Bits Bucket And Craigslist Finds For November 10, 2007
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
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I’m seeing a trend in all the foreclosure sites that I’ve been tracking - that, after rising meteorically since early last year, the number of listings seems to have all of the sudden leveled off the last few weeks. Anyone else notice this?
Given the ARM reset chart etc. this is interesting. Of course these are “current listings” and doesn’t necessarily indicate the rate of foreclosures, or the total of foreclosures that have occurred. It could just be that the first round of foreclosures from last year are now beginning to be sold of substantially.
At any rate - I know that most of us on HBB have been expecting that the foreclosure rate hasn’t yet hit its peak - based mostly on the famous ARM reset chart that came out in January. I would say now that I’m not so sure, at least based on what I’m seeing in the numbers. I’m thinking that even though there are tons of ARMs yet to reset - a lot of people went ahead and mailed in their keys *before* the reset, because they knew that they were hosed and couldn’t afford the new rate, and saw that rising home values now weren’t going to save them.
Thoughts?
A couple of things I meant to add/caveat:
- I say “leveled off”, but actually in most cases the number of listings is actually going down. Not a huge amount, but going down nonetheless.
- However it’s early - this is only about in the last 4-6 weeks that I’ve observed this.
- This is based on data mostly from Foreclosure.com and Emailforeclosures.com, though some from other anecdotal locations. It could well be that for whatever reason those sites aren’t accumulating as high a percentage of actual foreclosure listings as they once were. I just now started looking at data from RealtyTrac. If anyone has any good historical data from that site, or others please post a link.
maybe you’re seeing the investor flight- FB’s will hold on till the cc are maxed etc………?
BTW can anyone compare foreclosure rate now to 1991 ?
Only thing I’ve seen is this one, for San Diego:
http://www.sddt.com/Finance/EconomicIndicators.cfm
Change the “start year” to go back as far as 1982. It’s very interesting. The current ramp-up has already gone well beyond the early-90’s peak (which didn’t actually peak until ‘94-96 actually).
tx - SD had a late cycle w the defense thingy
wow ,is that going to sting again when the war spending ends
It takes 3 months of non-payment before most banks initiate foreclosure proceedings. Then of course foreclosure will take another 3-6 months if its clean, i.e. no fight for the home/foreclosure. Why mail in the keys when you get over 6 months of living for free? The foreclosure spike resulting from massive ARM resets that starts now will not show up until after the new year.
If someone did do a jingle mail, the bank would still let matters run their course as I noted above unless the “owner” did the responsible thing and initiate a deed in lieu (DIL), but I’m not sure if DILs show up in the foreclosure stats.
Of course. Folks who live on borrowed money they have no ability to pay back will drag this out as long as possible.
What’s particularly frustrating about every “bail out” scheme is that most of the people who bought houses they couldn’t afford had nothing to lose in the first place! I can’t imagine anyone with even a couple hundred K in savings overextending himself–he’ll know that he couldn’t just “walk away” without some risk of them going after his assets.
So, of course, these folks are going to stay in “their” houses until the sheriff kicks them out! Then they can say “boo hoo! I lost my house” and get in the newspapaper, and get the government to confiscate more of my money to help them.
Could it be simply that we are moving into the “holidays” when nothing gets done? Even in the good times, real estate here is dead at this time of year.
–
As I have commented before, Listings start to decline some time in October based purely on seasonality. They start to pick up again in February.
Jas
Right. If you want to make any meaningful comparison of listings over time, you need to take the holiday season slowdown in real estate sales into consideration. Who wants to be out shopping for a new McMansion when Santa Claus is coming to town?
“the number of listings seems to have all of the sudden leveled off the last few weeks.”
The zip I track 93552 Palmdale is at an all time record this month. The 3 and 12 month trends are still accelerating.
It’s like I said before though, they can only foreclosure every house in the zip code a couple of times before we reach bottom.
I would expect the rate of increase to level off and hold steady for 2-3 years. If you look at the SD chart, we are firmly in the damage zone for foreclosures now it is a function of time.
The numbers may have levelled out like core inflation has remained steady, but I see a lot more vacant houses for sale with the weeds growing when I run. Is there enough staff to process more foreclosures? It’s not the number of people that get foreclosed on that drives the price down. It’s the soon to be vast number of ugly houses that are not moving, and that number goes up weekly. All my runs have numerous foreclosures on them and the pace is going up.
Oh please, ‘core inflation’ is a farce. Subracted out is housing, energy, food, and medical. I can afford a shirt from China, but the ‘core’ is experiencing hefty inflation.
RE: a lot of people went ahead and mailed in their keys *before* the reset,
Back in the ‘90/91 bust I noticed it could take upwards to a year to evict someone from a foreclosed home-and that was with a local lender pushing the action.
With mortgage holders now strewn all over the world-who is to say how long it could take to repossess a property.
So why would anybody bolt from a “free” rent?
I also think there is a preponderance who think the government will bail their azzes out before the upcoming election.
“Thoughts?”
The famous ARM chart came out when foreclosures were off the political radar screen, and the prospect of a looming foreclosure crisis was pretty much in the tinfoil hat realm so far as the MSM was concerned. Now that we are in the middle of a nationwide foreclosure crisis (despite the fact that all real estate is local), there is a great deal of pressure on politicians to act in order to “save the homes” of people who bought houses they cannot afford, as their ARM resets are painfully demonstrating.
The upshot is that even though policy makers may not be able to wave a magic wand and undo the effect of all the unaffordable ARMs that were loaned at the height of the mania, they are nonetheless likely to take various mitigative measures going forward to dampen the predicted impact of ARM resets below what it would be if there were no available forebearance measures.
Re: “trend in all the foreclosure sites that I’ve been tracking”
I think it’s hard to study the trends on the foreclosure sites because there are multiple trends going, for example, someone buying a house he could never afford using one lender vs. had a house could afford but HELOC’d it to death using multiple lenders.
I started watching a house on Foreclosure.com that keeps appearing and then disappearing. The owner has three mortgages totaling $569,000 on a home that she paid $155,000 for in the 90’s and rents out for $4,000/month. It reached the point where the house was going to auction and then it was removed from Foreclosure.com and put on the market for the amount she owes on the three mortgages. Maybe the second and third mortgageholders contested the foreclosure? It’s going to be hard to sell at that price because not only is it overvalued, but needs a lot of work. So I can see it not selling and re-appearing on Foreclosure.com in another 6 months.
“the number of listings seems to have all of the sudden leveled off the last few weeks.”
I can’t comment unless you provide more data…by “listings”, is that “notice of defaults”, “foreclosures”, “REOs”, or some combination?
NODs would be the best indication of “ability to pay”…”foreclosures” will be dependent on how much the banks can re-structure loans, but will also have a variable lag from the actual resets (in other words, if there already have been a ton of NODs, the time it takes for them to get processed as a foreclosure could be getting longer and long, due to insufficient personnel). The REO number will tell you how much property the banks have been forced to take back, and will also have a longer and longer time lag from the original loan reset as banking personnel get overwhelmed by the number of houses to process.
I only keep track of NOD’s in one county of the 6-county Detroit metro area.
After going down to around 750 or so a week in that one county, those daily numbers are spiking upwards again, back to an average of over 1,000 a week. I would assume the other counties are similar, but I don’t know for sure.
I noticed this as well. The numbers backed off slightly in August, only to roar back for a new record in September and November.
http://put.elpasoco.com/NR/rdonlyres/3BE6A35A-85BE-441F-9D01-EB8DCED68F2F/0/ptstatistics.htm
These are the stats I follow - the El Paso County (Colorado Springs) foreclosure statistics. No “leveling off” in sight here, despite the continued “it’s different here” mantra of the local NAR shills.
Scroll down, and the true ugliness (or beauty from a smug renter standpoint) becomes apparent.
Sammy - what are the releases?
Foreign cash could boost the housing market. Yeah, right.
http://ap.google.com/article/ALeqM5gs7J81K2jeycsahYDzU3W5Bqr0XgD8SQLVL00
“The theory goes that foreign investors step in and replace first-time home buyers who have been squeezed out of the housing market during the recent downturn. These new investors in turn allow current homeowners to sell and trade up to larger homes.”
That’s right, HBBers. Your dream of buying a house on the cheap will NEVER come true, according to jamokes like Vitner. Buy now, or be “squeezed out” forever by foreign investors.
But wait, weren’t the supposed “foreign investors” having their own bubbles? Wouldn’t they be tapped out, too? And will those “foreign investors” buy up all those fugly cookie cutters the developers built? Will the “foreign investors” pay those outrageous second home taxes and insurance fees in Florida, for example? And will those “foreign investors” pay the HOA or condo fees?
The same Brits that invested in vacation homes in Florida that they can’t rent out the rest of the year for the cost of debt service and can’t sell for what they owe and also have similar vacation homes in Spain with similar issues are going to be buying more homes in the U.S.?
they are still buying, credit is still extremely cheap in Europe (far below inflation) and lending is as loose as ever.
not for long. small banks in europe are in trouble. The big banks are a year or two where the big american banks currently are. They are raising interest rates, and money is not as loose as ever. The bank of england is setting new standards for loans also, and so on, and so on. Remember these guys are investors. Rent rates have to justify the price they pay. Foreign investors will support the markets in a free fall, and we need eventually for a free fall to stop. We do need a floor at normal affortability in every location. I don’t want San Diego for example on a free fall with no end in site. We need to the economy to continue to function, and a real estate free fall will begin to freeze every segment of the economy like a domino effect. we don’t want that, or I don’t want that. So it may be good to have some foreign investors give this market the slow mulityear downturn in pricing to happen in a somewhat orderly fashion. I noticed alot of spanish speaking european looking people at the Carmel Valley bagle shop when I was renting there 3 years ago. So some parts were already investor driven, and it might explain why that CV pricing have not gone down that much as of yet, but they are lower and lower from peak every month. Condo being hit first.
mortgage rates in my country are going down again instead of up, and rates on savings accounts and deposits seem to have topped as well. And I see NO sign of tightening of credit standards, on the contrary. Even in the UK where one would suppose they learned a lesson the crazy mortgages (e.g. the 125% I/O) are still available on the same conditions as before.
From Cape Cod, spoke to a realtor, she’s working on a partnership with a broker in London to push Cape Cod homes there.
After the performance of the $, I’d give it a look.
This is hogwash. Pound or Euro strength will not compensate for a declining assett, high property taxes and low cash flow (assuming intent to rent).
Beat me to it Houston……I agree….
Houstonstan:
you are right, but do you think the EU speculators really think about that? They have been buying at the top and will buy all the way to the bottom, until the bottom falls out of the EU housing market (which would probably cause the easy money to dry up).
In Dutch investment magazines (and even more so in general magazines catering to elderly wealthy people) you can still find the ads promising 15-25% yearly revenue on FLA investments; same for Turkey and Dubai (the last two are getting a bit more difficult to sell now because some big companies selling the stuff went bankrupt last month, taking all ‘investments’ with them).
I say excellent! Let the Euro FB’s be the knife-catchers that provide the comps we need to validate price declines. We need things to sell in order to accelerate the move to the bottom.
do you think the EU speculators really think about that? They have been buying at the top and will buy all the way to the bottom
US real estate is a black hole that can eat investor dollars without limit. There are only so many suckers out there, and as long as prices are above historical multiples the builders will keep churning out houses and fleecing them. And then it will be over.
Stalingrad. And then what happens in the Fatherland?
Catherine Austin Fitts will be talking about the economy on Coast to Coast am tonite. Hmmm, I’m thinking Ben should call the show and talk to her… Ben would be a good guest on C2C too.
Geez, when are we going to make it past the denial stage and get on to acceptance and capitulation? If nothing else, the J6P sheeple have certainly been resilient during this last half of the boom/bust cycle.
Who cares about US consumers. Let’s devalue the dollar and target foreign investors!
I have many european friends who buy vacations in Europe. Won’t be successfull in the US. even if it dirt cheap. And think about it. If they do, they will buy at the resort areas. Who’d would buy a house in Fresno, CA, Slidell, LA, Hurst TX etc.. forget about it.
you mean they dont want homes in the middle of nowhere ?
It’s that sliding scale of affordability vs distance. Outlying areas are cheaper and cities generally expand outward. Just about every subdivision was on the edge at one time. In bubble times, this gets exaggerated-then when it pops, there’s a collective “WTF were we thinking?”
And space aliens COULD land in my backyard.
Never read such a bullshit before.
“The weakening dollar has caused many problems for consumers, but it may also be providing the fuel for one unintended — and very welcome — benefit: a rally in the struggling housing market driven by foreign investors.”
The Dollar is weakening, because money is taken out of the U.S. and invested elsewhere. It will take a while before the stream of money is reversing.
“Today, a foreign buyer would need only 34,100 euros to make a $50,000 down payment on a house.”
EUR34,100 is more than $50,000 and which US bank will lend a decent loan to foreigners without credit history ?
The US housing crash is in the news there every day. The last thing they will do is invest their money into a crashing market.
I talked to a homie in NYC last night who said NYC is screwed. This is the same guy I saw last summer who said there is no housing bubble. We’re making progress!
On the downside, the number of my Florida friends who are getting clobbered is piling up. I feel bad for *some* of them.
Some but not all? I presume most you do not feel bad about most? I only feel bad for the responsible people who are going to be impacted upon by this and for the children of sheeple who are now going be uprooted from their homes. The children will be traumatized by this greatly.
I think I understand your point. It’s like how I traumatized my children by renting the last few years and used the extra money for family vacations to Europe, NY, and Hawaii.
Seriously though, when I served in a voluntary capacity as a Mormon bishop for several years the most difficult thing to watch was children suffering due to parents stupid decisions.
One of the basic tenets of the Mormon welfare program “safety net” is that the church can help support the basic needs of life, but shouldn’t support lifestyles.
I would have people come to me asking for a grocery order and help to pay the cable bill and $200 long distance phone bill. It was all I could do to keep from pulling out what little hair I had left.
I’ve read from several sources the idea that the great depression was as severe as it was because it had to wring all excess from the system. Effectively it was a reset button. How far down until all excess is wrung from our current system?
“I would have people come to me asking for a grocery order”
Don’t Mormons put away six months to a year’s worth of food in case of job loss or catastrophe? I’m assuming these people who came to you didn’t participate in the food storage program.
The Mormons do it for a very special reason…
Many of them starved to death on a somewhat regular basis, in the frontier days of the 1840’s, and beyond.
When Mother Nature didn’t come through, on occasion~
(full disclosure: we have about a year’s worth of food, on hand)
Wow, Aladin. You must have a pretty big hand.
Out of interest what food do you have pilled up? When I prepared for one of the Houston Hurricanes, I had 10’s tins of tuna, veg (especially potatoes), chocolate, bottled water, gin (and tonic) and beer. Nothing that needed cooking.
Lots of canned, lots of dry, sugar, rice, flour, pancake mix, lots of anything with a shelf life, really.
One crazy thing we have is a dozen cases of this Washington state Sauvignon Blanc, $11.88 a 12 pack of 750 ml bottles.
Our neighbors are hip to it as well, and on occasion we show up at one another’s, with a bottle of one buck chuck, in tow.
We buy a lot of it from a store that sells brand name food cheap, as it gets over runs of this, that or whatever. Or sometimes it’s just a product that couldn’t get shelf space?
I just bought 99 cans of Muir Glen Organic Hearty Tomato soup, with a July ‘08 use by date, and paid 99 Cents a can for a 19 oz serving…
Gotta eat.
MY Dad lived through the depression and after he died my sister and I went thru his house and found at least a years worth of food stored in every conceivable nook and cranny. Most of it was dried beans and rice.
Some other things…
1.1 pound ground Trung Nguyen Vietnamese Coffee, it has a definite European flavor to it, and a little exotic lilt of the Orient mixed in. $4.99
6 packs of Fiddler’s Green India Pale Ale beers $3.99, brewed in Utica, Ny, only to get remaindered out West. Tasty.
I am eating some Earthbound Farm Organic premium pitted prunes, out of a 15 oz cannister that cost me $1.59.
Gotta do the hustle on eating them, though. The good by date is November 15.
But the hustle works both ways sometimes…
I guess I must be more bearish than even you Aladin, I have about 2 1/2 years of food squirreled away. Mostly freeze dried, beans, rice, powdered milk, canned goods, cracked wheat, flour, etc, etc. I’m hoping it all goes bad before it’s eaten
That’s why we like buying it on the cheap, and preparing at leisure, while others are sleeping.
It’s kind of a Trader Joe’s, on the cheap.
And they run out of an item quickly sometimes, and others linger on. 12 packs of Jones Soda have been $3.99, for months now. It’ll rot your teeth the good only fashion way, laced with cane sugar.
http://www.preparedness.com/sumrpaof48ca.html
Had to overcome considerable scepticism/teasing from my better half when I placed a bulk order for MREs and freeze-dried food. Preparedness, like insurance, is an investment you can’t afford to be without in times like these. Also have the firepower and training to defend my castle if it comes to that.
I’m not so hip on MRE’s…
I’ve used them a number of time backpacking, and the food is just ok, really.
Better choices out there…
p.s.
1 quart tetrapak, resealable container carton of Pacific Natural Foods Organic “Freedom” Onion soup, use by Feb 26 date.
99 Cents…
I like MREs. Back when I was in the military we used to refer to them as “Meals Rejected by Ethiopians,” but actually, they were quite tasty (at least when you were half-starving) and nutricious. They keep well, too, and require no water or preparation. Can’t get my wife & kids to try them yet, but they will if they get hungry enough.
I liked the hydrogen? heater thing that you added just a small amount of water to…
But in comparison, my Pocket Rocket Stove, weighs in at 4 oz’s and a 12 oz isobutane cannister burns for 1-2 hours.
One pound of heater and fuel will last one person about 5 days, used sparingly.
I just watched zeitgeist the movie (zeitgeistmovie dot com) and I’m wondering if it will do any good to stock up.
Survivalist hint #37.
After you stock up on ammo, gloves, and heavy outer wear, the best deal around is animal feeds. ‘Most any burg with horse enthusiasts has a feed store tucked away on the outskirts. 4-Way (wet/molasses)-$11/75#, rolled corn, $8/#50, seed corn $9/75#, game bird scratch, $13/75#. All securely bagged, stackable, and ready to rinse and boil. (Rodent and insect parts are bonus protein.) Throw in a few 100# bags of brown rice, wild rice, whole grain flours, bulk seeds and nuts, store yourself a #$% !load of chili seasonings, vinegars, pickles, dried fruits, jams. Hide away a couple 55gal barrels of honey for barter, warn the horses about the CalCan Company, and you’re good to go.
A few laying hens never hurt either.
You can always forage for greens and roots, but you’re just gonna have to break down and buy a lifetime supply of dental floss. Would hate to contemplate Armageddon without dental floss….
i enjoyed the first 30 minutes of zeitgeist tremendously, with its extremely cogent explanation of the origins of most religious symbols.
then i thought it went off the rails when it got into 9/11, etc….
I enjoyed the zeitgeist movie from start to finish.
Re: 9/11, I saw a few of those 9/11 terrorists at the Caesar’s casino bar on the summer solstice 2001. I was with a friend and she noticed one of them drawing detailed pictures of the casino said something to them. They invited us to sit down and my friend said, “No, you might be perverts.” They wanted to know what a pervert was and when we told them, they laughed and said, “No, we are terrorists.” Imagine my surprise when I saw their photo in the paper the day after 9/11. My friend called the FBI to tell them we recognized them. The FBI didn’t even want to talk to us on the phone. So, yeah, I believe we don’t know or don’t want to know the whole 9/11 story.
All those who are stocking up food (including Mormons), don’t forget your red table wine. You’ll need it for the nuclear fallout.
How far down until all excess is wrung from our current system ?
That is the real question IMO….Withh BB at the helm it will likely be a slow bleed….Insert P Volker and we would find out in short order….
if you really want to know how bad it’ll get you might want to read the latest on http://economicrot.blogspot.com/. It’s not a pretty picture, and it’s already to the failling CDO stage…
that is the single best description I’ve read of our current financial situation. Thanks for posting it.
“How far down until all excess is wrung from our current system?”
excess, our culture is based on too much ‘Stuff’. pass by peoples garages and one sees them full of junk. junk to fill ‘need’. this society needs a shakedown without a doubt. a society based on just consuming to satisfy it’s needs is not a healthy one in my estimation. somehow it’s got to move away from a ‘consumption’ society to a ’sustainable’ society. or a combination of the two. locally centered alternative energy generation , mass transit systems like bullet trains and the like, infill housing, are challenges we should be tackling as a culture. excuse my soapbox thingy.
http://www.providentliving.org is a good resource on food storage. In answer to the food storage question, mormons have ants and grasshoppers just like the general poulation. We just have a proactive ant training program.
“I only feel bad for the responsible people who are going to be impacted”
That’s basically what I’m saying. I’d like to think that all of my friends weren’t “Get Rich” types, but that’s not the case. I feel really, really, really bad for 2 couple friends of mine who were simply looking for stability for their new families. They bought at peak and they know. I know they’re losing sleep because they tell me. It’s even worse when they ask probing questions, like “sooo, you guys are renting, yes?”
This makes no sense. If they got a fixed mortgage, and could afford the payments, they’ll have no problems. Since house values are dropping, they’ll even be able to get their property taxes reduced.
There’s a slight danger that the bank will say “your house is now worth less! Pay us PMI” but I’ve never heard of them instating it if you weren’t paying it to begin with.
Of course, if they put no money down, have an adjustable mortgage, and have no money in the bank, it may be best to give it back to the bank.
I’m betting a lot of folks now wish they had taken the 30 yr fixed and paid the damn PMI. That was the big carrot to taking ARMS or piggy backs - you could get out of paying PMI. We had down money, but I never understood the aversion to PMI - it’s just another insurance that is cost of doing business like auto or health. Not that I love insurance at all.
Except, unlike health or auto insurance, you personally derive no benefit from PMI. It’s simply a way of disguising a higher interest rate.
Actually, the benefit derived from PMI is that it enables otherwise unqualified borrowers to borrow mortgages for homes. Kinda like “subprime” mortgages, but the risk is properly assessed (one hopes) and paid for.
“The children will be traumatized by this greatly.”
Today’s “traumatized” child is tomorrow’s millionaire, or billionaire, depending on what happens with inflation. Many children of the Depression were encouraged to be thrifty and work hard as a result of their parents’ lack of prosperity. Today’s traumatized children in the US will receive a valuable education that they’re not giving in the schools.
For real childhood trauma, take a look at the children in Gaza, Iraq, and the factories of India and China, and Romanian children being pimped by the parents on the streets of Rome.
“For real childhood trauma, take a look at the children in Gaza, Iraq, and the factories of India and China, and Romanian children being pimped by the parents on the streets of Rome.”
Palmetto, you so right on.
SubKommander Dred
Today’s traumatized children in the US will receive a valuable education that they’re not giving in the schools.
Does that mean I am doing my children a disservice by renting and living well with my means? I’m not traumatizing them enough! They’ll never learn! (insert smiley).
I’m with Palmy on this one. The word “traumatized” is thrown around too easily. It’s not like families are being broken up and the parents sent off to debtor’s prisons…they’re moving back to being renters. Reminds me of those folks who wanted to ban Grimm’s Fairy Tales some years ago because the stories were full of trolls and witches and children being eaten, etc.
That was supposed to traumatize kids too. But really, life is hard and there is plenty of bad stuff out there, and Grimm’s tales’ are full of inventive warnings about the pitfalls of life.
The parents may be dumb, but the kids might wise up.
While so good points are raised, I witnessed first hand how children are affected by constant moves. I was in the military for a decade and saw many friends with young children who would start acting weird when they were about to move to new duty station. Children (pre-teen) need a stable home environment, otherwise their proper nurture is in jeopardy. They are the future and now awe mass there is going to be a large mass of children who will experience a forced ejection from their home and they will not understand why. The military has counseling for dependent children, I doubt the banks and foreclosure specialists will be providing the same services. Your school of hard knocks sounds good in theory, but I know how it plays out in reality, this is going to be another social cost born out of this mess.
I have observed a good number of pre-teen kids (my daughter, her cousins and friends, etc.) and concluded that they are beyond being traumatised! I will never accept the argument that kids > 10 year old are innocent like little lambs. The present day kids are quite hardy mentally, it is the adults who should be given psychologists’ help. Nothing bothers the kids, they just need food, a little cash and complete freedom to do what they want among themselves. If adults want to move from one rental to another, it is not a problem for the preteens and teens, they will roam around in the shopping district all day and come home only to eat and sleep. I have observed that the only time the kids are traumatised is when parents try to talk to them or try to give them some good advice. Kids just want to be left alone. They are just fine.
“I witnessed first hand how children are affected by constant moves.”
Being forced to move from your “dream home” is not the same as “constant moves”.
I would submit that being dumped in kiddie kennels at the age of a few weeks, and looked after by poorly-paid “caregivers” instead of their own mothers, is the most insidious form of child neglect in our society - one we’re going to pay dearly for down the road. Ditto for the latchkey kids.
Joe,
What about all of us renters? Many “bubble-sitting” renters have been forced to move repeatedly because the landlords were FBs or they just wanted to cash in their rental home (saw a lot of smart LLs enter exactly at the bottom and cash out exactly at the top). Where are the tears for children of the renting bubble-sitters?
“For real childhood trauma, take a look at the children in Gaza, Iraq, and the factories of India and China, and Romanian children being pimped by the parents on the streets of Rome. ”
Amen! You said it.
Most of us forget to keep this in perspective. Our usually short-tem, apparently “worst”, problems are often better than what those people go through in every day life.
RE: Today’s traumatized children in the US will receive a valuable education that they’re not giving in the schools.
Spot on, Big-P.
Amen, brother. I’d love to see a society where kids actually get their priorities straight at an early age. It wouldn’t be a bad thing if some grow up with an abiding contempt for parents who put material possessions and “keeping up the the Jones’s” ahead of good parenting or responsible decision-making, or a society where avarice and greed count for more than honesty and hard work.
Palmy: You can’t tell what will traumatize a kid until it’s too late. There were 4 of us and we all reacted differently to the trauma of abuse and chaos. Losing a home and having parents act nuts at a young age can really wreak havoc throughout life. The overall fear and anxiety that follows you into adulthood can kill a body. Sometimes you don’t even know until hindsight that you’re making really stupid decisions in life. I’m just a sucker for kids and hate that they suffer the consequences of their parents.
RE: The children will be traumatized by this greatly.
Boo-hoo for today’s spoiled rotten, obese, video gamers.
I guess they will have to wear a set of $2.98 PF Flyer sneakers instead of $200.00 Reeboks.
Maybe now, they’ll learn a little bit about Depression history.
As I recall I was oblivious to the economy. All I cared about was my friends and sports. I got two pairs of jeans a year and a few pull over golf shirts. One pair of sneakers for school and one for play. I had not one other thing in my life save a balogna sandwich for lunch. I created my fun outdoors playing. I always had video game playing in my head. Trauma was screwing up and getting told on and waiting for the old man to come home. Jeesh!
I thank God I grew up in a time when boys could be boys. We were only indoors to eat and sleep, and the rest of the time were out and about with our neighborhood cronies, seeing what adventures or fun or trouble we could find. Our parents didn’t hover over us like helicopters, nor were we empty-eyed slaves to the latest electronic distractions. We had more than our share of close calls and misadventures, got into all kinds of non-malicious mischief, and all of us broke bones and ended up in emergency rooms at various times. It was all part of growing up back then.
I grew up in the deep south, not much went on in the little town I lived in. It was a wonderful life now that I look back on it, life was slow paced, parents and grandparents kept an eye out but let the little things slide (they knew more about kids than the so-called psychologists today do).
When I was 14 or so though I discovered two life long interests - math and football. I know that sounds weird as far as math is concerned but I devoured the subject and it was almost my only academic interest. Later I went on to receive a degree in the subject and later still became an actuary.
Football? A different thing, I was a jock back in those days and eventually got thru college with an athletic scholarship. Ah, but in high school that in itself was quite a nice life.
I’m not sure that the way I grew up even exists today or that it is now even possible.
“children of sheeple who are now going be uprooted from their homes. The children will be traumatized by this greatly.”
I don’t quite get this. If the parents don’t make a big drama play about it, the kids will be fine. Kids move all the time. All the kids want is to have a loving family, be well cared for, not be bored, and have fun. They actually get over things like “having to move out of your parents’ dream home”.
It’s the parents that get into a funk, becasue they can’t let the “dream home” go.
Look, if the banks/lenders are so concerned about foreclosures ,than the lender can rewrite the notes if they want to avoid a foreclosure .Its as simple as that . I don’t care if the notes were packaged and diced up . If the lenders think they can pass off the loans to a new bagholder ,(like govenment backed loans ) ,than they will not try to re-write the loans . Also ,only a certain % of the loans can be saved for homeowners that are real end-users that are borderline on the qualifying .
How about people that did qualify for their loans ,but they aren’t offered a lower rate and some borrowers that lied on their loan application are offered a lower rate ?
How can you take a corrupt situation and solve it by any other means than just letting the parties to the loan contract work out their own remedy . You can’t save a loan where a speculator put zero down and now they want to walk .
As I have said before ,I have speculator neighbor who is walking and expects the bank to pick up the loss in spite of the fact that this neighbor has more than enough assets to cure the short sale and bring in money to escrow .
Are lenders to bail out borrowers that already pulled out a wad of money from their homes and have spent it ? Would the public be in favor of tax dollars going to a party that refinanced and has a wad sitting in the bank somewhere, but is screaming victim because of the down prices ?
This was a mania that was riddled with unlawful corrupt lending practice and there is no reason why this mess should not be called what is is . This is no mystery ,yet they would like you to believe that lenders don’t know the loss and borrowers didn’t know what they were doing .
BB is willing to trash the dollar and bring interest rates down to nothing with bail out gov. backed loans ,up to a million ,in order to bail out this absurd chain of events in the financial markets .Corruption just begets more corruption . I move for a third party to be assigned the task to solve the current credit mess ,rather than the parties that are CYA right now and want to sweep blame under the rug ,and make the taxpayers foot the bill . For the Feds/Senators to proceed with their current plan would just sit the stage for more bad loans written and we need to just get away from bad easy loan writing for future or past money . Who is going to oversee the underwriting for Fannie/Freddie ,and the same corrupt mortgage brokers or lenders will be the same parties underwriting the notes and passing them on ,like Countrywide funding . Without addressing the faulty lending in a deep manner ,you just get more of the same .Remember these mortgage clowns knew how to micky a file and appraisal fraud was widespread ,yet they want these same clowns to process prudent loans ? Give me a big fat break .
Hit the nail on the head again, Wiz!
Let the lenders write down the loans and/or modify the interest rates. They made their beds.
If they want any extra money, let it come from all the greedy pigs who enabled this mess to go on like it did. All the executives & managers who had a hand in the credit bubble should have ALL their assests confiscated (overseas assets, as well) long before they try to confiscate MY assets thru inflation and taxes.
Looks like the housing market wil be saved by the foreign buyer. I guess people from other countries don’t mind buying into a depreciating asset (sarcasm off). Could this be a reason why housing prices aren’t crashing as fast as otherwise they would?
Foreign Cash Could Boost Housing Market
http://tinyurl.com/yvvrr4
The influx of foreign investors can help set a floor for the real estate market, Green said.
Because lending guidelines have been so restricted in recent months due to rising delinquencies and defaults, it is more difficult for U.S. customers to get a home loan. First-time homebuyers are especially being squeezed right now, Green said, and that is where the foreigners can provide support.
For investors from countries like Ireland, the exchange rate is providing a boost in spending power, said Phillip Hegarty, the sales director for Castleroc Estates, a Dublin, Ireland-based firm that works with Irish investors to buy residential and commercial real estate in the United States.
“It’s an enticing investment,” Hegarty said.
Ireland and the UK have there own housing bubbles. US housing may look cheap in comparison but when our bubbles burst there won’t be any spare money to buy that second house in the US.
I saw that. Condo next door to me got snarfed up by foreign money from South America. From what I heard, the buyer and the broker used threats like bankruptcy and foreclosure to beat the owner down further on the price at closing. It was a very nasty business.
hey, whatever gets the new comps down. They may be buying but they are going to get the comps down. That is the more important thing. They may have money to buy, but they are going to buy way, way low, and the next guy even lower. This will push pricing to a normal level where locals will begin to set the comps and stabililize. Again, they may buy, but they plan to buy cheap, cheaper then it is listed.
Blackbox, I give this guy two months, six months at the outside, because I think he bought it to flip and I think the real estate agent hosed him into buying with the promise that she’d get him someone to flip to. The sale has set a new low comp for this complex. There were two potential buyers. The financing for the American buyer fell through. For the foreign buyer, it was a go. Interesting. As far as locals setting the comps, though, I’m not so sure. Once the character and culture of a community changes, the former “locals” move on and don’t stick around to set comps in the future.
“hey, whatever gets the new comps down. They may be buying but they are going to get the comps down. That is the more important thing”
Excellent point.
The other day my wife was very interested in a house now listed for 280K and it was sold for 355K in May 2005. She was essentially saying that if someone buys it at that price, they can’t lose much even if they don’t gain for a few years, and we’d have lost a chance to buy it. The house is in Southshore of MA.
I told her that we shouldn’t rush, let us pray that someone buys it at that (or lower) price. Now we know that 280K is the upper limit. Next time a similar house can only go for a lower price! And so on. So the people who hold off make out like bandits!
Unlike the stock market, housing market has one important advantage for traders. We actually know the direction in which the prices move for the foreseeable future. For the stock market, we couldn’t tell the price movement on Monday. For the housing market, we are sure that prices can only go lower and each sale sets the upper limit for a similar house. So we actually know the max price we’d be paying when we buy. It is such a wonderful chance for a patient guy/gal with money in hand. I told my wife ‘let’s not buy on the dip, let’s wait for the absolute bottom which will be, as another wise poster said on this blog, when Time & Newsweek have cover stories begging people not to buy houses!
Till then, let’s stay together on this blog, support each other and enjoy Neil’s famous popcorn.
I posted the same thought above. Let the foreigners be the knife-catchers that set the lower comps. It’s all good! We need the knife-catchers on the way down, it validates price declines.
But won’t that keep the comps at this level instead of having them drop lower? If enough buy at this level, housing prices won’t go down further. I must be missing something here.
I think that you’re neglecting to take into account is the considerable excess supply in most markets. The pool of qualified buyers is far exceeded by sellers who need to sell within a very short time-frame. Comps cannot stabilize until the market is functioning normally again, i.e. an equal number of interested buyers and sellers. We are years away from seeing that, so prices will only continue to decline.
there is extreme pressure on the ECB to lower rates significantly as a measure to lower the value of the euro. This pressure is coming from big corporate parties and you can be sure the ECB is listening, they have even officially commented on the concerns (without stating what they will do, but they again left rates unchanged this week).
If the ECB lowers rates or starts intervening in currency markets to keep the euro down, this would give the EU housing bubble another boost (it has slowed in many countries, but none of the EU countries has serious bubble troubles at this moment). And it would probably slow RE purchases abroad because of declining purchasing power, especially in countries like the US where RE is far cheaper than in Europe but certainly not cheap compared to other regions like parts of Eastern Europe, non-Eu countries around the Mediterranean etc.
The taste of sour real estate is universal.
“It’s an enticing investment,” Hegarty said.
Yeah…So is crack cocaine…
SubKommander Dred
I wanted to share with people who bit on my 4 BR colonial home when we put it on the market with “Get out of Dodge” pricing.
One lowball from a youngish single guy renter who wasn’t going to finance much. His name was that of a Declaration of Independance signer so we were wondering if we had a flipper on our hand. Later a relative with the same name made the news. I think the family has deep pockets so I’m not so sure about the flipper part.
A retirement age single gent who also low balled. He was a renter. The water systems seemed to spook him. We’re not on town water.
A young couple who came into the mix late while we were considering the other offers. They were renters. They were supposedly going to offer full price because another buyer had countered w/full price before we even responded to their original offer. The new couple kept blowing off the written offer and disappearing after telling us it was coming. After we had accepted another offer they called in desperation asking if it was too late. We were bumming because we didn’t want a contingency and would have preferred going with them. We had to make a choice because the first 2 guys had waited almost a week after their offers w/o a response as others were countering.
The party we did end up going with paid full price w/o us even responding but had a home under contract. Their farm had been on the market over a year and was being purchased from a gentleman from Ireland who was going to establish an international horse business. I was very nervous about him realizing at the last minute he was making a mistake. This couple was seriously downsizing. Our home cost 1/2 what they sold theirs for.
Also my apologies for not revealing my home was for sale. The town I’m in is very small and I felt the realtors or others probably lurk here. I didn’t want to blow the deal. Thanks for those that did offer advice though.
As for my family….renting. Nobody local seems to understand why and probably think we’re in financial trouble. Heh! Heh! Heh! However, just this week relatives in bubble zones are starting to e-mail how smart we are. Finally some redemption!
“As for my family….renting. Nobody local seems to understand why and probably think we’re in financial trouble.”
Uh-oh. Now you will not be invited to dinner parties, you dirty renter!
Yeah, I’m suffering in my rental…..
the 80 acre farm. We get our eggs from the chickens in the barn. My son and I had a blast pulling up the last of the onions, hot peppers, carrots, and beets yesterday.
Friendly people who tend to the animals are in and out of here. (Former high tech exec family…no dem, dese and dose types for those who think farmers are all uneducated) It’s such a relief after my old social climbing neighborhood where most didn’t even wave to each other. We have an incredible view off the wrap around porch. The renovated farmhouse is simple yet gracious. Who needs to rub elbows with the posers? The good friends I invite here all report how relaxed they are. Now that’s achievement.
Good for you! My wife and I have just signed a lease for a renovated farm house in New Hampshire next to a ski area and hope to acheive the same success. We are finally hanging up our spurs and parking the motor home. As I recall you live in the area I was born (upstate NY, lake george area)? Your rental sounds fabulous, good luck.
CarrieAnn, I’m envious! I’d love to be on a place like that.
You want to hear something funny auger-inn? I was born in Manchester, NH. Seems like we made a little switch. But as I mentioned before you’re in my ole stomping ground in the Conway area. Two of my college friends still own an inn in the area as far as I know. So I’m officially jealous of you. ; )
Are you next to Loon, Mtn? I skiied all those NH and ME slopes and miss them terribly. Hope you enjoy it to the fullest!
Sammy-There are a few farms in this area that are for rent. One right down the road from this one if you could find work in Syracuse. Ya never know.
I like Mr. Warren Buffett rumors better.
Only fundamentals - i.e. renting being profitable on a cash flow basis - can support prices in the long run. Foreign buyers will just keep the builders going for that much longer, increasing the oversupply, and increasing the severity of the eventual bottom. Just like they already have in places like Florida and Nevada.
Bring ‘em on.
I think I figured out why there are so many houses for sale in St. George, Utah…
The St. Joseph statue trick doesn’t work there, turf rivalry and all.
Kind of like Gandalf and Saruman duking it out, but this time its St. Joseph and Moroni.
Sometimes words have two meanings…
LOL!!!!
You are right! No Catholic Saint would be willing to go to bat for home sellers in areas where polygamy is still practiced nearby.
November 10, 2007
Update — Market TOP Watch
If you recall, I made a call for the stock market top on 10/11/07 within minutes of the top based on a sudden sharp reversal on an innocuous piece of news. These were the highs for Dec futures before the reversal:
NDX: 2214.0; SPX: 1586.5; and Dow: 14270.
I also said that when two or more of the above highs are breached my call would be proven wrong. Until then it would stand. As of Friday’s close here are the changes in the three indexes from the highs on 10/11/07:
NDX -172
SPX -132
Dow -1223
As a matter of fact, the NDX futures did cross above the 2214 level for 2-3 days, but SPX and Dow never even came close. Most likely, the stock market is finally taking the recession threat seriously. I have already declared that the US economy IS already in a recession. Please remember the following sequence:
Recession –> Commodities Bust –> Deflation –> Depression.
Some time in this sequence we will have China bulls and India bulls, or India goats, to be more precise, slaughtered. India goats have been fattened for the slaughter and for the crooks to feast on.
Jas
PS: Monday could be ugly.
Recession –> Commodities Bust –> Deflation –> Depression.
Hi Mr. Pretcher,
You left out the hyperinflation between Recession and Commodities Bust. Seriously, the FDIC is the hyperinflation trip-wire that you and your followers ignore. Because, if things get bad and banks go under, then the presses will be cranked up to print $$$ for the FDIC.
Granted, the government may chose not to honor the FDIC. But, then fractional reserve banking without a gold-backed currency would NEVER work again.
And here’s the crazy part…
There are tv commercials on right now, that imply that anybody not using plastic, thus cash- is a loser.
I’d guess cash transactions are perhaps 10-15% of all transactions?
So if the money got flowing, the tv commercials would have do flip-flop and say how utterly groovay baby, it is to use the almighty
Greenback Dollar again!
If one were to do a proper $ikor$ky in$ertion…
–
Please don’t insult me with “Mr. Pretcher.” I have paid no attention to Mr. Prechter ever. I am a fundamentalist and not a technician. I think that Elliot Wave Theory is a bunch of mumbo-jumbo. Nor am I a salesman like Mr. Prechter.
Jas
Monday hasn’t been ugly since 1987. It would be a first.
Monday the banks are closed and many (most?) traders are off to the weekend golf courses or to do a little bird and rabbit hunting. Nobody will be there to short. Market goes up.
Yep, I’m positioned that way. SRS, SKF and REW. 1 long : NRT for dividend but I am not really that enamoured about keeping it.
REW is an interesting 2x short against technology that I picked up thursday and am looking for an entry to add more. I think this could have more move potential in short run.
As an aside, I had a beer buddy at my local who last night asked my advice on stocks. In past it has been “RE goes up forever, stocks go up over long term, US is best economy ever blah. Let’s change topic and talk about sports..”
The declines are now getting to him. He is thinking about selling up everything even though he was “Diversified” in mutual funds. I wasn’t in the mood to panic him so I told him to do whatever he had to do to sleep at night: at least sell some of his positions if he is feeling nervous, as I may be wrong about market.
I threw in comment that his financial advisors probably didn’t know much about anything and will never tell him to sell anything. They will just take a fee and provided they slightly beat index average there is no questioning on their performance.
He asked how I knew about such things and just said I read around. I also suggested times could get pretty hairy if dollar continues to decline for multiple reasons. He went quiet for a while but didn’t want to talk about sports but continued to talk about China and commodities.
This is what has been worrying me too. We have a brokerage account with one of the firms that have been making the news and I’m very uneasy about it. The investments are very diversified between CDs, bonds, mutual funds and some stocks (though I’ve been following the blog and gradually lowered the percentage of stocks). We also have retirement accounts with them. I’m wondering if I should make a stink and sell all the stocks to reduce my exposure with this firm. I suppose I would leave the retirement accounts in place, since they are long term. Any suggestions?
Cass: I am not sure what advice to give you as in theory stock brokerage branches should be seperate. You do whatever helps you sleep.
My trading account is with eTrade who I’m just reading have caught Sivilis (exposed themselves to MBS) and now are under scrutiny by SEC. Etrade Stock was down 10% friday ! My exposure is not big but if there’s a run, I want to be out 1st. I may just transfer my cash out but keep the securities.
I know, houstonstan, it’s impossible to give advice in a situation like this. I think I am going to take some cash out and put it in my regular account, just in case. I still won’t sleep, though, but that’s me…
Jas: Monday - it’s a holiday. More time for people to freak or talk themselves into bad decisions. Now Tuesday could be double ugly.
No it isn’t.
—————-
Monday, November 12, 2007
All Fixed Income Trading areas will be closed except for Listed Corporate Bonds, Preferred Stock Trading and Equity Only UIT’s
US equity and options markets will be operating under normal business hours.
Here’s a good on….to put it kindly the Philly Eagles are not having a good year but if you want season tickets with a new house …here’s the one for you
http://philadelphia.craigslist.org/rfs/474293613.html
Oh, the news here in Fla is full of the various sports teams that want new or refurbished stadiums at taxpayer expense. Sarasota just lost some spring training or second tier baseball team to Arizona because the taxpayers wouldn’t cough up. The media was trying to show how important the team was to the economy of the area, so they tried to get a quote from a regular spectator. The best they could come up with was some illegal speaking in Spanish, so they put him on and translated his words, LMAO!
559k for a house in Mullica HIll? Mullica Hill was a charming town with antique shops that lined the main road. That was its claim to fame for a long time. It was on the way to the shore from the Phila metro so you could stop and do some antiquing on your way home from the beach. The rest of Mullica Hill was farmland.
Not any more. Now folks live in 560k homes in the middle of nowhere and think they’re going to unload the beast with Eagles tickets to sweeten the deal. (It might work if the team were winning - Eagles fans be crazy.)
We had an outstanding discussion a few weeks back on inflation vs. deflation. I still hold out hope for a deflationary turn, as does Jas and others? I will say though that my faith is wavering.
Anyone care to revisit this based on the latest such as $1million max for GSE loans etc.?
I’m voting for a prolonged bout of hyperinflation, followed by an worldwide depression after the financial system collapses.
I fear you are right; I think BB’s well-timed 1 million dollar remark officially kicked off the new strategy.
Also, I’m seeing worrying signs of wage inflation in Europe, despite all the comments about cheap labor from abroad (we have that here to, workers from Eastern Europe etc. instead of Mexicans). It’s not wage inflation for everyone (mostly industry sectors that are doing well, higher level government workers, politicians obviously) but these people get wage increases that are FAR above official inflation (3-10% yearly increase plus often fat one-time bonuses, while the Dutch CPI is said to be around 1.5%; some groups like pilots or train drivers even get +30%). So the more wealthy part of the population (maybe the highest 10-20%) will have lots of spending power in the next years, while of course the rest of the people will not be able to keep pace with even the official inflation numbers. Severe inflation is in the cards, and as it usually lags money creation by several years I think it will continue getting worse for many years.
“we have that here to, workers from Eastern Europe etc. instead of Mexicans”
Yes, I just was reading an article yesterday about some politician in Italy, usually thought to be a “liberal”, who ordered the bulldozing of shanty-towns occupied by “Romanian Gypsies”, on account of some of the Italian citizens who have been attacked or even killed by immigrants from Romania. Fascinating article. It gave the impression that Romanians in Italy are the equivalent of illegal Mexican/Central Americans in the US. They even refer to them as “gypsies”, which I suppose is their way of saying “migrants”.
They even refer to them as “gypsies”, which I suppose is their way of saying “migrants”.
No, they refer to them as “gypsies” because they are ethnic gypsies from Romania.
Romania always had a rather big gypsie population (not really popular among the locals either), and when Romania joined European Union, a lot of gypsies headed to Italy.
Thanks for clearing that up. Why did they head to Italy? Because here, we’re doing it the other way around, it seems. Mexican and Central Americans heading to the US, and then demanding amnesty or even suggesting merger with Mexico and a NAU.
Italian fertility rates are among the lowest in Europe - that is, among the lowest-low. They are getting sucked in by a growing vacuum.
I don’t get this “fertility rate” thing, I’ve heard the same statement from a Russian friend of mine, who says Russia needs the immigration because of low birth rates, although the Russians in general don’t seem to want it.
I guess I don’t understand why Romanian parents are pimping their own children on the back streets of Rome, if work is plentiful. I only mention this because I saw a documentary on it recently. It was blood-curdling, to hear a father tell the potential client (undercover reporter) what forms of gay sex his son would and wouldn’t participate in. If there were work for these people, they wouldn’t need to pimp their children.
At least here in the US, illegals are not quite driven to that with their children, because of the taxpayer support.
The gypsies have been an irritant to some Italian regions long before Romania joined the EU. I recall the tales my newly arrrived cousins related about the mischief and mayhem the gypsies visited on the inhabitants of their rural mountain locale. On one of my visits to Italy, I saw a gypsy mom, daughter and grandkid. They were dressed in a modernized traditional garb, and the women were naturally blessed with the kind of bodies that plastic surgery addicts can only dream of.
This was about 20 years ago. Gypsies hadn’t attracted the attention of national politicians because their activities were mainly confined to out of the way $hitkicker towns.
The Russian birth rate would be higher if we Americans would stop importing all the good looking Russian women for the same purpose.
They gypsies are an underclass throughout EU and their home country in Romania. They don’t have a good name as they are often associated with illegal activies.
In Rome, groups of gypsy kids go around and target tourists supposidly agressively begging for money as distraction whilst others pickpocket you. It happened to one of my collegues whilst there on business.
Yes, supposedly the kids will throw a open newspaper or map in your face to distract you and pick pocket you. In planning for a trip to Rome about 10 years ago, a couple of guidebooks mentioned this. This did not happen me. Feel like a got cheated out of a travel experience.
Why did they head to Italy?
Because now they could. It got much easier to cross borders after Romania joined EU.
There are lots of people from various Eastern European countries working crap jobs in Italy and other Western European countries, some legally (like Poles in the UK), many illegally.
The reason the Gypsies don’t work is because they don’t want to. They think it’s beneath them. They will do anything else - beg, steal, pimp their kids.
Back in the Communist days the government made them work. Now they don’t have to.
Sorry to sound so blunt but I’ve spent time in Eastern Europe and have some idea of what I’m talking about.
Some of the eastern European countries are more than happy to see their gypsies head West, and try to harrass them into leaving [or point out how much more loot there is to be had in Western Europe and the UK]. Legions of Gypsies are showing up in the UK to claim asylum, while creating their own huge crime wave.
All gypsies are not Rumanian, and all Rumanians are not gypsies. Some gypsies are called “Roma.”
http://en.wikipedia.org/wiki/Gypsy
No need to vote, just look at what the fed has done in the last few months - cut interest rates, and “injected liquidity” in giant amounts, which is double speak for printing money. Either they raise interest rates, increase the reserve requirements (which are essentially zero), and stabilize the monetary base, or you get the current result - big time inflation.
The fed is actually monetizing the slimy CDO’s and all the rest of the alphabet sound of finanical garbage by taking them as collateral, and then printing money. Talk about a terrible idea - let the banks and Wall Street choke on their own creations, as they are doing now. Betcha half the big banks and big investment houses are currently bankrupt, they are just postponing the day of reckoning.
Got gold, silver, oil?
All this talk of depression is just plain wrong. Here is why. Going back many years the average number of people owning homes has been around 60%. Recently that average has moved up to around 70%. If you take a US population of around 300 million and divide by the average family size of 4.5 you get an average of 66.7 million families. Now take that 66.7 million and multiply by 60% to get 40 million families owning homes. Compare that to the number at 70% and you would find 46.7 million families own homes. That means that as homeownership increased by 10 percent 6.7 million new households were created.
Now even if 50% of those folks go into foreclosure it is only a little over 1% of our population. I doubt that that number will be as high as 50% because I have bought two houses in the last three years and I have a 30 year fixed rate mortgage.
So less then 1% of the population is go to be foreclosed on. For these people it will be a depression. For the rest of us a recession or stagflation. The real losers if there is no bailout is the banks. Remember foreclosures started to rise almost a year ago. But it was not until the drop in the stock market in August that are politicians noticed. Afterall where do you think they get all of their financing to get elected? Could it be hedge funds?
There’s a hell of a lot more going wrong with the worldwide financial system that housing foreclosures.
Amen! I’m with you guys. It is not contained, It is not just housing and the fed has no real idea what to do about it.
“That means that as homeownership increased by 10 percent 6.7 million new households were created.”
Your post does not make a bit of sense. I am part of a household, but not a homeowner. Please read a basic economics text book or take econ 01 at a local community college before theorizing here.
A good try, but I truly think you should read the FDIC paper
“Scenarios for The Next Recession”
Your basic premise of the size of the average home owning individual is incorrect, there are 117MM SFRs in the US.
“The underlying thesis to our recession scenario is that an interruption in liquidity always precedes a recession (see Chart 37). You can look at the S&L crisis, especially, or, as Kathy did, to the Long-Term Capital Management crisis or to the Enron/WorldCom bankruptcies in 2002. We believe that the next interruption of liquidity will affect the consumer market specifically….
Home equity, which has really been the consumer’s ATM over the last certainly five to ten years, has enabled a lot of this affordability. A lot of the new home mortgages that are originated come with piggyback home equity loan features.
Now, I want to point out that [Chart 49] is only talking about revolving home equity lines. The total home equity number is closer to about $800 billion. So a lot of this home equity is acting like sort of a new version of a credit card for consumers….
Bank exposure to mortgages and home equity is now at peak levels, having risen dramatically (see Chart 50). If you look at 1998, the total exposure to mortgages and home equity loans was about 25 percent. In the last quarter, the third quarter, it had risen to 37 percent….
I’m going to give a little background here. We believe credit cards have become the loan product of adverse selection, based on the expansion in homeownership (see Chart 54). The age-old rule by banks is that 80 percent of your losses come from 20 percent of your borrowers—the so-called “80/20 rule.”…
This is a massive liquidity squeeze. At a very minimum, it will shrink the growth in balances at the credit card issuer level. So, as I said with the denominator effect, these loan balances are going to shrink for Citi and J.P. Morgan, because customers are paying more of their debt off. At another level, your liquidity as a consumer is also strained, and that is what we believe will set up higher defaults at the bank issuers….
If you segment the consumer market into three very important buckets, then take out the folks that have no access to credit and take out the folks that are what I would call the fat cats—who already had access to credit, have gotten a lot richer because they’ve owned homes, and may have taken on more debt but remain well positioned from a financial balance sheet—then we can really focus on the 10 percent of consumers that are at risk….
Then we add the other 5 percent of households, including the folks that are playing credit card roulette, who are going to be squeezed by this minimum payment guideline, who have never had access to credit before, who have gotten a lot richer over the past decade, and are about to get a lot poorer because of liquidity strain….
Again, we think 10 percent of the U.S. consumers will definitely go into a segmented recession, but the rest of corporate and consumer America looks pretty good.”
Meredith Whitney
March, 2006
FDIC
This is before any potential problems with regard to CDOs, CLOs or corporate defaults.
Very prescient…
We are well beyond what she had described happening~
–
Your numbers are grossly inaccurate. I wouldn’t comment any further.
Jas
What?
Since this is an OT thread…
Yesterday I dropped a rather large Bernanke on Tom for posting support for Ron Paul. Sorry about that, I was in a mood.
Anyway, I like Paul, but don’t think he’s electable at this point in history. Maybe in 20 years, when the sheeple are all eating little green wafers, but not now.
So irrespective of their positions on the War on Terriers, out of the current crop of presidential candidates, who would be best for the economy from a long-term perspective? I just don’t see it in any of them, and I was hoping I’m just missing something that one of my fellow HBBers could point out.
Rally,
I’m a paul supporter and I intend to vote for him as a matter of conscience, because voting for the least worst choice has left us with one disastrous admin after another. That said, I have heard not one intelligent remark from any of the contenders from either party yet, and I have been tracking them. They all seem to think it’s really 1975 and with some gov’t intervention we’ll get over the inflation caused by Vietnam deficits and the oil crisis caused by OPEC. No recognition of the dimensions of this tsunami.
For outliers, my only thought is Bloomberg, a self-made billionaire from the Bronx, who has spoken about the upcoming “downturn” (his word) he expects for more than a year, and adjusted city budgets to account for lower tax revenues, and has instituted a hiring freeze and other prudent measures. He knows Wall Street, he made his money selling to them and I think he knows exactly what kind of mess the country is in. If the economic pain continues to accrue, I expect that to be the issue that drives the election, not Iraq, and Bloomberg might become viable. Just my thoughts.
i admire paul, and bloomberg even more. but i think the best race we can hope for at this point is rudy v. hillary. i’ll be quite disappointed if romney is nominated.
giuliani may be a bullying bastard, but he does seem to have an independent streak, and some sense of social tolerance. way back before he was reaganized, he was originally a liberal democrat, and he did apparently mop up the mafia in nyc. his best recommendation is the unbelievable hatred and bile he inspires in ultra-liberal elitist new yawkers, who will never forgive him for finally busting the incredibly corrupt and patronage dripping new york city democratic machine and rearranged the new york city political terrain forever — no small feat! without his mentorship and blessing, bloomberg (running for mayor in 2001 on the “I am like giuliani!” platform) wouldn’t have been elected.
a bald, ethnically named, 3-wived pro-choice, socially moderate republican would be somewhat of a breath of fresh air, even if he follows the essentially insider corporatist policies of his predecessors.
Ron Paul is just a little too much of a hypocrite for my liking. He wants less government in our lives, and likes to chant “states rights” but still finds ways to justify the Federal Government stopping states from legalizing same-sex marriage.
He also doesn’t seem to understand why separation of Church and State is so important.
I’m pro-religion. I’m an active member of my congregation. But I don’t like it when the Government gets subsidizes certain churches.
One particularly nasty church that has our Governments in its pocket is the Boy Scouts of America, which is simply a Church for boys. They have every right to exist, just like the American Nazi Party, the Mormon Church, and the Synagogue I belong to. They have every right to pick and choose who they have as members and leaders.
But they don’t have the right to rent out military bases for $1 to have their revival meetings. My synagogue wouldn’t be allowed to do that. And Ron Paul has come down on their side defending this policy.
(BTW, The BSA does crazy, perverted things like make thousands of kids watch people get electrocuted and burn to death! At taxpayer expense! On a military base http://en.wikipedia.org/wiki/2005_National_Scout_Jamboree )
Some Libertarian he is!
Why can’t these folks just worry about safety and security of our nation and not worry about Flag Burning amendments and who can get married? The Republican Party seems overburdened by this crap.
(Interestingly, the Republican front runner, has demonstrated to the rest of the Party that voters don’t care about those issues as much as they may have believed)
He would have a better chance if he ran as an independent. Running as a Rep, he has no chance at all. I have to agree he is small government for financials and is anti-this war, but he’s big government for social issues. All those good folks that voted their conscience for Nadar in 2000 ended up doing more harm than good IMHO.
http://www.ronpaul2008.com/
Please explain to me, using Ron Paul’s own words or actions, how he is “big government on social issues.” Are the Republicrats already genning up their disinformation campaign?
His ardent “pro-life” stance would be one.
Also, it’s easy to say you want lower taxes & no welfare, but how does one pay for all these “unwanted babies” if they were to be born? Most girls have abortions because they cannot afford to keep them.
If you suggest forced adoption, that opens up a whole can of worms WRT forced surrogacy (involuntary servitude, to say the least) & forcing “poor girls” to have babies for the benefit of “rich” people who want to adopt. Do you think they ought to legalize/allow free-markets to work WRT surrogacy?
Personally, I think pro-lifers ought to create and maintain a fund which supports these girls and their (otherwise aborted) babies until the babies reach the age of eighteen. If a pregnant girl knew she and her baby would be taken care of financially, it’s much less likely she’d have an abortion. Any takers?
He did run as an independent 20 years ago…at least now he gets invited to the debates.
I know Catholic Scouts, Protestant Scouts, and Jewish Scouts. Must I convince them they are mistaken about their religion, and although they don’t realize it, they belong to the Boy Scout Religion? Apparently.
Ron Paul supports the “congress shall make no law (for or against) religion”. “No Religion” is just another belief system. In the spirit of making no laws regarding religion Ron Paul has the right position.
Ron Paul is not for or against same-sex marriage and says all “voluntary associations” should be permitted. If he was against some measure then it was probably due to government interference of some kind rather than the specific aim of the interference.
Anyway, I like Paul, but don’t think he’s electable at this point in history.
So, go on voting for Establishment Tweedle Dees and Tweedle Dums, while failing to grasp the link between your “electable” candidates and our continued decline as a nation. While I’d love to see Ron Paul win, even if he loses, my support - and the supports of millions of true patriots and lovers of liberty - sends an unambiguous message to the corrupt GOP and DNC political whores and their Wall Street masters.
I agree. I’m voting Paul I don’t give a damn what the naysayers, TV pundits or political hacks have to say. This voting for the “lesser of two evils” or “he can’t win” or “you are putting Hillary in the WH” crap is part of what has put us in the current mess we are in.
LOL… Wow, that’s really impressive. You two sure told me; good luck with your “unambiguous message.”
They are right
Those in Tucson can meet and greet with Ron Paul on Nov 30th. Any HBBers out there willing to go, ask some pointed questions, and report back?
It’s getting ugly in RE land…
_____
Personal Assistant Is Charged in Broker’s Killing
By Al Baker and Anne Barnard — The New York Times
Published: November 10, 2007
http://www.nytimes.com/2007/11/10/nyregion/10stein.html?_r=1&hp&oref=slogin
A personal assistant was charged yesterday with using a piece of exercise equipment to fatally bludgeon her boss, Linda Stein, the former punk-rock manager turned real estate broker, in her Fifth Avenue penthouse, the authorities said.
The assistant, Natavia S. Lowery, 26, of Brooklyn, said she was driven to violence by the victim herself, who, she said, treated her poorly, “just kept yelling at her” and even made her ill by blowing marijuana smoke in her face, officials said.
Finally, Ms. Lowery told detectives, she bashed Ms. Stein six or seven times in the back of the head on Oct. 30 with what she called a yoga stick after Ms. Stein, 62, made a racially demeaning remark, other law enforcement officials said.
“Lowery, who had been Stein’s personal assistant for approximately four months, claimed that Stein had been verbally abusive to her,” Police Commissioner Raymond W. Kelly said at a news conference yesterday at 1 Police Plaza.
Several friends of Ms. Stein, who have described her as a larger-than-life, sometimes volatile character, said they did not know Ms. Lowery. Ms. Lowery’s aunt, Julia Carrow Lowery, said her niece had enjoyed working for Ms. Stein, and declared her incapable of killing anyone.
more and more murders of big RE tycoons, developers and their lawyer friends in the Netherlands too. That’s a good start IMHO, getting rid of them will often be good for society.
Ah, yes, the citizens of Richistan never do get it, do they, nhz? Hence, we have “terrorism” to combat, when I would argue that 90% of “terrorism” comes from groups of people being pushed to the brink of frustration by the unholy alliance of government and business. I saw a fascinating documentary, I think it was the BBC that made it, about ordinary Palestinian citizens having their long time, legally owned family homes bulldozed under by the Israeli army. It was all there on tape, documented by concerned Israeli citzens, no less, who were outraged over the injustice. Here in the US, entire communities have been ruined by the developer citizens of Richistan, with water sources being paved over and their illegal temporary employees being dumped on the communities for health care, education of their children and law enforcement.
When you think about it, many, if not most, of the laws are enacted to protect the citizens of Richistand.
That’s a good use for 3 car garages… parking rocket launchers. If the IE can just get set up before LA builds the wall…
Caponestates of America
definitely, similar problems everywhere in the world. Laws are used mostly to protect the big crooks from honest citizens.
Its a good sign though that the RE mob in my country is now getting busy murdering each other. Apparently they are getting a bit nervous about the return of their legally stolen money. I hope this problem will quickly spread to the political circles that are involved, that would help to get this bubble done for good (hey, maybe Microsoft can start some real investigative work regarding the developer buddy of Neelie Smit Kroes, who has cost them a fortune this year?).
“made a racially demeaning remark”
Hey why not? It seems to be a good excuse to do anything you want. Maybe we can outlaw whatever was said?
http://www.nydailynews.com/news/crime_file/2007/11/09/2007-11-09_personal_assistant_arrested_in_linda_ste.html
Ms. Lowery killed Ms. Stein for (allegedly) using a “racist slur.” Lowery is black. It wouldn’t surprise me to see a jury of her peers conclude that this is legitimate grounds for murder.
Newsflash…
Moody’s just downgraded (triple-bbb rated) to (double-bb rated)
More news, as it comes in…
Dutch Housing Bubble update:
some on the blog will recall that most of Shillers home price research is based on the Dutch ‘Herengracht index’ that was researched by professor Piet Eichholz. Today Eichholz has an article in Dutch newspaper NRC where he shows that Dutch homeprices, when corrected for inflation, are the highest in 300 years, just a tad lower than the all time high set in 1736. He expects the all time high to be surpassed in 2008. Keep in mind that the current Dutch inflation indexes that he uses are just as rigged as those in the US, claiming inflation is 1-2% while it probably is above 10% by pre-1980 standards.
The nominal price of a merchant home on the Herengracht in Amsterdam increased from about 6000 florins (2500 euros) around 1650 to 2.5 million euros now. For those who want to check the inflation corrected record (interesting because you can see that RE moves up or down for MANY years in a stretch):
http://www.nrc.nl/achtergrond/article816285.ece
nhz, I would love to get your opinion on the Associated Press article posted above in this thread, where it says that foreign money is going to boost the housing market in the US.
I posted a remark in another thread. As long as the ECB does not clearly trash the euro (keeping perceived buying power for EU buyers high) and the housing bubble in Euroland is alive (lots of home equity to spend), I think the foreign buyers will keep up the market in the USA - although the only effect might be to prolong the downturn. For the moment, 95% of US RE looks extremely cheap to EU buyers.
why in the hell would most EU buyers want US real estate!!??
For starters, there are plenty of nice hotels and rental condos if they want to come over and look at the waves crashing on one of our beaches instead of theirs. For the rest of the US, I don’t see a European influx of buying in Alabama, Tennessee, Texas, etc….too far to get to. One look at the rental management contract for their non-owner-occupied homes and prevailing rents in the area ought to sour the deal, even if equity prices look cheap compared to their hometown.
Oil Price Rise Causes Global Shift in Wealth
Iran, Russia and Venezuela Feel the Benefits
By Steven Mufson
Washington Post Staff Writer
Saturday, November 10, 2007; Page A01
http://www.washingtonpost.com/wp-dyn/content/article/2007/11/09/AR2007110902573.html
High oil prices are fueling one of the biggest transfers of wealth in history. Oil consumers are paying $4 billion to $5 billion more for crude oil every day than they did just five years ago, pumping more than $2 trillion into the coffers of oil companies and oil-producing nations this year alone.
The consequences are evident in minds and mortar: anger at Chinese motor-fuel pumps and inflated confidence in the Kremlin; new weapons in Chad and new petrochemical plants in Saudi Arabia; no-driving campaigns in South Korea and bigger sales for Toyota hybrid cars; a fiscal burden in Senegal and a bonanza in Brazil. In Burma, recent demonstrations were triggered by a government decision to raise fuel prices.
In the United States, the rising bill for imported petroleum lowers already anemic consumer savings rates, adds to inflation, worsens the trade deficit, undermines the dollar and makes it more difficult for the Federal Reserve to balance its competing goals of fighting inflation and sustaining growth.
High prices have given a boost to oil-rich Alaska, which in September raised the annual oil dividend paid to every man, woman and child living there for a year to $1,654, an increase of $547 from last year. In other states, high prices create greater incentives for pursuing non-oil energy projects that once might have looked too expensive and hurt earnings at energy-intensive companies like airlines and chemical makers. Even Kellogg’s cited higher energy costs as a drag on its third-quarter earnings.
With crude oil prices nearing $100 a barrel, there is no end in sight to the redistribution of more than 1 percent of the world’s gross domestic product. Earlier oil shocks generated giant shifts in wealth and pools of petrodollars, but they eventually faded and economies adjusted. This new high point in petroleum prices has arrived over four years, and many believe it will represent a new plateau even if prices drop back somewhat in coming months.
“There’s never been anything like this on a sustained basis the way we’ve seen the last couple of years,” said Kenneth Rogoff, a Harvard University economics professor and former chief economist at the International Monetary Fund. Oil prices “are not spiking; they’re just rising,” he added.
“In the United States, the rising bill for imported petroleum lowers already anemic consumer savings rates, adds to inflation, worsens the trade deficit, undermines the dollar and makes it more difficult for the Federal Reserve to balance its competing goals of fighting inflation and sustaining growth.”
Note to Fed: Fight inflation, to hell with growth. On another note, I was watching the local political punditry show on PBS last night (West Central Florida) and one of our respected political science professors who concentrates on local politics said that the mood among the people here is getting REALLY ugly. Apparently, there’s a large anti-growth movement in Florida that I wasn’t aware of and country commissioners are in very delicate positions. People are tired of the influence of developers and pro-developer commissioners in Sarasota were thrown out and some measure limiting density was passed. Whoo-hoo! Go, Florida!
“People are tired of the influence of developers and pro-developer commissioners in Sarasota were thrown out and some measure limiting density was passed.”
I expect that the sheeple will soon get tired of a lot of inequities and wealth shifts, CEO pay being one of them. Da boyz would be wise to fear a potential stampede of braying voters.
If the recent election results from ‘07 extrapolate to ‘08, the Democrats will have a victory of generational proportions (think 1932). Given the recession next year, the only issue is whether Pres. Hillary will have a super-majority in Congress or not.
Badger : I agree with you. If this continues, Pub’s will get blamed and with Bush’s luck, he’ll preside over an ugly situation.
However, Hillary will have a poisoned challace that will be beyond her competance to fix.
“no-driving campaigns in South Korea”
Anybody know more about this?
Since nobody actually knows how to drive in South Korea, judging by Korean drivers here, it was probably a public safety issue.
“High prices have given a boost to oil-rich Alaska, which in September raised the annual oil dividend paid to every man, woman and child living there for a year to $1,654, an increase of $547 from last year.”
Apparently the author is pulling information out of his hiney instead of doing research, so I don’t know how much I would trust the rest of the article. Yes, the Permanent Fund Dividend went up a lot this year, but that is independent of the present price of oil. The PF has been accumulating oil money for about 30 years and now holds around $40B. The dividend payment is based on a five-year average of investment earnings from the fund (after inflation-proofing). So recent gains in oil prices has only a minute effect on this year’s payoff.
My favorite MSM opinion blogger gets it…
_____
Bush’s Disastrous Dollar Policy
By Dan Froomkin
Special to washingtonpost.com
Thursday, November 8, 2007; 1:32 PM
http://www.washingtonpost.com/wp-dyn/content/blog/2007/11/08/BL2007110801247.html
President Bush doesn’t talk about the dollar much, but when he does, he’s got exactly one thing to say about it: “We have a strong dollar policy.”
It’s becoming increasingly clear, however, that Bush’s “strong dollar policy” is driving the greenback into the ground.
The dollar is hitting record lows this week amidst fears that the mortgage-market meltdown will spread to other parts of the economy and as the Chinese make noise about moving more of their investments into euros. But it is the underlying dynamics of the American economy — continued massive trade deficits and a whopping national debt — that have put the dollar in such a precarious position.
A true strong dollar policy, aimed at increasing the confidence of international investors, would require Bush to do a bunch of things he doesn’t want to do. For instance, he would have to stop borrowing so much money to fund his tax cuts and his wars. He would need to encourage the Federal Reserve to raise interest rates, rather than depend on it to keep propping up the domestic economy by decreasing them. That sort of thing.
Instead, Bush just offers the strong-dollar line, without specifics, and moves on.
Deny deny, lie and deny some more. Expect nothing less from that group.
Why does Bush get the blame? Is he the King of America? How about sharing for all the scoundrels, including those with the power to pass laws, declare war, and control the pursestrings of the country.
What exactly is Congress’s dollar policy?
I believe we are seeing it every day. The government is in lockstep behind the Fed and banks.
I have to ask…. why apologize for him? Seriously… why toss every bit of credibility overboard?
Welcome to the Wide World of $horts…
I’m your host, aladinsane McKay
Today…
We travel to exotic ABXPulco, to watch cliff divers plying their trade.
Many of them are making the common mistake of hitting the water, when it isn’t there…
Because of misjudging the tide of information flow, coming in…
http://bp1.blogger.com/_pMscxxELHEg/RzTJ1k3pFlI/AAAAAAAABKA/XnXxLg3gzUc/s1600-h/ABXHEAAA072Nov9.png
whoops
Space shuttle credit spread lift off.
http://tinyurl.com/2ng4zq
click on
CMBX-NA-AJ 4
I was reading the comments in one of the threads yesterday in regards to San Francisco, and it kind of blew me away how seedy and beggar infested it had become, but it’s got the right climate to be homeless and survive, living outside, and one of the few places in the country it can be done during winter.
I’ve seen homeless people in Calgary in the winter, they looked liked shuffling mummies, trying to keep warm.
I had a biz in Santa Monica nearly 15 years ago, and the homeless there were primarily mentally whacked, but i’d guess a growing part of the homeless in SF, is the cash whacked?
I haven’t been there in like 10 years and it seems to have gone downhill fast, thus all of the homebuilding that went on, in it’s version of the Inland Empire, everything within a 50 mile radius of Sacramento.
Yeah, my wife and I went to San Fran about a year ago for a self-guided walking tour vacation. Good lord, it’s really gone downhill there, as have the surrounding areas.
Makes me glad I live in Northern Colorado. This area has its own problems that are ever-so-slowly getting worse, but it’s paradise by comparison.
How is Sequel homes doing Bob? They have a development on the south side of Ft. Collins?
Not sure, WAman. Maybe Messr. “In Colorado” knows…? You out there, buddy?
A few years ago the American Psychiatric Assn meeting was at Moscone Convention Center in SF. Everybody laughed that they could have had a 5-block walking tour on Market St. nearby and seen most of the psychiatric diagnoses in untreated walking form. Sad what the de-institutionalization laws have done.
“I had a biz in Santa Monica nearly 15 years ago, and the homeless there were primarily mentally whacked, but i’d guess a growing part of the homeless in SF, is the cash whacked?”
I used to have family living in Santa Monica and I would go and visit during the mid to late 1990s. Being originally from New York and having lived in South Florida, I thought I’d seen everything when it came to homeless populations. Santa Monica was an eye-opener. I was walking by some shops when some homeless person was forcibly thrown out of a shop onto the sidewalk, puking his guts out. Whoa! I nearly walked right into him.
They were an interesting bunch, Golden Monkey, Lipstick Mary, The “Twister” (he’d slowly walk up and down Wilshire Blvd., doing 360’s muttering to himself, all the way) and many more circus performers that passed by my window, every day.
Yes you can thank Reagan for that!
hah! you know lipstick mary! She is a very wealthy lady believe it or not.
Hangs out at 14th and Wilshire with her 6 shopping carts
She used to do 17 carts, another victim of deflation…
Santa Monica got really whacked by the ‘94 earthquake, but it didn’t have the same tv visuals, as Northridge did and didn’t get much press, it seemed.
Just before dawn that day, after turning right onto Lincoln Blvd., off the 10 freeway, I had to swerve to avoid a side of a building that had fallen onto “my” 2 lanes of the Blvd. I parked my car and wandered around town, and every other window pane was blown, and homeless people really never sleep, and the thin 1/2 inch plate glass was all that separated the goods in the window, from them.
I saw lots of small-time pilfering, that all went away once daylight shone on later day vampires…
There was a church on Arizona & 7th, that was so demolished, it looked like the aftermath of a rigged explosion aftermath, where it pancaked perfectly, just as you’d hoped it would…
I’ll say it got whacked. I have pictures of three-story apartment buildings with an entire side of front wall missing - they look like doll houses with the walls open and the furnishings inside.
BTW, how did you get to SM on the 10 after the earthquake? You must have been coming from someplace west of where it collapsed?
It was amazing really…
I was near the Orange Curtain, when the quake went off, just a heavy roller and scary, no damage. Took a shower, got on the 60 freeway headed west and hooked up to the 10, listening to the radio all the way, and nobody knew anything.
After being on the 10 for a few exits, it was coned off, as part of it was missing. I got off, and went towards the just opened 105 freeway, headed towards the 405, got back on the 10 and saw a transformer blow up, in the hills above the Bundy exit. Colors like you’ve never seen colors before, wow.
There are many professional homeless in SF who make a great living! Some of them do come down to the Peninsula, where they go to Palo Alto and beg for cash near Stanford University. Rich Kids are the biggest suckers! They feel like they’re “doing good” by handing a $5 to a bum.
I don’t know why you’d every pay anyone money to stand and smell bad.
Some of the better beggars can probably clear $300/day tax free cash.
I really do believe we have a moral obligation to help people. But it’s much better to find a trusted organization that provides food and clothes to the homeless, and help for the mentally ill and give them money, than to hand it to people on the street.
Direct payment to people on the street simply creates more of a problem!
“had a biz in Santa Monica nearly 15 years ago, and the homeless there were primarily mentally whacked, but i’d guess a growing part of the homeless in SF, is the cash whacked?”
SM has a constant balmy year- round climate mostly sunny and with mild breezes (rarely exceeds 90% even when rest of Scal is roasting at close to 100% during summer heat waves. Winters mild in SM as in SF. Combine that with the predominant liberal
tolerant policy of SM and that is why SM has a homeless problem.
I have been in SM many times and the homeless problem -at least from my perspective-seems mild compared to Dwtn LA. Of course i have been thru some really nasty Inner LA tijuana-like cesspool areas and SM ’s Homeless is indeed mild in comparison though i have noticed that many of the SM back alleys even off the busy commercial’ pedestrian-friendly’ district around 3rd st promenade are regular homeless haunts.
IMHO The homeless in SM are a bit cleaner and more well-behaved than in dwtn LA though that is of course relatively speaking .
1 in 4 of our homeless are war vets from Iraq and Afghanistan wars. Just shows you what our society does for the bravest amongst us. An utter and complete disgrace. Why there arent mobs in front of the Houses of Congress with pitchforks and torches is beyond me.
I live in San Francisco area. there have always been scores of homeless beggars on our streets, but in the last ten years it has gotten worse. EVERY place you go it is like Dicken’s London. Really dicrepit mentally deranged, drug and alcohol addicted, sorry souls. Men and women. Its sad and depressing. I’d hate to see what would happen if the economy got worse for an extended period of time. And somehow I think it might.
Newsflash…
(double-bb rated) has just been downgraded to (Dr. Evil: I demand the sum… OF 1 MILLION DOLLARS.)
More news, as it comes in…
Was at a meeting in Manhattan yesterday where several high profile people in the national transport industry were attending, including the deputy secretary of transportation. Several port directors comfirmed that traffic is down and they are a bit surprized. A few major rail operators also confirmed that traffic is down. They are starting to connect the dots and it was mentionned that real estate could be a cause of this downturn… On the positive site, most ports reported a growth of exports, particularly commodities.
“On the positive site, most ports reported a growth of exports, particularly commodities.”
Is that really a positive? Or just indicative of the falling dollar?
(Dr. Evil: I demand the sum… OF 1 MILLION DOLLARS.) speaking…
People of the future, just as you underestimated my demand 10 years ago, consider the ridiculously high figure for a home now and how much i’ve overestimated 1 Million Dollars now, when the average house is like $250k…
“Why must I be surrounded by frickin’ idiots?”
–
Inflation/Deflation Debate Continues…
A Swiss banker (via a friend): “The US government policy of depreciating the US$ and creating inflation to amortize the US debt mountain will result ultimately in inflation becoming global, but there is a key difference between the English speaking countries (US/US/Canada/Aust/NZ) and continental Europe because the former comprises highly indebted consumers who under democracy will vote out of power any government which is NOT an inflationist until inflation becomes too big an issue and/or their debt/income ratio becomes more reasonable…”
All the buyers of the US Treasuries are stupid? They have been laughing stupidly all the way to the bank for 26 years and would continue to do so for at least 3-4 more years. And what % of Americans would benefit from inflation and vote for inflation policies? Most importantly, WHO will benefit from inflation and who will lose out? You mean the most irresponsible 1/3rd of Americans, debt-ridden, will dictate the policies? Forget all this, when the irresponsible among Americans are forced to consume less, because they run out of money, the supply-demand will automatically lead to deflation. Credit Crunch means deflation and not inflation.
Inflationists are a bunch of lazy thinkers with herd mentality. Everyone seems to be an inflationist with few exceptions. When was the last time that the herd was so right?
I bet that Scam lovers have no idea how much return long-term US Treasuries have delivered since 1981 and with lot less pain than Scams.
Jas
but there is a key difference between the English speaking countries (US/US/Canada/Aust/NZ) and continental Europe because the former comprises highly indebted consumers who under democracy will vote out of power any government which is NOT an inflationist until inflation becomes too big an issue and/or their debt/income ratio becomes more reasonable…”
Well, that was 10 or 15 years ago but no longer. In most of continental Europe, the more wealthy citizens and (maybe even more important) big companies have loaded up on debt and are totally geared to profit from the coming hyperinflation. As an example, in Netherlands many wealthy people who could pay cash for a home take out the maximum mortgage and put the money in a savings account (or use it for investments like buying additional homes abroad). They will profit hugely from a hyperinflation, because their real debt plunges while their assets will surge. Unlike ’stupid’ savers like some on the blog who get cut from both sides in a hyperinflation. I can assure you that in many parts of continental Europe the sheeple will vote for more inflation (lower mortgage rates, more government housing subsidies, higher HMD; more government debt instead of higher taxes; higher wages for them but of course not for the neighbours), until they taste the bitter consequences of that policy (but then it is too late).
I agree that the herd usually is not right, but I think the more wealthy and powerful part of the herd (in Europe too) has every reason to want more inflation.
–
“I think the more wealthy and powerful part of the herd (in Europe too) has every reason to want more inflation.”
Vow! That would be first. OK, who all don’t want inflation?
Jas
Feds ban grandma’s angel ornament on Christmas tree
HUD orders residents to avoid Jesus in decorations
http://worldnetdaily.com/news/article.asp?ARTICLE_ID=58596
The issue arose at the Plant City Living Center in Plant City, Fla., where 85-year-old Mrs. Arnold was told that federal law now prohibits her from displaying anything that references religion – words, decorations and the like – in the common area of her apartment building, a HUD facility.
It’s all because of me too.
Can anyone tell me how santa fe NM is holding up, I am here visting my cousin and he says…drum roll please…”its different here” prices are just holding steady.
Goldilocks appears to have caught SIVs.
Markets Tumble As Dollar’s Fall Adds to Anxiety
By JOANNA SLATER and CRAIG KARMIN
November 8, 2007; Page A1
The credit crisis sparked by mortgage problems reared its head anew, as stocks tumbled on fears about shaky financial institutions. This time, the dollar’s fall to record lows and oil’s flirtation with $100 a barrel added to the worrisome brew.
The Dow Jones Industrial Average fell 360.92 points, or 2.64%, to 13300.02. The index has now wiped out all of its gains since the Federal Reserve on Sept. 18 made the first of its two recent interest-rate cuts, sparking a short-lived rally that sent the Dow to a record high Oct. 9.
Wall Street is once again nervous about how much damage remains from subprime mortgages and other bad credit, even after tens of billions of dollars in write-downs. The wave of credit-rating downgrades on mortgage securities continued yesterday, and bank shares were especially hard-hit. Shares of Washington Mutual Inc., a major lender, lost 17%, and after the market closed American International Group Inc. and Morgan Stanley reported new write-downs connected to housing problems. (See related article.)
…
“If you get a dollar rout and people start dumping quickly, that will complicate monetary policy and undermine the Goldilocks scenario that investors are hanging on to,” said Russ Koesterich, head of investment strategy at Barclays Global Investors.
http://online.wsj.com/article/SB119448572112285960.html?mod=googlenews_wsj
“…Any onset of increased investor caution elevates risk premiums and, as a consequence, lowers asset values and promotes the liquidation of the debt that supported higher asset prices. This is the reason that history has not dealt kindly with the aftermath of protracted periods of low risk premiums….”
Mr. Alan Greenspan (when) Chairman of the Federal Reserve Bank
Jackson Hole, 2005
“…One of the things that (Mr.) Greenspan said at the Jackson Hole conference (Aug 2005)—and I want to leave you with this thought, because I think it’s a good one—is that during the last two decades, 25 years or so, we’ve lived through what has been a period of rolling bubbles, with money moving in and out of asset classes, bubbles forming when the values in that asset class become overvalued, then moving out to a different asset class.”
Kathleen Camilli, Chief Economist and Director, Camilli Economics
By what percent is subprime contained at this point?
AIG, Morgan Stanley Show Subprime Losses Aren’t Quite Over Yet
By LIAM PLEVEN and RANDALL SMITH
November 8, 2007; Page C1
Instead of weakening, the subprime storm that has pummeled Wall Street got worse, with two large financial firms reporting losses related to the corner of the mortgage market.
http://online.wsj.com/article/SB119447737487885750.html?mod=Leader-US
lets look at this from a standpoint of status.
what do we have that works.
my thanks to Ed Harris.
Apollo 13. “Houston, we have a problem”
England has it’s Royal lineage, and over the course of my lifetime it seems that our politicians at the highest levels, in particular…
Have become our ersatz Royalty~
And they are of course $iame$e twin$, with the “$wift” boatin’ Brobdingnagians…
Timber!
I have read reports that the Inland Empire of California has a newer emperor.
LOL
& adjacents
The mortgage mess seems to be infiltrating insults as well.
I saw people holding protest signs (non-housing related) recently here in SD that stated:
(Nat’l political leader) should be FORECLOSED!!!
(Same Leader) is SUBPRIME!!!
Just returned from the EHX (Electronic House Expo) Show in Long Beach Ca. Last year there were approximately 320 vendors and the show was well attended. This year the show had 190 Vendors and the attendance was low. The last day (Friday) was very slow.
A telling sigh?
A couple of months ago when to the Baltimore Antiques Show. It’s a very, very, nice show. Almost as nice as NY Winter Antiques Show. Many dealers lots of them from Europe. Pre-sale tickets must have been slow. Got bulk rate post card for free admission. The show was the slowest I’ve ever seen it in my 10 years of attendance.
This SD Craigslist post had me laughing.
http://sandiego.craigslist.org/rfs/474275577.html
The post claims that the house in question is “just listed”, when it’s already been on the market for a long time. The pictures deserve a dual award for Glaringly Obvious Abuse of Photoshop, and Just Ugly. The owners have finally lowered the price a whole $25K after all those months of sitting vacant.
I’ve driven by this place lots of times. House in question sits right next to a busy 4 lane intersection on a major street that backs up with traffic. The former owner liked to buy potted plants and over the years, packed them together next to the house without bothering to remove them from their black plastic pots. The inside is about as bad too.
Looks like the owners have lived there forever, but they’re not going to give this away. Nope.
Ha, I’ve driven by that house a thousand times on Genessee. I thought the old couple died a few years ago.
why are the pictures only of the outside?
Here’s pictures of the inside from the old listing if you’re still wondering why. http://tinyurl.com/38sqh7
Maybe they thought the pasted in blue sky with fluffy white clouds would be a good distraction instead?
Eddie looks like he’s 14 years old. Have all the realtors cleared out of the business and now only paper boys can afford to market houses? Every time another FB cancels delivery, he asks them if he can handle the listing…
Much of that part of Clairmont have bars on the windows. That’s usually not a good sign.
Comment by dude
2007-11-10 05:43:47
‘I think I understand your point. It’s like how I traumatized my children by renting the last few years and used the extra money for family vacations to Europe, NY, and Hawaii.
Seriously though, when I served in a voluntary capacity as a Mormon bishop for several years the most difficult thing to watch was children suffering due to parents stupid decisions.’
Testify, dude! I was the oldest of 8 kids produced by excessively, even lavishly, perhaps even *magnificently* stupid Mormon parents. And, just as you say, kids sure can suffer from stupid parents.
My mom still believes if she just prays hard enough Baby Jeebus will wander by and fix any problem she may be having. A lifetime of evidence to the contrary has not changed her wistful hopes. As for my dad, who knows what he thinks? He’s out in the desert somewhere eating locusts and jerky while playing with his guns.
Ah, fundamentalist Utah. Land of Gods chosen ones.
Oh, by the way, how is Utah doing nowadays? Anyone got good anecdotes? If not, make some up, to please me.
Utah is building in inventory for sale and swimming in denial. I’d say it’s about a year behind California.
I spend a lot of time working to save my little brothers from the assumption that it’s always a good time to buy RE.
Whoo hoo!
And good on ya, in your efforts to save your little brothers. Hope it works.
Before I go into my blind, I have to post a truly “crappy” house. LOL
It is so me!
http://tinyurl.com/3cdx3q
Inside JoongAng Daily (In English)
Please keep your water closet humor coming…
“Predatory Servicing” by Jack Guttentag. Another place to regulate?
http://finance.yahoo.com/print/expert/article/mortgage/52812
Ah, life out west is good. That’s where I am today, thawing out, plus stashing away one ounce of platinum and 3 oz. of gold in my hiding place.
Neil Cavuto’s show on FNC was discussing the effect of terrorism on shopping. Neil thinks it will be a good consumer spending season despite threats of terror attacks on malls.
I’m not so sure on that. I kind of got strange vibes from that show. There is a lot the market has to digest before the general stock indices continue the 4 year boom. So many factors ahead include world peak oil, the credit bubble, the inflationary policies of the Fed, big Republican entitlement spending ($560 billion prescription medical benefit welfare to the senior citizens), and so on. On top of that is general moral decay and flabby minds of the American public. I’m a hedonist in many senses and by no means support religion, but I do back the philosophy based on reason. We’re decades from morning in the Galt’s Gulch.
I’m buying 2 more ounces of platinum next week. That and gold are the antidotes for the flabbiness of America, led by theological Christian fundamentalists instead of being led by reason. Cannot fight rabid Islamic fundies with any dose of rabid Christian fundamentalism. That is the reason for a prolonged war on terror and the bills keep piling up.
my contention with the “alarm bells” regarding the threat of terrorists attacks on malls simply get the sheeple ready for even poorer numbers coming out of retail.
The threat of attack is not whats keeping Americans at home. The lack of disposable income is whats keeping consumers at home. Credit contagion is now going after the credit card companies.
shoes are still dropping.
Is there likely to be any meaningful political opposition to BB’s bright new idea to guarantee GSE debt up to $1m, thereby passing the fallout from disastrous housing policy on K Street and scam mortgage securitization on Wall Street squarely onto Main Street? Or is the American public so clueless in matters economic that this massive dumping of toxic mortgage debt into U.S. taxpayers’ laps will be a relatively seamless operation?
By the time it happens ,the American taxpayer won’t know what hit them and it will be to late to change it . The time to object to this proposed new loan relief by government backed loans is now .
My Octomom just got back from a trip to Italy and she told me a buffet lunch in the restaurant in her hotel was 30 Euros, like $44 or so.
it strongly depends on where you are; in some remote parts of Portugal the cost for a good lunch with some wine could be 2-3 euros, I think 30 euros for a buffet lunch in Europe is above average (but in cities like London that would be cheap …).
Credit is still crunched, and the Fed is pushing on a string. It is interesting how both the Financial Times and The Economist have recently likened Central Banking to dentistry.
Still squeezed
Published: November 7 2007 19:17 | Last updated: November 7 2007 19:17
It is like an aching tooth. Action – going to the dentist – promises immediate pain. Delay – waiting for an abscess – promises deferred agony. Institutions in the credit markets, through their failure to come clean on losses due to the current turmoil, are taking the latter option and risk making the squeeze more painful than it need be.
Despite a cumulative 75 basis point cut in US interest rates, several factors have thwarted a credit recovery. First, subprime mortgage collateral, and far more important, the outlook for a wide range of US loan collateral, has deteriorated further. That has hurt the value and trading liquidity of instruments backed by such loans. From mid-September there was a sharp second leg down in indices tracking subprime mortgage bonds; the amount of asset-backed commercial paper continues to decline; and interbank lending rates remain unusually high.
http://www.ft.com/cms/s/3804afea-8d63-11dc-a398-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F3804afea-8d63-11dc-a398-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus
How can one regulate an industry which has pretty much gone up in smoke?
COMMENTARY
The Anti-Mortgage Lending Act
By STUART M. SAFT
November 10, 2007; Page A10
The Mortgage Reform and Anti-Predatory Lending Act was approved by the House Financial Services Committee last week and has been sent to the floor for a vote. This piece of legislation is intended to overhaul mortgage lending and legislate our way out of the subprime mortgage crisis. Unfortunately, like most actions taken in the immediate aftermath of a high-profile event, the bill should not become law. It is fraught with peril to the housing and credit markets, and it will not help low-income housing purchasers.
http://online.wsj.com/article/SB119465153801788542.html?mod=opinion_main_commentaries
Credit markets
CDOh no!
Nov 8th 2007 | FRANKFURT, LONDON AND NEW YORK
From The Economist print edition
With trades scarce and losses mounting, it is going to be a harsh winter
IT WAS not a good omen. This week Lewis Ranieri, a pioneer of mortgage securitisation in his “Liar’s Poker” days at Salomon Brothers, sold his property-financing firm because the subprime crisis had cut it off from fresh debt. If the industry’s godfather can’t navigate the storm-tossed markets, what hope its greedy children?
http://economist.com/finance/displaystory.cfm?story_id=10113339
Prof, don’t know if you’ll read this since I’m posting at 1 in the morning west coast time, but thanks for this article. Good read.
De nada.