Bits Bucket And Craigslist Finds For October 26, 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.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
November 2024 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
A few days ago, I made a remark that mis-characterized the lively nature of debate on this forum.
I apologize for that remark.
I truly believe that the contributors to this blog are the “brightest people in the room” and that the education and comradery I’ve experienced here can be found on no college campus. I also salute Ben for his courage and persistence in sounding the alarm on the housing fiasco several years ago when nobody would listen, and for offering such a spirited forum for us to congregate.
droogie
I don’t recall what you said, droogie, you’re OK in my book.
Me either, but i would like to second both comments above. First, this is a great blog, and the debate and discourse here on housing (and many broad economic issues) is really without compare anywhere else I have ever been. Second, as Palmetto said, you’re ok in my book Droog.
One thing that I find SO different about this blog is the ability of a group of people to disagree about something, and yet, after all making strong and convincing arguments, NOT resort to name calling/slurs to get their point across.
I post at other blogs as well, and I can tell you, without a doubt, that this is truly a unique thing about the HBB compared to everywhere else I visit. We disagree (often it seems) but we disagree on issues that actually are debatable! And debate we do!
“that this is truly a unique thing about the HBB compared to everywhere else I visit.”
I second that wholeheartedly. I don’t post at other blogs anymore, although I sometimes read the opening posts for information. The level of vitriol and nastiness that seems to prevail turns me off. Of course, there can be passionate agreement or disagreement, that’s a good thing and I do see that here.
This blog’s sense of humor has helped me make it through many a day.
Good droogie.
I don’t recall what you said either droogie but as long as it’s not personal I think all remarks are legit.
I’ve stopped reading comments on articles because it’s too depressing. People are vicious and illiterate. Even though I’m on of those dreaded libs, I don’t feel out of place. This is the only blog where I see true civil discourse. People are able to disagree without being rude and descending into name calling. Droog, anyone here is OK by me, too. Thanks to all.
“droog” means “friend” in Russian.
No worries!
~Misstrial
Well, thanks for the kind words!
Droog does mean ‘friend’ in Russian, but I’ve pulled it from the following:
http://en.wikipedia.org/wiki/A_Clockwork_Orange
And now we come to the sad and weepy part of the housing story for your humble narrator…..
Pigman Talks Recession
http://www.stockmania.com/index.php?showimage=78
Countrywide loss: $1.2 billion
Top mortgage lenders sees loss much larger than forecasts, but predicts quick return to profitability.
NEW YORK (CNNMoney.com) — Countrywide Financial, the nation’s leading mortgage lender, reported a staggering $1.2 billion loss Friday that was much larger than Wall Street expectations in the third quarter, but predicted it would quickly return to profitability in the current period.
Countrywide’s net loss came to $2.85 a share, or $2.12 a share excluding certain items. Analysts surveyed by earnings tracker Thomson First Call, had forecast a loss of $1.28 a share, compared to the net income of $648 million, or $1.03 a share, profit it reported a year earlier.
The company said its first loss in 25 years will be short-lived. ????
Losses will be short lived HA -HA -HE -HE- HO -HO (more like 2+ years)
http://money.cnn.com/2007/10/26/news/companies/countrywide/index.htm?postversion=2007102608
Dead man walking.
CFC trading up 20% premarket. Hope nobody was short that. The story will be, the bad news is out.
Now MSFT up 13%? That one I’ll take a crack at on the short side with a stop at 37.
They issued significantly higher upside guidance than expected. .25 - .75 vs. .16. They’re either going to burn the shorts for a year or be sued back to the stone ages. I wonder what they’re seeing to take that kind of risk.
They dumped all the bad loans on others, and all their competitors went bust? That’s the only way out I see.
They are probably seeing a falling dollar which helps to “inflate” profits as they bring the money back to the states.
There might be a shorting opportunity in late December, early January if the housing market worsens. They are hanging way way out there . . . even so, I’d use out of the money puts to limit risk.
There might be a shorting opportunity in late December, early January if the housing market worsens.
Hey tx, couldn’t help notice that you said, “IF, the housing market worsens….” Are you predicting “the bottom” by year’s end? (LOL)
“…if the housing market worsens.”
Oil at $92.00… the straw that breaks the housing camel’s back has a name with pain:
“I see debt people”
I see Cheney’s been invited to Thanksgiving dinner with Hugo, Putin, or the Islam buffet at the “AK47 Cafe” in Tehran…decisions, decisions, decisions?
Got Oil?
no, but you have to take into account what is priced in at this level
They appareantly have a deal with BoA. BoA is closing down all wholesale side completely (this is on yop of the 3,000 already announced). New business after 11-30 is going to be directed to CFC.
There was a huge screamingfest on the BrokersOutpost about it on Weds or Thurs.
I would keep an eye on the inside trading over the next several months.
Damn, I was hoping to pick some up today around $12 after the bad news pushed them down some more, and sell on the inevitable spike that I guess I just mis-timed by a bit.
Woe is me. I kept my puts…should have known the worst was baked in. I’ll sell this morning with a profit (not as much) and reenter once the stock bounces…it’ll probably regain some local highs.
CCC I know what you mean. I took my CFC profits at 16ish and MTG at 22. I made a few bucks but have been kicking myself for a week as I watched them tank further. I guess I have to learn to not be greedy.
I sold EMC at close and bought MSFT. Kinda glad I did : )… regret selling AAPL at $150 to buy EMC at $21.50. Mistimed it a bit but did ok.
I sold half my puts two days ago, fortunately. Bought some back this afternoon. It’s hard to believe people are buying on statements like “we’re going to be profitable, trust us, really, no kidding…”
Actually, if you fire nearly all your people and do nothing but collect payments for a set fee, you might make a profit - a small one and with a much smaller company, but the world needs paper pushers too.
But it will take a lot longer than 3 months to dismantle the house of cards.
“The company said its first loss in 25 years will be short-lived. ????”
The losses will be short lived if CFC goes under quick….
I’m utterly confused as to how they can even pretend the losses will be short lived. But then again, like I needed any convincing that the tan man has no morals…
Denying the truth only makes it uglier when it rears its head.
Got popcorn?
Neil
BofA getting out of the wholesale lending business (no brokers) and if CFC keeps their broker business (and BofA has stake in CFC) almost all jumbo loan business will be going to CFC.
like I needed any convincing that the tan man has no morals
No kidding! Being a CEO is not unlike being a politico. Neither is likely to fall on his sword.
yea - and they are insisting they will be profitable in 2008. Just how may I ask will this happen??????
You go from 25 straight years of profits to a $1.2b loss in the span of 3 months.
I realize there is all sorts of accounting that makes this possible, but I mean really?
Asparagus, you bring up one of the aspects of the bust that really blows my mind. Here in FLA, there are businesses that have been around for decades that are taking a dump big time. That’s where, just like you, I have to say: I mean, really? These businesses were successful for decades without any boom, but now that this boom has bust, they’re blaming the bust for their failure. BS. Now, I can understand scaling back. PGT, a local manufacturer of windows that has a major regional presence, is laying off workers. This I can understand, if demand isn’t as great. But to say that the bust has ruined your business, as some have claimed, is a little much. Business is business. You either do well, or you don’t, despite boom and bust cycles, unless your business model was meant specifically to take advantage of a boom.
Interesting observation. Could this be the manifestation of the “misallocation of resources” that we hear about during inflationary times? Sounds like a lot of firms believed that the good times would last forever thus borrowing and expanding into the boom only to be caught with high overhead servicing reqm’ts on the lull. Gee, kinda like the flippers!
“But to say that the bust has ruined your business, as some have claimed, is a little much. Business is business. You either do well, or you don’t, despite boom and bust cycles, unless your business model was meant specifically to take advantage of a boom.”
The business model may not have started out to take advantage of the boom but the boom caused the business model to evolve into something that it was never intended to be.
This, for example, is what happened to the prudent lenders in this RE boom; the prudent lenders were forced to become less prudent else the other lax lenders would steal their business. Change with the times or fold up shop and lay everyone off were the two choices imposed on them.
Agreed. When you see businesses go out of business that have been in business for 30-35+ years you know that this is not a normal business cycle in any sense of that term.
They gambled, big time, that the good times would last, and that “it’s different this time.” They lost. Maybe they won’t make the same mistake next time.
“Maybe they won’t make the same mistake next time.”
“They” won’t make the same mistake but as time passes another “they” will emerge and a similar mistake will be make by a new generation of they.
The beat will go on.
Malinvestment with borrowed money to expand into the boom. Naive extrapolation.
“You go from 25 straight years of profits to a $1.2b loss in the span of 3 months.”
We’ve been playing the inflation game since the early seventies, working longer and smarter, putting the wife to work, etc., and it has finally caught up with us.
Productively bankrupt, so to speak?
asparagus…
now what kind of name is that??
It’s Greek.
LMAO
CFC predicts a quick return to profitability, but provides no proof. Yet investors are cheered.
WAMU warns of rough times ahead in the same article.
By and large they are both in the same area of the country, right?? So how can the two forecasts be polar opposites??
Thank you in advance.
CFC has all the proof it needs.
“Henry Paulson presses for aid to sub-prime lenders
Henry Paulson, the US Treasury Secretary, is seeking to persuade the White House to offer financial compensation to American mortgage lenders that try to help troubled homeowners by renegotiating the terms of their loans.
The Times has learnt that Mr Paulson is lobbying President Bush to provide funds so that mortgage lenders can reduce the loss that they would incur from either reducing the rate of an adjustable home loan or extending the life of the mortgage to make it cheaper for the property owner. …”
Times on Line
http://tinyurl.com/38c3hu
Government at its finest “To big to Fail”
Granite kitchens too big to fail - the american standard, apparently.
Two different @ssholes, therefore two different opinions.
“The public preference for stock is not only as marked as ever, but also the will to speculate is still a speculative factor not to be overlooked. The prompt return of huge speculation and the liberal manner in which earnings are again being discounted indicate that it will be difficult to quench the fires of stock market enthusiasm for long.”
- Barron’s, March 24, 1930
Spooks….
http://www.economist.com/finance/displaystory.cfm?story_id=10024679
Great article.
That article is right in line with a point I have made repeatedly here: One can only hide an elephant under the living room rug for so long before the room begins to stink.
This week’s Economist has a special feature on Central Banking.
Krugman on lack of regulation and how the Fed knew what was going on…
http://www.nytimes.com/2007/10/26/opinion/26krugman.html
“Increased subprime lending has been associated with higher levels of delinquency, foreclosure and, in some cases, abusive lending practices.” So declared Edward M. Gramlich, a Federal Reserve official.
These days a lot of people are saying things like that about subprime loans — mortgages issued to buyers who don’t meet the normal financial criteria for a home loan. But here’s the thing: Mr. Gramlich said those words in May 2004.
krugman and the left cheered the 97? banking bill and every deadbeat own a home bill of 03. Now it’s bad policy………
Gramlich also said it wasn’t the Feds ‘business’ to burst bubbles, etc, Selective revisionism by Krugman, IMO.
same theory regarding downside trading curbs on the market, you dont slow down the upside euphoria.. you channel expectations on the downside to a tighter range.
Agreed and look at what Democrat Sec of Housing jumps from CFC’s board after making a gazillion-Cisneros
Gramlich also said it wasn’t the Feds ‘business’ to burst bubbles, etc, Selective revisionism by Krugman, IMO.
I think we read Gramlich’s statements differently. I don’t see any revisionism.
He said they shouldn’t be in the business of “bursting” bubbles, but he was actively advocating policy that made it more difficult for a bubble to inflate in the first place — a more nuanced approach. And, in fact, if more highly regulated methods had been used, the bubble probably wouldn’t have expanded to the size it did.
If anyone is attempting to spin a revisionist history, it’s Al Greenspan and his harem of see-no-evil economists.
‘I think we read Gramlich’s statements differently. I don’t see any revisionism. He said they shouldn’t be in the business of ‘bursting’ bubbles, but he was actively advocating policy that made it more difficult for a bubble to inflate in the first place — a more nuanced approach. And, in fact, if more highly regulated methods had been used, the bubble probably wouldn’t have expanded to the size it did. If anyone is attempting to spin a revisionist history, it’s Al Greenspan and his harem of see-no-evil economists.’
I agree that AG is the worlds show-stopper when it comes to after-the-fact CYA, but Gramlich has some accounting to do in heaven:
‘If you worry about asset prices, that represents a trade-off with your primary objectives. It would be impossible for the central bank to target a single asset class such as equities or housing.’
I also have a post somewhere on his famous Princeton speech where he made the ‘business’ quote.
After scanning through some more of Gramlich’s speeches on the Fed site, I agree that he’s more all-over-the-map than I realized.
He is at least thinking about subprime issues earlier than many of his brethren at the Fed, however. From 2004:
At the same time, increased subprime lending has been associated with higher levels of delinquency, foreclosure, and, in some cases, abusive lending practices. On a social level, one question is whether the gains afforded by these new market developments outweigh the losses. Another question is whether anything can be done to limit foreclosures.
In the same speech, he seems to endorse cashing some value out of one’s house, even for subprime borrowers:
In addition, subprime lending has enabled millions of cash-strapped home owners to liquefy the equity in their homes to help reduce the burden of other financial obligations or to improve their homes.
Yikes.
Source
. . . and everyone though Clinton was a genius when Easy Al was conductor. Bubbleonians.
Clinton messed up BIG on trade and economic policy, at least in some ways (I liked his tax policy, mostly). And he and Greenspan cooked up the ‘inflate our way out of SS’ plan. (As a young person, I didn’t mind that either–while it was working, which it isn’t because inflation is now out of control.)
Still, he was way better on foreign policy. Seems trivial, but look at the MESS we’re in now. USA, Inc. would not be looking at the possibility of an Argentina-style collapse were it not for these atrocious war debts.
I wish Krugman would be more specific about what type of regulation would prevent this situation. There isn’t enforcement of the regulations we have, mortgage fraud was and remains illegal. I am also curious about how GFEs and HUD-1s were presented to subprime borrowers and whether these documents were processed properly. Additional unenforced regulations will not cause any change whatsoever.
Here’s an article that’s suprisingly frank about some of the shennanigans teh government & bankers are trying to pull off. This is the first I’ve heard mention of a 2% rate cut being discussed.
http://articles.moneycentral.msn.com/Investing/SuperModels/WhyWeNeedARecessionSoon.aspx
If BB wants to cut again and also achieve a shock and awe effect, I guess he will have to go for more than 1/2 percent.
Just go to 0 and get it over with
Are you refering to the interest rate or the value of the dollar? Both are heading the same way, of course…
Technical trading, it’s discussed a lot here, but I can never find a reliable (and free) source of data to teach myself. Any suggestions? E.g. I’m looking to learn what it is traders mean when they see “head and shoulders” patterns. I can get basic definitions on most items fairly easily, though ‘cup and handle’ was a pain. The problem is, definitions don’t actually teach anything.
hardrightedge.com
my friend AF owns and runs that site. Great free info on there.
I was wondering the same thing. Thank you very much for the link.
Thanks. That’ll keep my brain sufficiently fried for a few weeks. Once I can use the techniques and make a profitable trade with them, I’ll toss the profits to Ben again in thanks.
give a few bucks to your local dog or cat rescue organization. If anyone makes money off things I say, I’d appreciate that. Thanks.
thankyou chick. I’m delving into this stuff myself
Tx, I want to thank you as well. For those us less astute at these things your insights are truly appreciated.
Worden Brothers telechart. That is if you believe in TA.
I wonder if the dollar is ready to sink even lower. They have Snow on CNBC talking about why a weak dollar is necessary.
One thing is certain, when they cut rates, they are wacking China over the head since they peg the juan to the dollar. Oil goes up for them too.
“wacking China over the head”
China’s whacking itself, on the news last night were all sorts of juicy toy recalls. It is a shame to see time honored brands like Mattel and Fisher Price go toxic. But that’s what they get for doing biz with China.
BTW, HR 1955, it seems, has passed the House. It’s called the Violent Radicalization and Homegrown Terrorism Prevention Act of 2007. You may wish to research this. If it passes the Senate, we’re in deep doo-doo, because “thought crime” becomes an issue under this. Yeah, laugh at me if you want, but it can restrict the freedom of speech on a blog like this.
Well, isn’t that waht it really all about? I doubt much of the “anti-terrorist” legislation passed recently has done much to stop terrorism. And it’s obvious the government doesn’t really care when they encourage millions of illegals to cross the border and are intent on cramming amnesty down our throats.
No, the real target of all these measures is good old U.S. citizens. There is no more “loyal” opposition. Either you’re for the government or you’re against the government, and I make no distinctions between parties; they’re in cahoots.
Palmetto and Devil,
agreed. And that’s for posting the info. i think controlling the blogsphere is very close to job one for the government.
With the corporate media in their back pocket, this is the only wild card of freely exchanged information out there.
And that’s for both parties…dems and repubs.
Testify, brothah! Nothing’s made sense since 9/11. Where’s Osama (and why do they keep trotting out his videos whenever they want to scare us?) What about the illegals? What’s all this poison Chinese crap pouring into the country and apologizing for recalls? What’s cueball Hank doing trotting the globe and vomiting about “protectionism”? What’s with the deliberate weakening of the dollar?
On a more immediate note, can you see some frustrated RE agent pointing to this blog because some poster here “advocated violence with a Joshua tree”? Think I’m joking? That’s how ridiculous it can get.
`SEC. 899B. FINDINGS.
`The Congress finds the following:
`(1) The development and implementation of methods and processes that
can be utilized to prevent violent radicalization, homegrown terrorism,
and ideologically based violence in the United States is critical to
combating domestic terrorism.
`(2) The promotion of violent radicalization, homegrown terrorism, and
ideologically based violence exists in the United States and poses a
threat to homeland security.
`(3) The Internet has aided in facilitating violent radicalization,
ideologically based violence, and the homegrown terrorism process in
the United States by providing access to broad and constant streams of
terrorist-related propaganda to United States citizens”
yeah, sure, CONgress “Finds”. CONgress couldn’t “find” its anus because then it would know where its head is.
And it’s obvious the government doesn’t really care when they encourage millions of illegals to cross the border and are intent on cramming amnesty down our throats.
We are currently in Anaheim (on vacation) and if you drive a few blocks away from the resort area you will realize just how far the invasion has gone. I drove to a local supermarket this morning (during rush hour) and my observation is that EVERYONE here is hispanic. Now I realize that it might be a central OC thing, and imagine that Mission Viejo and Laguna Niguel still look “American”, but the handwriting is on the wall.
“….I drove to a local supermarket this morning (during rush hour) and my observation is that EVERYONE here is hispanic….Mission Viejo and Laguna Niguel still look “American”….”
Not to criticize, but there are many hispanics (including my husband) who are very loyal Americans and who hold national security clearances.
RE: Anaheim. Anaheim PD is known for having a federalized enforcement of laws as related to illegals of any ethnicity and which has federal officers and PD officers who have received training on immigration enforcement who separate the illegals for deportation hearings (depending on the crime accused of) from the other suspects/incarcerated persons. APD has been known for stepping up enforcement of immigration laws and have been the subject of criticism from illegal-immigrant rights groups such as MALDEF.
I doubt that all the hispanics you saw were illegals since generally, they tend not to shop in supermarkets (i.e. “Albertson’s, Von’s”) but in convenience stores or markets catering to the hispanic community-at-large.
btw, Anaheim has one of the best used-book stores in OC - Book Baron (Ball & Magnolia). Wonderful place - I would take the kids there about 1x a month to load up on used books of all topics.
I hope that my post is understood in a positive, purposeful way.
~Misstrial
what invasion? california has been hispanic for hundreds of years, even before you came.
I lived in SoCal in the 60′ and 80’s. And yes, there were plenty of hispanics back then. But at intersections I made a point of checking every car that went by, and without exagerating, it was 95% hispanic.
I doubt that all the hispanics you saw were illegals
I am sure of that as well. Many were surely born here (perhaps of illegal parents), and others might have arrived legally. But fact remains that in just a couple of generations metro LA has become the second largest Mexican city in the world, and this happened mostly because of the open borders and amnesty programs of the past few decades. There is no doubt that had the borders been secure during this time that metro LA would be smaller and look very different than it does today. I lived in central OC in the 60’s and it was a very idyllic place back then. The kindest thing I can say about it today is that its a hellhole, and you couldn’t pay me to live here.
Another observation: while driving north up Harbor Blvd I noticed that they are tearing down old shacks in the barrio and building houses and condos. I have no idea what they cost, but its a safe bet that the house prices are proabably close to 10x the local median income. For a house on ugly Harbor blvd, within earshot of Disneyland’s thunderous nightly fireworks show, and surrounded by houses with bars on the windows. It makes you wonder what the locals are smoking.
Cual invasion? Abrete los ojos mi buen Jose Manuel. Y fijate que los que vienen no son nativos de California, son de Oaxaca y Michoacan (y de Guatemala y El Salvador tambien.
Me doy cuenta que te da gusto el exito de la reconquista, per como dicen aqui “be careful what you wish for, it might come true”, porque California se esta convirtiendo en una provincia tercermundista, rumbo a la bancarrota.
Haven’t researched it yet, but does it define “thought crimes”?? Not sure I like the sound of that.
Thanks.
Blano, just a taste, but I do urge you to research on your own and form your own opinion.
“Literally, the
government according to this definition can define whatever they want
as an extremist belief system. Essentially they have defined violent
radicalization as thought crime. The definition as defined in the bill
is shown below.
`(2) VIOLENT RADICALIZATION- The term `violent radicalization’ means
the process of adopting or promoting an extremist belief system for the
purpose of facilitating ideologically based violence to advance
political, religious, or social change.”
What, I can’t talk about trouts or Joshua trees anymore? LMAO!
`(2) VIOLENT RADICALIZATION- The term `violent radicalization’ means
the process of adopting or promoting an extremist belief system for the
purpose of facilitating ideologically based violence to advance
political, religious, or social change.”
Sounds like a law that can be used to go after those websites that hint at violence towards abortion doctors or are anti-gay, etc. When a democrat wins the WH and starts appointing US Attorneys… The Christian right should be pretty afraid…
Brian, I think that’s the point — this kind of legislation is bad for free speech no matter what your political stripe. This shouldn’t be a left v. right issue.
(Note: The threat of imminent violence is not considered protected speech, but Americans should be able to get riled up about whatever they damn well please.)
The “Christian right” tends to be very patriotic, so they are definitely in the crosshairs of whoever is in charge. They were duped by GW, but are beginning to see the light, and are threatening to stop blindly supporting the GOP.
I agree this should not be a left right issue. It is a danger and a threat to all liberty loving Americans. One of things to look at is how they define a “terrorist”. Among many other things are what is called “single issue” groups. Really? Technically this is a single issue group. How about illegal immigration? etc
“i think controlling the blogsphere is very close to job one for the government.”
You can bet your ass on that! It is a threat to them and the MSM. No control - no taxes. If they are allow to start taxing the internet then they can subjugate it to further regulation and ultimately controlling it and content.
Thank you Palmy, I’ll be doing exactly that.
regarding these laws. isn’t it always the case the laws were written to be vague. and that is the reason that the judiciary branch exists. words like the intent of the law has been used for ages. the scary part is how the branch has been radicalized to serve the executive branch.
they’re also wacking themselves in what they are doing to their own environment. precious lakes are being turned into chemical pits as they dump there wastes into them, making them turn green. killing fish and making communities unliveable as the stench is almost unbearable. what cost ‘growth’? what cost ‘consumerist societies”? i’ll tell ya, icebergs melting, drought, and a planet that is killing itself.
vent . thanks.
Orwellian
It’s all BS. For instance the weak dollar is proclaimed necessary to correct the trade imballance. But actually that’s what tarrifs are for. With the stroke of a pen we could have fixed the trade balance issue long ago, and retained a strong manufacturing base and currency to boot.
But tariffs are projectionist, we can’t do that!!!!!
We can’t have the American government protecting Americans
We must follow the advice of the international bankers who say that more international trade is the road to wealth[/sarcasm]
Of course those bankers don’t mention that more international trade is the road to their wealth since all that money passes through their hands.
Has anyone else noticed that a lot of things in Wal Marts are not made in China anymore. Seeing lots of other countries popping up on the labels.
Also did anyone see this morning that Allstate is going to cancel insurance in all the SO CAL fire areas. Banks weren’t allowed to refuse to lend in certain areas; it was called redlining. Why don’t insurance companies have the same restrictions?
China is getting more and more expensive as their manufacturing capabilities mature, similar to Japan and Taiwan several decades ago. Thus you/we will see more and more products with “Made in Vietnam” or Cambodia or anywhere else that has nickel-an-hour labor and zero concern for the environment.
Huh? We were starting to see electronics assembled in Malaysia and Viet Nam ten years ago, because Taiwan and Korea were getting too expensive.
Devil,
I think we should drop the word “protectionist” and go with “defend”. As in “Defend America”. Defend America’s safe food,
it’s remaining manufacturing base, and of course, freedom of thought.
Protectionist as a word is poison–but defend? Now there’s a gem.
Right on spike66 .
Spike66, framing the issue in the right way can make all the difference, and I think you’ve hit on a great way to do it.
Absolutely. When you allow those against your interest to define the argument and the words you lose. PC is a not a myth!
I think the problem is Americans talk out of both sides of their mouths. They mourn the loss of all the manufacturing jobs, yet they won’t give up buying the cheap crap from overseas. It used to be I not only loved to do it, but I saved a ton sewing clothes for my girls. Eventually, it got to where unless I was shopping at Sax, it was as cheap or cheaper to buy clothes nearly everywhere. Girls were spoiled and didn’t want the same junk as all their friends so money ceased being the issue.
I can’t remember when sewing your own clothes was cheaper and I’m not that young either. Young kids now are totally into sewing their own clothing and accessories and crafting. There are DIY clothing makers that make a pretty penny peddling their stuff on Ebay now.
Agree with Wickedheart: there are many eBay sellers who design and manufacture clothing themselves.
Also:
“I think the problem is Americans talk out of both sides of their mouths. They mourn the loss of all the manufacturing jobs, yet they won’t give up buying the cheap crap from overseas.”
Don’t confuse American consumers with American retailers. Not the same. It’s the *retailers* who are buying the overseas “cheap crap” and who are determined to not offer choice in the marketplace. eBay is a way around all that.
~Misstrial
Good points, all. I learned how to sew clothing at home and at school in our mandatory Home Ec section (boys and girls). Home Ec was more fun than the mandatory music section, let me tell you. (I did orchestra and chorus, but nothing is so boring as a “music” class where 60% of the people don’t want to be there.)
I made a jacket–which I still wear, 15 years later–using a pattern and a sewing machine. Boy, was I in for a shock when I went to JoAnn’s for the first time and got a gander at the yard price for not even clothing quality fabric. Gack!!!
Being able to repair clothes has saved me a lot of money, but when I want to buy clothes I go to the thrift store. F*** this s***.
When I was younger I was convinced it was a conspiracy by the retailers, but now I think the consumer has a lot to do with it. Too many people willing to pay too much for things. Why do you think the same or better quality basics are available for 1/4 the price in Black sections of town? I mean sold in actual stores, not “hot” goods out of the back of a pickup truck. ^_^
Blacks and Asians are both VERY price conscious, but Asians save their money and open their own businesses (1st gen, anyway), whereas Blacks blow it all on status items to impress their friends. (This is not to say that a few Black families haven’t gone into business and become VERY wealthy–however, when 12% of the population accounts for 50% of the welfare cases, then for whatever reason, legacy of slavery, discrimination in education, etc, there is clearly a cultural problem.)
Bank earnings commentary:
http://www.minyanville.com/articles/index/a/14632
That’s an accurate summary.
SD County fire facts show the following numbers of homes burned:
Witch Creek 1,061
Harris 97
Poomacha 50
Horno 0
Rice Canyon 206
Total homes destroyed 1414
http://www.signonsandiego.com/uniontrib/20071026/news_1n26facts.html
http://www.bloomberg.com/apps/news?pid=20601109&sid=af3wCbWHvK4w&refer=home
And if you have special insurance you get private fire protection.
Brother told me about this when the fires hit Idaho. All the rich in Sun Valley had their houses foamed.
Current estimate of all SoCal homes destroyed in this week’s fire events = 1780
http://www.mercurynews.com/breakingnews/ci_7287435
Considering that there are millions of homes in SoCal, that’s still chump change.
Just wait for the big one (earthquake) to hit, and watch 25-50% of SoCal burn to the ground. All those ruptured gas lines will be a major nightmare.
Is it time to call a bottom on the dollar’s plunge? Look on the bright side — at least the stock market almost never goes down by much.
Dollar at Lows Against Euro, Aussie, and Canadian Dollar
By Riva Froymovich
Word Count: 527
NEW YORK — The dollar hit an all-time low against the euro Friday, and touched fresh long-term lows against the Australian and Canadian dollars as well, following the release Thursday of another round of disappointing U.S. economic reports.
The euro charged forward to $1.4389 early in New York. The dollar also dropped to a new 33-year bottom against the Canadian dollar and a 23-year low against the Australian dollar. The pound approached the 26-year highs it reached in July.
http://online.wsj.com/article/SB119338418739672730.html?mod=hpp_us_whats_news
There is no bottom in sight for the buck. Oil is over 91, gold up, silver over 14, and rates will be cut next week.
http://quotes.ino.com/chart/?s=NYBOT_DX&v=i
Click on “Chart Range — Max” for a clear view of where the dollar has treaded since the housing bubble popped (late 2005)…
Yes its scary and may prop up home prices or keep them from a real crash which I suppose is what the FED has in mind?
Unless wages go up, that means nothing. And they’ll never allow that. Wages going up is inflation, don’t'cha know?
Min. wage IS going up … day late and dollar short. The thing is, few jobs not filled by illegals were still min. wage anyway, and not even then sometimes. Retail usually starts at $6.50 or $7 … of course, it’s different in Florida, but they raised their min. wage above the federal years ago.
Min. wage doesn’t mean much when your hours are cut to 20 and you don’t get any health insurance, though. See you at the food bank.
I had dinner with a realtor last night that handles transactions largely in the SE Minneapolis suburban market. She remarked that almost all of her sales have been short sales and that she was getting used to working with the bank representatives with offer negotiations.
Apparently the word is out that the banks, at least the ones that she has worked with, really want to do short sales as opposed to foreclosures.
She also stated that she has several listings that are NOD’s but not yet foreclosed and the owners have stopped paying the mortgages. I thought that was a bit odd but apparently the banks are encouraging all efforts to sell these homes regardless of current owners mortgage delinquency. I wonder if when these numbers get large enough the banks will start to modify the foreclosure process in that as long as the listing sales price conforms to the bank’s requirements (ie realistic), the deadbeats get to stay in the home in order to defray costs/maintenance as well as accounting gimmickry?
Thanks, Auger — that’s an interesting observation, and one of the reasons I think Ben’s blog is often on the leading edge.
Sooner or later, the banks, or at least those sensible enough to try and temper their losses, were going to have to turn to this. Much better to short-sale a house now, before it gets wrecked in foreclosure and then sell it damaged for even less later.
This development, though, is more bad news for those hoping for prices to stabilise (read: to stay too high) because once the banks start pushing all this onto the market, look out.
Who in the he11 is going to lend money in this environment.
Subprime earnings blame game
EARNINGS
Subpar Earnings: Companies Blame
Housing, Credit Problems for Weakness
As companies prepare or release their quarterly earnings statements, many are blaming the subprime meltdown, housing slowdown and credit crunch for weaker-than-expected results. Here’s a selection of companies that have cautioned of an impact in recent months. This chart will be updated as more companies report. Updated 10/24/07
http://online.wsj.com/public/resources/documents/info-retro-subpar20070925.htm?&s=2&ps=false&a=up
“Groundwork” = selling a gazillion shares of CFC stock, then using OPM to buy back shares before the opening today?
Countrywide Swings to Steep Loss
By KEVIN KINGSBURY
October 26, 2007 9:16 a.m.
Countrywide Financial Corp. posted its first quarterly loss in 25 years in the third quarter on $2.27 billion in mortgage losses and write-downs and soaring credit-loss reserves.
But Chairman and Chief Executive Angelo Mozilo said the groundwork to return to profitability in the fourth quarter has been laid, sending shares sharply higher in premarket trading.
http://online.wsj.com/article/SB119340069184872775.html?mod=hpp_us_whats_news
The headline U.S. indexes sure do seem to have a recent propensity to defy gravity…
http://www.marketwatch.com/tools/marketsummary/
Merrill up $5 today after losing billions. LOL. The fix is in.
A tale of two markets:
- U.S. dollar exchange rates on the left
- U.S. headline stock market indexes on the right
I wonder which market is getting more stabilization these days?
http://www.marketwatch.com/tools/stockresearch/globalmarkets/
If you click on the “futures” tab on the right graph, you can see the evidence of rampaging primary commodities inflation.
Today’s charts bring to mind the ominous feeling I had last Sunday upon first noticing the huge billowing cloud of smoke on the horizon above the Witch Creek fire.
I never felt so bad about making money. It feels like stealing from my children, but I didn’t make this inflation so I have to play the game. On a related note it’s very easy money, frontrunning inflation.
More Subpoena’s for Standard and Poor Re Credit Ratings.
Oct. 26 (Bloomberg) — McGraw-Hill Cos. said its Standard & Poor’s unit received a subpoena from the Connecticut Attorney General related to an investigation into credit ratings.
The subpoena was received Oct. 16, New York-based McGraw- Hill said today in a regulatory filing. The company said it is responding.
Connecticut’s subpoena escalates investigations of S&P, which faces a probe by the U.S. Securities and Exchange Commission and the state of Ohio. S&P, Moody’s Investors Service and Fitch Ratings, the three largest ratings companies, also faced criticism from lawmakers and investors, who say they gave excessively high rankings to subprime mortgage securities that later lost more than half their value.
No surprise..private firefighters for AIG’s wealthy clients in Cali.
“AIG this year expanded its Wildfire Protection Unit to 150 ZIP codes in California and Colorado, up from 14 when it was formed in 2005. The unit has had the busiest week since its inception as fires burned at least 719 square miles (1,861 square kilometers) from Santa Barbara to San Diego, destroying or damaging about 2,000 homes and 200 businesses and causing at least seven deaths.
The Wildfire Protection Unit has six trucks outfitted to spray Phos-Chek, the fire retardant used by the U.S. Forest Service. Customers can have Phos-Chek sprayed on brush surrounding their homes before each fire season. During a wildfire, the trucks are sent out whenever a fire comes within three miles of a home and spray all combustible areas.
Such protection doesn’t come cheap. It’s available only to customers of AIG Private Client Group, which serves affluent individuals and their families. The average customer spends $19,000 a year on the insurance, which may also cover yachts, art collections and ransom demands, Rivera said.”
http://www.bloomberg.com/apps/news?pid=20601109&sid=af3wCbWHvK4w&refer=home
“No surprise..private firefighters for AIG’s wealthy clients in Cali.”
San Diego keeps voting down bond issues for fire houses and more firemen. Volunteer fire departments in San Diego in 2007.
And their just had a major fire in 2003.
Got to keep those Republican taxes low.
“AIG this year expanded its Wildfire Protection Unit to 150 ZIP codes in California and Colorado”
A family member of mine has AIG annuities. AIG is the worlds largest Insurance company but has sigificant exposure to RMBS.
I myself never liked annuites, though AIG seems to be the safest of the bunch so far, at least for said family member. That said, i really want to find a way to transfer a portion of this annuity into other investments. A 1035 tax-free exchange is only for exchange of similar assets-thus my Mom is still stuck with AIG annuities but can move it penalty free, at least portions of it. Problem is how much tax she will pay to move say $25,000/yr into a different asset class. She is in a low-income bracket.
I understand AIG is taking a big writedown on losses on its RMBS portfolio. That is why i am concerned and thinking of transferring out of AIG-though it has been generally a safe, solid investment for the seven yrs it has been in my family.
Any general suggestions would be appreciated, even just throw out general opinions on AIG annuities, annuities in general, ect. I am pretty savvy on investment alternatives and if it was MY PORTFOLIO i would know exactly where to invest and would by now have pulled out of AIG.
Problem is tax consequences on transferring unlike-assets which is not my strong suit.
Being a former wildland firefighter. Phoscheck is only good for a very, very short amount of time. It basically is equivalent to dish soap and removes surface tension of water. This allows for the water to more thoroughly cover fuels (brush, wood, etc.) while denying oxygen to the fuel and fire. It doesn’t put out fires. I can’t tell you how many times we had sprayed burning logs with this to see them continue to smoke once the phoscheck dried (in about 10 minutes).
The best solution I have seen yet is the new fire gel. Unbelieveable stuff. If any of you live in a wildland-urban interface, I would seriously look into buying this stuff. It is definitely a “wow” factor. Problems with it are that it is kind of expensive (but how much is your home worth?) and a 3-year shelf life.
Is it Barricade?
“BARRICADE® Fire Blocking Gel is a revolutionary product that is changing the science of fire fighting and exposure protection. During recent years, the increasing number of out-of-control wildland/urban interface fires has made headlines around the world. These challenging incidents, such as the devastating fires in California, Oklahoma, Colorado, Montana, Nevada and Florida have threatened lives and destroyed many homes, businesses and other structures. Even more unfortunate is the fact that firefighters have been injured and killed in their valiant efforts to fight these monsters. BARRICADE® will finally allow us to control and extinguish these fires safely and effectively.”
Thanks for the info! :>)
I’m open to having my mind changed, but I don’t see any problem with paying extra for proactive insurance. A large portion of the population thinks that they should be able to build wherever they want (floodplains, earthquake zones, wildfire areas) and then have the taxpayers foot the bill for dealing with their problems when an expected disaster occurs.
These people have recognized the additional risk they have chosen to undertake and are paying an average of $19,000 a year to mitigate it.
The 3Q 07 housing vacancy survey data is out from the U.S. Census Bureau, and there is big, bad news.
The homeowner vacancy rate is at 2.7%, up from 2.5% a year earlier. Only vacant for-sale units and owner-occupied units are included in the vacancy rate. Vacant for-sale units are up 139,000 from a year earlier.
Vacant for rent units are up by 58,000.
Total occupied units are up by 670,000.
So what happened to all the other units completed last year?
Seasonal units are up by 569,000, and “other” vacanct units are up by 531,000, for a total of 1.1 million additional vacant units that are not for rent or sale. What are those units doing?
Meanwhile, owner-occupancy is DOWN by 465,000, and renter occupancy is up by 1,134,000.
Oct. 26 (Bloomberg) — Confidence among U.S. consumers fell more than forecast in October as the housing slump deepened and fuel prices rose.
The Reuters/University of Michigan final sentiment index dropped to 80.9, the lowest level since May 2006, from 83.4 in September. The measure is trailing the 89.6 average for the first half of the year and is also lower than year-earlier readings.
…
Economists forecast the Michigan index would decline to 82, according to the median estimate of 62 economists in a Bloomberg News survey.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aaGxeqtuL4S4&refer=home
Watch that Euro…Bad News Spreads.
Credit Crisis Spreading New Jitters in Europe
FRANKFURT, Oct. 25 — Europe, which once hoped to avoid major fallout from the summer’s credit crisis, is now feeling an autumn chill of slackening economies and warnings of further market upheaval.
The Bank of England warned of more financial instability.
The ill tidings came in several European capitals Thursday, including a reduced growth forecast in Germany and a Bank of England report that said financial markets were still vulnerable to shocks from the crisis that originated in the American home mortgage market.
nytimes.com.
Stock Market Investors are as bad as FB’s in Housing. CFW loses a billion and told Investors they are going to be profitable: Market goes up and CFW’s stock goes up.
Hmmm:
Housing is tanking.
CFW can’t really do much in Subprime,
they still have thousands of employees
CEO selling stocks fast like the colorado river
Huge resets coming in the next 5 years.
Profitable. “I don’t think so”
Happened upon this gem while browsing craigslist for some cabinetry…a must read.
http://reno.craigslist.org/hsh/431754662.html
From the link:
“I just finished remodeling and unfortunately i’m one of many that had adjustable rate mortgage… So to keep it short, screw countrywide I’m selling everything. Hey i payed for it!”
Hmmm, what if he didn’t pay for it but is trying to sell it all anyways?
I suspect that many nice homes will be ruined in one way or another as this whole mess unwinds . . . You’ll know for sure when that ‘pre-owned Granite’ store opens up in the local strip mall!
Am I reading this wrong or did this guy just take a big bath on this sale?
MEGA-developer Steven Roth has finally unloaded his Park Avenue apartment at its $9.5 million asking price, reports The Post’s Braden Keil. The Vornado chairman first listed his 10-room prewar co-op at 800 Park Ave. in May 2006, after renovations were completed on a 15-room duplex at 770 Park he bought from the estate of Gianni Agnelli in 2003 for $25 million. Two potential buyers were turned down by the co-op board at 800 Park before Roth’s Corcoran broker, Deborah Grubman, found a couple who passed muster. Roth, who’s worth more than $1 billion, is still probably relieved he doesn’t have to pay the $7,000-a-month maintenance fee plus taxes for the vacated place.
I was trying to sleep in this morning, Stayed up late talking to the translator in Japan. But the phone got me up. It was a realtor who had just listed a house in my area. Wanted to know if I wanted to buy a house or knew someone who did.
I was too tired to go with my first reply “are you soo greedy you need two commissions?” So I told the truth, that we might be looking for a house near by in February of next year
She hung up
The NAR has finally pulled the web link to the “Anti-Bubble Reports” which were done by David Lereah’s minions back in the fall of ‘05.
These documents are full of data supporting the conclusion that real estate can only go up in 2006 and 2007. That’s not all they are full of, as HBB readers might suspect.
NAR did not pull the reports, just the link page, so if you want a fun document with which to taunt the “REALTORS” in your city just Google “anti-bubble reports” and click on Google’s cache of the http://www.realtor.org page (which should be the first hit).
What am I missing here?
Oil at $92; 2 MIL vacant homes; Home sales plummeting and foreclosures skyrocketing; home builders going bankrupt; Banks reporting record losses; unemployment up; retailers expecting a bleak Christmas season; credit card debt mounting
And the stock market is soaring?
Is there a reasonable explanation for this?
American Economic Consumer Meatloaf: Oil is the 38% fat hamburger…US Dollar for the “bread crumbs”
Recipe at K-Mart in the Martha Stewart “Homemade” section
“…20 million barrels of oil consumed by U.S. consumers every day.”
http://www.reuters.com/article/politicsNews/idUSN1929571620071019?sp=true
O.K., what is that x42 gallons per barrel @ $3.05 a gallon = $122.10 x 20 million per day x 356 days per year
Good thing for PEP Boys… that Americans keep producing cars, building x3 car garages and Uncle FED keeps printing money…
Got Oil?
It’s up only in US $ terms, down by oil and gold standards. Don’t look at the fundamentals. They have ceased to be relevant. Markets go up and down at the pleasure of the central banks.
OT, but there’s a very thick cloud of brown smoke on the W.horizon out here in E. Utah - Calif fires affecting us indirectly, hope things are getting better out there.
http://www.washingtonpost.com/wp-dyn/content/discussion/2007/10/16/DI2007101601220.html
Washington Post RE discussion - Elizabeth Razzi and Co.
“The OPEC countries have gotten used to these prices,” said Claudia Kemfert, head of the energy department at the Berlin-based DIW economic institute. “I think that in the future they will seek to keep the prices high.” - as soon as someone says this oil goes to 20 bucks.
I agree with the beginning remarks about the value of this blog and it commenters. It help me from becoming a FB. Thanks to Ben and all.
On another topic I wonder if any one knew of a way to find out what a house was sold for in San Diego County. The situation is this in my neighborhood which is a suberb called Clairemont near the end of a cul de sac near a canyon. (not affected by either the recent or past wild fires) a house was put on the market and sold within 6 weeks. The other day a local realtor left his latest promo activity on my door. It had the recent market activity for the area. This house was listed as pending with a sale price of $595,000V. The V being a variable range listing. I looked it up on zillow which only had data as of the middle of Sept. but gave a value of appr $463,000. It also had in its home description: Seller will entertain offers between $575,000 - $595,000. This is a 3 bedroom 2 bath house that was built in 1957. It’s a okay house in a nice but not fancy neighborhood and is no way close to being worth almost $600,000. Something seems off. Anyone with any insights?