Bits Bucket And Craigslist Finds For October 18, 2007
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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This isn’t bad although the whiny tone of this person set me about looking for the trout:
http://www.thestreet.com/s/a-profit-shrivels-amid-the-housing-blowup/newsanalysis/investing/10383712.html?
A 60% premium over the previous sale, even with a 140k “price cut” and the hag is whining? UnFrigginBelievable.
I read that earlier this morning and wanted to take the PATH over to Jersey and track this whiny ______ down. What a bunch of crap. She acts like they lost a $140k entitlement.
It was more than 140 after she paid the realtor too but they like to delude themselves that it wasn’t.
If the tone didn’t get you, the picture will.
Yikes. I hadn’t seen that. That’s a face that belongs on radio. I would never have guessed she was from New Jersey. Why is it that Jerseyites just have “that look” to them?
You sound a bit like my daughter with that last line. You gals can be ruthless.
You gals can be ruthless.
Oh yes.
But only when messed with.
“But only when messed with.”
I wish.
She is such a whiner. Based on what I infer from the story, she still made off with more than 250K. Not bad for “living” in a place for 7 years. Dang, I need a job that pays like that.
With that money, she can fund the kids’ college education or take a nice vacay and still buy cash somewhere nice with a little left for savings. What greed!
Oh well, I guess despite all our analysis of fundamentals, the real bottom line reason for this bubble is simply, GREED!
The sense of entitlement continues.
So they figure their house has peaked at $800k, and then can…
tolerate a second price reduction, down to $749,900
Oh, how gracious of them!
Greed, greed, greed!!!
Trout slap needed, please.
Tort slap, more likely.
Sorry exeter but you are the whiner. She did what everybody on every HB says to do, lower the price, sell, and buy a smaller home in a more affordable area. She said she would have liked to have the extra $140K, “but that would have been greedy”. What did you want her to do “give the house away!”
Put the trout down, Tex, I think I have sonmething a little more efficient.
lmao…. But I don’t think you’d want it anywhere near that face. Did you look at the photo first?
Don’t think that the Cosmic JT minds what people’s faces look like…..much more interested in the ‘other end’…
Y’all are being way too hard on this lady. Yeah, there are a couple of annoying sentences, but read the entire article.
She’s noting that she and her family still made a nice profit on the house, didn’t run up a bunch of HELOC debt, and banked a lot of their profit rather than plowing it into some McMansion whereever it is they moved. In other words, she’s one of the ‘good guys’, so to speak.
She sold her home and she’s still homely.
Even though she bought in a less expensive market, she still bought in this current market and it is very likely she overpaid by a bunch on the new house. There are not many places untouched by the bubble. Karma works wonders.
Walk away…
http://online.wsj.com/article/SB119266868024662861.html?mod=todays_us_personal_journal
These people are not investors, they’re clowns, but apart from that, in the article:
As a result, Mr. Rozzen’s credit score plunged from 730 to the high 400s, he says.
One of my favorites. Was this idiot’s 730 fico score an accurate predictor of how he would perform on the loans? Hell for that matter, was Casey’s fico score a good tool for the lenders to use? No, it wasn’t. That whole schtick is totally bogus and should be trashed IMO.
It looks as if the banks are moving towards trying the scare tactic to keep people on the hook….Hey banks, good luck with that. By the way, how are those models doing?
Before walking away from a mortgage, legal experts say, investors should approach a lender about a possible loan “workout,” in which the mortgage payments are reduced but the investor gets to keep the property. Some investors say they have tried this, but without success. Still, banks don’t typically want to act as property managers, nor do they want to have high foreclosure numbers on their books.
“There is a real incentive for both lenders and borrowers alike to do a workout and avoid foreclosure. Lenders are not good at being homeowners,” says Fred Witt, national director, real-estate tax services, at Deloitte Tax LLP, in Phoenix.
Right… and most lenders don’t know what to do if a borrower does call, except put them on hold.
Why do the so-called experts continue to advise people to do things that don’t work. Does this guy really think the lenders is NOT going to foreclose on some guy with from 4 to 16 properties?
Dork!
I hear ya. People need help RIGHT NOW! How many things in our system happen right now?
What almost all professional, debt investors forgot is that there are 5 C’s to credit evaluation. The pro’s, based on really bad quant analysis, decided that only character, as measured by FICO score, mattered. A couple of hundred years (back to the renaissance Italians, or thousand years (back to the ancient Greeks) of history showed what the outcome would be.
This is why FICO is such crap. Sure, FICO might be all well and good for CCs and used cars, but when it comes to purchasing a home, that’s an entiely different story. You need to look at ability to make the monthly nut. You need to look at how much someone makes in relation to that monthly nut.
We have to remember, though, banks didn’t care because they got their fat commissions and just sold all the crap off.
Me personally, I would rather have a millionaire with a six-figure income and little, but solid credit history, rather than some noodle head working as a MickeyD’s night manager with an 800 FICO asking to buy the 900K home. The numbers just don’t compute for the manager, even with the 800 FICO.
I thoroughly disagree. There are rich people that don’t pay their bills and poor people that do. Character is all-important, and FICO is just one way to measure. The problem is–there are as many scams to improve your FICO as there are to get you into that high priced property.
Which brings us back to the idea that ALL FIVE c’s of credit (character, capacity, capital, collateral, and conditions) are important. Thankfully, commercial banks, regulated by the OCC and State regulators, have followed these “C’s” whereas secondary market lenders, who sell their loans, have not.
I went on a grocery run yesterday evening. In the checkout line, I was chatting with the cashier, an older woman, who had mentioned that she was working 75 hours a week at two different jobs. I complimented her for being so ambitious. She said “I’m not ambitious, I’m acutally lazy, but I just don’t want to lose my house”.
I don’t know what her exact situation is, could be she’s just caught in a tax and insurance hike or she could be a run of the mill FB with an ARM or she could be HELOC’ed. She said she’d run through most of her savings already. I told her if it got to be too much, walk away. It’s just not worth it.
That’s depressing. She’s not killing herself to save for a better life. She’s killing herself to be a slave to a vinyl box. How many people do you think have told her, “renting is throwing your money away”?
That’s what I have a problem with, what good is the house if it just becomes a place to crash in between jobs trying to hold onto it? Again, however, I don’t know the entire situation, if she’s got relatives she’s taking care of, too. Some of the older ladies around here are out busting ass working to pay medical bills while nursemaiding some old geezer who sits around watching TV and taking heart medicine all day.
The scary thing is that way too many people are counting on their house to fund their retirement. So while they are working two jobs now, they believe that a handsome payback is waiting down the road.
I was at the grocery store the other day and an older lady ahead of me had a complete melt down at the check out register because her credit card had been denied. They took her away, wailing, in a ambulance. Shadow of things to come?
Don’t be surprised by Hamster Serfs running at 75 Hrs per Week just to keep the roof over their heads. We all knew people would be caged in by their ARMs.
Unlock your innner sheep. Don’t Walk. Run away.
hamster serfs - one of the better descriptors I’ve heard - LOL
“bettor”
Hey Palmetto - good news for you in that article !!! I’m sure you loved the suggestion that folks facing multiple forclosures “move to Florida and buy a big house” to protect assets.
Looks like more of the kind of new neighbors that you will just loooooove down there in sunny Florida.
Why fight it? Maybe you should open Palmetto’s Florida Asset and Witness Protection Company — helping folks fleeing multiple forclosures in California, Nevada and Arizona buy biiiiiig properties in Florida and start anew. Just think of the lovely new friends you’ll make and fabulous “all my friends made money flipping” stories you’ll hear along the way.
Big P~
Chew on these numbers…And this is a property owned free and clear by the writer.
Great to be a renter.
http://www.boston.com/business/globe/articles/2007/10/18/mortgage_payment_just_a_start_to_figure_how_much_house_you_can_afford
Hey! I worked 72 hours last week, according to my billing! (I’m an entertainment industry consultant, who hits the HBB mostly from Airport lounges.)
Feel sorry for me, too! I’d only have to work 36 hours if the Government didn’t take half my income!
And at least this grocery clerk gets to deduct her mortgage interest! When I was paying a mortgage (now paid off), the Government decided I didn’t deserve this deduction. (There’s an income cap on mortgage deduction.)
Millions like her will go for 6-12 months and then walk. We’ll see this through 2010-11.
Good thing that only sub-prime borrowers are involved in the housing bubble. Good thing there won’t be defaults of borrowers that had high credit scores. Too bad someone like me who doesn’t really use credit and pays for everything upfront has such a hard time with these credit ratings.
I was wondering if anyone in the know sees signs of any new credit rating systems in the works (to replace the failing FICO system)?
What will replace replace it is gold old common sense comparisons of free cash flow to contemplated debt -10 years from now!!
For those of you that think metals will be the next big bubble, this article is a must read. I hadn’t really thought of this fully but this guy makes a good point. To be a true “bubble” requires a lot of external pumping. That just won’t happen.
http://tinyurl.com/2sgk2d
NYC,
I disagree with the author. The free market is very good at creating bubbles without “external pumping”. All it takes is the fear that the world will run out of something really good before we get a chance to buy it.
Got Uranium?
I recommend Uranium, but only physical holdings.
But gold requires a lot of money to purchase. This isn’t beanie babies. The average joe doesn’t have enough money saved to buy even a single ounce of gold. Maybe they max out their credit cards? I think the expense of gold makes it difficult, but not impossible, for a true bubble to form.
Aladin (Emperor Norton of IE, Mexico and adjacents) sane,
There are some good ways to play the industrial metals market. And not just stocks.
A gold bubble is very possible via leveraging - e.g. margin on ETF’s. I’m not sure if that’s feasible actually, but there’s always a way to margin something.
The problem with gold is - how do you know if it’s really a “bubble” or not? Gold has near zero intrinsic value actually, especially in hard economic times. It’s main use is jewelry, which isn’t exactly in high demand when people lose their jobs. Thus the true value in gold comes in the expectation of demand as a money exchange mechanism - i.e. if the SHTF with the economy. In that respect, there’s absolutely now way to put a value on it, because there’s a 100% range of expectations with regards to the economic future of our country (or the world for that matter). If we start a hard recession or depression - gold values will probably skyrocket, but IMO this won’t necessarily be a bubble - if the dollar ends up going the way of the dodo bird and we end up reverting to gold as money exchange, it’s value will be well worth it. OTOH if the economy settles down and the dollar doesn’t go to pot, then if gold prices remain high it will indeed be a bubble.
Personally I’m hedging my bets and have a fair amount, just in case.
P.S. aladinsane - LOL at the Uranium comment - good one!
What is the intrinsic value of a paper Federal Reserve note?
Nycityboy, This excerpt from that article.
No bubble in gold is possible, at least in the same sense of bubbles in MBS and tech stocks.
This does not mean the gold price can’t go through the roof as the latest government gambit to fight markets and manage currencies and credit unravels. We have not changed our $2,500 - $3,000 gold price target.
What the author is alluding too is that there will be no gov’t sanctioned bubble like stocks or housing.
Gold is a world-wide store of value (money). When you think outside of a US centric model you will find that folks in countries within which populations number in the billions believe gold to be money and a store of value (think China/India). Our gov’t has been suppressing the price of gold for over a decade. There is a reason behind why they are doing this (gold is a barometer for the health of the dollar and the fiat currency system). Take the time to investigate this matter and you will come away with a respect for the potential move of gold.
http://news.goldseek.com/GoldSeek/1192636836.php
http://news.goldseek.com/JamesTurk/1192633380.php
“What is the intrinsic value of a paper Federal Reserve note?”
Same as the value of all your blood, sweat and tears. It’s an IOU on your toil. Maybe rather a “they owe you”.
I find dollars bills are a little softer on the tush than no name brand toilet paper, but not quite as good as 2 ply charmin.
With some blue cheese dressing a dollar-bill salad can actually be quite tasty.
I remember reading about 10 years ago that an amazing amount of $20’s in circulation, had cocaine residue on them…
…and boogers. One end of the rolled $20 rode the white line, the other end went where again?
makes me want to launder my money before trying that salad idea. 50s should be OK, shouldn’t they?
The Confederates knew what to do with their fiat money. Wallpaper!
A German friend said that these were used in the Weimar Republic for decoration:
http://www.vision.net.au/~pwood/Volume191.jpg
That whole thing didn’t end so well.
“It is impossible to grasp the meaning of the idea of sound money if one does not realize that it was devised as an instrument for the protection of civil liberties against despotic inroads on the part of governments. Ideologically it belongs in the same class with political constitutions and bills of rights. The demand for constitutional guarantees and for bills of rights was a reaction against arbitrary rule and the nonobservance of old customs by kings. The postulate of sound money was first brought up as a response to the princely practice of debasing the coinage. It was later carefully elaborated and perfected in the age, which through the experience of the American continental currency, the paper money of the French Revolution and the British restriction period had learned what a government can do to a nation’s
currency system.” – Ludwig von Mises
“During times of universal deceit, telling the truth becomes a revolutionary act.” – George Orwell
One funny thing about Fair Isaac (FICO) is that people who pay off every month are “outside the model”. You’ll still have a good score, but you won’t be at the limit.
With my BA in Mathematics, I’ve always been smart enough not to pay credit card debt, regardless of my financial situation. I have never, in my entire life, carried a balance.
But, because I can get a no-fee 1.5% cash-back card (Fidelity), I put *everything* on it, and take the cash-back!
This gives me a high “average” monthy balance, lowering my credit score. The fact that there’s never any revolving credit used doesn’t negate the penalty for high average monthly.
BTW: I find if you use a cash-back card for a couple of years and always pay in full, the companies generally try to drop you.
Anyone here think the fact that the suicide loans followed the bankrupcy “reform” is not a coincidence? Anybody?
We predicted that here in mid 2005.
I don’t see it. The BK still allows (or forces) the FB to walk away from secured debt. Lender gets the collateral, call it good. Unsecured debt, that’s the barbed hook. No walking away if you have any income you will pay to your ability and learn to live without toys for a few years.
I’d say that using the credit card to make mortgage payments is the real suicide loan.
Why BK for a non-recourse foreclosure? Which, perhaps, is a future stage of bailout…making underwater owner-occupied foreclosures non-recourse and non-taxable. I recall in Austin, by 1991, if you just had your own house foreclosure as the only bad mark on your credit, you could get a prime rate mortgage with some banks trying to unload foreclosures!
“During the height of Las Vegas’s real-estate boom two years ago, property investor Rob Rozzen bought 16 homes, hoping that skyrocketing prices would pump up his retirement nest egg.”
Does anyone track the number of investers who bought more than two homes?
“Honesty is the recognition of the fact that the unreal is unreal and can have no value, that neither love nor fame nor cash is a value if obtained by fraud—that an attempt to gain a value by deceiving the mind of others is an act of raising your victims to a position higher than reality, where you become a pawn of their blindness, a slave of their non-thinking and their evasions, while their intelligence, their rationality, their perceptiveness become the enemies you have to dread and flee—that you do not care to live as a dependent, least of all a dependent on the stupidity of others, or as a fool whose source of values is the fools he succeeds in fooling—that honesty is not a social duty, not a sacrifice for the sake of others, but the most profoundly selfish virtue man can practice: his refusal to sacrifice the reality of his own existence to the deluded consciousness of others.”
John Galt
Right on John Galt .
Checked Marketwatch @ 7 AM, headline was “Futures Steady!” or some such drivel. Then at about quarter past, I guess BoA announced that they took a good pounding, and the headline was quickly changed to “Taking a turn for the worse”.
Should be an interesting day.
Yesterday was one for the ages. I caught the entire move down in the nasdaq futures and was shocked when I came home later and saw the close. This is not a market, it is a circus run by hedge funds.
Amateur!
Hater!!!
“This is not a market, it is a circus run by hedge funds.”
Testify. I’m really angry about this. I’m not going to sit idle and watch these turds in suits trash the financial system. Hedge funds should be outlawed, period. With a life in prison penalty for even thinking about forming one. I don’t care what kind of blah-blah anyone wants to give me about “free markets”.
The idea of hedge funds are just wrong. When I hear Rudy Giuliani talk about how badly this city needs hedge funds I know I can cross him off my list of candidates I would potentially vote for. The politicians are so deep in the hedge funds’ pockets that it is scary.
Giuliani lost my support when he said he’d vote for McCain if G wasn’t running. Your comment above just adds to it.
Stephen Colbert is my write in. He’s got it all.
Ditto - pity he’s only campaigning in SC, though.
Just a minor observation here. The other day I picked up “The Day the Bubble Burst” at a library book sale. The more I read and learn, especially on this site, the more it looks to me like today’s hedge funds are no different than the “pools” that were put together in the 1920’s to manipulate stock prices. Yes?? No??
I think somebody’s been peeing in the pool.
That is an excellent history! It reads like a novel.
I got it when it was published (around 1980?). Loaned it to my Mom and it made her weep as she recalled standing in line to get her money out of the bank.
Blano
You’re essentially correct. If hedge funds actually lived up to their name and tooked actual hedged positions, that would not be the case. But in reality, many if not most are simply legal structures for taking gigantic, leveraged one-way bets. Those funds are simply supercharged versions of the pools from the 1920s. They can lever up by borrowing and lever up further by using derivatives. That’s what most of the big blowups have done.
We have so many of the same trends now as then. Stock watering, leverage, consumer debt, addiction to luxury, blind faith in financial authorities (near worship of the Fed), etc.
Blano, I picked up that book in a thrift store this summer and read it about a month ago. It was pretty good, if a little “liberal” in recreating scenes and dialogue.
I think you are essentially correct about the relationship between hedge funds and the pools of the ’20s, though the hedges are much more abstract and indirect — it’s harder to see their direct influence on the markets.
But, but…John Galt?!
agree, and not just any prison, but Poin’ de Moun’ in Utah (Point of the Mountain for those who speak English).
I know it’s a crooked circus, but it’s the only circus in town.
aladinsane: Marge: Homer just because the circus comes to town doesn’t mean you have to join it!
I was in KC for the weekend. One of my friends here in Dallas asked me if I would be going to one of the casinos up there. Told him: “I trade stocks - I work in a d*** casino.”
You’re in Dallas? Ha! We should have lunch some time.
txchick
Would love to do lunch. I actually live in Arlington, but you know the drill. Do business frequently in the Turtle Creek area. You’re near White Rock Lake IIRC?
Drop me a line at: dataslave1@yahoo.com
“I caught the entire move down in the nasdaq futures and was shocked when I came home later and saw the close”
Alas, when in riskier markets where a few millions of dollars can cause the markets to move in 20 point increments, it is always advisable to not leave your moneys on the table when taking a stroll. Tx, this is the most illiquid market I have seen in 20 years.
Oh please. Remember the summer and fall of ‘02 and the spring of ‘03. Gawd, now THOSE were illiquid. I loved it!
“This is not a market, it is a circus run by hedge funds.”
A Casino run by hedge funds. We don’t invest anymore. We gamble.
Dam, I unloaded my short position on the financials yesterday after deciding the banks were going to try to hide their losses indefinitely. BAC will set the tone, so I am getting back in and staying in for the long term.
I am long on UNH and NVS, both beat estimates but that doesn’t mean anything anymore.
http://quotes.ino.com/chart/?s=FOREX_USDJPY&v=s&w=1&t=f&a=0
The yen all of a sudden shot up.
This - again - correlates with what nhz has said about the U.S. market reacting to the yen carry trade more than any other factor.
From Bloomberg:
Bank of America lost $1.14 to $48.89 in Frankfurt. The second-biggest U.S. bank said profit declined 32 percent in the third quarter after credit-market writedowns and loan losses. It reported profit excluding some items of 82 cents a share, missing the $1.06-average of 16 analyst estimates compiled by Bloomberg.
What exactly does “excluding some items” mean?
This will drive the markets down today and then GOOG will announce after the close. Like YHOO’s report it will reinvigorate the bulls and keep the mini-tech bubble growing. At some point RIMM, BIDU, AAPL, AMZN and several other techs will be incredible short opportunities, if they aren’t already.
When will GOOG split, and what will it be 30 to 1?
This is for Phillygal. Yesterday she had gently scolded me for being a little rough with az_lender. Phillygal can put her mind at ease. Yesterday’s post was an inside joke. Az_lender and I routinely email each other about finances, investing and general housing news. Last month az_lender had lunch with my wife and I, and a couple of my co-workers, in Midtown Manhattan. She was shocked to hear the City Boy’s Midwest accent. She looked really lost when I ordered a pop with my walleye hotdish.
For those of you that don’t know, yesterday I joked about giving az_lender the finger while driving through Virginia. Last week it just so happened that we had both gone to the Outer Banks of North Carolina at the same time. This was just a coincidence, or so az_lender says. I think she may be stalking me. To be on the safe side I have bought several cans of pepper spray and a stun gun. I will continue to email the lender because she has great insight and is a very nice person but don’t think I won’t use that stun gun if necessary.
There are a few things you can do to protect your money even as creditors are moving in. One idea: Move to Florida and buy a big house. As long as you can stay out of bankruptcy and qualify for Florida residency, a creditor can’t force the sale of your home under Florida law, says Mr. Rothschild, the New York lawyer, who adds that the tactic won’t work under new bankruptcy rules if you’re forced to file for bankruptcy protection.
See there’s still hope for FL yet. If the realtors see this, they’ll be using it in their ad campaign.
As long as you can stay out of bankruptcy and qualify for Florida residency
That’s the tricky part. I think it’s 6 months residency now? Used to be you could just move there, buy something, and then file the next day. Ask Burt Reynolds, that’s what he did.
I don’t think so, he was actually born and raised in Palm Beach County. He owned many properties there for decades.
And OJ.
Don’t laugh, that has long been a major driver of high end sales in FL.
One of my customers in the area specializes in just this kind of trasaction; moving the customer to a state like FL, moving the funds offshore and then showing nothing on the books (usually for divorce) while not declaring BK or defaulting on loans. It’s a great racket, especially for FL, where we have gold diggers/dirty old men a plenty!
When Connecticut went with a state income tax, we got an influx of CT residents buying homes here and declaring Florida their primary residence.
Florida just recently got rid of its horrible “intangible” tax, too (basically a tax on the amount of liquid assets you held) making it a bit more attractive.
However, there’s a measure on the ballot to eliminate inflation protection on property tax (which starts at 2% in some counties), so that’s another danger. (And it has a sneaky name, like the “Lower My Property Tax” initiative, so it’s likely to pass because voters only read titles of things)
From an email I received yesterday:
“The House has approved two additional provisions in their Policy and Budget Council. The first provision would apply an assessment cap of 3% to all properties in Florida. That means that Commercial and non-Homestead properties would enjoy the same assessment cap as Homestead properties - they would not be re-assessed at full value upon sale of the property. The second provision would authorize a one penny sales tax increase to “buy-out” a portion of the property tax that is attributable to the “required local effort” (the school portion of everyone’s property taxes). The school portion of our property taxes totals approximately $9 billion each year and a one penny sales tax would buy out over 1/3 of that amount. This would provide substantial tax relief to all property owners in Florida.”
Be careful! They’re offering to offer a discount on the “value” for your initial assessment. But that’s in exchange for inflation protection!
I’d take the inflation protection, esp if I were relatively young and wanting to retire in Florida.
Suppose they give you an “assessment” discount. So your house that some assessor arbitrarily decides is worth $800K is only assessed for property tax as if it was worth 400K. Great deal, you’d think!
But, what if 20 years from now, there’s another bubble, or simply rampant inflation. And people think your house is now worth $5 Million. You’d have to move, because you can’t pay your property tax.
Face it, the assessor’s value is arbitrary. Without inflation protection, even with a “discount” they can raise your property tax as much as they want any time.
This discount on assessed value is as phony as the “75% off” sign you see in oriental rug stores.
Back in the late 1980s Oklahoma and Florida were the refuges for many of the S&L scoundrels. Sink a couple of million into a mansion then file for Chapter 7. The full homestead exemption meant that baring fraud, creditors couldn’t get at the money in the house.
Hey txchick57, was there a dollar limit on Oklahoma’s gun exemption?
I don’t know. I try to stay as far away from that place as I can.
Sounds like a Texan.
Who could have ever foreseen such an event, other than the bloggers? I’m sure the economists were shocked as they sat on their litter boxes and read their newspapers.
http://tinyurl.com/345g2j
With all the financials reporting shitty quarterly’s, I wonder how long it will take them to to dump all their REO stucco shacks.
“With all the financials reporting shitty quarterly’s, I wonder how long it will take them to to dump all their REO stucco shacks.”
They will hold on to them until the bitter end. It’s clear they are not willing to acknowledge the losses. They will run the clock down and bail when it’s time to pay the piper. Buy your short position now (SKF), sit back, and wait.
Nah, the word is they’re all frontloading the bad news. Buy buy buy. It’s all out there.
LOL
the word is they’re all frontloading the bad news
Actually, I think there’s a possibility that they are front loading.
Those execs have cushy jobs and would like to keep them. They have to be well aware that multiple quarters of bad numbers will cost them their jobs. So if they’re smart, they are putting everything possible into this Q’s losses.
I note that my argument hinges on “if they’re smart”.
I will take the “not smart” bet. I’ve been around BofA enough to confidently say that it is a corporate behemoth that succeeds, like most corporate behemoths, in spite of itself. I know a consultant that used to work for BofA and all you have to do is mention the company’s name and he goes off on an hour rant about how awfully run the company is. I would guess they have a lot more bad news coming down the pipe.
Remember, they’re already whining that they could not have anticipated the amount of fraud that went on. What else have they not anticipated that will be the excuse d’jour next quarter?
Yeah you both have points. I mean, how long has Pat Russo strung along her stockholding minions?
Ask Toll, Hovnanian, TanMan, etc. how they got all the bad news behind them in one quarter. If it worked for them, it’ll work for the banks. BTW, did the Prince cash out $130 mil recently?
if you do not mind could you please share your due diligence on SKF? thanks!
And let us not forget the secondary impact any problems at Bank of America will have. BofA all but owns Charlotte, NC. Remember that Charlotte is one of the last bastions of home price appreciation. That makes them so special. Add a bad BofA report to a terrible drought and how long do you think Charlotte home prices will hold up?
You are on your own, Seattle. Don’t blink.
Wasn’t it Bank of America that owns all that $18/share stock in Countrywide?
CFC: Pre-market at $16.75
Expect a bumpy ride for them today. They will probably get some stupid bump up at some point but CFC is doomed.
BofA + CFC = going to zero
Yup! CFC stuck out the tin cup about 1 - 2 months ago & Boa provided them with a ? 2 Bil equity infusion, exchanged for some type of preferred stock. Re-enforces the feeling that bankers are a bunch of dorks!
–
“And let us not forget the secondary impact any problems at Bank of America will have.”
It claims to be “the Bank Of Opportunity.” To screw the shareholders and to bankrupt lot of Americans?
The founder, Gianini, was one of the greatest bankers in American history, but he has too independent for NYC crooks and the crooks ultimately got control of the bank (originally, named Bank of Italy). All the independent-minded businessmen had to yield control to Wall Street.
Jas
Let’s be realistic. This thing has had so many mergers and acquisitions that this is no longer anything connected with the original Bank of America. Nations Bank bought Bank of America and kept the name. BofA was the eaten, not the eater.
–
My point was that all good independent businesses are turned into mediocre, at best, businesses by the workings of Wall Street bankers. Conglomeration is very bad, long-term for the economy. It kills the real competition.
Jas
I filed an extension this year. When I sent in my return with payment, I sent it return receipt. Got the receipt back stamped “Received Bank of America, etc.”. Makes me a little queasy to know my tax payment is going to BofA. Creepy, especially since BofA is behind some of the loans to illegals and issuing credit cards to same. I have an uneasy feeling…
BofA probably has the contract to take the checks out of the lockbox and process them for the government.
Many, many moons ago, I processed IRS checks for Mellon Bank. I went into one of the big Mellon buildings in downtown Pittsburgh at 4pm and spent the evening entering stuff from checks that were all made out to the IRS. I guess the system is still in place.
Since Foxton’s went under, they’re not letting sellers out of their contracts. Amazing…
http://www.nj.com/news/ledger/index.ssf?/base/news-12/1192684121321000.xml&coll=1
Instead of releasing homeowners from their contracts, Foxtons is asking a bankruptcy court judge to allow it to sell its inventory of 4,300 listings to another broker. And that means homeowners like Armstrong have been in limbo since late September.
In Ohio most regular brokers will let you break your contract. Secondly, in our state, if your listing changes hands or your company is bought out by another, they have to get the sellers OK to transfer to a new company, and get a new listing agreement signed. I remember our company having to do that with hundreds of listings when it just changed names. It was still Coldwell Banker, but the sub name changed.
“I’m still waiting for them to take the magnetic lock box off my door. I took the sign down myself.”
It’s called a hacksaw lady….
Or just get a new door
Devildog,
Hacksaw? You mean a BAR?
Roidy
Roidy,
You’re dating yourself. Maybe you meant SAW?
Will be interesting to see how that “auction” goes. Why would regular (i.e. “full service”) brokers and agents currently getting 5-6% commissions (& who are certainly not short of listings these days) throw money away to get a bunch of 3% listings which expire in a couple of months anyway? They can get the listings free as the various contracts with Foxtons expire.
The guy on CNBC, a floor trader, was just talking about all of the expenses associated with owning a house. He said there are maintenance expenses, interest payments, property taxes, etc. His point was that it is expensive to own a house. He stated it will be a long time for the housing market to come back. He said housing is just not affordable right now. I thought Becky Quick was going to choke. What a great start to one of my last vacation days. Smoke ‘em if you got ‘em.
Insurance, depreciating furnishings etc
Sounds like you need a vacation!
1. Step away from CNBC.
2. Step away from the terminal.
3. As you said, smoke ‘em if you got ‘em.
Builder goes kaput in Myrtle Beach, SC.
http://www.myrtlebeachonline.com/news/local/story/219551.html
But the Carolinas are booming. Myrtle Beach is overbuilt. Charlotte is overbuilt. Charleston is overbuilt. Raleigh/Durham is overbuilt. We just got back from the Outer Banks. Good lord. I have never seen anything like it. D-I-S-A-S-T-E-R is all I can say.
I wish I could short the “Carolinas” housing market. Maybe the Chick will research a way for me to do that. It would be so sweet.
Publicly traded furniture companies? Any company in the Research Triangle that isn’t a tech or biotech/pharma. ARe there any?
I put aside to save for historical reference the Nov. 2007 “Big Blue Book of Dreams” which is inserted in our local paper (Greenville News) by the largest realty company here in upstate SC. We have hit the point where our custom homes cost as much as many large metro areas. About 20 pages of photos/listings of houses 500K to 3.5 million, many of which have been built, ready, and advertised all year with no takers. Seeing the first signs here of the long-faced realtors and mortgage brokers. Middle price range (200-350K) still fairly strong, but the high end is officially a dead duck.
$3.5 Mil in Greenville?!! I presume they are 5,000 SF mansions in a gated community on the shores of a large lake, they have a Nicklaus-designed golf course with membership included, they have expansive water views, and each house has its own covered, 2-boat slip with lifts.
Even for all that, $3.5 Mil is high.
What did you see in the Outer Banks? Just curious - kinda thought that might be one area that wouldn’t get hammered too badly, just on account of the limits to supply there. But I guess there’s still enough sand to build on in a lot of places.
And, speaking of sand - did you see any spots with worrisome beach erosion?
Zero, it was beyond amazing for me. I had never been there before. It reminded me of the suburbs of San Francisco where every inch has to be built on. The size of the vinyl boxes they have built is just amazing. They are massive. Many of them are on the sites of teardowns. The homes are now too big and expensive to be rented for enough to make them any kind of investment.
The amount of homes for sale was mind numbing. In Nags Head and Duck we saw blocks where it would have been easier to put “Not For Sale” signs in the yards of the homes that were not listed. It seems like everybody is trying to get out at once. We saw some blocks where 5 houses in a row had “For Sale” signs. In Manteo they had lots for sale that have been for sale for two or three years and are not selling at all. The prices are far too high.
We had a funny story in Manteo. There was one development all set to go since 2005 but they haven’t been able to sell the lots. The trees are cleared. The roads are in and nothing is being built. There was one house at the end of a cul de sac under construction. That’s it. Our friend that was showing us around said, “who was dumb enough to lend money on that thing?” We pulled closer and saw a sign that read, “Financing provided by XYZ Bank”. It just so happens our friend works for XYZ Bank. The look on his face was priceless when he saw the sign and just muttered, “aw fuuk”.
Lots of flipping was happening in the Outer Banks.
Have family there, with land for sale too.
Don”t see it selling anytime soon.
Such a shame to see another beach area overbuilt and turned into schlock housing that caters to rental markets that encourage groups of ten or more per house in order to be affordable. Yuck.
Nice anecdote from Manteo, NYCBoy! Priceless!
This is not necessarily a Myrtle Beach builder - most of Levitt’s projects, from what I can tell, are in Florida. A similar article is in every local paper where Levitt has stopped building on a project.
This should teach all of us to never put money down on an unfinished project.
Tangelo Glow
http://www.stockmania.com/index.php?showimage=71
As Homer Simpson would say, “mmmmmmmmm, tan pork”.
For some reason the song.. “spider pig, spider pig… ” comes to mind. As in the pigmen are hanging by a thread…
priceless
a stat report on the Los Angeles Craigs List. last winter, Craig’s list in Los Angeles was getting about 500-600 posts per day(Real Estate For Sale section). And a few month before that, it was getting about 200-300 posts per day on average(Real Estate For Sale section). This week, the “Real Estate for sale” section in Los Angeles is getting an average of 1100 posts per day. I welcome comment on this statistic.
It’s surprising how many houses I see listed on there lately. I had to remove the RSS from my Outlook reader. Too many to sort through. I’ve filtered out all the listings that we can’t afford ( above 200k) to reduce the number. When that folder starts filling up, I’ll know it’s time to look.
BAC- remember the postings about banks NOT sending 1099 on short sales and dragging out foreclosures
hmmmmmmm
Oct. 18 (Bloomberg) — Bank of America Corp., the second- largest U.S. bank, said profit declined 32 percent in the third quarter after trading losses, defaults and writedowns cost almost $4 billion.
Net income fell to $3.70 billion, or 82 cents a share, from $5.42 billion, or $1.18, a year earlier, the Charlotte, North Carolina-based company said today in a statement. The average estimate of 16 analysts surveyed by Bloomberg was $1.06 a share. Bank of America shares fell more than 3 percent after the earnings announcement.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a4vDKF4Gk3pc&refer=home
But Buffet was buying Bank of America. I thought that meant the stock was a buy! And of course, they sunk 2 billion into CFC and everyone called the CEO of Bank of America a genius. The next Sandy Weill.
uhhhhhhhhhh lol he doesn’t look so smart does he?
On a side note, Ebay reports a huge loss and the stock shot up a few dollars. They take away was that they were making more money with less customers? That is because they keep raising rates. Eventually customers will move to something else and say “screw this.”
I think Amazon would be better off offering an auction website or Google.
I don’t know if it’s appropriate to use the words “Ken Lewis” and “genius” in the same sentence.
eBay is a great anecdotal market indicator, as perhaps 3/4’s of all transactions are paid by credit card.
A lot of useful stuff gets sold on eBay, but the lions share of what gets sold, is stuff you don’t need… like collectibles~
If you are an avid collector of older comic books, and you are at your whits end, and needed money for next month’s mortgage that suddenly went up $666, because of your interest only loan?
Instead of being the one-way comic book customer always a buyer, you become the dealer, selling now.
I agree. There have been low grumblings for years from power sellers who have opted out of Ebay and built their own sites or moved to other selling services. On top of ever increasing listing fees, ebay has been overrun by “speculators” turning the antique and collectibles market into a flea market. It’s definitely a good time to buy and sniping is the name of the game.
I almost puked after reading the Journal’s Lewis pump. It was all part of the CFC bailout charade.
It’s doing the same crap with the Super SIV today. It’s the Londoner’s fault SIVs were created not C. Plus, the garbage from Rosenblum and Wallison.
Anyone who actually had a profit, however small, rather than a loss did well. We’ll see about 4Q, 1Q, etc.
“An advocacy group has started a campaign calling on the Minneapolis City Council to support a three-month voluntary freeze on foreclosures in the city to give some borrowers more breathing room. ACORN turned to the City Council after getting turned down by the Hennepin County Board. ACORN also will talk to St. Paul officials.
County officials project that the number of countywide foreclosures this year will jump 60 percent over last year’s 3,039, and that was an 82 percent increase from 2005. Earlier this year, foreclosures were occurring in north Minneapolis alone at a rate of more than four daily.
But some people who just can’t afford their mortgage are better off shedding the property rather than working out new terms, according to Cheryl Peterson, manager of the foreclosure prevention program at Twin Cities Habitat for Humanity, which specializes in Minneapolis borrowers.
Tim Bendel, president of the Minnesota Mortgage Association, said that it welcomes any effort to diminish foreclosures, but some borrowers don’t have a long-term prospect of keeping up with their loans. A freeze would only delay the inevitable, he said.
The 1980s farm crisis generated a push for a statewide moratorium on foreclosures that farmers’ advocates could not persuade the Legislature to enact. Instead, the 1986 Legislature required mediation between most lenders and farmers before foreclosures.
Johnson said she’s bothered that a freeze could help investors, who represent 70 percent of foreclosures in her ward.”
Full story at
http://www.startribune.com/10241/story/1491676.html
acorn is a commie group- who’s makin the payments ?
Northern Minneapolis, also known as “$hitsville” is probably the Minnesota epicenter of foreclosure activity. That is subprime heaven over there. I bet the East Side of St. Paul is also seeing a huge rise in foreclosures. The Minnesota housing bubble started in ‘97/’98. That will be a nice disaster you have on your hands. Calling a moratorium will be just silly. These idiots don’t realize that they are going to lock up the lending industry. I love it. Pass the walleye hotdish and some ketchup. I’m feeling hungry.
“An advocacy group has started a campaign calling on the Minneapolis City Council to support a three-month voluntary freeze on foreclosures in the city to give some borrowers more breathing room.
That’s like buying clothes at the mall and the council telling you, you have to wait 3 months before getting paid. They have no authority for that.
Looks like hedge fund managers are being “whacked”.
The have a story on CNBC about a 44 year old manager who lost manager and was found dead outside of his house.
Seth Tobias.
http://www.bloomberg.com/apps/news?pid=20601103&sid=aE_UCifGvLDo&refer=us
His assistant says he was “murdered.”
The Assistants name is Ash.
They say Tobias was found in his hot tub outside his house. Also, the fund is being liquidated.
Wow, I used to communicate with him a few years ago and bounced stock ideas back and forth.
This guy lives about 1.5 miles from my house, I have a good friend who lives in the same development (Bear’s Club), it’s really over the top!
Anyway, this is just SO Palm Beach, those you live here know exactly what I am talking about. The intrigue in this area is almost without limits, everybody is doing something behind someone’s back (or someone, as in this case). It’s just amazing to watch it all play out in front of you; it’s a very intersting place to live.
At some point I think that I might have to write a book about my time here; honestly, compared to the rest of the world, the stuff that is “commonplace” here would make someone’s head in Ohio explode off their shoulders. Women/money/drugs/sex/power/theft/corruption… The list goes on and on.. It’s a very exciting place to live, that’s for sure!
I will try to get by Seth’s house in the next few days and see if I can snap a picture for the blog. It’s only a few hundred yards from my buddies house in there…
Michael, spent 13 years in Fla in the 80’s and early 90’s. Spent several evenings at the PB Kennel club clubhouse with Roxanne Pullitzer as a fellow elbow bender. I as well have many stories. Maybe we could co-author.
..
I used to live in Jensen Beach.
I remember the Pulitzers. My girlfriend at the time ( I was in college ) was a waitress at the Palm Beach Club on Jupiter and was also a beautiful model ( lucky me ).
I also remember the Diamond-T Ranch Cocaine Scandal:) and the linkage to Roxanne Pulitzer.
The whole thing “disappeared”; nobody ever went to jail.
“Dirty Sexy Money”:)
I live in Ohio and trust me the same stuff goes on here too. My former neighbor owns a jewelry store, as I’ve said on here before. He filed bankruptcy because they were in debt over their heads with houses, cars, vacations, clothes, private schools, etc. Then he comes home and catches his wife in bed with their daughter’s, boyfriend’s father. (catch all that) She tries to commit suicide, but another lover of 7 years, that they used to take on vacation with them, finds her and rushes her to hospital. (I’m sure she took just enough so he’d have time to get her there.
They divorce and he has to pay her alimony because he kept the house which is heloc’d to the hilt. He doesn’t pay, so they sentence him to jail. He doesn’t show up, so now there’s a bench warrant out for him. Oh did I mention he’s also a city councilman. They tried to arrest him at the meeting, but he didn’t show up.
In the meantime he runs up hundreds of thousands of dollars more debt adding a pool, poolhouse, theater room to the house. Now he’s being sued by the contractors. Then he defaults on $46k radio advertising and $20k newspaper advertising for jewelry store ads last Christmas. Now National City Bank, who holds loans on the jewelry inventory, wants the Chapter 13 changed to Chapter 7. Now the SEC is investigating him for selling a diamond, holding it in the vault for the customer, and then giving it to a loan company as collateral on his own loan. He’s got so many trials going, I don’t know how he keeps track.
She, in the mean time goes to the house, assaults the daughter and gets arrested.
These are people who always looked down their noses at everyone else. Now they both have records.
All this drama and this is a city of 5500 residents. There’s so much stuff in there every day, that you can’t miss reading every line.
This week the county sheriff got picked up for drunk driving, speeding and reckless operation. If he’s convicted he can’t run for office next year. He also tried to bribe the arresting patrolman. Our paper is loaded with this stuff every day and the main part is only 14 pages long. It’s better than a novel, because every few days there’s a new installment in the paper. We’re the drug corridor between the NE and Columbus and Dayton. Choppers flying over all the time looking at the fields. Crime in our town is not very high, since the drug busts are usually in towns south of here, but the scandals a riot.
There’s more sex scandals and money laundering going on than the days of the Youngstown mafia.
From September 5. Old news. Not that CNBC is known for being on top of things, or producing original journalism.
Oct. 18 (Bloomberg) — SunTrust Banks Inc., the third-largest bank in Florida, said third-quarter profit fell 23 percent, missing analysts’ estimates as it revalued loans held for sale and took charges related to cutting jobs.
Net income declined to $412.6 million, or $1.18 a share, from $535.6 million, or $1.47, a year earlier, the Atlanta-based bank said today in a statement. The company earned $1.26 a share excluding severance costs, missing the $1.29 average estimate of 20 analysts complied by Bloomberg.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ataINlR.bRdg
NEW YORK, Oct 18 (Reuters) - First Horizon National Corp … the largest bank in Tennessee, said it posted a quarterly loss on Thursday, as it set aside more money for credit losses.
The Memphis-based company posted a third-quarter loss of $14.2 million, or 11 cents a share, compared with earnings of $67.1 million, or 53 cents a share, a year ago.
Analysts on average expected earnings of 27 cents a share, according to Reuters Estimates.
http://tinyurl.com/2acoyw
I was just watching CNBC and I started yelling at them again. The talking head was going on about BoA and said “loans given to people with bad credit scores are defaulting faster than expected”
So now its a given people with bad credit cant repay loans? what the hell. I thought the whole idea behind a loan was that you got it paid back.
I for one think we need to give all people with bad credit scores, amnesty for dept and tell the leanders its there place to take the risk.
Hater!
And where would a borrower with bad credit find this “saved money”?
http://tinyurl.com/37gth4
You can have “bad credit” i.e., lower FICO score if you don’t use credit at all and pay cash for everything. Does that make such a person a worse credit risk than the idiot in the WSJ story with the 730 fico?
Pay cash for everything? You’re the one holding the line up?
I feel like a dinosaur because I always have cash. The other guys my age need to pull out a credit card for a $6.00 lunch. I know. I know. They get miles. But they never seem to go anywhere.
Note that this loosening of credit by banks took place, for the most part, after banks and other lenders got congress to tighten bankrupty rules, which make it harder for people to be forgiven debt through bankruptcy.
Any thoughts on that?
October 17, 2005 - a day that will live in infamy.
LOL,
Time sequence is a little off. 1995 reserves for mortgage backed loans eliminated, 1999 Glass-Steeagal Act repealed allowing allowing banks to invest in risky investments. 2001-2003 US FFR dropping to effective 0. 2005 BK changes.
The CC issuing banks had been trying to get the BK system “reformed”, i.e., drafted by them for them, for several years prior to 2005. I remember getting the ABI newsletters and email alerts with items about various bills before Congress beginning around 1997 so this had been in the works for some time.
What’s funny is they keep saying, “faster than expected?”
To be frank, this is slower than WE all expected. We should be the high paid ones with our own news channel.
We can them put out reports that say, “This is happening slower than we expected.”
Plenty of jobs in Vegas. Well………..plenty of job seekers!
In June, Las Vegas Sands opened an off-site employment center, allowing job applicants to set a time convenient for their interviews. Human resources executives had hoped for about 50,000 applications for 420 job classifications. But the response has been better than expected.
“By the time we’re done, I think we’ll have about 65,000 to 70,000 applications,” said Dan Nogal, director of compensation for the Palazzo and its sister resort, The Venetian…”
http://www.lvrj.com/business/10627762.html
In Summer 2006, CL Los angeles, Real Estate For Sale section (see: losangeles.craigslist.org/rfs/ )was getting about 200-300 posts. In December 2006, that same section was getting an average of about 500-600 posts per day. This week, October 2007, that section is getting an average of about 1100 posts per day.
I believe the historical trend aver a couple years ago for that secition was hovering around 100 posts per day.
This shows a dramatic increase in the number of real estate for sale posts in the Los Angeles Craig’s List “Real Estate For Sale Section
At least in the DC area, the stuff on craigslist is complete crap… all way more overpriced than what you would find on Redfin or Ziprealty with not even 10% of the selection and say 5% of the information.
Speaking of information, has anyone in the east noticed that Zillow’s listings… let alone it’s zestimate… are incredibly out of date. It certainly doesn’t look like they have imported in any MLS data for months.
I was checking the Zillow discussion boards the other day and they have zillow people monitoring (and commenting) constantly . . . anyway someone asked why the zestimates are so out of date and they said some bull about a system update that has kept them from updating in the last month or so . . . when a non-zillow person mentioned that best practice would have been to run on a parallel development server (i.e. common softward dvt practice to allow your “real” site to continue to be updated while you’re doing all your dvt/testing on another site) there was no response . . . make your own conclusions
Nothing selling, so nothing to import?
Is there a particular day of the week that is favored for posting price reductions? I would think it is either Monday (after a weekend with zero showings) or Friday (attempt to create some interest before the weekend.) I need to manage my schadenfreude time better.
BTW I changed my login because there was a frequent poster with the same name, hopefully my posts will start coming through again.
Mark Gilbert’s take on SuperConduit-Massive-Black-Hole, from Bloomberg:
I can’t decide whether the Treasury’s willingness to patronize such a misguided effort is evidence that the situation is more desperate than anyone thought, or a positive sign that financial markets will continue to evolve and innovate and might eventually wrestle the subprime demon to the ground.
One thing is clear, though: I wouldn’t want any of my pension money invested in the Master Liquidity Enhancement Conduit.
http://www.bloomberg.com/apps/news?pid=20601039&sid=a.ulmtkOVNG8&refer=home
Recent MSM/Realtor advice:
“If you don’t have to sell right now, take your home off the market and wait until the market picks up.”
Analogy:
You are in a grossly overcrowded, upper story club with insufficient exits when a band member accidentally sets the stage on fire with ill conceived pyrotechnics. You can:
a) risk personal injury, fight and claw your way out the packed exit, and down the stairs to the street below;
b) risk personal injury, break a window and jump down to the street below; or
c) calmly wait until the exits have cleared, then move briskly and safely down to the street below.
According to Realtors and MSM advisors, you should choose option C to avoid taking a hit on your way out of the building. The downside of option C is that you will be cooked alive before the exits clear.
Waiting until “the market picks up” means waiting for the bottom, which means waiting until the market value of your house is as low as it will go.
Now imagine that you have several tons of popcorn in the burning club…
and, remember:
“if you must panic, better to be among the first to panic.”
Nice analogy!
Strange analogy.
Crowded, enclosed spaces are my only phobia. I have taught my son, from the first time we were ever in a theater together (1998), that the first thing you do when entering a crowded public space is to locate the exits, and make sure you can get to one or more of them quickly. I have reminded him of this at stadia, arenas, move theaters, restaurants, and malls. I have tried to hammer the message home that when he goes off to college, he had better practice this advice if he frequents frat houses and/or bars. Once you know where the exits are, you move towards them at the first sign of trouble (failed pyrotechnics or a fight in the stands, for example). do not assume you are safe until you are out of and away from the building.
I never thought about it in terms of the housing bubble or investing, in general, but I guess it’s the same as due diligence.
Always be ready for the worst.
BTW: If you’re at the beach, and all of the water disappears, don’t run out to look at the exposed sea floor - f you get my drift.
nice to see you passing your phobia on to your child.
my mother passed her’s on to me.
Take heart, Marcus - I do exactly the same thing when I get into an airplane. First thing I do once I’ve sat down is scope out the nearest exits.
‘Coz, you never know…
Yep. Crowded trades are dangerous trades.
Uh, oh!
WASHINGTON (Reuters) - The number of U.S. workers filing new claims for jobless aid jumped by 28,000 last week, far more than anticipated and the biggest increase for any week since February, the Labor Department said on Thursday.
http://tinyurl.com/2885rv
It seems they are setting the ’stage’ up for another rate cute.
marc faber on CNBC this week:
http://www.cnbc.com/id/15840232?video=561408372
I watched that live the other day. It was excellent. When he said “confetti dollars” and then compared the U.S. dollar to the Zimbabwe dollar I thought the CNBC shill was going to stroke out. Mark Haines is one of the most bullish of the CNBC shysters. When both he and Erin Burnett are on at the same time, I just want to throw a brick through my TV set. She is awful. Instead I just turn it off and go poke my hand with a fork. It is less painful.
NYCB, That’s what they made Bloomberg TV for.
“…Instead I just turn it off and go poke my hand with a fork“…
LOL - that’s a mental picture I’ll be carrying around with me for the rest of the day.
This one’s for VT_Dan. I was listening to the radio last night. Beamer was talking about the football team’s win over Duke and upcoming game with BC. An ad came on for something called the Collosseum, a new luxury condominium hotel in Blacksburg. I did the radio equivalent of a double-take and tried not to crash my vehicle.
http://www.collegiatetimes.com/news/1/ARTICLE/8950/2007-04-12.html
There’s just so many things wrong with this. First the obvious another luxury condominium hotel in a college town? Second the timing. “Get in now with great pre-construction prices!” Third, even more than most college towns, Blacksburg is not the market for this kind of a building.
Here’s the actual site for the place. Scary.
http://www.thecolosseumblacksburg.com/
Holy cow, I had not heard of that project yet! They want almost $600 per sqft for those condos! They must be counting on a bunch of really rich alumni. VT just built a new alumni center and significantly enhanced the stadium! From what I have seen VT’s football program has been falling apart over the past several years (compared to the days of Vic).
They are building like crazy in Blacksburg and neighboring Christiansburg!
I am happy to report that I have successfully closed on the sale of my house, have my equity in BoA and am now a “bitter” renter.
Question for the group: Where would you put $100K if you already had another 40K in PM? I don’t trust the “dollar” nor BoA but trust the stock market even less (maybe shorting it?).
Depends on a lot of factors, including how speculative you feel, and how Armageddonish you think this is going to go. For middle of the road on both, I’d say split it into tenths, and find 10 good companies, buy their stock directly. Go big, but not behemoth that produce consumer necessities. Food, gas (for as long as that lasts), booze, guns and ammo are classics. Without doing any due dilligence I think 2-3 U.S. companies and the rest scattered across the globe, and you can pick up an ADM (watch out for gov’t subsidies ending), a Johnson&Johnson, or maybe an Alcoa… All of them feel too big for me, but that might give safety. If you’re feeling really speculative, grab a handful of small nible companies that can adapt to this future and are still producing valuably.
“As you sit back and relax on your private outdoor balcony overlooking the beautiful Blue Ridge Mountains speckled with their autumnal hues of maroon and orange, breathe in the clean, crisp air and unwind. Relax and release the worries of a busy week gone by. Rejuvenate your mind and body as you prepare to re-connect with old friends and the campus you have come to love as much as home. Excitement and anticipation begin to stir with thoughts of the big game and the jubilation that comes with another hard earned victory.”
I’m sold.
Man this rag is headed to the bottom.
News that a dissident investor sold his 7.2 percent stake in the New York Times Co. reinforced his opinion that investors should avoid the stock, a Goldman Sachs analyst said Thursday.
Elmasry had been pressing for a number of changes at the Times, including an end to the two-class share structure that allows the Sulzberger family to maintain control. In a note to clients, Appert said “the apparent decision to exit the stock is consistent with our view that NYT’s A/B share structure makes the company effectively ‘takeover proof.’”
http://biz.yahoo.com/ap/071018/new_york_times_ahead_of_the_bell.html?.v=1
RE: Man this rag is headed to the bottom.
If the pathetic subsidiary BeanTown Globe goes with it, the world will be a better place save for having less fish wrap.
Angelo Mozilo grabbing the drapes just before the closing.
http://money.cnn.com/quote/insiders/insiders.html?symb=CFC
You would think he would just say, “quit selling my stock” to the people that administer the stock sales. That must be possible. I don’t care if these are automatic sales or not. There should be a way to put an end to this and try to show some confidence in the company. He won’t live long enough to go to jail but I’m sure these coming years will not be pleasant for him. I don’t care how much money he has.
They would be even less pleasant without as much money as he can get.
If he quits selling while it’s now in the crapper, he’s even MORE likely to get reamed by the SEC.
If he wanted to show good faith, he’d be buying with cash to cover his sales and more. But he’s not. He could easily say “I’m putting some of my 42 bucks a share money back in at 18, because I believe in the company.”
He’s not. He doesn’t.
I for one want to see his “childern’s education money” invested in a money market account, and then put into the super siv
The dominoes are falling:
“The PMI Group, Inc. has issued a news release.
Title: The PMI Group, Inc. Announces Housing, Mortgage and Credit Market Conditions to Adversely Affect Third Quarter 2007 Financial Results
Date: 10/18/2007 6:10:00 AM
For a complete listing of our news releases, please click here
WALNUT CREEK, Calif., Oct. 18 /PRNewswire-FirstCall/ — As a result of the continued weak housing and mortgage markets and associated dislocation in the credit derivative markets, The PMI Group, Inc. (NYSE: PMI) announced today that it expects to report a net loss per basic and diluted share outstanding of approximately $1.05 in the third quarter of 2007. The primary components of the loss are incurred losses in its U.S. Mortgage Insurance Operations and a mark-to-market (or fair value) adjustment at its unconsolidated subsidiary FGIC.”
I drive past this abortion every day on my way to Whole Foods. What you need to know is that nothing on this street ever sold for over ~300K at the very top end until this housing mania started a couple of years ago. This will put the builder into bankruptcy. Nobody will pay within 40% of what he’s asking for it. Note the second tier realtor as well. None of the million dollar RE poodles who sell in that area would touch it.
http://dallas.craigslist.org/rfs/452527377.html
Tx- I expected to see dopey and grumpy somewhere in the photos.
Not only makes me want to vomit - it looks like vomit.
What a lovely backyard. I love dirt patches.
Good God. I can’t believe anything like that would be built In Lakewood. I live just north of there and this is something you’d see in the Park Cities area.
That house is so confused looking that it just makes my eyes hurt.
An absurd price and 6300 sq ft of affectation. Blech!
Wow…6,000 + sq ft of downright ugly. Honestly, who needs that much room anyway?
As a kid, we lived for a time in a house in Louisiana that had about 5,000 sq ft. We were a family of 7 and only lived in less than half of the rooms, kept the rest shut off and unfurnished because we just didn’t need them.
I’m more shocked that you shop at Whole Foods every day. You could have owned 5 houses by now =p. *tease*
Hey TX, what exactly is Sherry “ready” for? Surely not selling overpriced RE? Reminds me of a “dancer” I met, just got her RE license and was going to hang up the dancing (she has a 5 year old child to care for and didn’t think that dancing was a very honorable profession).
I just hope for the child’s sake she reverted to her fall-back occupation (which she was quite good at). ED (e-rot-ic dancing that is).
That is heinous! Just a pastiche of styles for the nouveau riche and artisically challenged. Add some furniture with plastic covers and a gauche statue in the yard and you are good to go!
AND DOESN’T SHERRY KNOW THAT THIS IS AKIN TO SCREAMING AND UNREADABLE!!!????!!!!?????!!!!????!!!!????
Love the “treed” back yard.
Would make a good Mortuary.
looks like dr seuss design inspired.
Comment by Marcus Aurelius
2007-10-18 07:50:22
‘Crowded, enclosed spaces are my only phobia. I have taught my son, from the first time we were ever in a theater together (1998), that the first thing you do when entering a crowded public space is to locate the exits, and make sure you can get to one or more of them quickly.’
I always look for the exits when I enter a place, too. I also take a quick glance over who’s in the room, and who comes into the room. You don’t have to gawk around, with a notebook. It becomes a very automatic and quick mental habit.
It’s not just for fires. Stuff happens, accidents, or worse, and the world has some crazy people in it. Why not know where to run?
I learned this from my habit of dating cops. Dating cops has lots of advantages.
handcuffs? expert frisker? what am I missing?
“Dating cops has lots of advantages.”
lol unless you happen to pick a nutcase who uncorks on you and your friends at a pizza party at 3 am with an AR15 because someone insulted him.
Carry Trade, we hardly knew you?
txchich57: Sherry Cabrera needs to get her pictures straight!
I know you all love financial charts
LOL. He stole that from this blog. I posted it here a couple of days ago.
on what thread? i’d love to see the comments from here
One of the bits buckets. Probably two days ago.
oy vey! rents are up 12 percent in the Bay Area
“Even as Bay Area home values weaken, a new report shows rents are soaring - indicative of the curious mix of a sturdy economy and a faltering housing market.”
http://tinyurl.com/36ngr6
the san francisco chronicle calls this a ’sturdy’ economy. for whom? not the poor kids without health insurance.
SD rents (at least for apartments) are also rising — not sure about rents on houses. The condo conversion craze plays a likely role in this story through at least two channels: (1) condo conversions reduced rental supply; (2) repartmentized condos (those that did not sell and were reconverted to apartments) now have fancier amenities (like granite counter tops) which are reflected in higher rents.
One might guess with all the vacant homes sitting around, that rents on houses would fall, but the owners appear to prefer holding these homes vacant (off both the rental and purchase market) to either renting them out or selling at a discount to 2005 pricing.
There is a graph accompanying the linked article below which is vertically scaled to give the appearance that rent increases are devastating renters’ finances. It is worth noting that shouldering a rent increase (as in the graph) from $1250 to $1363 over the period from early 2005 to the present, conservatively assuming the full rent increase occurred at the beginning of the period, would have represented an additional cost (above the cost of renting if rents had remained the same) to the occupant of
24 X $113 = $2712.
By contrast, a 5% decline in the value of a recently-purchased $500,000 San Diego starter home would set the buyer’s net worth back by $25,000.
Landlords reap rewards in housing slump
Credit crunch, foreclosures, shortages boost rental rates
By Emmet Pierce
STAFF WRITER
October 18, 2007
Tighter lending standards, a shortage of rental units and the recent spike in home foreclosures are benefiting the San Diego region’s landlords.
A survey coming out today from the RealFacts research firm shows that apartment rental rates climbed to an average of $1,363 in the third quarter, up 5 percent from a year earlier and 1.26 percent over the previous quarter.
http://www.signonsandiego.com/uniontrib/20071018/news_1b18rent.html
Government help to bank fund pushes bounds of moral hazard
Thu Oct 18, 2007 7:49am EDT
By Mark Felsenthal - Analysis
WASHINGTON (Reuters) - In a financial crisis, government officials face a quandary: let bad bets go sour, risking pain among innocent bystanders, or steer markets to safety, possibly emboldening repeated reckless behavior.
Many observers agree that the U.S. government is choosing the lesser of two evils as it facilitates a private-bank-backed fund to purchase distressed securities. Still, this runs the risk of fostering more of the same risky practices that led the credit crunch in the first place.
“They create an expectation on future investors that somehow they’re more protected,” said William Niskanen, chairman of the libertarian Cato Institute and a former chairman of the White House Council of Economic Advisers.
http://www.reuters.com/articlePrint?articleId=USN1536453320071018
Reports indicate that area of the market is getting worse since the announcement of this plan. What’s more, two SIVs just announced default. It’s not coming back. That market is dead.
The Capital Times - Madison, WI
No end in sight for real estate woes, panel says
http://www.madison.com/tct/news/stories/251854
–
http://www.dqnews.com/RRBay1007.shtm
Bay Area home sales plummet amid mortgage woes
October 18, 2007
La Jolla, CA.—-Bay Area home sales sank to their lowest level in more than two decades in September, the result of a continuing market slowdown and borrowers’ increased difficulties in obtaining “jumbo” mortgages, a real estate information service reported.
A total of 5,014 new and resale houses and condos were sold in the nine-county Bay Area in September. That was down 31.3 percent from 7,299 in August, and down 40.1 percent from 8,374 for September a year ago, DataQuick Information Systems reported.
Sales have decreased on a year-over-year basis the last 32 months. Last month was the slowest September in DataQuick’s statistics, which go back to 1988. Until last month, the slowest September was in 1991 when 5,735 homes were sold. The strongest September was in 2004 when sales totaled 12,868. The average for the month is 8,961.
…
Down 61% from Sep’04 (in Bay Area sales peaked in 2004)
Jas
As usual, unexpectedly bad news for big banks is good news for stocks, as investors know that more FFR cuts are in the pipeline.
October 18, 2007 3:09 P.M.ET
BULLETIN
CRUDE-OIL FUTURES CLOSE AT RECORD-HIGH $89.47
Indexes find paths to green
Jarred by unexpectedly weak Bank of America quarterly results, bulls battle back, trimming intraday index declines in afternoon trades.
http://www.marketwatch.com/
yes thats the logic of it. Commodities is the thing now, uh except lumber. hedge against inflation or in other words too many dollars chasing too few foriegn economies. And wasn’t it only yesterday those dollars were chasing homes.
http://tinyurl.com/2zm4r8
Some more Stock market stuff from Trowe Price PRNEX new era fund.
“Oil and gas equipment and services companies were again the fund’s top contributors, driven by efforts to find new energy sources. Diversified metals were top contributors. We favor capacity-constrained metals, such as copper and nickel, whose demand is driven by the construction boom in China and other emerging markets but which cannot be produced internally by China. Forest products firms detracted. The industry faces headwinds from increased input costs and falling demand in some segments, particularly newsprint. Paper products are also sensitive to economic cycles and were punished as investors feared a slowing economy.”
“Forest Products detracted” Haha I think they are talking about home building
“Resource producers are struggling to increase capacity, and, with demand growing, prices are likely to remain well above historic norms. While the major integrated oil companies should do well the rest of this year, we think next year’s results are likely to be tempered. Weremain positive on coal and are warming to natural gas. The most significant risk is a recession, an event that has yet to appear on the horizon. We believe this environment should continue to provide good investment opportunities for the fund.”
And no I am not a salesman for mutual funds just looking for that next big bubble.
In my neck of the woods Bay Area, Northern CA zillow.com has stopped updating zestimate. What does this mean? Are they in cahoots with local RE?
OT, can anyone help?
Two months ago I wrote about a real estate saleslady who tried to pursue a demented MD into a locked mental ward to get him to sign escrow papers on a hugely overpriced POS in Temecula. Long story short, she succeeded. The mortgage is held by IndyMac. Does anyone have any info about this company? Is it a CFC with a MoZillow-like CEO? Is it a viable entity or is it primed (sorry,) for default? I’ve explained the concept of jingle keys to the guy, but could really use some more info on the holder and the likelyhood of them pursuing what’s left of his pathetic “assets” (basically a gas-hogging truck and his computer.) Thank you so much for any ideas or innuendo you might have.
Was he really demented? As in non compos mentos?
Yes. Hospitalized. Bipolar. Unfortunately lawyers cost money.
Well what I’m getting at is perhaps the contract could be voided on the ground that he was not competent to enter into it.
Thank you, Ms. Chick. That is the avenue I’ve advised.
Alas, he’s truly inpecunious at this point, (IE: no funds for a retainer,) and I’ve donated waaaay too much to the cause over the years.
Was hoping the threat of a suit against the realtor and the broker (who both knew he was NCM at the time and went after the sale anyway,) would force a stalemate. Just curious about IndyMac’s solvency.
Sigh. Where do I FIND these people…?
You’re one of my heroines by the way….
Hope you see this even though it’s late. IndyMac is the largest lender specializing in alt-A loans. Over the last several years a significant majority of their mortgage lending has been of the lo/no doc “liar loan” variety.
Because they get their funding from their bank subsidiary’s deposit base, they are unlikely to go belly up. But it is certainly possible that they could take further huge losses as they have reacted to the crisis by holding more of the trash on their own balance sheet. They couldn’t sell it profitably or even at a small loss. If the quality of the loans is anything like the norm for this sector, they will be taking very large writedowns on this portfolio for a long time but I doubt they’ll be BK.
Who will buy our debt?
China says the United States has “gravely undermined” relations between the two countries by awarding Tibet’s spiritual leader, the Dalai Lama, with its highest civilian medal.
More fraud.
http://www.suburbanchicagonews.com/heraldnews/news/608663,4_1_JO18_PLAINFIELDMORTGAGE_S1.article
NEW YORK, Oct 18 (Reuters) - Capital One Financial Corp … posted a third quarter net loss, hurt by charges from shuttering its GreenPoint Mortgage business.
http://www.reuters.com/article/bankingfinancial-SP/idUSN1820725820071018
NEW YORK, Oct 18 (Reuters) - Zions Bancorp … a western U.S. regional bank, said on Thursday its third-quarter net income fell as a result of higher loan losses, writeoffs and weak credit conditions in residential real estate.
http://www.reuters.com/article/bankingfinancial-SP/idUSN1821155120071018
For Dallas area HBB community theater-goers:
Glengarry Glen Ross
Tonight until October 28 at the Dallas Theater Center.
http://www.dallasobserver.com/search/events.php?oid=770176
“Third prize is you’re fired.”
Glengarry Glen Ross must be in vogue lately. I recently saw an ad for a local live performance of it too, in NH I think.