. Pat Paulson for President”.
That’s an excellent article and spot on about Goldman Sachs. Indeed, they are fraudsters and should be treated like Mafia gangsters.
The above quote from the story illustrates why I feel the US is going to collapse financially. The fiat currency is only as good as the confidence in it, and that confidence is fast eroding.
After Paulson went to Treasury, I remember Ben had some post that contained a pronouncement by Jan (A$$)Hatzius, an economist at Goldman. I said that US monetary policy was now being dictated by Goldman, for the benefit of Goldman.
Anyway, I’m not the sharpest tool in the financial shed when it comes to all this exotic crap, but IMHO, the current system is gamed as far as it can go. We need a new one and a collapse, though disconcerting, would be OK with me if a sensible, equitable system rises from the ashes.
I am with you. And while we may want to know a bit more than buy low, sell high, I do not think that we need to have complex algorithms based on god only knows what data, trading our life savings away at a whim or whatever. These quants and their ilk, are not brilliant, the models are flawed, the players are greedy, and I am PISSED OFF!
I keep repeating myself, but this is exactly why some of those Wall Street firms need to flat out die an ugly financial death. No merging with another WS firm, no buyouts, nothing. And throw in a few perp walks to boot.
I think even one perp walk of one white collar thief with the obligatory chrome bracelets and cameras rolling would shake things up rather dramatically but I’m not holding my breath.
Nah, exeter, no one seemed to be chastened by what happend to Ebbers, the Enron gang, etc. In fact, it seems to have gone even more over the top.
Actually, we do need a mass rounding up of all the players involved. And then we could outsource our prison industry to Mexico. What’s wrong with that? These fraudsters love outsourcing. This would solve a number of problems. First, it gets all the perps off the streets and out of the country in a big way. Now, Mexico is very worried about the housing and consumption slump in the US because they aren’t getting as much money. They’d like us to do more business with them. Send the perps to Mexico.
I’d have to agree with Palmetto. There’s always one sacrificial lamb, maybe two. The rest skate with fines or go scot free. Go after ALL the big fish, then the smaller fish waiting in the wings might get the message.
Not holding my breath either.
There will be no real prosecution and what to learn from this ordeal? Be on the front end, have no integrity, and get out and leave the sheeple holding the bag. THAT is the lesson I am learning here. This sucks.
I have a hard time investing in this market….
“past performance is no guarantee of future results”,
“housing always goes up”,
revising of last month’s numbers, etc…….what the heck? How is a person supposed to invest in their future if the owners of the game keeps cheating. Every time these big bankers get record bonuses, I cannot help but be angry that they have dipped into our funds cookie jar (and probably will again this year) and reward themselves. They are basically living off of realized gains money while all I get is a monthly statement of unrealized gains which can vaporize at anytime between now and my retirement.
I’m just sick and disgusted of all this B.S. in this country.
ANT
Amen, ANT. Amen.
…and one by one confidence in the system is lost. Big trouble starts in small ways.
$239900 I’m Fed Up & I Want To Sell…… Any Serious Buyers Out There???
Reply to: hous-451429763@craigslist.org
Date: 2007-10-17, 6:35AM EDT
Immaculate 3 bedroom 2 bath POOL home in Lake Sarasota. Spacious and open floor plan with great views of the pool from the living/dining room, family room, and the master bedroom! Updated kitchen and bathrooms. 16″ Ceramic tile throughout. New carpet in bedrooms. Large screened lanai with newly re-marcited POOL. Fresh paint inside and out. Plus, a 2 car garage! This home is IMMACULATE and ready for new owners. Great location… Close to Everything! Best Value in Lake Sarasota. Asking $239,900… NO REALTORS!
–
“great views of the pool…”
God, people are sick.
Jas
NEW YORK, Oct 17 (Reuters) - Comerica Inc … a large U.S. regional bank, said on Wednesday third-quarter profit fell a larger-than-expected 10 percent, hurt by credit-quality problems related to commercial real estate in Michigan and California.
Comerica set aside $45 million for loan losses…. The increases reflected what Chief Executive Ralph Babb called “increased stress on our commercial real estate portfolios, particularly in Michigan and California.”
http://tinyurl.com/33k5rn
CRE lags behind residential RE and seems to be the last leg to fall out before outright recessions many times. We are definitely already in a recession in some parts of the country.
This is my favorite part:
Comerica said it moved to Dallas to be nearer the faster-growing states where it operates: Arizona, California, Florida and Texas.
Right, my friend the lawyer with the huge income is sucking up business left and right from them. They’re here in a big way.
Comerica still has their main back office operations here, but IMHO those 2,000+ jobs will eventually end up in Dallas as well.
Blano, I think they’ll still keep major back office ops here. This was a case of Babb wanting to go home. Of further note, CMA does not focus on retail lending, so it loan portfolio will mostly be hit by R/E downturn on developer side (and at that it’s not a big CRE lender). Loan portfolio has one of the highest % of corporate to total of any bank in the US.
GP,
Do you think the commercial/retail construction around here has been out of whack in relation to the economy??
And did you see in the Detroit News that the Wings are trying to figure out why they aren’t selling out?? Just had to laugh. I was outraged at Bowman’s attitude enough to send Terry Foster an email about it. Bowman is out of touch.
Haven’t noticed the commercial - what I find astounding is the retail contruction in Novi and Clinton Twp. Just what Hall road needs- another fricken mall.
As for the Wings - I wonder how many season ticket holders were lost in the past year.
Sorry…I meant retail only.
Sounds like quite a few were lost. The article talks of “thousands” of seats that haven’t been sold. Told Terry Foster they’ll still go see the Wings, but near their new living quarters in Dallas, Atlanta, Nashville, etc.
They moved to TX becuase Babb is from Texas. Simple as that. No reason they couldn’t have continued to run the franchise from MI. Also the net interest margin took a hit because of a big drop in non-interest bearing deposits, the reason for which they tried to palm off as people suddenly wanted to move to interest bearing. That’s BS. MI residents exited CMA as their primary bank because of the announced move.
You’ll probably not see this GPBlank - but try to get any young talent to move to MI…not happening. The good people cut their teeth there, then move on. It’s a place you want as a line item on your P&L, season your middle managers, then bring them home.
Good morning everybody…….
http://www.detnews.com/apps/pbcs.dll/article?AID=/20071017/METRO/710170321
Shock among shocks. Bay area couples can’t make it on $50k a year:
http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/10/17/MN0ISQEFP.DTL
Welcome to the new middle class: The working poor
Sounds like the two kids wasn’t a great idea if they’re going to be blue collar workers in the most expensive city in the U.S. This is not difficult.
Having two kids shouldn’t be a luxury. It also shouldn’t be free, and I’m not for socializing the costs of raising children. But even blue collar workers should be able to afford to raise two children in any American city if they manage their money well. If they can’t, the cost of living is out of control, which is the situation we’re in now.
Lucky bastard…with a $750 rent in SF he is getting one hell of a deal… a studio or a garage in San Jose is $850..he should be able to live like a king on $50K …in SF you don’t even need a car
:-) he must be eating out every night
My GF and I were living on $50K in a $724/mo apt last year in Gainesville. No problem (but no kids either).
We were saving, but I could imagine how money could be tight. No trip to Europe if we had had kids to feed.
I think they’re around a lot of big spenders. Tends to make one confused.
Make no mistake, though–even in this town, with all the real poverty and the lower cost of living–you do feel poor at times. Thinking about the possibility of ruinous healthcare bills (even with disability and health insurance), knowing that you have to go years between replacing cars and computers, having to economize on things our parents take for granted, or opening the paper and reading about all the spending that people do in the Lifestyle section. Heck, even buying clothes at the mall (this is why I prefer to go to Goodwill first). You aren’t rolling in it at $50K.
I always tell myself I don’t need STUFF because I have philosophy.
STUFF is a disease.
“Most Californians live on less than $50,000,” said Michael Shires, an associate professor of public policy at Pepperdine University.
They do?? They survive?
I’da thought the premise of this plea for a raising minimum wages and increasing social programs would be that people are dropping like flies..
They survive with the help of the “financing of the last resort:” a pocket full of nearly maxed-out credit cards…
If you’re struggling to survive, credit cards are definitely not something you can afford.
It is much better to tighten the belt and cut down your expenses until the next paycheck, than it is to worry about paying off your ever increasing cc bills.
Welcome to the new middle class: The working poor
I’m surprised that more Californians aren’t bailing for flyover country. They”ll earn the same pay (maybe even more) and the cost of living is just a fraction.
Give them time as “reality” will hit them with increases taxes, cost of living rises. Very costly living in the sunshine state as wages for the middle class are stale at best. For those who can move they will; while others are just simply trapped and can’t get out. Recession/depression will hurt California’s middle class the most.
And some just won’t move. We hve some friends in San Diego county. They bought their house back when they cost 100K. During the peak of the bubble realtors would cold call and tell them they could get 500K. They are unskilled and have menial jobs. I told them two years ago to bail out of California. They could buy a nice place out here for 200k (much nicer than their 40 year old shack) and save the balance for retirement. Did they go for it? Heck no! And now their shack would probably only fetch 350K, and will continue to fall.
With taxes what they are in CNY, I wouldn’t want to raise 2 kids on a $50k income here either. The $250-$300k homes might appear cheap but that’s before the $6000-$10000/yr tax bill. Landlords pay mortgages and those giant tax bills, and rents reflect that fact. The war on the middle class is national.
I have never thought of a 300K house with a 10K tax bill as “cheap” or even affordable for the middle class. Maybe 150K nwith a 1K tax bill (you can get that out here)
$150k in (Buffalo) WNY will land you a $3k tax bill. My aunt’s $250k house in Syracuse hits her $8k/yr.
The unbelievable property tax bills in upstate NY kill any hope for the region’s recovery. With a great, affordable housing base, and access to the Great Lakes (plenty of fresh water0, they ought to be positioning themselves to benefit from folks looking for affordable options. But instead, they continue to beggar the middle and working class instead.
Oh. Oh. OH!
(waves hand)
I just paid my property tax bills.
Ha! The specifics of this post got cut off.
I’ll take that as cautionary from the internet gods.
In summary, they were next to nothing, and included a lot of nice holdings. Rural Central CA.
In light of the Bear Stearns Story
Chinese Banking
http://www.stockmania.com/index.php?showimage=70
interesting that not only can the foreign treasury holders start to march US yields higher through net selling, they also have the “liquidity” to begin the transfer of wealth in ernest by purchasing highly valued US assets including banking.
The dollars are coming home to roost, these same dollars that fueled the consumption rate for so many years being used as a missile strike on treasuries and deflating bubbles.
Really enjoyed the comment by OPEC yesterday after we asked for increased production, they say… its all good, global demand looks just fine.
Keep it up Kahuna. You deserve thanks for these. They are funny as heck.
Thank you! Maybe StockMania.com will be the next Google. Ha, well, probably not, but it is nice to hear someone enjoys them.
kahuna,
We just happen to have a vacancy for house cartoonist in the Empire…
Lemme know asap,
Emp
Two Items:
Item #1: All of these solutions that the Fed, Treasury, banks, etc are coming up with to “solve” this problem are not going to work. People keep saying: “like the RTC in the ’80s”. Ahem, the RTC sold those properties from the failed S&L’s. They didn’t mark-to-weirdo or create a strange fund or anything like that. They sold the crap for what it would bring.
Item#2:
I called a friend of mine who lives in Fla. He said that when I left Fla I sold my home at the top of the market. Great! I did well.
My Fla Friend is a finance type who once tried to sell me on an ARM for my house. He said I could use it to buy a car (he did), furniture, etc. I was appalled that a house loan could be used to buy goods that wouldn’t last anywhere near 30 years. Our conversation of a few nights ago was informative. He is saying that the market died and stayed dead since I left. It was starting to get moving as of late but barely. He is an optimist so he did term it the beginnings of a recovery. I say it’s a dead cat bounce of a failed market, but I wouldn’t tell him that directly. We’ll see.
He is rather wealthy and would presumably be able to weather higher rates and is most assuredly a prime credit risk. So, what will ultimately happen in Tampa, who knows? If I learn anything else I’ll let you know.
Roidy
P.S. I’m glad he is not bankrupt or in severe problems due to this. He is a really great guy.
‘People keep saying: “like the RTC in the ’80s”. Ahem, the RTC sold those properties from the failed S&L’s. They didn’t mark-to-weirdo or create a strange fund or anything like that. They sold the crap for what it would bring.’
I was paying great attention when this was going on in the 80’s. It was all around me. The press called it the S&L ‘bail-out’, but there was no BO. It was a liquidation. RE prices dropped like a rock. The S&Ls went away. This event is 50 times bigger, IMO.
Right. My firm’s business was heavily FDIC/RTC and I even worked briefly for a RTC contractor on some bankuptcy stuff (the government’s claims in consumer and small business chapter 13s and 7s). This was straight liquidation. You’d get these printouts every week of every conceiveable type of asset - land, autos, office supplies, etc. It was excellent steady work for law firms and auctioneers, that I can tell you.
Ah, Those were the days.
Treasury Secretary’s Son Agrees To Pay Half of RTC Debt
The Washington Post
WASHINGTON
Lan Bentsen, son of Treasury Secretary Lloyd Bentsen, has agreed to pay about half of the $54 million in debts that ventures he controls owe the Resolution Trust Corp., the federal agency that cleans up failed savings and loans.
Terms of the settlement call for Lan Bentsen, a Texas real estate investor, to pay the RTC $3.4 million and to turn over his interests in a number of real estate projects that bring the total recovery to $28 million.
The settlement was reached in February and made public under a Freedom of Information Act request filed by The Washington Post.
Bentsen’s debts to the RTC are the result of a series of real estate investments he made during the early 1980s using money borrowed from University Savings Association in Houston, whose bad debts have been taken on by the RTC.
March 30, 1993
Based on all the talk from Treasury, The Fed, it’s become quite clear to me that these guys (Paulson, Bernanke, Wall Street thugs) are working to prevent panic. As I’ve insisted here since early 2005 and elsewhere beginning in 2004, this thing has got to hit a wall. When prices of schlock like shingle shacks DOUBLED in old, declining New England mill towns where most of the younger folks are leaving along with what few jobs there are left, there is no friggin way prices should be going up, no less doubling.
I often converse with my brother who still lives in the VT town we grew up in and he frequently asks me “how long will it take for the fallout of bad lending to work its way through the system”. What he’s really asking me is when will RE resume an upward trend. For a long time, he drank copious amounts of RE Koolade but since I’ve been emailing him hard truths about RE, he’s finally coming around a bit but his denial is still there. He wants to believe that an RE bust cycle is 6 months to a year and then happy days are here again. I think he’s just coming to the realization that it will take years to work through the inventory. He doesn’t want to look at the 50% price drops though. It’s too painful for him. He’s a real gentle guy I fear for his future as he is the typical demographic for the dis-located manufacturing worker. 48 years old with a crappy service industry job (thank you Art Laffer) who owns the shack he lives in and 50 unusable acres that he thinks is worth a pot of gold. I try to tell him that the only money in land is when you build value into it (i.e, subdivide and install underground, water sewer, etc) but his dwindling hope still seems to tell him that some sneaker wearing fool with a hole in his pocket will give him millions for it. It’s very sad in a way.
Yeah, New England real estate, although not bubblish in the sense of the coast cities, got as ridculous as the rest of the country. There’s no jobs here and you want how much exactly for that lot of land?? Raw land prices have been sticky recently - most should be $10K or $20K at most and no one can part with their bit o dirt for less than $50K.
Not to mention in VT at least it is now a phoenomal pain in the rear to aquire or own real estate. Instead of lowering the property tax rate, everyone *must* file for an income adjustment even if you don’t qualify for the adjustment. I’m not really sure I want to own real estate in VT again.
I think part of it is that Vermonters have bought too much into their “we’re special” mystic and the bubble has totally played into it. Of course some rich out of stater is going to come here and buy my special slice of paradise so I can be faboulously wealth.
RE: most should be $10K or $20K at most and no one can part with their bit o dirt for less than $50K.
To see the fallacy of a land shortgage in New England, just climb to the top of any mountain peak. Forested acres for miles and miles.
Yeah, the raw land seller’s want to burn both ends of the valuation candle.
$400 per acre for assessment purposes under an agriclutural highest and best use, until it’s time to bail to a southern state for retirement.
Then it’s a $50k asking price for a proposed houselot.
Lucky I’m not on the state assessment board. I’d give these “land barons” their due.
Everything’s assessed at the residential highest and best
ue.
Then you’d see the price of raw land fall.
“To see the fallacy of a land shortgage in New England, just climb to the top of any mountain peak. Forested acres for miles and miles.”
BULLSEYE!!! But the latte drinking, eurotrash driving fools are too lazy to climb up there look or just don’t want to know how SCREWED they got by a local. All the more power to the natives for robbing the metro-wierdos blind.
RE: All the more power to the natives for robbing the metro-wierdos blind.
Rock on brother…Only trouble is when your a native in the north country and your wife scaddles and takes half of the former homestead monies, to buy back in with a solo income is a bitch.
For Vermonter:
” Instead of lowering the property tax rate, everyone *must* file for an income adjustment even if you don’t qualify for the adjustment. I’m not really sure I want to own real estate in VT again”
Sounds like the NYS STAR tax reduction program. If you don’t set up the program when you first buy your property, you overpay every year until you do. I feel the same way about not wanting to buy again. Once I’m no longer tangled in their tax-aholic and pro bank ways I’m not sure why I’d make arrangements to return.
hd74 will probably have blood spurting out of his eyes to hear I’ll be returning to the land of generations of my ancestors once its done deflating: Massachusetts.
The only problem is I love NE and upstate NY. Even with bottom line house prices, the property tax snafu is enough to keep me from moving back there, when I’m too old for NYC. But I do love the Thousand Islands though.
” All of these solutions that the Fed, Treasury, banks, etc are coming up with to “solve” this problem are not going to work.”
Exactly. Reason being, they just are simply unable to do anything honest or straightforward about it. It’s gotta be another twisted game, because they don’t know of any other way.
Definition of insanity: Doing the same thing over and over, expecting different results.
He is saying that the market died and stayed dead since I left.
I blame you.
As NYCityBoy would say……
Hater!!!! : )
ROFLOL
philliygal,
So now I’m on your Blame for Florida Real Estate Crash List and Olympiagal’s Deferred Vengeance List, too? Wow! I’m getting popular with the ladies around here.
Roidy
P.S. I still need a tiara. Anyone?
I can offer nothing but a crown of loans…
EN2otie
Roidy,
There were a couple people I blamed last week, one was in Florida. Since you are a ladies’ favorite, I’ll give you the Florida Crown.
Tiara is on its way, as well as two dozen red roses for you to carry as you take your Victory Walk down the Runway of Crash Infamy.
smile pretty!
Roidy
Oct 17th 2007:
Good “Mourning” Messieurs Paulson & Bernanke…so the US economy gets damaged…what you & your families are going to go on the Hampton’s “potato soup” diet?
I can really sense the emotional & psychological torment your both currently suffering…your recent “get-together” luncheons with Sir Greenspent over at “Morton’s” must be horrific when discussing the financial impact on all those American “families” who are just starting to suffer the effects of bank loan resets…that has to really cause you fellows some deep personal pain… and to now realize the effects of your policy decisions is hurting both bankers and American consumers…must almost be over-whelming. It sounds to me like you fellows are not going to be all that cheerful having dinner with “Dicky Boy” Cheney in the new Halliburton Corp cafe in Dubai next year.
“…KAI RYSSDAL: The collective Washington economic wisdom about the housing market so far has been: everything’s gonna be fine. Both Mr. Paulson at Treasury and Mr. Bernanke at the Federal Reserve have said, more than once, that they thought the fallout would be contained. That’s the actual word.”
“But in a speech last night from the Fed chairman, and another one this morning from the Treasury secretary, we learned that might not be the case”
“Treasury Secretary Henry Paulson echoed Bernanke’s concerns.”
“Let me be clear, despite strong economic fundamentals, the housing decline is still unfolding and I view it as the most significant current risk to our economy,” he said.”
” the housing decline is still unfolding and I view it as the most significant current risk to our economy,”
Don’t misread Paulson here. When he talks about “our” economy, the “our” he is referring to is Goldman Sachs.
They have concocted the must elaborate and convoluted version of…
“there’s nothing to see here, move along”
…that is humanly possible.
I read this commentary in the Financial Times. http://www.nber.org/feldstein/ft101507.html
This Reagan, then Harvard economist thinks that shrinking the deficit with a falling dollar will help “growth and employment by raising exports and causing US consumers to buy domestic goods”, thus avoiding a recession. He then states: “a dollar decline by itself puts upwards pressure on the US inflation rate. But the overall inflation rate need not rise if the Federal Reserve sticks to its goal of price stability.” Finally, he says that “With appropriate policies, the dollar’s decline will correct the imbalances that threaten the global economy without higher inflation in the US or decreased growth in the rest of the world.”
Can someone explain if this outcome is possible? Is Feldstein implying that if the Fed raises rates, everything will be fine?
“the dollar’s decline will correct the imbalances that threaten the global economy”
Eff the global economy. I only care about the US economy right now. Only when countries clean up their own acts within their own borders, can they then cooperate with each other. Until then, “global” anything is just an opportunity for a bigger bogus con game. I’m in curmudgeon mode today.
I think he implies that with enough fudging with the statistics (especially the inflation statistics), everything will look fine.
and since when have economists said anything of value regarding the economy? They generally seem to be the most ignorant of all …
yeah why is there such a discontect with reality arent they supose to be giving the guidance. Its like they are in some cult where a blackmark would be put on them
RE,
“Can someone explain if this outcome is possible? Is Feldstein implying that if the Fed raises rates, everything will be fine?”
I really don’t know. It appears that he is saying the falling dollar will put upward pressure on interest rates. I assume he means long term rates. The short term rates -discount rate,Fed funds rate- are set directly by the Fed. The long term rates are a target that the Fed tries to maintain with variable success.
Roidy
Short-term rates are used to finance speculation, long-term rates to finance fixed investments. Basically, the structure of the yield curve since the Fed began its current campaign has moved dramatically in favor of speculators and against investors. A nice metaphor for the policies of the Fed since Greenspan took over.
just remember what happened in the Weimar era: people spent all their time speculating (feverishly exchanging their Reichsmarks as soon as they got them for something with more stable value) and as a result real production in the country declined to almost zero. Ben Bernanke thinks he can get the US out of a recession in the same way; prop up assets (stocks, homes etc.) and don’t worry about the real economy. He clearly spent too much time learning the wrong lessons about the Great Depression, and completely skipped all other history lessons
I spent a weekend at Bernankes…
Trying to lure him away to the Empire, until I realized there was no there, there.
Emperor Norton II
I think he’s saying that after a period of inflation if the FED increases rates to halt it the average consumer won’t be able to buy crap from overseas thus putting downward pressure on imports.
ie if you bankrupt the consumer inflation will moderate.
more big gov help=more punishment for taxpayers
And HUD is considering additional ways to move homes off the HUD inventory, including lowering down payment requirements even further from the standard 3 percent of the home’s cost — potentially as low as $100 — to attract buyers. Maggiano said borrowers will still have to prove they will be able to repay the loan.
“…potentially as low as $100…”
$100 = $0, for practical purposes.
Northern Trust says no thanks to SuperFund
http://tinyurl.com/2rulyw
i think they’d be smarter to play ball, even if only as a small, token gesture. Things look sweet now but the time may arrive when Northern Trust needs a favor.
Maybe, but Northern Trust has Mr. Paul Kasriel who studiously kept Northern out of this mess. I don’t think Mr. Kasriel would be inclined to come in now. From Oct 2006
“Housing Recession Isn’t Spreading?
October 31, 2006
Paul Kasriel
This is the nonsense that many of the talking heads are spewing. But that’s what it is nonsense.
Direct your eyes to Chart 1, which contains the year-over-year percent change in real personal
consumption expenditures. For Q3:2006, the year-over-year change in real consumption was
2.8%, down a full percentage point from its reading of Q3:2005 and the lowest year-over-year
growth since the first half of 2003. Perhaps it has nothing to do with the housing recession, but
the data say that growth in consumer spending, although not yet collapsing, certainly is
decelerating. ….” etc, etc, etc. going back years.
and more power to him… But here’s the thing:
To the extent that the Superfund is successful, the market(s) will stabilize and may gain strength.. This is a good thing for everyone, and will benefit everyone including Northern Trust.
Neighbors don’t soon forget those who were too busy or too tired to grab a bucket and help extinguish the fire at a neighbor’s house.
IMHO Northern may be positioned to pick up the pieces from a collapse. Why then should or would Northern try to assist the morons? Perhaps Mr. Kasriel regards the Superfund the way a reasonable person should regard the Superfund as a means to get rid of bad decisions.
I know the CDO market, I would not want to have any moneys exposed to long risk at this time. The Northern Trust Bank has always been one of the more conservative banks, I cannot even fathom the despair of other banks to ask them to join in a Superfund.
agreed, and imo, nobody in their right mind would willingly join this fund.. and none of them are.
The same thing was said about Bear Sterns when they refused to help bail out LTCM, that they might regret it later.
Closing eyes…
Clicking heels three times…
There will be no superfund…
There will be no superfund…
There is no superfund…
Wake Up : )
U.S. Sept. housing starts down 10.2% to 1.19 mln
WASHINGTON (MarketWatch) - New construction of U.S. houses retreated for the fourth straight month in September, the Commerce Department estimated Wednesday. Starts fell 10.2% in September to a seasonally adjusted 1.19 million annualized units weaker than the 1.28 million pace expected by economists surveyed by MarketWatch. This is the lowest level of starts since March 1993. Starts of new single-family homes fell by 1.7% to 963,000 in September, while starts of large apartment units fell 34.3% to 228,000. Building permits, a leading indicator of housing construction, fell 7.3% to a seasonally adjusted annual rate of 1.23 million. This is the lowest level of permits since July 1993.
and needs to be adjusted by10% ? for increased population since 1993
nes paw
August new home sales were at 795K, and a lower September number (post-credit-crunch) is in the bag. A building rate of 1.19 million thus appears to leave the rate at which new home supply exceeds new home demand to over 395,000 homes per year. I am sure I am oversimplifying this, but the magnitude of these numbers makes it appear the overbuilding merrily rolls along into the bust.
Does anyone in the REIC even bother to look at this simple supply-and-demand math, or is grade school arithmetic a bit over their heads?
Dutch Housing Bubble update:
A national thinktank proposes to dump the Dutch HMD, huge renter subsidies and transfer tax when selling a home. The report was published despite the fact that the current government has forbidden politicians and government workers to even talk about the subject (the H0word seems a threat to Dutch national security). The reason behind the report seems mostly that the cost of homeowner and renter subsidies in the Dutch system (more than education and healthcare combined) will spiral out of control in the next years when rates go higher.
In the proposal, some new subsidies/deductions (for everyone) will come in place of the old system, one of them being a subsidy on land prices for local government etc. for building on land that was purchased ‘too expensive’. The new proposed system sounds more fair than the old system which is extremely favorable for the highest incomes. There seems to be broad support for the new proposals, including from some part of the RE mob. I can already see the big land owners and developers drooling over how they can rig the new system to bring in multibillion euro yearly profits
The report thinks that the effect on homeprices will be very small, a 3-7% reduction, based on previous experience in Sweden (they got to be kidding, just 3% off after a runup of 1000% in some areas?). The report assumes for its calculations that without any changes, Dutch home prices would keep rising at 3% yoy for the indefinite future (very low compared to the last 15 years but still, didn’t the US ratings agencies also assume at least 2-3% yoy price growth forever?).
The article in the newspaper about the proposal also includes a picture with home price statistics (courtesy of our Ministry of Truth) from the last 40 years, ‘corrected for inflation’. This ‘proves’ that home prices in the Netherlands have risen just 50% from 1990 to the present in real terms. They do this while everyone can look up in the official statistics that the average home prices has risen nearly 400% over this period, and that is without correcting for all the huge distortions that keep the averages down (like dumping cheap rental properties on the market, splitting up huge homes in small and relatively cheap apartments, etc.). If we truly believe the 50% appreciation, inflation over this period must be at least 8% yoy instead of the official 1-2%. Now we just have to figure out which part they are lying about …
Moody’s says in talks with banks on SIV plan
Wed Oct 17, 2007 8:33am EDT
LONDON, Oct 17 (Reuters) - Ratings agency Moody’s Investors Service said on Wednesday it is in talks with the banks that have proposed a fund that aims to help structured investment vehicles, or SIVs, to avoid forced asset sales. Moody’s said in a statement it believed the creation of the so-called Master Liquidity Enhancement Conduit, or M-LEC, would have a “generally positive impact” on the SIV sector.
Bank of America (BAC.N: Quote, Profile, Research), Citigroup (C.N: Quote, Profile, Research) and JP Morgan Chase & Co (JPM.N: Quote, Profile, Research) said on Monday they were planning a fund that would buy assets from the SIVs in an effort to stabilise the asset-backed securities and commercial paper markets.
as I said here before, just wait for Moody’s to give this SIV fund a AAA+ credit rating and sell all the junk to bribed EU/China pension/investment funds. The fees that Moody’s gets on this one will easily offset the losses in clientele that resulted from the massive fraud of the last years.
Maybe to the EU, but the Asian nations have turned into sellers of US debt. Russia won’t have anything to do with our debt. Norway’s Sovereign fund won’t buy WalMart stock, why would they buy crap debt?
So forget about foreign purchasers, the end purchaser will be the US taxpayer.
yep, the global money is gonna sit this one out. America is now at war with itself…no combatant is going to be left behind.
What does that say about your situation when even the Russians won’t buy your debt?? (a little sarcastic here)
RE: What does that say about your situation when even the Russians won’t buy your debt??
USA Numba #1, GI!
the Asians bought into Blackstone, and Blackstone is trying to buy all the subprime sh** they can get their hands on (at a discount but still, ask the Chinese about the discount they got for the BX IPO). I don’t think the Asians have learned their lessons yet. Also, keep in mind that the recent Treasury redemptions are TINY compared to what they are still holding.
“Master Liquidity Enhancement Conduit” = fancy-shmansy word for bailout.
Damned if they don’t think we’re all dumb sheep.
“Master Liquidity Enhancement Conduit” = another plan that won’t work.
The basic idea is this: put all of your problems into one mechanism and then fix that mechanism. No way.
Roidy
Question for the FL folks and legal experts.
FL is proposing a system of “portability” which allows a resident to take the accumulated tax breaks they have on one home with them to their next home in FL. The result of this is that two people who buy the exact same home and the exact same moment can have dramatically different tax bills (depending on when they both bought their first FL homes and how much they sold them for).
Now, I know that this is a very bad idea, that’s not really what I am looking to figure out (although, any commentary is always welcome). What I am curious about; IS IT LEGAL? This seems to be a targeted tax on the young (as it is impossible that a younger buyer will have the same accumulated tax savings) and seems to violate equal protection laws. I am sure it will be legislated, but I would like the learned blog opinion. Can you tax 2 neighbors differently based on when they bought their FIRST home in FL?
no idea about the US, but something very similar is used in the current Dutch HMD system and yes, it is extremely unfair. The major argument in favor of it (from our conservative government) is that aquired rights (for huge tax deductions) are far more important than treating every citizen equal.
Wow, that explains alot about housing values in your area!
I really do hope this does not pass… This sets a horrible preceident, one that I will admit has a horrible impact on me, but also, IMHO on the country/state as a whole.
This opens to door to all kinds of crazy legislation… Let’s levy increased income taxes on the young. Let’s increase sales tax on the young. It’s just wrong on so many levels, I can’t believe we are even considering trying to pass this kind of law.
it sucks, Michael, I have to agree.
conservative ? Dutch conservative is way left of hilary, dude
it used to be, but no longer.
The three big Dutch parties are just as conservative as those in the US, except on some ‘personal’ issues like gay right etc. Our ‘liberals’ and ‘christian democrats’ mixed up is similar to the Republicans, and the ’socialist’ party PvdA is getting very similar to the US Democrats. Our PM Balkenende (the Harry Potter copy) is - always has been - a strong supporter of GWB and his friends.
Equal opportunity violation.. court will easily deem it illegal.
cannot happen.
Then how did the original SOH cap pass legal muster?
It’s socialism and does exactly what socialism always does - steal from the future to subsidize current consumption. It’s why university graduates under 33 in France have a 25% unemployment rate. It’s why we have the Social Security ponzi scheme here which simply take your money to pay off current retirees and assumes you will do the same to the next generation. The law of unintended consequences is clearly operating here. All of the manipulation to prop up RE has resulted in massive distortions and costs. To offset those, government entities create further distortions, etc, etc, etc. A lie begets a lie.
It’s bad policy, it’s stupid policy — but it’s not socialism. It has nothing to do with socialism. Why drop buzzwords to rile people up?
Capitalism generates plenty of bad policy all by itself (and some good policies as well). This clearly falls into that category.
Give it a break. Anybody buying a house in Florida is stuck with paying property taxes based on the selling price. Under the portability idea, If one moves from a homesteaded million dollar house to another million dollar house, his taxes will remain the same, but if he is buying a million dollar house for the first time, he will get hit with the usual tax rate on a million dollar house. Without Save-Our-Homes caps, most Floridians would have lost their homes during the bubble when county appraisers were trippling “values” of everything in site, and the state would have spent all the huge new revenues and still be screaming poverty. Eliminating the cap is not going to give you, Michael Fink, a bargain; the millage rate will not come down, and the pain will not be diluted by the increase in revenues. All that will happen is that the State will get tons more money and spend it; millions of Floridians will lose their homes to ridiculous property taxes, and you will still be complaining about high property taxes preventing you from buying a house, unless you’re planning on buying one for back taxes.
Here’s a test: Let’s say you DO buy a house in Florida. Will you promise, here and now, NOT to claim homestead exemption on it, but to let the tax collector re-appraise it every year based on his or her personal whim, and to pay whatever tax he or she deems appropriate? Of course, now that the bubble has burst, you could easily say yes, thinking you’d come out ahead, but you can never count on government in this state to do the right or even logical thing.
Without Save-Our-Homes, my father would have lost his house long ago, and to whom? Someone like you, perhaps, waiting in wings to grab it, because you think you have a right that’s being denied by greedy old people?
What MAY be unconstitutional is the fact that there are multiple property tax rates in Florida, instead of one consistent rate for everyone. Hillsborough County has more than 28 property tax rates, so that the owner of million dollar house in south Tampa may pay many times what the owner of a million dollar house in north Tampa pays. Why is nobody addressing this?
Oct. 17 (Bloomberg) - Housing starts in the U.S. plunged more than forecast to a 14-year low in September, keeping the real- estate market the Federal Reserve’s top concern.
The number of starts was the lowest since March 1993. The decline was led by a plunge in construction of townhouses, apartments and condominiums.
http://www.bloomberg.com/apps/news?pid=20601087&sid=azX2jPWDdGxo&refer=home
and of course the markets like the news, EU stockmarkets are up 1.5% …
Here’s another article.
http://www.msnbc.msn.com/id/21342004/
We’re getting down toward the 1 million starts per year that represents a real retrenchment, but we’re not there yet. And they are still starting and permitting more than they are selling.
In NYC, permits are at the highest level since the early 1960s, as builders rush to get foundations in and grandfather under expiring rules that exempt new development from property taxes for 15 years.
Too bad that as we approach the 1m starts per year that supposedly represents a real retrenchment, the rate of new home sales keeps slipping down farther and farther out of sight. It is high time for a rule change which helps encourage people to once again buy homes they cannot afford, so we can keep the price of housing artificially high and restart the residential construction industry.
News from Southern Calif.
http://www.latimes.com/business/la-fi-homes17oct17,0,3645826.story?coll=la-home-business
In Washington, Paulson said, “The longer housing prices remain stagnant or fall, the greater the penalty to our future economic growth.”
Inflate or Die!! Is that what hes saying?
seems they can inflate everything EXCEPT housing
Yes. Part of the Bernanke doctrine is that deflation so destructive to the economy that it is to be avoided at (almost*) all costs.
*I assume a little deflation might be tolerated if the alternative was an end to the $US’s reserve currency status.
The Bernanke doctrine’s Achilles heal:
When market participants “know” the Central Bank will not tolerate deflation, they also “know” that asset prices will always (by-hook or by-crook) go up. Hence everyone jumps on the asset purchase bandwagon and drives asset prices up to a level where new purchases are unaffordable on the basis of available financing (however exotic or fraudulent) and labor income. Competitive producers of said assets (e.g. homebuilders) have an incentive to exploit the price anomaly generated by speculative purchase of assets (the kind that “always go up” in value like housing). At this point, deflation is in the bag, as labor incomes and exotic financing cannot be increased rapidly enough to keep up with the perfect storm of rapidly rising prices and inventory.
This brings us up to the status quo situation in the national U.S. housing market.
The greatest moral hazard problem facing central bankers:
There is a massive temptation for the incumbent to apply an excessive level of monetary stimulus which accelerates economic activity above the real economy’s long-term speed limit. The incumbent gets to bask in the glory of illusory economic health, and the successor has to deal with the aftermath.
“The longer housing prices remain stagnant or fall, the greater the penalty to our future economic growth.”
He, or Greenspan-Bernanke, had no problem when home prices more than doubled in many areas. Could it be that that was the only thing that kept the economy growing? Now, it is time to pay the piper. No way to avoid a recession, Mr. Paulson, because we are there. During recessions inflation rate has fallen bet. 2-12% over the past 35 years. So, deflation is not far away. If the recession lasts 12 months deflation is guaranteed.
Jas
Inflation is getting worse how nice , Ben will keep going for all its worth in a pathethic attempt to save his banking pals from all their bad junk mortgage paper
http://biz.yahoo.com/ap/071017/economy.html
So far this year, consumer inflation is rising at an annual rate of 3.6 percent. That compares with an increase of 2.5 percent for all of 2006.
cooked CPI numbers:
Oct. 17 (Bloomberg) — Prices paid by U.S. consumers rose more than forecast in September as food and energy costs climbed, while core measures showed inflation remains contained.
The 0.3 percent increase followed a 0.1 percent decline in August prompted by falling oil prices, the Labor Department said today in Washington. So-called core producer prices, which exclude fuel and food costs, rose 0.2 percent for a second month in line with forecasts.
With inflation under control, Federal Reserve policy makers have leeway to consider cutting their benchmark rate again later this month to keep the economy growing in the face of a deepening housing recession. Fed Chairman Ben S. Bernanke this week reiterated the central bank would “act as needed” to foster sustainable growth along with price stability
The dam is leaking or going over the top. Whichever, duct tape and bailing wire won’t do any good.
RE: The dam is leaking or going over the top.
But the E-Trade finger saved Holland!
Danker sein, Mister!
If oil is up we are told only the core matters - if oil is down the core is downplayed. MSM articles on the matter are shameless about this - read them yourself and take note about the emphasis given to the core movements - its pretty blatant linguistic manipulation.
The FED has to kill the dollar to save us. OK don’t fight the FED I’m getting out of cash into stocks. Oil , minning, transportion, anything foriegn buyers want and the transports to get it to them. We are getting poorer as a nation as the FED spreads out the RE bubble aftermath to all who hold dollars through Inflation.
‘The FED has to kill the dollar to save us.’
I disagree. The US$ is ultimately the true power of the Fed and if it fails, so do they. Sure, they devalue it, but they can’t kill it without closing their doors. I don’t believe they worry much about saving you or me.
What is happening today to the American saver is equivalent to what happened to the Kulaks (land owners middle class) in the Soviet Union under Stalin. It wasn’t pretty.
http://www.soviethistory.org/index.php?action=L2&SubjectID=1929collectivization&Year=1929
Buy stocks. The stock market always goes up.
… almost always.
http://www.marketwatch.com/tools/marketsummary/
Bernanke put strike price appears to have been retrenched to 13,900 on the DJIA…
KCKid, I know a number of Kulak granchildren. You are wrong.
“KCKid, I know a number of Kulak granchildren. You are wrong.”
Wrong about Stalin or what happened to the Kulaks? I think the deliberate debasing of the currency is the same as the destruction of the saver in this country. Just a different methodology.
At least oil prices are still going up…
October 17, 2007 1:10 P.M.ET
BULLETIN
Crude explosion: $89/barrel
Benchmark futures hit new record high.
Oh my f—ing god. You are comparing savers to the kulaks? Go get a history lesson. The kulaks were systematically “liquidated as a class”. That didn’t mean making them bankrupt. That meant killing them by the millions. Get a grip when trying to make comparisons. This one is just plain stupid.
And that is what uneducated ideologues do. Make grade school idiot comparisions.
this amounts to killing the goose that lays the golden egg (consumer)…the stocks that will continue to run are in the commodity complex. People will end up spending more money on the things they need and less on things they want.
Luckily, only volatile food and energy prices always go up, or else Wall Street bulls might have cause for concern about Fed tightening.
AP
Consumer Prices Up Sharply in September
By MARTIN CRUTSINGER
AP Economics Writer
WASHINGTON
Wednesday, October 17, 2007 07:56:59 AM PT
Consumer inflation rose at the fastest pace in four months in September, reflecting higher energy and food costs.
The Labor Department reported Wednesday that its closely watched Consumer Price Index increased by 0.3 percent last month as energy costs, which had been falling for three months, posted an increase and food prices jumped by the largest amount since June.
http://marketplace.publicradio.org/apheadline_detail.php?story_id=D8SB0G5O1&group=ap.online.headlines.business
I really dislike one way bets.
Everybody knows the dollar is going down.
Everybody knows the Yuan has to increase in value.
History has shown the minority is almost always correct. The more members in a minority, the greater the likelihood that the majority will come around to the minorities point of view. What is the current minority doing?
Just random thoughts this beautiful day.
“What is the current minority doing?”
- Reading your post.
- Trying to avoid bad bets.
Oct. 16 (Bloomberg) — Five of the 12 regional Federal Reserve Bank boards opposed the central bank’s decision to lower the charge for direct loans to banks by half a percentage point last month.
Four district banks voted to cut the discount lending rate by only a quarter point in early September, while the Philadelphia Fed wanted no change at all, minutes released in Washington today said.
The records show greater divisions among officials than indicated by last week’s minutes of the Sept. 18 Federal Open Market Committee meeting….
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=atUa17wv3hQc
this is total BS…. just more ammo for the “uncertainty” to creep back into the markets about what the FEDs gonna do….
they are clearly cutting rates as the disaster unfolds..
Even the IMF is saying the decreasing dollar is good for the globe…yeah right. What else ya got, $100 a barrel oil? $1000 an ounce gold?
I’m not sure yet if it is BS. There seems to be some backpedalling ahead of the G7 meeting. From the FT:
The meeting of finance ministers and central bankers from the seven leading industrialised nations in Washington this weekend comes amid signs of severe strains in global currency markets. The question is whether they will do anything about it.
Ahead of the meeting, the Europeans are fretting over the impact of a strong euro on the region’s exporters, while the dollar’s slide is making a mockery of the US Treasury’s mantra that a strong currency is in the country’s interests….
http://tinyurl.com/33phna
It’s too early to conclude for certain if they will cut or pause. The net sales of US securities could force them to pause. Here is some more from the FT:
This is the first time the leaders of the world’s biggest economies have met since the credit crisis.
The fallout of that crisis for the dollar, and for global capital flows, is only now becoming fully apparent. Tuesday’s official data on US capital flows for August were truly astonishing. The net sales of $69.3bn of US securities during the month were more than triple the previous record monthly outflow, set in August 1990.
That prompted reasonable speculation that the point might soon come when the US feels forced to do something tangible to support its currency. Add to that the rhetoric coming from politicians in France, where exporters are worried by the strong euro, and maybe the G7 will do more than talk.
http://tinyurl.com/yvolbp
REIC expert bottom caller prediction formula:
“Housing slump to continue through (insert current year here)+1.”
Housing slump on for another year
Mortgage bankers predict tough times until at least the third quarter of 2008
By Amy Hoak, MarketWatch
Last Update: 12:00 AM ET Oct 17, 2007
http://www.marketwatch.com/news/story/housing-slump-last-least-another/story.aspx?guid=%7B4E840E50%2D5652%2D47E5%2D8394%2D0520B3BF3813%7D
‘And if confidence isn’t restored in the credit markets, the wait could extend until 2009, the group’s chief economist said.’
The thing which has not sunk in yet in the minds of many REIC experts is that the housing market’s current problems are not due to a crisis of confidence, but rather to one of affordability. Without the crutch of exotic subprime lending with lax and/or fraudulent underwriting standards, purchase demand is not adequate to support prices at anywhere near their 2005 peak levels. We would need to have a very hard price crash for this situation to be rectified by late 2008, and that scenario would not leave many folks in either the mood nor the position to buy.
Washington Post on the new SIV program:
http://www.washingtonpost.com/wp-dyn/content/article/2007/10/16/AR2007101602151.html
“One question still hanging over this plan is what the new entity will pay to roll over the commercial paper, or buy the assets of one of the bank SIVs. As is their habit, the Wall Street sharpies have come up with some clever ideas for slicing, dicing and repackaging the risk that allows them put off the day of reckoning. But there is no doubt that the final price will be higher than the banks would have gotten if they had all been forced to sell on the open market.
How do I know that? Because if the prices weren’t higher, then there would be no need for the Super SIV. The premise, however, is that once the market returns to normal and the bad assets can be separated from the good, the higher prices will prove to be justified. If that’s not the case — if this turns out to be a problem of bad loans rather than a temporary shortage of liquidity — then a reckoning will occur, and the banks and their lenders will be forced to take their losses.
To me, all that makes pretty good sense.”
Sorry, but the idea of sticking toxic mortgage debt into some kind of a Superfund holding pond until the market for toxic mortgage debt recovers makes absolutely no sense whatever.
the repackaging only makes sense if it helps to offload part of the current risk/loss to third parties; so I think that is exactly what they are aiming at with this SIV. Otherwise it would just redistribute the risk/loss between the banks, which seems totally irrelevant when they are happily working with 40:1 leverage for their investments.
Who are the third parties, though? (Obvious guess: The U.S. taxpayer, but details of how the liability is transferred remain opaque.)
“Knowledge gap” = “Do you mean we have to pay back the $500,000 we borrowed???”
Monday, October 15, 2007
Homeowners: Be more concerned
House made of $50 bills
A nationwide survey of homeowners with adjustable-rate mortgages shows only a small percentage are worried about impending trouble. Steve Tripoli reports there may be a dangerous knowledge gap at work.
http://marketplace.publicradio.org/display/web/2007/10/15/some_homeowners_should_be_more_afraid/
Story said that 41% of owners that have already been through a reset are worried (only 18% of those that haven’t been through one).
I would like to know how many of the 59% that have gone through at least one reset but aren’t worried have another reset coming up that they don’t know about.
Two-thirds of those surveyed who’ve seen payments rise don’t recall a lender ever telling them how much of a hike to expect
So wouldn’t you ask?
lilly
Ebbers defense comes back into vogue…
Monday, October 15, 2007
Will Steady Freddie lose his cool?
It’s been four years since former Freddie Mac CEO Leland Brendsel was accused of accounting fraud to the tune of billions. Today, he’ll have to convince a federal judge that he didn’t know he was doing anything wrong. Sam Eaton has more.
Freddie Mac headquarters in McLean, Va. (Stefan Zaklin/Getty Images)
TEXT OF STORY
Scott Jagow: The former CEO of the mortgage giant, Freddie Mac, goes to court today. It’s been four years since he was accused of accounting fraud. Sam Eaton reports.
Sam Eaton: Leland Brendsel may have fortified Freddie Mac’s reputation as “Steady Freddie.” The tactics he used to achieve those famed smooth earnings are the subject of today’s trial-like hearing before a federal administrative law judge.
Brendsel is accused of orchestrating an accounting scandal to the tune of billions of dollars. His defense team argues that Brendsel wasn’t aware of the alleged accounting fraud.
http://marketplace.publicradio.org/display/web/2007/10/15/steady_freddie_slides_into_court/
“Brendsel is accused of orchestrating an accounting scandal to the tune of billions of dollars. His defense team argues that Brendsel wasn’t aware of the alleged accounting fraud.”
Yeah, that gambit really worked for Kenny Boy.
When you take the job and the fat paycheck, you accept responsibility for the company. Yep, sucks doesn’t it, that you are actually expected to work for the money, by exercising oversight.
Unable to do that? Don’t take the job.
This guy ought to be ashamed to show his face…but no, I’m sure he felt entitled to every nickle he raked out Freddie Mac. Guys like this have done more damage to the country that drug dealers. But will he do time? Oh no, the money he took from Freddie will buy him his freedom.
That’s strange–when they cite you for speeding, “ignorance of the law is no defense.”
It’s good to be the king.
Okay, so I put an offer in on this big-azz, fixer-upper at about 40% under asking. There was a little confusion on my offer, so it was presented to the seller a little later in the day than anticipated. At this point, we’re past the reply time (yesterday) and I haven’t heard back. My last conversation with the seller’s agent was yesterday who said that she expected to hear back from them by the end of the day. I’m assuming that the offer is being considered, but I think they might be shopping - calling previously interested parties, builders, etc… - so what do I do? I’m thinking of giving them until 5:00 today and telling them that I’m making an offer on a new construction that is at the same asking price. Any advice????
“Any advice????”
- Approach the lowball offer game like a job hunt, expecting lots of rejections.
- Keep doing it until someone says “Yes.”
Advice?
Don’t tell lies.
You already gave them a deadline. Giving them now another one reveals how really really anxious you are and will cost you $$ in the counter offer.
I agree, just wait.
And in the meantime, give us some details…who owns the house? Is it part of an estate? I’m from your area, what’s the zip, (if you care to share).
If you’re rejected, so what, there will be more opportunities.
P.s. when you talk about a fixer-upper, who will be doing the work?
I checked back here too late - I already gave them a 5:00 deadline. It’s owned by the 4 older children of a deceased old widow. It’s been on the market for over a year, marked down 30% already. One of my concerns was that one of the kids was going to try to arrange financing to buy out the others, and I didn’t want to give them the luxury of time. They’ll find out how anxious I am when I tell them to “kiss it” if they come back with a counter offer.
it’s weird but I had the feeling that a bunch of heirs were throwing this ball back and forth among them
in these situations, there’s always a mucho greedy heir who holds out.
Ha, I just got a call from the realtor (she is the dumbest one I’ve ever spoken to!), and she said that the lawyer who is handling the estate is sending me a letter and faxing a copy to the broker. So, another lawyer profits from the housing downturn. Interestingly, the agent told me (as if this was going to UP my bid), that the property appraised in May 2006 for about 18% of what it is currently listed for. What a knucklehead on 2 counts: 1) That she believes that my offer would go up based on this info; and 2) That she would actually tell me about it. She also said that the broker said he could sell it in a day for what I bid. I told her, “Good luck with that.” Should be interesting to see what the lawyer has to say….freaking vulture.
She also said that the broker said he could sell it in a day for what I bid.
Cool. So why did he have it on the market for 30% more than what you bid - for over a year?
Oh, and I guess the inducement for you to increase your bid is that the property supposedly appreciated by 82% in one year.
This crew is the Keystone Kops of home-selling. How did you stumble upon them?
Whoops, typo in last message. The house appraised a year and a half ago at 18% less than its current asking price. Even so, to suggest that it went up 18% since then is inane. This is the listing agent for the house.
Ha! If they want to play, wait a few days and ask to see any appraisal the the lawyer has on file.
San Diego REIC spin: Jumbo slowdown is a temporary aberration, which requires a big asterisk.
Housing slump persists
Credit crunch fuels drop in sales, prices in 6-county region
By Roger Showley
STAFF WRITER
October 17, 2007
Home sales throughout Southern California plunged last month to their lowest levels in more than a decade, with prices falling in most areas as well, DataQuick Information Systems reported yesterday.
But there was a big asterisk attached to the monthly data.
The report showed a lingering impact of the summer credit crunch through a scaling back by lenders in financing jumbo loans used by nearly 50 percent of all buyers in the region. Jumbo loans are $417,000 and up.
NANCEE E. LEWIS / Union-Tribune
[Prospective buyer Tara Nitahara and daughters Lauren (left) and Kayla attended a Sunday open house near the bluffs that lead to Mount Soledad. Last month, the median single-family home resale price in La Jolla fell 5.1 percent compared with that of September 2006.]
DataQuick analyst John Karevoll said the failure of many big loans to close escrow in August and September resulted in fewer sales last month and exaggerated the downturn that has been under way for the past year.
“There is a slowdown, but the numbers for September overstate that significantly,” Karevoll said. He predicted the jumbo funding delay, while less severe today, will likely slow some escrows for the rest of the year.
http://www.signonsandiego.com/uniontrib/20071017/news_1n17housing.html
NEW YORK, Oct 17 (Reuters) - Marshall & Ilsley Corp … Wisconsin’s largest bank, said on Wednesday third-quarter profit fell 8 percent, hurt by narrowing margins and increased loan losses.
…
“As the third quarter progressed, it became clear the housing market was continuing to deteriorate,” Chief Financial Officer Greg Smith said in a statement….
http://tinyurl.com/2jfdvy
There was one question asked of Bush at his press conference about the housing recession. His answer was that lenders should not be bailed out, and that homeowners should be helped to stay in their houses. His only suggestion was raising the FHA loan limits. Not good.
Your translator is broken…”lenders should be bailed out and homeowners should not be helped.”
“His answer was that lenders should not be bailed out, and that homeowners should be helped to stay in their houses.”
Only the biggest banks on Wall Street are worthy of a bailout.
Just in case this was missed yesterday
http://articles.moneycentral.msn.com/Banking/HomebuyingGuide/HousePricesExpectedToFallUntil2009.aspx
Oct. 16 (Bloomberg) — Wells Fargo & Co., Regions Financial Corp., and KeyCorp, three of the biggest U.S. banks, posted lower-than-estimated third-quarter profit and said rising loan losses may hurt future earnings.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ahcPsPs5BUb4
http://finance.yahoo.com/loans/article/103704/The-United-States-of-Subprime-Loans
The United States of Subprime Loans
This story got me yelling at the radio before 6 a.m. this morn:
http://www.npr.org/templates/story/story.php?storyId=15353636
Single mom with four kids who’s now facing foreclosure. Conspicuously absent from the NPR story was why she refinanced into a subprime loan after a decade of homeownership.
–
“Single mom with four kids who’s now facing foreclosure.”
How about a single mom with 5 kids, on welfare for life with a live-in boyfriend, mentally sick and on welfare for life, was able to buy a 5 BR home and was evicted after 17 months? Who all made money and who all lost money in the deal?
Yeah, yeah, we have the best economic and political system in the world.
Jas
Exactly! I heard this and wondered the same thing. It looked to me like she almost owned it. Now, she’s getting thrown out.
Roidy
You guys need to realize that there’s a big reason why the top leaders of the media, Fed gov’t, and big business get together every year in places like Boca Raton, Bohemian Grove, and the Bahamas (I forget the name of the island).
–
To rule over us without creating riots in the streets. And they muts be a doing a pretty good job of it. But, for how long? That is the question.
Jas
Slim: I just sent an email to morning addition pointing out their lack of professionalism for not checking county records to see how much she refied for and then questioning her on why she did it and what she used the money for. I also suggested that instead of sob stories they might try debunking these stories so that we could get some sort of accurate idea of real victims (truly frauded like identity theft, refying due to extreme medical emergency, death). There’s not alot we can do about this, but I’m determined to point out the truth to every article I see with a phony slob story. Maybe if enough folks do this, the media might catch up with HBBs
Residential Capital LLC, the home-lending arm of GMAC Financial Services, will announce a reduction of about 25% in its work force today….
The unit, known as ResCap, is expected to cut about 3,000 of its 12,000 employees, in addition to the 1,000 who were to be cut by the end of this month, as announced in January.
WSJ: http://tinyurl.com/32lh5y
May I introduce myself?
My friend, why do you torment yourself with these mundane things in life when the call of your 1600 year old friends beckons you to join them in the dance?
–
Market TOP Watch (call still holding)
Scam Market Bullies At a Record
October 17, 2007
Bulls above 60% (62%) and bears below 20% (19.3%) has triggered many a bear markets. We will see how this one turns out.
Date Bulls Bears
17-Oct 62 19.3
10-Oct 60.2 21.5
3-Oct 56.5 25
26-Sep 55.6 25.6
19-Sep 53.9 27
12-Sep 48.3 31
5-Sep 42.9 37.4
29-Aug 41.7 37.4
22-Aug 40.6 37.4
15-Aug 43.8 32.6
http://www.schaeffersresearch.com/streetools/market_tools/inv_intel.aspx
Jas
Time to declare bears an endangered species.
they tend to appear when euphoria is in the air. We’re almost there.
–
But unprotected by laws!
Good thing, for us bears, is that only the fittest of the fit have survived. If my scenario of depression during 2008-10 comes true I will make out like a bandit in the Scam Market. Bulls have been bandits long enough, no?
Jas
where are you from.. USA United subprime America..
On a strictly once in awhile basis,
The Emperor is In.
sort of sincerely,
Emperor Norton II, of the Inland Empire
shouldn’t you be protecting Mexico?
On occasion, even though it’s beyond my boundry line…
Oil Hits $89
Congress’ foolish move to declare the massacre of Armenians by the Ottoman Empire a genocide will have an impact far beyond politics. It affects you — both in your pocketbook and in your security.
After Turkey’s government warned on Oct. 7 that the declaration on Armenian genocide might damage U.S.-Turkey ties, the price of oil jumped from $79.03 a barrel to $87.61 Tuesday, a gain of 11%, or nearly $9 a barrel, in a little over a week.
The Democrats’ move, blamed by oil traders for the upsurge in crude, has increased our monthly national oil bill by roughly $3.53 billion at current import rates. That’s about $42 billion a year. Call it the Stupidity Tax.
http://www.ibdeditorials.com/IBDArticles.aspx?id=277426742645300
Totally. It should be referred to as ‘downsizing.’ Or maybe ‘rightsizing’ or something along those lines.
Now if we could get them to pass a law calling the USA’s actions against the Native Americans genocide, those casinos will losen up their slots.
Comerica:
http://www.wegmanpartners.com/StaffCareers.html
Oops. Let’s try again
Comerica:
http://www.minyanville.com/articles/CMA-bank-earnings-The+Street-estimates-revenue/index/a/14514
Daniel Gross
Protecting Paulson’s Pals
The subprime collapse didn’t bother the Bush administration, until Wall Street bankers started whimpering.
Oct 17, 2007 | Updated: 10:12 a.m. ET Oct 17, 2007
The subprime mess has been spreading like toxic mold since the housing market peaked last year. So why did it take until now for the government to decide it should do something about it? I have a theory.
When individual borrowers began to suffer, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson didn’t seem overly concerned. The market would clear out the problem through the foreclosure process. Loans would get written off; properties would change hands and be resold. When upstart subprime mortgage lenders ran into trouble, Bernanke and Paulson shrugged again. The market would clear out the problem through the bankruptcy process. Subprime companies like New Century Financial filed for Chapter 11, others liquidated or restructured, and loans made to the lenders were written down. Meanwhile, Paulson and Bernanke assured us that the subprime mess was contained.
But as the summer turned to fall, and the next several shoes dropped, their attitude changed. And that is because the next group of unfortunates to fall victim to subprime woes were massive banks.
http://www.newsweek.com/id/52626
BUSINESS
The Latte Era Grinds Down
Average Americans were living like the Riches, thanks to easy credit and the real-estate bubble. Now they’re trading down instead of trading up.
By Daniel Gross | NEWSWEEK
Oct 22, 2007 Issue
http://www.newsweek.com/id/43345
what a great article, with so much material…
but it was a lot of fun, showing off those unused spaces when your monthly payment wasn’t racking you…
well, that dude will be eating his “Frisco manse”. You can’t give anything away out there.
Thanks, Professor Stucco. Now people will start to realize that saving is good and designer stuff isn’t so great.
Savers are fools. Don’t fight the Fed. Buy stocks and houses now or get priced out forever.
Wow. Finally an incentive that will make me jump into the market! If I spend $500,000 on a house this agent will give me 250,000 airline miles! Enough for 10 round trip flights in the US. (Or about one and a half business class flights to New Zealand.) Heck, if the average flight can be found for about $300 this is a $3,000 deal! Where do I sign?
http://tinyurl.com/2ghjp2
BULLETIN>> FED BEIGE BOOK SAYS U.S. GROWTH HAS ‘DECELERATED’ OVER PAST 6 WKS
PB’s forecast: The economy’s slow patch will continue for the foreseeable future, but underlying strength will indefinitely stave off recession.
either that or false government statistics on GDP.
Aside from weak consumer spending, manufacturing and service industries, the Beige Book indicated a favorable outlook.
U.S. stocks fell on concern mortgage-market losses will accelerate. The Dow Jones Industrial Average and the S&P 500 Index declined, reversing earlier gains.
The Fed said today economic growth slowed since August in five of 12 regions, as consumer spending, manufacturing and service industries weakened.
“The pace of growth decelerated,” the central bank said in its regional business survey, known as the Beige Book for the color of its cover. In consumer spending, which accounts for more than two-thirds of the economy, “reports were uneven and suggest growth was slower in September and early October than in August,” the report said.
http://www.bloomberg.com/apps/news?pid=20601087&sid=afPNm9vZQTdE&refer=home
this economy is easing into recession like an old man easing into a pool of cold water.
exeter wrote:
Based on all the talk from Treasury, The Fed, it’s become quite clear to me that these guys (Paulson, Bernanke, Wall Street thugs) are working to prevent panic. As I’ve insisted here since early 2005 and elsewhere beginning in 2004, this thing has got to hit a wall. When prices of schlock like shingle shacks DOUBLED in old, declining New England mill towns where most of the younger folks are leaving along with what few jobs there are left, there is no friggin way prices should be going up, no less doubling.
I was very curious about why prices where skyrocketing too.
I concluded that it was easy credit doing it, as those who were the most financially irresponsible and the worst at math were setting the prices. These people would take out the most exotic loans with the lowest initial downpayments.
I thought it might be the end of the fixed rate mortgage. I’m sure when the 30 year fixed rate mortgage came around, home prices spiked. When ARM’s came around, with Greenspan’s blessing of them in his famous speech, I thought it might well be possible that home prices would permanently spike.
However, with the even more toxic teaser rate / neg-am loans after that, the prices spiked even more. It’ll be interesting to see how the credit contraction impacts the market. If the 15/30 year fixed comes back, home prices are in for quite a tumble.
If the equilibrium settles back on the less exotic ARMs, the decline will still occur, but it won’t be quite so dramatic as it would if people had to go back to pre-ARM, fixed rate mortgage financing.
The top tier of lenders, realtors and builders are not ever going to wring their hands and capitulate; they are always going to look for ways to extract maximum value from the customer, and if they have to lie, cheat and bribe (sorry, “lobby”) politicians to do it, they’re going to.
“I was very curious about why prices where skyrocketing too.”
Indian stock market regulators are very curious and concerned about why their stock market share prices are skyrocketing as well. Bizarre, inexplicable, non-fundamentally-based asset price appreciation is a natural consequence of monetary policy through massive, poorly-targeted helicopter drops of liquidity coupled with a deregulation juggernaut which knocked down all impediments to the free flow of financial capital across borders or into the hands of unqualified borrowers.
–
October 17, 2007
Paul McCulley of PIMCO on CNBC: “Equity Market Is a Call Option On No Recession”
Well, the recession is here already so no good reason to buy a call option on no recession.
Jas
What if there is a put option from the Fed to make the call option bet pan out no matter what?
–
Let us see if people can cash-in their put options. Fed would simply say we never wrote those. They were fakes sold by Wall Street you-know-whats. Chinese are not the only ones making fake stuff you know.
Jas
Dark matter liquidity unnerves Indian stock market regulatory authorities…
ASIA MARKETS
Volatile Mumbai leads declines in Asia
Regulator’s clarification provides stability for jittery India shares
By V. Phani Kumar
Last Update: 6:40 AM ET Oct 17, 2007
HONG KONG (MarketWatch) — Asian stock markets mainly dropped Wednesday, with India going on a roller-coaster ride as its securities regulator sought public debate on a proposal to curb foreign fund inflows from anonymous overseas investors.
…
“The government is serious about it. Till now, they weren’t serious, but now they are serious because the liquidity from this unknown source is increasing very rapidly. So, they want to take corrective steps,” said Arun Kejriwal, director at KRIS Capital in Mumbai.
http://www.marketwatch.com/News/Story/Story.aspx?column=Asia+Markets
Wow, crud. I knew this was an issue when I invested in India (MINDX). I hope the fund managers know what they’re doing.
At best, I hope the Indian government will forestall a parabolic blowoff Shanghai style and continue to foster sustainable growth in India, with out screwing over completely foreign investors who so kindly lent them some money. I know it’s a tall order … especially when you have shady traders who want to make 50% returns all the time.
Oct. 17 (Bloomberg) — Washington Mutual Inc., the largest U.S. savings and loan, said third-quarter profit fell 72 percent as the company wrote off bad home loans.
…
“The writedown is less than we expected, given the turmoil in the secondary market for nonconforming loans,” wrote Piper Jaffray & Co. analyst Robert Napoli yesterday in a research note that predicted little relief for WaMu next year….
http://www.bloomberg.com/apps/news?pid=20601087&sid=a8wBcfYfyzfc&refer=home
Oct. 17 (Bloomberg) — E*Trade Financial Corp., this year’s worst-performing U.S. brokerage stock, reported its first loss in five years and slashed its forecast for 2007 earnings after surging U.S. mortgage defaults led to higher costs for bad debt at its online bank.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aUMpY349SgXI
NEW YORK, Oct 17 (Reuters) - Sovereign Bancorp Inc … the second-largest U.S. savings and loan, on Wednesday said second-quarter profit fell 68 percent, hurt by increasing credit losses in its home equity and auto lending portfolios.
Net income for the Philadelphia-based thrift fell to $58.2 million, or 11 cents per share, from $184 million, or 37 cents, a year earlier.
http://tinyurl.com/2y4olt
According to the WSJ:
The Securities and Exchange Commission has opened an informal investigation into stock sales by Countrywide Financial Corp.’s chief executive officer, deepening problems at the nation’s largest mortgage lender, according to people familiar with the matter.
Countrywide is one of a dozen companies the SEC is investigating in connection with the subprime fall-out. At least one area of inquiry, these people say, involve sales by founder and Chief Executive Officer Angelo Mozilo, who sold at least $130.6 million in company stock in the first half of the year through executive sales plans.
http://tinyurl.com/28fcgs
Kathleen Pender: Bank bailout plan doesn’t solve underlying problem
Tuesday, October 16, 2007
…
Because the banks themselves didn’t own the vehicles or guarantee the commercial paper, they didn’t have to put them on their balance sheets. So for a long time, nobody worried much about them.
Earlier this year, subprime and other borrowers started defaulting earlier and in bigger numbers than expected. As a result, investors became unwilling to buy many types of loans and debt instruments, including commercial paper backed by such assets.
Suddenly, the vehicles were stuck holding loans and debt instruments they couldn’t refinance, like a retailer that finds itself with a warehouse of inventory it can’t sell.
“This is like Chinese toys with lead paint. Citi owns a lot of wooden toy trains,” says Christopher Whalen, managing director with Institutional Risk Analytics.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/10/16/BUF3SQCHQ.DTL
Warning bells sound over currencies
By Peter Garnham
Published: October 17 2007 06:06 | Last updated: October 17 2007 06:06
The meeting of finance ministers and central bankers from the seven leading industrialised nations in Washington this weekend comes amid signs of severe strains in global currency markets. The question is whether they will do anything about it.
Ahead of the meeting, the Europeans are fretting over the impact of a strong euro on the region’s exporters, while the dollar’s slide is making a mockery of the US Treasury’s mantra that a strong currency is in the country’s interests. In Tokyo, the yen’s slide rings alarm bells as investors show a new interest in carry trades, in which the low-yielding Japanese currency is sold to finance purchase of riskier assets elsewhere.
http://www.ft.com/cms/s/59c0c834-7c48-11dc-be7e-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F59c0c834-7c48-11dc-be7e-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus
Is it just me–or is someone flipping a switch at 2pm (two hours before the market closes) and making a “smiley-face” graph out of a previous “ski slope” (down) day? Been seeing it a lot lately. I’m starting to buy into the PPT thing.
The “experts” on PBS’ Nightly Biz Report seem more fidgety lately, too.
UPDATE 2-Fed’s Dudley says market adjustment “far from over”
Wed Oct 17, 2007 7:36pm EDT
(Adds comments from Q&A)
By Tamawa Kadoya
PHILADELPHIA, Oct 17 (Reuters) - The process of restoring financial markets to normalcy from their recent turmoil is “far from over” though the situation seems to have improved, a senior New York Federal Reserve Bank official said on Wednesday.
“It will take time for circumstances to return to normal,” William Dudley, executive vice president of the Federal Reserve Bank of New York, said in a speech to the Global Interdependence Center.
Dudley is in charge of overseeing financial markets including the Fed’s daily money market operations.
Financial markets have been in turmoil after a sudden tightening in credit conditions surfaced in early August that stemmed from a downturn in the U.S. mortgage market.
Asked about a fund set up by major U.S. banks on Monday to shore up structured vehicles, Dudley said the Fed did not have an official stance but that the central bank was “supportive” to avoid a disorderly liquidation of assets.
http://www.reuters.com/articlePrint?articleId=USN1738120620071017
Hi. I’ve been lurking on this fine blog for some weeks now, and it’s been most entertaining read so far.
I’m an expat in living and working in Korea. I work in a civil engineering company here, and a couple of months ago we started getting lots of investment proposals from Korean-American investors for real estate projects in the States. Being the only foreigner in my company, I was tasked with researching the real estate market, and this blog was one of the best places in finding the actual facts.
If anyone is curious, the projects were mostly condo and land development projects in California, Florida and Virginia. Needless to say, I advised my bosses to stay clear of them.
One project, a condo in San Diego, had construction costs running to about 400$ per sq. foot, with expected sales for 800$ per sq. foot. Now I wonder if they can get even 10% of that…
Since nhz has been kindly keeping us up to date on the situation in the Netherlands, I figured you people might get a kick out of our Korean bubble, which no one seems to acknowledge exists.
Unless your family was magnificently rich 30 years ago, chances are SFH (what they would call ‘mansions’ in Korea) are out of reach for you. So we live in smallish apartments instead, usually around 700-1200 square feet big. The apartment buildings themselves are 20+ stories high. If you’ve ever been to any East Asian city, you know what I’m talking about.
Keep in mind that Korean wages are meager compared to the States or Europe. I believe the average household income is around 40k.
In Seoul, the average apartments cost 500$ per square foot. In the most popular school districts, people are paying 2000$ per square foot just to ensure their kids can go to the best schools.
Most middle-class people consider buying apartments as the only way to become rich, and speculation is rampant. Meanwhile the median cost to income ratio in Seoul has gone up to, wait for it, 17.
So when will the bubble burst? A year ago, there was some talk about it bursting, but since then prices have been rising steadily. But eventually reality will catch up with people here, too.
Welcome…
Information from beyond is always beneficial.
Nice bubble you got there, ha