Bits Bucket And Craigslist Finds For November 18, 2007
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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This is a post from a troll last night:
‘Frank Abignale Date: November 17, 2007
Fellas….I hate to tell you this but the fed isn’t going to allow the housing bubble to burst much further. You should have bought a few years ago.
Now population is growing much faster than new home construction. There will be a huge housing shortage in 2 years.
Expect rents to skyrocket and home prices to stabilize and begin to increase again.
I’m sorry to tell you this but you made a big mistake in waiting for a housing crash that just won’t happen.
Perhaps you should buy something now or forever be a renter.
That has to be a joke. Frank Abagnale was a con artist. Remember the movie “Catch Me If You Can”?
http://en.wikipedia.org/wiki/Frank_Abagnale
Frank Abagnale put on his “rented” Foghorn Leghorn suit:
Foghorn Leghorn: “Dawg = chicken”… I know son, it looks like a dawg…but it’s really a chicken see…now go get’em boy!
I’m getting all warm and tingly at this comment. Doesn’t it remind you of the scorn we had to tolerate up until a few months ago? The masses of disbelievers who just knew it was different this time? The legions of salespeople masquerading as financial experts? The contempt aimed at us for daring to think that housing prices should be in line with incomes? Ahhh, the good old days.
Dear Frank – You could possibly be very right and all of us very, very wrong. You should go buy 10 houses immediately so you can come back on November 17, 2009 and tell us about the millions you have made through the population boom. We will most likely be sitting here reading your gloating summaries about all of wealth you have amassed and drinking our Everclear straight from the bottom to dull our pain.
The only other scenario would be us lining up to buy your foreclosures, but we all know that could NEVER happen so you should buy immediately before the price start going up 20% a year again!
Heavy sigh - always something. Bottom = bottle.
Okay, the Fed sure can’t control this and the comment about the population is just plain silly. My only concern is that Peter Schiff may (or may not be) correct in his prediction that the dollar will fall so far that foreigners will want to spend all those crappy dollars and flood our country with them.
Wouldn’t that mean buying properties and renting them to Americans? Thomas Jefferson said something similar could happen if we let the bankers control our currency.
Thomas Jefferson was concise in his early warning to the American nation, “If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered.”
It’s happening.
test
This is from the “who we are” page of the Redburn partners. http://www.redburn.com
Redburn Partners is one of the largest independent Pan-European institutional equities brokers.
Redburn is built upon a commitment to first class research, execution and client service.
Redburn’s services are tailored for institutional investors to the exclusion of any other activity. Our independence avoids potential conflicts of interest associated with corporate finance and proprietary trading. This is true independence and has been a significant factor in the growth of our client base, which includes the leading institutional investors.
Redburn Partners offers a compelling alternative to the integrated investment banking model. Our strong entrepreneurial culture is the catalyst for intellectual freedom, first class client service and partnership values.,
This is a PDF report that they just released that is just an excellent recap on the “what, when, who and why” of where this country is financially and why gold is going to the moon. I didn’t get the idea that these folks were gold bugs from their web site and they are from a credible european investment firm. It’s a must read, really. I’m keeping it as a reference work. PDF FILE!!!!
http://www.gata.org/files/RedburnPartnersGoldReport_11-12-2007.pdf
Citi bank is trying to close the door on withdrawals. Can capital controls for the US be far off?
Dear Friends,
Although you should read the entire agreement to put the following in context, it speaks for itself. Most funds coming in and out of banks today go by ITT bank wire system. The funds, when confirmed as received, are immediately good money. This clearly restricts such transfers in my opinion. Up to now bank wires have never had a limit in or out of a major institution.
https://web.da-us.citibank.com/tandcFiles/printable_cashedge.htm
Next Day. Funds are credited to your account on the next Business Day, if I request the transfer by 3:00 p.m. ET on a Business Day. This type of request is subject to the following conditions:
(1) in order to request an INCOMING Next Day Transfer: (a) the available balance in my Eligible Citibank Account must be at least $500; and (b) I have successfully completed an incoming standard transfer from the same Verified Account in an amount of at least $500 at least 20 calendar days prior to requesting the Next Day Transfer.
(2) in order to request an OUTGOING Next Day Transfer, the available balance in my Eligible Citibank Account must exceed the amount of the requested transfer by at least $500.
Limits on IIT Transfers
Type of Limit Standard Transfers Next Day Transfers
Incoming
Standard TransferS Next Day Transfers
Daily $100,000 $1,000
Monthly* $100,000 $2,500
Standard Transfers Next Day Transfers
Daily $2,000 $1,000
Monthly* $10,000 $2,500
Without relying on the above account agreement, or the above institution, my read on this is to put in place a tool to prevent an electronic run on an institution such as the one which recently occurred in Great Britain. If you have $1,000,000 in such an account and such an agreement governs it, it would take you 100 months to withdraw the funds.
Such an agreement would, in my opinion but not referring to the above bank, never be put in place unless there was a suspicion that such a run in the bank could occur.
I have a question for you. Have you taken the steps I have suggested to increase the barriers between you and the events occurring in this unprecedented time in the foundation of our financial system in the form of a MELTDOWN IN FINANCIAL ASSETS OF CREDIT AND CREDIT DEFAULT DERIVATIVES that stand on the FINANCIAL ASSETS of securitized debt which in turns has its foundation on NON-FINANCIAL assets, the mortgages themselves?
While it looks like a wire product, it is not. Nothing prevents you from wiring everything out of your citibank account by calling your bank and initiating a wire transfer after you signed the wire transfer agreement with the bank.
Best 104 pages I’ve read in ages. Thanks for the link!
Auger,
Though many of your posts might come across as alarmist, they tend to have a great deal of truth to them — as do many of your arguments.
While I’ve long been a bear’s bear, some of the things that are coming to pass are rather frightening, even to me. Guess I was hoping I’d be wrong about all the “doom and gloom”.
Here’s hoping all the bears’ predictions DON’T come true…
How could Jefferson’s vision have been so clear?
He actually did know a thing or two like many of the founders. Not quite the evil dead white guy that often gets scorned these day in school.
Schiff is badly wrong. Foreigners are going to depreciate their currency right along with us.
So the only currency outside of the central banks is metal currency. Are you a believer that metals will continue to rise against all of these fiat currencies?
Well there sure isn’t going to be a shortage of houses because there’s any buyers. 2/3 of this country couldn’t buy if they wanted to. Just add up all the people with bad credit that bought, then add in all the people who bought and overextended to the point of bankruptcy and foreclosure, then add in all the people who stayed in their houses but can barely buy groceries let alone have closing costs to move again. This country has one big crash coming and the government or no one else can prevent anything of this epic proportion.
We just had another bank in our area that had to do a large write down. They bought out a bank in August and didn’t know the extent of the loans the bank they bought, had to Franklin Mortgage in NY. All Franklin’s loans were subprime, so the new aquiring bank got a nasty surprise. Tell me most of this stuff isn’t hidden and it’s going to slowly leak out for years to come. Besides slowing selling these securities out, it’s also going to stop a lot of bank acquitions, because they have no clue what they’re buying.
“…it’s also going to stop a lot of bank acquitions…”
Ghost — that’s an interesting and logical conclusion.
“Wouldn’t that mean [foreigners] buying properties and renting them to Americans?”
Kay — not many, and not for long, IMO. Positive cash flow is a universal concept with regard to investment property. They will have to receive their rent in US Dollars (or equivalent rent in another currency). While prices are too high, the rent ratio will lose any “investor” money. I think it would take a pretty stupid foreigner to buy real estate here and now in 98% of our markets.
As for buying low, holding on for a long time and selling high, I think that is obviated for most of the country simply because builders can build and sell new stuff for less than the “investors” would have paid for the old stuff.
The only exceptions I can think of might be the most desirable and built-out areas, and small, cheap vacation properties on which the foreigners can waste their excess cash because they think they are getting a great deal — sorta in lieu of buying time shares.
I recommend “Catch me if you can” highly…
Great movie, very entertaining book.
The life of a pre-computer age grifter, making it up as he went.
He would have made a great RE agent!
Frank Abingale, correct?
Since a few years ago was the top of the bubble in many places, and he acknowledges, however reluctantly, that it has popped some and will continue to go down a bit more, I think that the conclusion that “we” should have bought a few years ago is specious. And he claims that prices will be going up in about 2 years to threated us as if a person with a steady job and cash couldn’t buy if he wanted to in less than two years.
He is not only wrong about all his alleged facts, he draws the wrong conclusions from the ones he has.
I am almost tempted to feel sorry for anyone whose brain works that badly.
I love troll posts on here because I love watching the sharks here tear them into little bits.
Note that this post consists entirely of errors:
1. Fellas: We know women strongly influence house purchase decisions.
2. the Fed won’t: The Fed can’t do much with rates or short term lending that will prevent this major correction.
3. should have bought: Generating a windfall by selling and avoiding disaster by not maximizing equity based lending are good options available to people who see a bubble that don’t even relate to this obviously wrong statement.
4. population growth: Demographics warn us of impending population implosion starting with the retirement of the boomers.
5. housing shortage soon: Overbuilding has been global and pervasive even in Manhattan.
6. rents to skyrocket: Rents are even more strongly related to incomes than purchase prices.
7. Prices to stabilize and then increase: Stagnate is a better word to use, and any increase is going to be relative to inflation which is significant.
8. Big mistake in waiting: The big mistake is buying now, and many seeing the bubble are being tempted to sell rather than being turned off to buying as the troll asserts.
9. priced out forever: All serious research shows housing always coming back to a low baseline that moves only with inflation.
Based on the voice, the bogus assertions, and the fake name my guess is that this is troll extraordinare Jeff/”Prime Property”. I could be wrong, but in any case it is remarkable how much of a role individuals played in this on both sides from Casey and the Tan Man to Patrick and Ben.
Frank was pranking with you all…
He had to lie about everything, when he was plying his trade. Just reverse everything he wrote and see for yourself.
Bizarro World, live the dream.
Ben, don’t be too offended by the troll. He was probably just in a bad mood after shaving his wife’s back. I’m sure that was a lot of work for him.
Let’s hope he owns a big expensive McMansion, mortgaged to the hilt, that he can sit in and watch the value dwindle year by year.
Thanks, but no thanks. I will happily be a renter forever rather than catching a falling knife in a slow motion crash.
“I hate to tell you this but the fed isn’t going to allow the housing bubble to burst much further.”
That line has to be the most humorous of them all, as it suggests the Fed has deliberately allowed the crash to get as far as it has to date. All the “Subprime is contained” rhetoric they could muster, not to mention all the liquidity they could pump in to the market from August onwards, could not stem the decline of the dollar along side the deflation of the housing market.
But now they are going to put the really big gun to the task? I don’t think they even have any dry powder left to speak of, much less a secret weapon to fire.
Consumer inflation is up 3.5% yoy. I know this Frank Abiganle was just messing around but in reality the Fed has lost control of the situation. They sure don’t want to cut in December. They are trying to make that clear. Wall Street is trying to bully them. Two rate cuts, for a .75% total, don’t seem to have done much of anything except continue to put pressure on the dollar. The Fed reminds me of Barney Fife. They have one little bullet and they keep it in their pocket. These guys must be smart enough to know this.
Every $coundrel worthy of his moniker, has a Gulfstream V, gassed up and ready to go, at a moment’s notice…
$hrangla-La, in this instance… can be as far as 6,500 one way miles away, non-stop.
“They are trying to make that clear.”
Either that or else they are setting up the bovine herd for a surprise ‘larger-than-expected’ FFR cut in order to fuel another bull run, which might possibly take Wall Streets’ minds off the twin woes of the credit crunch and the housing bust.
“I hate to tell you this but the fed isn’t going to allow the housing bubble to burst much further.”
Wages have only increased 2% to 4% per year since 2001. House prices doubled in all the cities that appeal to me. I want value and quality construction at reasonable prices that follow the average income growth in the community where I would buy. I think most of the public still is not aware of the 2.5 * income rule. But they will relearn it. They will force the prices to come back down in line with income growth. That means 50% price cuts from the peaks.
Bill — I think the 2.5x income rule will be a huge shock for the first-time buyer generation. Older folks should have known it, but have forgotten or discarded the idea. Though I suppose it may be most applicable to families with children, I lived with “2.5″ because it was wisely enforced by my lenders at the time. We had very few luxuries, even at that ratio of housing expenditure.
I think it could be an interesting exercise to challenge a “non-believer” to come up with a rent s/he would pay for, say, a house or condo that is virtually identical to the one they would buy. Give them full access to rental rates in the area and tell them you expect them to add an additional amount to the rent — to guarantee that this theoretical house will not be taken out of service and they forced to move. Heck, let them make almost any mathematical assumptions they want that are not absurd (4+% price appreciation, starting soon, being an example of absurd). You just cannot make the math work, because rent ratios are way in excess of 150X, much less the 120X - 100X many of us would like to see before buying, in almost all areas where rentals are reasonably common/numerous.
And make sure they factor in rising insurance rates, rising property taxes, maintenance and repairs, and HOAs. Used to we didn’t expect to be able to own a house right away and 1st house was expected to be small starter home. Of course, without the big house with lots o storage, where would everyone keep all the junk they keep buying? It’s amazing to me how much clothing people think they need to own these days.
“I hate to tell you this but the fed isn’t going to allow the housing bubble to burst much further.”
First off, the FED would actually have to know what they’re doing before they could prevent a bubble burst. So far I’m not real impressed with the brain power there.
Hey, Mr. Troll, what did you tell us about the current downturn 2 years ago. Now you can predict what the FED and the housing market will do in the next 2 years. You missed the boat 2 years ago, you don’t get a do over.
“Hey, Mr. Troll, what did you tell us about the current downturn 2 years ago…”
Good point.
Years ago this Trolls like this one were spewing off with the rest of the “RE goes up forever” crowd–now changing his/her tune to “prices will stabilize then go up.”
It’s kind of fun having a Troll around to viscerate again. I was remarking to my girlfriend how the Trolls have been almost nonexistent since the bubble started to really blow.
Sometimes I picture our old delusional, massively underwater FB’d Trolls from 03′ thru 06′–now curled up in fetal positions sucking their thumbs, or sitting in some dive bar sucking down happy-hour rot-gut…”put it on my taaab Earl, BURP.”
DOC
Real estate is essentially purchased by auction.
Bidders bid on properties. The amount of money they are willing to bid determines the price of the properties.
In recent years, the amount of money people could raise to bid on properties skyrocketed due to flawed lending practices. Hence the current surge in foreclosures.
If the lending spigot shuts off, people will not be able to bid at the previous, stratospheric levels. And house prices will deflate. Those people (subprime) who are the most irresponsible or the worst at math will no longer set the prices for a neighborhood.
I don’t think it’s good for a society to be so deeply in debt. Selling one’s soul to the company store was considered a miserable way to live. Many willingly did it in recent years.
Government is indebted to the big money interests (”We have the best government money can buy”), and will thus do all it can to try and keep the lending spigots open, by trying to cushion the losses of the big lending companies and allowing the cycle to continue. As long as lenders keep making money, the spigots will remain open.
I guess the question is - how much can cushioning (payments to the big lending companies) can government provide? And for how long?
What’s funny is that one of those foreign stores here in FL (serves the hispanic community) is selling bus tickets like crazy back to Mexico. There are no jobs here for them.
So what population growth?
Would somebody please explain what happened to “Suzanne, I researched this”? I think I missed something.
I don’t remember her as a troll, but I was gone for a few days and now everyone talks about her like she was. Was she a long term sleeper from the REIC who outed herself during the time I missed? What happened?
I’m not sure I have all the details on this, polly, because I first started posting back in late 2005, but if I recall correctly, there was, in the early days of the blog, a realtor or member of the REIC by the screen name of Suzanne who insisted that there was no bubble, real estate was only going up and she used to say in her posts “I researched this”, to support her points. As a result, another poster here took the screen name of “Suzanne, I researched this”, as a joke. “Suzanne, I researched this” is not a troll, I don’t think. Somebody correct me if I’m wrong.
Suzanne was the name of the realtards in the Century 21 commercial with the harpy wife demanding the beaten down husband buy a house, because Suzanne researched this.
There have been several posters with that handle. Some changed their names after the joke wore off.
I believe there was an actual realtor from WI named Suzanne. She was a somewhat reasoned bubble denier. She was run off the blog in less than a week.
Here’s the youtube link.
http://www.youtube.com/watch?v=Ubsd-tWYmZw
LOL, thanks for setting the record straight, sunset. I never saw those C21 commercials, but I did remember vaguely the Suzanne realtor that posted. I guess “Suzanne, I Researched This” is a part of HBB folklore and therefore open to myth alteration as time goes by. Gotta love it.
Speaking of commercials has anyone seen all the national realtor commercials. As someone who had a license years back, and hated the fact that I had to belong to this useless organization, I’ll tell you they’re desperate. NAR never advertised in the fall, and definitely not before holiday season, because it was a total waste of money. They only started ads about mid March and ran into early summer. These current ads are a sign of real desperation.
Good, let them burn through their rapidly depleting ad budget so we can get those asshats off the air. It’s a good time to go BK! (their new mantra).
http://www.youtube.com/watch?v=Ubsd-tWYmZw
It’s a referenced to a 21st Century RE commercial that aired at the height of the bubble… http://www.youtube.com/watch?v=Ubsd-tWYmZw
The comments below the window reflect what we here all feel after viewing this piece of Bernanke.
That commercial will be the lead in on the history channel on what the sentiment was during the Great New Millenium Housing Bubble’s version of the Tulip Craze…classic! Somehow, the commercial continues to facinate me in so many ways.
Wow! I never saw that commercial but saw the posts from Suzanne I Researched This. I saw some comments months ago on what they thought that name meant. But this sets it straight.
This is historical and epitomizes the real estate bubble.
Other terms of this decade are acronyms: FB, GF, noDoc, etc.
How about phrases: “Fence Sitters?” Describes the smart money of this decade.
Those are like “Easy Rider” or Jack Kerouac was to the counter culture part of the boomer.
The squeaky wheel always get the grease, so those foreclosed on, will always loom largest.
What’s a good word for them?
how about…
Foregones
The squeaky wheel always get the grease, so those foreclosed on, will always loom largest.
What’s a good word for them?
how about…
Foregones
http://www.youtube.com/watch?V=Ubsd-tWYmZw
Are casinos feeling the pain, too?
The local (midwest) casino ran an ad for “Hot New Penny Slots — 18 NEW machines, new arrivals coming thru mid-December. That’s over 60 NEW Penny Slots by Mid-December!”
Pennies? Wtf? Is granny now forced to rob her piggy bank of pennies to indulge her habit? And who is hired by casinos to put all those pennies into rolls? Brokers, lenders, etc.? What’s next, wooden nickels?
Is this just local or are casinos in other parts of the country doing the penny slot thing now?
Back when slot machines used to be mechanical and actually took coins, a Cent slot machine went through 5 times as much wear and tear as a Dollar slot machine for much less profit, thus Penny slots were a rarity.
Most of em’ are computerized now and as no coins go through them, the casinos are sticking Penny slots by the dozens, at the entrances of their houses of chance. We saw this over and over again last year in LV.
Always figuring out new ways to psychologically mess with people…
In this particular Centuation, getting them into the casino, is job number 1.
Viva Pavlovegas!
And I’m sure these are the type of machine that has three or five rows visible, and the player can purchase additional permutations across them to increase the odds of “winning.” That being the case, they might as well be nickel or dime slots.
Also, for the “take” to be the same, the house must lower the odds of your winning with a smaller bet. Better to play higher value slots to increase your odds. That is, if you’re a total idiot droid who likes losing to begin with.
MrBubble
PS: If you’d like to actually smell desperation, visit the Stockmen’s Casino in Elko, NV. Good gravy.
“Also, for the “take” to be the same, the house must lower the odds of your winning with a smaller bet.”
No, no, .. the idea is to let you easily WIN with the smaller bets so you’ll be drawn furthur into the casino where the real casino money-makers are located.
The casinos put the penny slots with player-friendly odds near the door and use them the same way fishermen freely use chum to coax fish into their nets.
Look below at Dr. Strangelove’s reply below. That’s what I meant. You’ll lose more of your money over time with pennies.
Don’t have a link for that but I read it somewhere.
Also once you have been drawn into the casino, ever notice how hard it is to get back out of the casino?
Out here in the desert, they are re-doing one of the big casinos and I noticed last week they have gotten rid of nearly all the penny machines. Also, there’s not nearly as many people in them. Asians aplenty who rent buses to bring them out from Gardena.
“Pennies? Wtf? Is granny now forced to rob her piggy bank of pennies to indulge her habit? And who is hired by casinos to put all those pennies into rolls? Brokers, lenders, etc.? What’s next, wooden nickels?”
Actualy, the Casinos really clean up with these machines. On can still bet up to $5.00 a single bet with penny machines, but the house edge is huge compared to higher denominated quarter and dollar machines. An office assistant at work told me she plays penny machines and bets a few dollars at a time. I ask her why she doesn’t play the dollar slots at 2-3 dollars a bet as they pay out much higher and more often. She just doesn’t get it. I guess she just thinks it’s safer to play a “penny” machine because it’s a penny machine–nevermind her money vaporizes quicker with these than the higher denominated ones.
DOC
Say what you will, but I happen to win at slots pretty consistently. I don’t play a long time, I move from machine to machine, I play machines I watch others pour money into and I never play my money. The reason I play the nickels and pennies is because you can make max bets for same price as lower bets on the dollars or quarters and you get bigger payoff per bet IF you’re on the upside. Best part is that unless you hit over $1199 here, no reporting. I’m sure data says it’s losing proposition, but it all works for me.
Private equity firms (who evidently don’t read this blog enough) willing to throw away reputations to get out of bad deals.
http://www.nytimes.com/2007/11/18/business/18deal.html?_r=1&oref=slogin
For example:
It is almost laughable to hear the buyers of Home Depot’s supply unit contend that the housing market’s slump caused the business to deteriorate so far beyond their expectations that they had to renegotiate the deal they struck just months earlier. If the buyers didn’t see that coming — if that possibility wasn’t baked into the firms’ models — then shame on them.
If this isn’t an indicator that we are in a recession, I don’t know what is.
“Everyone repeats the same line: “There’s no question that this summer the world changed,” Leon Black, founder of Apollo Management, said this month at a conference for The Deal, a magazine.
Well, yes, Mr. Black. The credit market did change; there is no question about that. But that doesn’t explain how private equity firms, whose entire business is premised on accurately forecasting a business’s potential and risk, called it wrong.”
This is no different than the idiots who put down deposits on unbuilt Miami highrise condos and then trying to weasel out on some BS argument about square footage when it becomes apparent they aren’t going to make the anticipated killing. These arrogant PE assholes couldn’t see the changes that a bunch of yahoos on a blog could way ahead of time. Maybe we should be getting the $20M bonus.
“These arrogant PE assholes couldn’t see the changes that a bunch of yahoos on a blog could way ahead of time. Maybe we should be getting the $20M bonus.”
That’s what I’ve been thinking all along, Ben should be getting the $20M bonus. He should also be getting Sean Snaith’s (the wet-behind-the-ears so-called economist from CA who came to Florida to repeat his silly “souffle” bubble analogy”) salary.
He should have moved to Seattle. There, he could have restarted the cult… if he moved FAST.
Big business and greedy individual buyers who lied about their incomes to buy at the peak, the NAR, the brokers, they all whipped each other in a frenzied hysteria of proportions never seen since the Tulip bubble. These are tens of millions of self perpetuating bubble blowers.
It has been a great hysterical and historical event (”histerical?”) to watch this years-long Great Denial. It’s something you can tell your grandchildren “Yup! I remember valet parking attendents who claimed they had 3 houses but overstated their income and basically walked away from their houses when payments were too much. But I rented during those crazy times. The next decade hundreds of thousands these real estate ‘tycoons’ were living out of cardboard boxes and eating from garbage cans while I lived on my savings…”
TX,
I totally agree, and wonder how it was that everyone got this so wrong in the banking sector. Yes, certainly greed has some/much to do with it, that’s for sure. But, honestly, when we (most of us without deep economics training) can plainly see (and, guess what, we were right) what was going to happen because of this lending stupdity… How could they NOT see it??
How could so many have been so blinded by the BS during this bubble. At the personal level, I understand it, people are stupid and trust those selling them stuff (RE agents) much more then they should! However, on a corporate level? Come on; most of these companies have armies of economists. How did they miss this???
“and wonder how it was that everyone got this so wrong in the banking sector. ”
Have you ever met any bankers? Get back to me when you have and you will realize you have answered your own question.
“Come on; most of these companies have armies of economists. How did they miss this?”
Groupthink in action. Those who want to belong go along; dissenters are chased out of the group. After the dissenters are gone the only ones left to make decisions are the yes men.
With all due respect I really don’t think anyone in the mix really missed the boat on the end result. I believe they simply denied it to a point and decided to ride it into the ground. I asked a loan office how he could put people into such instruments and sleep at night. He said, “hey I just send them up the stream and I will be here doing it till the music stops.”
“I asked a loan office how he could put people into such instruments and sleep at night. He said, “hey I just send them up the stream and I will be here doing it till the music stops.” ”
This is the mentality that will burn us all down if its not kept in check. As long as there’s no anticipated consequences–asshats like the above will screw over their fellow man until (1.) There’s no more $$ to be made, or (2.) They fear being punished.
As we’ve observed…tons of quite intelligent (and not so intelligent) people have just enough greed-driven, callous, anti-social personalities to perpetuate destructive endeavors/bubbles.
My thought on apropos punishment for these scumbags brings to mind tabasco-dipped joshua trees.
DOC
Interesting piece in the NY Times today about renters whose landlords are being foreclosed on…
http://www.nytimes.com/2007/11/18/us/18renters.html?hp
The House just passed a bill that would require 90 days notice to these tenants and would require banks to continue the lease for 6 months. I wonder if Bush would sign such a measure.
sure, no problem…*
* as long as you let us do what we call a “signing statement”
Common practice, we’ve done 800 of em already, so me must be good at it.
regards…
’ssshrubery
I haven’t mentioned it in a while, so let me remind people that I am a lawyer and a federal employee.
I have never so much as checked to see whether any legislation I am required to interpret has a presidential signing statement.
There is a decent chance that if someone told me I had to read and conform my activities to such a statement that I would have to consider it a violation of my oath to uphold the constitution of the United States and refuse on those grounds. I was taught in law school that interpretation of legislation is subject to some extent on the intent of the legislature that enacted it, but never to the intent of the executive that signed it. The executive gets a yes or no vote on what the legislature passes; he doesn’t get to change it.
And if I were fired for such a thing, I would sue and take it all the way up the courts. I bet the ACLU would take that case.
But, it has never come up. Ever.
Is he just trying to get carpal-tunnel syndrome?
If it has no teeth, why bother?
I see a bite coming.
I agree. I think they are just testing the system to see what they can get away with. You have to believe that it’s being done to absolve him of any illegalities he may have or may want to commit. But the Constitution is pretty clear on the veto thing. If he signs a bill, it is enacted as is, aside from any signing statement.
cynicalgal, one of my main beefs with Congress is that shrub’s ears have not been pinned back throughout his disastrous terms of office. And then it dawned on me that, just as many members of the middle class submit to screwings by the parasitic wealthy (as opposed to the productive wealthy) in hopes that one day they’ll be rich enough to get in on the goodies, so were many members of Congress fascinated by shrub’s over the top actions and didn’t perhaps act, wondering how they could get in on those goodies themselves. shrub has set a dangerous precedent for future presidents, and I don’t put it past some of the “top” candidates from either party to do much the same if they get elected. Aside from Ron Paul in the Republican camp, I think, on the Democratic side, that Obama would not do this.
It could be more than just testing. There may be departments with more political appointees who do check this stuff. I wouldn’t know. I have to go through a whole pile of managers before I get to a political appointee. We don’t do it.
It’s a great article, though a little melodramatic. I would have liked to see a brief digest of the states that already have similar protections, but newspapers rarely are that useful when it would require a lot of work to get the info.
Not sure if Bush would sign it as a stand alone law, but it would never be introduced that way. The article called it a “broad mortgage act.” Don’t know what else it includes, but I have said here fairly often that I don’t think Bush will buy in to most of the bailout schemes that congress has discussed. I don’t agree with the president about much, but I think he is looking to re-establish some semblance of a smaller-government reputation. It is far too late for that, but he can’t try to do it and fund a bailout for people who bought high and now regret it. When the guy hosting the super-SIV meeting told the participants that the government was providing the food for the meeting and that was all the government money they could expect, that was that party line. I think they will stick with it, though they will probably rely on republicans in the Senate to filibuster the bills rather than go with a veto.
By the time a replacement is elected, the size of this thing will have gone beyond all possible hope of anyone that a bailout can be funded or that it would even work.
By the time a replacement is elected, the size of this thing will have gone beyond all possible hope of anyone that a bailout can be funded or that it would even work.
You are so right. They’ve never seen anything this big, ever. People say the great depression, but what was the population then and how many actually owned houses. This is going to be astronomical.
RE: Bush Bailout
He’s done his bail-out with the posting of Ameriquest’s Arnell to the post of US Ambassdor to the Neatherlands.
Loser…
Interesting. By what twist I wonder does the federal government believe it has constitutional authority to control rent laws at the state and local level? Is this to be interpreted as somehow an issue of ‘interstate commerce?’
By the authority of the . Mortgages are commerce between the states, even if eviction is local.
http://en.wikipedia.org/wiki/Commerce_Clause
COMMERCE CLAUSE
“There are no exact figures for how many renters have been evicted because of foreclosures, but a survey taken this year by the Mortgage Bankers Association found that one in eight foreclosures was not owner-occupied. This figure probably underestimates the problem, according to the association, because buildings receive tax benefits if they are registered as owner-occupied.”
http://tinyurl.com/2ezupc
“In California, 22 percent of the properties lost to foreclosure this year were not owner-occupied, according to ForeclosureRadar.com, which tracks California foreclosure auctions.”
“In Nevada, which has one of the highest foreclosure rates in the country, 28 percent of mortgages that were in default this year were for homes not owner-occupied, more than twice the national average, according to the Mortgage Bankers Association. Arizona and Florida, both leaders in foreclosures, are also well above the national average.”
“Foreclosing lenders typically evict tenants so they can sell the property, said Vicki Vidal, senior director of loan administration and government affairs at the Mortgage Bankers Association.”
“Many renters say they never knew their building was heading for foreclosure.”
I read this article - this is absolutely terrible. And since the old landlord holds all deposits, I bet they don’t even get their deposit money back when they move. The sad thing is these are the people who played by the rules. Instead of taking out an 80/20 loan and buying a house they could not afford, many of these people lived simply and tried to save for a down payment. Here in Austin, there was one subdivision that was luring in working class people with the boast of no payments for 4 months (till the end of 2006). A lot of suckers took the bait. Saving for a down payment and a little extra was for fools.
Also, I am landlord myself. If I see an eviction on someone’s credit report, I will not rent to them - it’s the kiss of death. I don’t really care about bad debt / credit cards. But evictions are the last thing you want. I this case, these people probably had no idea what was going on.
Roger H,
As a landlord, how do people that have had their houses foreclosed on, rate?
As far as criteria goes, as to whom you’d rent to?
They obviously have bad debt…
These evictions apply mainly to tenants of single family homees that are rented out. I always preferred mulitiple unit dwellings - apartments - owned by large corporations. I once rented a unit out of a triplex owned by some woman. I lived on the second floor. Swamp cooler was on the roof. The swamp cooler would break down several times a year, conveniently when the owner was gone from town for the weekend. I had to suffer in 95 degree heat all weekend. From that point on I swore I would never again rent in a small complex, but rent in a large complex from a large corporation. Maintenance is responsive 24/7. The only way I will be evicted is if I miss rent payments or violate the lease. No worries here.
I found a bank owned house where the bank is renting it out.
http://dallas.craigslist.org/apa/482093843.html
owned by Deutschbank. Can’t imagine what they’re thinking - that area will never appreciate much from where it is now.
DB is sitting on a lot of REOs here in N AZ too. They will postpone auctions over and over.
Can you imagine how much they stand to lose just from renter wear and tear? My personal belief is that you should either be a professional landlord or not one at all. That is not an easy gig. My wife and I are rarities in the renting world. And even we can’t keep from putting wear and tear on a place. I have seen what renters can do to homes. It isn’t pretty. I’ll admit that a lot of renters are real jerks.
RE: Can you imagine how much they stand to lose just from renter wear and tear?
LMAO…Nothing like tenants with a phalanx of Rottweilers.
Adios floor coverings, woodwork, and landscaping.
Nevermind getting the dog stench out of the walls.
They also own a few properties here in the SFV (CA)
Also in San Diego…
The only rational explanation I can think of for an international bank to sit on REO is that they believe some kind of bailout will come to pass to reflate bubble prices in time for them to do better by selling later rather than sooner. Otherwise, I guess we we might be witnessing the similarities of international bankers to cargo cultists.
This is great. While you’re turning in your rolled up dimes and quarters for folding money, you can complain to the teller that your A/C doesn’t seem to be cold enough and ask her to send somebody out to check on it.
Every time i’ve been in a supermarket in el lay, the past 6 months or so, i’ve seen 1 or 2 people waiting to cash out their $40.01k Ira plans, @ the Coinstar machine.
And they say we aren’t a nation of savers, anymore?
I used one of those Coinstar machines about 5 years ago. I felt violated when I was done. The damn thing should have at least bought me dinner.
I use those machines about once a year when I have my half gallon jugg full. I net about $175. The machine gets about $16. Have you ever tried to roll up $191 and bring them to the bank? It’s a major PITA and you certainly couldn’t pay me to do it for a measly $16. I guess some banks accept large amounts of loose change that they will count for free, but I don’t think mine does.
I roll my own out of principle. I don’t wait until the end of the year. It is not a stressful activity. I wouldn’t want to do $190 at a time. Nine percent to count my coins seems a little excessive.
Commercebank in NYC, has free coin machines, and you don’t have to be a customer to use them. They’ll hand you the cash.
Vegas casinos (no Cents though, that’ll tip em off)
free counting.
“Vegas casinos (no Cents though, that’ll tip em off)
free counting.”
LOL. They’d probaly just smile if there were a few pennies in the mix…they know most folks probably won’t make it out of the casino without “trying their luck” with their “coin cash” anyway (I picture Chevy Chase in “Vegas Vacation” losing $50 at the roulette table–while waiting for breakfast)…Smiles!
DOC
“I roll my own out of principle. I don’t wait until the end of the year. It is not a stressful activity. I wouldn’t want to do $190 at a time. Nine percent to count my coins seems a little excessive. ”
Agreed.
The higher the amount, the less sexy it looks.
I don’t mind rolling coins. I have one of those nifty, plastic automatic sorters that I just drop my pocketfuls of coin into daily. Then I wrap the coins with the free wrappers from the bank when the tubes of the machine fill up.
No big deal. I figure I cash in at least $300+ a year as I’m an old school cash purchaser–the thought of giving up $30 or more p/year just to cash in doesn’t sound too sexy. Besides, I enjoy cashing in around $50 at a time when I go to the bank. Will usually treat myself to a nice dinner, movie or bottle of wine.
DOC
My brother and I once spent about 12 hours over several evenings rolling up coins for our father who worked as a bartender. We carried about 40 pounds of rolled coins in several large trays into the bank.
The teller took the trays, put them on a cart, wheeled the cart over to a machine and dumped them in. It ripped open the rolls and re-counted the deluge of coins.
A metaphor for the working world if there ever was one.
the 8% or so comission is indeed a ripoff, however FWIW those machines will also issue an Amazon voucher at full value….
I get rid of my change by paying in automated teller lines in Kroger’s. I used coinstar once at the same store and was unpleasantly surprized at it’s take.
Hey, its Deutschbank! Maybe they’ll send over a certain ex-Fed chairman they hired not too long ago - with plunger in hand - once they realize he had a roll in the creation of all DB’s REOs.
I call them douche bank. They have more foreclosures in our newspaper than any other bank or mortgage company.
Did you actually see the paperwork, or did they just SAY that they owned it?
Did you actually see the paperwork, or did they just SAY that they owned it?
That’s the other problem. They want to sign a law that says the banks have to let renters live there 6 months, but with all the repackaging, who actually owns these houses.
Probably owned by DB as trustee. I suspect that a lot of the servicing agreements for home loan pools and conventional MBSs contain no incentive for the servicer to sell REO. Keep in mind that once the REO is sold the balance goes off the books and the servicer no longer gets its 30 bps per year on that balance. It could be that servicers are having REO listed at the unpaid balance amount, or rented out, simply to maintain the value, and cash flow, of their servicing rights.
I haven’t read a master servicing agreement in 20 years so I don’t know what they look like these days.
Did they hire property managers or are they hoping for the best?
I’m going to call tomorrow and find out. Curious.
Or is this a case of some enterprising entrepreneur renting out someone else’s REO without the someone else knowing about it?
Honestly, this is want banks need to do if they want to truely forstall the day of reckoning. Set up a residential property mgmt division, hire professional RE mgmt personnel and have them rent and manage the properties. Get a cash flow going and use the tax codes depreciation tables of the assets to ease the pain over time. Otherwise they will lose their shirts and have to keep writing this stuff down as they sell it all at the same time
Has anyone read the “new December” issue of Money magazine, with an article on the housing markets that are still hot? They include Seattle and Salt Lake City as growing markets. However, the fine prints says that their analysis is based on June 06 to June 07. If you look at the most recent 6 months, using housing tracker.net, you find that inventory is up something like 100% in Salt Lake City and asking prices are down >10%. They claimed that good markets in some locals were due to job growth and the economy. However, it’s been clear for a long time that these markets are just lagging (maybe by 12 months) behind what has been happening in other bubble markets.
I was thinking the same thing, Bill. Often, articles and TV stories about the bubble end by talking about how real estate is “local” and there are markets where housing is still going up. I wonder if there are any markets left in the US that are still appreciating.
OT, sort of: What exactly is an ‘executive’ house (home, condo)??
I suppose no real definition applies? Just some fancy word for nothing?
No known insect or rodent infestations?
executive house/condo = corporate love nest
These days, and “executive” home means no home boys or hoods in the neighborhood.
Grr! “an” instead of “and.”
In the 1970s an executive home where I lived in Fresno was a single story residence with a double front door, at least one acre of lawn in front and back, a large olympic sized pool and a tennis court, minimum of 3 car garage, in the northwest part of the town. I think those were selling for around $80,000 in the early 70s. And yes, there were no ‘hoods’ in the hoods.
These days you cannot escape from having hoods in the hoods, no matter what price you pay. A Rap Music star with an expensive home in Carefree (or Cave Creek) Arizona was recently in trouble with the law. There are more and more ghetto culture types living in areas where traditional families of high income businesspeople live.
This is another reason why I prefer renting. My lease is a maximum of one year. If my neighbors go ghetto on me, I can move. If I pay $800,000 for a house and a gang banger moves next to me, he knocks down my value by $300,000 or $400,000 and I cannot do anything about it.
Our culture is destroyed and neighborhoods get destroyed quick these days. Another reason why renting will reign superior to buying for a generation.
I read some time ago about HUD changing the section eight program rules, to get rid of the typical public housing section eight ghettos. They would disperse them into regular neighborhoods. I guess the experiment was to see if it would improve them. Has it socialized them into better people, or brought the neighborhoods down? It has been a failed experiment for the most part in my view.
Moving an alcoholic, a lowlifer or an undereducated person into a better neighborhood does not change who that person is.
In Baltimore County, it’s been a disaster. All it did was spread the blight. People kept talking about how we had to move people out of the “Drug Infested Buildings”, as if the problem was with the building itself, not the druggies who lived there. The result was that formerly stable neighborhoods were ruined.
When it comes to marketing of any kind, and you see the word ‘executive,’ just mentally substitute the word ‘big shot.’
They are trying to tell you that this is the type of house big shots live in, and if you lived there you’d be a big shot, too.
I’ve brought up Kunstler before, and some of us have argued a little about his points, but if you get the chance I think you should to his “Commonwealth of California speech” (it’s on his website about halfway down on the left side http://kunstler.com).
He ties all of this to peak oil. I’d love to hear opposing and supporting arguments. He also predicts the rise of a “bring back the middle-class” demagogue. I see this already in Ron Paul.
Anyway, his main point is that suburbia and our happy motoring layout is the greatest misallocation of resources in the history of mankind. Kunstler also believes that this is the year the “long emergency” starts in which all of this unwinds.
I agree with most of what he says (that we’re screwed), but I’m not sure I believe that this is going to be as peaceful as some of us would like. I wouldn’t categorize myself as a card-carrying doomer, but let’s be honest: we can’t make on a plastic widget economy.
I’m not even sure what I am asking or saying. Any thought or comments? Is is possible this is the death of the middle-class? Is this the end of suburbia? Riots? Hoarding?
“Anyway, his main point is that suburbia and our happy motoring layout is the greatest misallocation of resources in the history of mankind.”
A few years ago, I read a great article in Atlantic Monthly about the type of “toxic housing” and architecture that was built in the US post WW2. The thesis was that the automobile was the driver (pun intended) behind policy in the US. (What’s good for General Motors is what’s good for America, or some such thing). As a result, zoning boards everywhere got their panties in a wad about “setbacks” to allow for parking lots and local roadways virtually eliminated the idea of the sidewalk over time. “Toxic” architecture that discouraged neighborhoods and mixed economic populations abounded and people became individuated from their neighbors. The important thing was the “car”. Downtown areas and neighborhoods became blighted as people moved to suburban enclaves. And the car and cheap gas enabled them to do this. The article lauded those few towns left in the US that still had walkabout mercantile and neighborhood districts.
My sis lives in a Connecticut town with a great little downtown area and when I was up there visiting, it was delightful to take a walk from her home to the shopping district and have a bite to eat at the local diner, browse the local used bookstore and pick up a few items at the grocery to take home. That’s what I call living. Having to drive everywhere sucks.
…and we once had a very extensive network of intercity passenger rail operations, intraregional interurbans, and intracity light rail. We HAD these things - they were not dreams or plans - they were real.
So, whenever someone tries to tell me about the infallibility the “market” or our heoric and all-knowing business leaders and politicians - I simply remember what they threw away.
EXACTLY, john. Tampa is completely screwed if we don’t get light rail up and running and the local pols are still dithering about it.
I’ve debated this with people many times. Light rail will not save the Tampa area. There are no work centers and no living centers. It’s just a big mash of whatever. It would be incredibly inefficient.
What would be a good line? From where to where?
Well, for one thing, I’d appreciate a ferry or hydrofoil from Ruskin/Apollo Beach into Channelside area, and perhaps other waterfront stations along the way.
IMO the biggest force behind the “automobile culture” has been the heavy-handed use of taxation and eminent domain to favor the automobile over other forms of transportation.
As you may know, public paved highways were originally used mostly by hobbyists and adventurers. There were car driving clubs who basically lobbied the gov’t to pave the roads so they could have more fun driving around. It was not a question of economic necessity.
The solution is not to have the gov’t throw more money and coerce people in different directions to balance things out. The solution is to return the roads to private hands so that appropriate tolls can be charged, and people can decide for themselves what type of transportation they prefer.
Yep - even in LA. Used to have trolleys and there were even leftover tracks on the westside until they redid SM Blvd and removed them. Now, they’re talking about spending zillions to put light rail there. Westside of LA is toast for transit. There are so many streets that can’t be widened. I’m talking streets that barely have room for one lane each way without parking. Used to take me one hour each way to get from M Beach to UCLA - 17 miles.
The old towns that kept those nice little downtown areas have been prized in the past couple of decades. One of the first places that comes to mind for me is Stillwater, Minnesota. They kept their little block of shops and restaurants on the waterfront. It is a jewel even though I haven’t been there in some time. I’m sure there are plenty of other cities like that.
NY, I think yesterday Ben was posting about the advantages of mobility. That’s the one thing that keeps me from looking for a “deal” right now, when TSHTF, I want to be within walking distance of work and shopping areas, like my sis. IMO, that’s where the “prime” RE will be in the future. Either there, or in rural areas conducive to agriculture. Suburbia will be a wasteland.
Aww, I missed that, picked the wrong day for a long walk. Mobility - in every aspect of the word - will prove crucial in the coming years. A great subject to discuss.
That’s the kind of town I live in. Little shops, cafes, and restaurants. Single screen theater (recently remodeled with new screen, sound, seats, concession stand, restrooms)etc. Next door they added an internet cafe. We had a great planning commission because all the building of plazas, fast food, gas stations etc. are north of the town, so the downtown has kept it’s character.
Ghostwriter, your town sounds wonderful. What state do you live in?
Before the malls and the multiplex theaters moved in, I grew up around 3 single screen theaters all within a bus ride. The State theater in SSF, the El Camino theater in San Bruno, the Millbrae theater in Millbrae, Not one of them are left as theaters. The front of the buildings are still there. The architecture is still there, the theater is gone. They now house a bar, a video store, and one has become a multi-use building. The small downtowns of all of them went through some rough patches. They are slowing coming back.
“He ties all of this to peak oil. I’d love to hear opposing and supporting arguments. He also predicts the rise of a “bring back the middle-class” demagogue. I see this already in Ron Paul. ”
There was a Wall Street Journal article from last Friday that said Lou Dobbs was strongly considering running.
http://online.wsj.com/public/article/SB119515461427494522.html?mod=blog
I would LOVE to see Lou Dobbs run for president & would vote for him in an instant!!!
People who know me (and knew me as “Bill in Phoenix”) are aware that I’m a Peak Oil fanatic. I’m hoping water desalinization http://ga.water.usgs.gov/edu/drinkseawater.html will be seriously persued in southern California. Los Angeles has had light rail for years. Phoenix is constructing light rail. I can picture desalinized water piped in from Southern California to Phoenix if they get their act together and build it all before the water crisis. Along with that, I like the potential of solar photovoltaic power for individual homeowners, along with more nuclear fission plants. Desalinized water, light rail, more nuclear power, and solar energy are all that Phoenix needs. I can also see San Diego thriving if they build desalinization plants in, say, the Oceanside area.
There is a big supply of water, and “peak water” is a laughable phrase. But peak oil is something that only fools take lightly. Teh ability to walk or bike-ride or use mass transit to go to work will be very important sooner than you think. Here is a timely link on the latest oildrum.com blog:
http://local.theoildrum.com/node/3224#more
I’m not so sure about desalinization in SoCal. We certainly don’t want to burn fossil fuel to produce the necessary heat, and I’m not optimistic about the chances for nuclear systems until people are literally dieing in the streets from dehydration. I can just imagine the screams from the SoCal nimbys when they are told that a nuclear plant will be built in their back yard to water lawns in Phoenix.
Personally, I think nukes are the wave of the future, but they are still political poison, and it’s not clear how bad things will have to get before we can start building new ones. I heard a report from the Democratic debate that all of the candidates were assuring Nevadans that they would oppose the waste storage at Yucca Mountain. Let’s face it, the waste has to go somewhere, and nobody is going to take it voluntarily.
We might see tugboats towing icebergs from Alaska before we see nuclear desalinization plants built in SoCal. Yes, I know that’s dumb, but the politics are tough.
Sounds so Easter Island-ish
nukes power over a third of Phoenix. These plants are located in Arizona about 50 miles west of Phoenix. Relax. We won’t want to put them in the People’s Republic, anyway! I’m not afraid of nukes. They are the cleanest form of energy and I wish they would power all of Phoenix!
Actually a lot of environmentalists and others seem to be jumping on the nuke bandwagon and it seems like the publis view is changing. I have a feeling people will ok nukes when heating or cooling the house costs $1,000/mo.
Already being worked on:
The Carlsbad desalination Project will provide San Diego County with a locally-controlled, drought-proof supply of high-quality water that meets or exceeds all state and federal drinking water standards.
http://www.carlsbad-desal.com/
Some Swedish news:
More difficult to sell your home
http://www.e24.se/pengar24/bostad/bostadsmarknaden/artikel_98927.e24
Brokers are talking about showings where no one shows up and an unusually slow real estate market. This is confirmed by statistics from Hemnet, which indicate that the supply of homes on the Swedish market is record high.
There have been many reports of a slowing housing market lately. It started with SBAB’s broker survey which showed dropping prices and less optimism among brokers.
The survey was followed by Mäklarsamfundet’s (”Brokers’ Association”) statistics about real estate prices, which showed marginally dropping prices in the country, especially in the bigger cities, since the peak in August this year.
At the same time, there have been many reports from sellers and brokers about a drop in speculators at showings. That the supply of homes is at record levels is confirmed by Hemnet (a national MLS; essentially the only one of any importance).
The numbers show that there were 34 148 different objects for sale in October, an increase by 43% since the turn of the year. Roughly 13 000 of these objects were houses, 11 000 were condos and the rest summer houses etc.
…
The supply of houses increased by 74% in Stockholm county between January and October. The same number for condos was 45%.
Despite this increase in supply, the prices of homes have not dropped. Real estate economist Stellan Lundstrom at KTH (Royal Institute of Technology) claims that prices are flat because sellers have yet to accept a market with lower prices:
- “Turnover speed” has decreased in the market. …
…
————
Some of you might be interested in visiting Hemnet (the national MLS), its address is http://www.hemnet.se. If you wanted the listings for Stockholm, you’d do this:
In the drop-down meny “Välj län” (Select region), choose “Stockholms”.
In the drop-down meny “Välj kommun” (Select county), choose “Stockholm”.
Then click “Nästa” (Next).
Then check whatever type of property you’re interested in (the choices are, from top to bottom: House, Summer house, Farm, Condo, Land, Other).
Then click “Nästa”.
Then click “Visa lista” (Show list) or “Visa på karta” (Show on map).
Rum = number of rooms (excluding kitchen and bathrooms).
Boarea = living area (in square meters).
Avgift = condo association fee (in SEK, divide by 6 to get USD).
Tomtyta = plot size (irrelevant for condos).
Pris = price.
Once you’ve clicked on a listing, it might also be good to know that “Alla bilder” = “all pictures” and Planlösning = floor plan.
Investors in mortgage backed bond’s are going to be freaking out, as the bubble popping spreads out across the globe. Everyones pointing at the U.S. now. Europe looks like it’s now making the turn lower. The strong Euro won’t last for long. Competitive devaluation in currencies, is right around the corner. Gold looks better and better all the time.
The value of currencies in relationship to each other is relative not absolute. If the euro goes down, the dollar goes up.
and the adjustment wave continues around the world.
Our house overseas is up 27% or so in USD value in the last two years… on exchange rate. Of course, it lost 50% going the other way in the mid 90s.
But it is still contained to U.S. Subprime… right?
Since nearly every loan dished out in the past 5 years could have been considered “subprime” under traditional standards then the answer is “yes”. “Yes”, it is contained to only subprime.
sounds similar to Netherlands: number of homes for sale up 40-50% from a year ago, prices still rising (on a yearly basis, but small drop in actual sales prices from previous month). I haven’t heard complaints from realtors yet, but you will probably only hear that when the bottom has been reached. One big realtor office recently commented that ‘it’s because of the recession’ when a newspaper asked why most of the commercial units they are offering for sale/rent are still empty after one year on the market. But no one dares to make the same connection for private homes, and of course the Dutch economy is officially ‘red hot’ and growing at the fastest pace in many years (thanks to truckloads of inflation like for energy prices).
Of course, the Netherlands IS different from the rest of the world. A politician from the biggest party proposed a big new island in the North Sea last week but fortunately for the RE mob, despite staggering construction cost, the island will get everything except private homes. So no need to worry, despite the fact that the Dutch may be making more land again the mob is in full control and will ensure that homeprices always go up.
Last week my towns city council reported that, despite trying very hard, they are unable to build starter homes for less than EUR 200K (about 8x average local income). The strange thing is that there are excellent plans available for starter homes costing just EUR 75K, and that price is based on even higher land prices than those in my area. Of course, everyone involved in the decision benefits from higher prices so they came up with the obvious solution for the problem: more homeowner subsidies!
more homeowner subsidies!
——————–
Sorry to hear about that, NHZ. At least there **might** be some slowing in your RE market. Thanks for keeping us updated!
The neighborhhod food bank here reports that between January and September this year the number of people served doubled - from 525 to 1082….but…then it jumped another 25% to 1388 just to October.
Real numbers, no spin.
Those are shocking numbers…
People are giving up, in droves.
One of our local food banks was literally stolen, lock, stock and barrel. That’s because the church group that ran it had everything in a large trailer.
http://cnewspubs.com/waterfront/modules/articles/article.php?id=37
Now I know where that day old bread I used to get at St. Vincent’s went to.
Where are you located? I wonder if the huge uptick happened just as people had to start paying for heat.
edgewaterjohn is in the Chicago area, if I remember correctly. That would go along with your theory about heat.
North side of Chicago. In a very economically fractious neighborhood - a corridor of relatively low rent apartments and senior homes that is virtually just across the street from areas with SFH approaching $1M. We had a relatively warm October - though - so I don’t think that was it - only used the heat myself for the first time last night.
Many seem to have run out of do re mi heat, all of the sudden.
If it wasn’t the gas/oil/electricity bill, then the numbers you report are even more disturbing. Sounds like real trouble.
Same here. Big plea on TV for 2nd harvest food bank. They also said their numbers had more than doubled. A couple of the people they interviewed on TV said they used to donate there and now they’re in line to receive food. Recession anyone?
I live 25 miles south of Youngstown, but the report was for the county Youngstown is in. I’ve also gotten tons of mailings for my county too, looking for money and food donations.
Rembember Ivan Boesky’s famous “Greed is good” line, popularized in the movie Wall Street? Flash forward twenty years to the 2007 version:
‘I personally made a boatload of money on bubbles. On the basis of my own personal enrichment therefrom, I can only draw one conclusion: Bubbles are good.‘
I NOTICE THAT GOOG HAS CRASHED CONSIDERABLY SINCE PERKINS’ INTERVIEW. ALL BUBBLES COME TO UNHAPPY ENDINGS.
November 6, 2007, 12:15 pm
The Bubble in Tom Perkins’s Sails
By Saul Hansell
Tags: Google, Tom Perkins
There’s a lot of chatter these days about whether the current state of Silicon Valley qualifies as a bona fide bubble. The tone of this discussion implies that being in a bubble ushers in some sort of dark and dangerous age.
Tom Perkins disagrees. Fresh off of an appearance on 60 Minutes, Mr. Perkins, the venture capitalist, came by this morning to talk about his book, “Valley Boy: The Education of Tom Perkins.” He chatted as well about his new high-tech mega yacht, which cost him well over $150 million to build.
“Bubbles are good,” he said. “I’ve made a lot of money on bubbles.”
Mr. Perkins’s firm, Kleiner Perkins Caufield & Byers, was an early backer of Google. Mr. Perkins said he has sold a chunk of his shares.
“My friend said that I should have called my boat, which I named the Maltese Falcon, the Maltese Google,” he said.
http://bits.blogs.nytimes.com/2007/11/06/the-bubble-in-tom-perkinss-sails/?ref=technology
Youtube has that interview. That sailing yacht is incredible. (I allow special dispensation for conspicuous consumption that is super cool.)
“In a nation run by swine, all pigs are upward-mobile and the rest of us are f*cked until we can put our acts together: Not necessarily to Win, but mainly to keep from Losing Completely.”
Hunter S. Thompson
RE: Hunter S. Thompson
They broke the mold with him.
RIP-Dr. Gonzo
“ole Dr. GonzoThe man was physically ill; knew he had
Bubble vision
Remember the fellow who said you couldn’t know a bubble until after it burst? With some distance from his perch at the Fed, Greenspan seems to have acquired 20-20 vision. He now dispenses bubble diagnoses freely (on the U.K. housing market and Chinese stock market), handicaps U.S. recession (the odds are less than 50 percent currently), and finally found a bailout he doesn’t like (the Treasury-supported plan to combine the best assets from bank-related Structured Investment Vehicles into a Super SIV).
Rubin, Greenspan’s former colleague on “The Committee to Save the World,” as Time magazine put it in its Feb. 15, 1999, cover story, is back in the clean-up business. The job of cleaning up the mess that Greenspan made has been left to Bernanke.
Caroline Baum is a Bloomberg News columnist.
http://www.app.com/apps/pbcs.dll/article?AID=/20071118/BUSINESS/711180327/1003
–
To the list of “Saviors Of The World Economy,” Greenspan, Rubin and Summers, we can now add Bernanke. Their primary tool? Manipulation. As Norman Mailer declared, “God is the Creator and Satan is the Manipulator,” we may conclude that these gentlemen are Satan worshipers.
We can guess what the future of the world economy is likely to be over the next decade or two.
Jas
“Their primary tool?”
Fooling games, based on their monopoly position as regards the right to issue fiat money.
Now that the stability of many landlords is coming into question, will many of you renters do more due diligence in checking their financials out, before renting?
Thankfully my wife and I rent from a true owner-landlord, so we don’t have to worry about that for now. He owns the home free and clear and has a small tax basis because it was purchased in the 1950s. The downside to living cheaply in West LA is that, while 3 years ago our graduate schools were within a couple miles, our jobs now take us 40 to 70 miles in different directions.
However, we looked for a rental at a midpoint between the two jobs and we always asked the owner about their financial position. Some were taken aback when I said that we’d be wanting a credit report on them just as they were asking for one on us. I think, “Get used to it.” “Owners” are the new renters.
My favorite guy was the one with the Hummer. I asked him if he’d give us a discount if we paid cash for a year up front just to screw with him; his eyes lit up like he hit the jackpot.
Will Your Money-Market Fund ‘Break the Buck’?
By Tim Paradis
Associated Press
Sunday, November 18, 2007; Page F03
NEW YORK — One of the safest and, lately, most attractive places for people to park some of their savings — the money-market account — is suddenly looking a little less secure thanks to fallout out from the mortgage mess.
Bank of America became the latest financial company to announce plans to shore up a group of money-market funds, in its case with a $600 million reserve. Its move last week raises questions about whether this category of savings might suffer hits that are serious enough to cause losses for investors.
Money-market fund inventor Bruce Bent said banks’ action is precautionary.
The notion that some money-market funds might give investors less than
a dollar-for-dollar return on their investment, an occurrence known as “breaking the buck,” is a sobering thought. Some experts say it remains unlikely, however.
The Bank of America funds have run into trouble with a type of investment known as a structured investment vehicle, or SIV, which uses borrowed money to invest in perhaps risky but high-yielding investments. These often complex transactions have operated, and made money, on a basic principle: that borrowing was easy and cheap.
When the market for risky mortgages collapsed earlier this year, credit in general got squeezed, and SIVs have suffered badly.
http://www.washingtonpost.com/wp-dyn/content/article/2007/11/17/AR2007111700209.html
Watch out for those “safe” money market investment choices in your pension plan investment alternatives. And avoid like the plague any financial vehicle with “Enhanced” as part of its name.
WEDNESDAY, NOVEMBER 14, 2007
WEEKDAY TRADER | Online Exclusive
Mortgage Woes Damage a GE Bond Fund
By ANDREW BARY
A SHORT-TERM INSTITUTIONAL BOND RUN MANAGED by General Electric Asset Management apparently has suffered losses in mortgage and asset-backed securities and is offering investors the option to redeem their holdings at 96 cents on the dollar.
The setback at GE Asset Management’s GEAM Trust Enhanced Cash Trust is the latest in a series of problems encountered by money-market and short-term bond funds from the turmoil in the mortgage and asset-securities markets.
Wachovia and Bank of America have had to provide financial support to their money-market funds to prevent their funds from “breaking the buck,” or falling below the $1 asset value that money funds seek to preserve.
The GE fund, totaling $5 billion, is an “enhanced” cash fund, meaning it seeks to provide a slightly higher yield than a money-market fund while preserving principal and maintaining an asset value of $1 per share.
The fund has been willing to take more risk than a money-market fund by purchasing floating-rate mortgage and asset securities with high credit ratings. The bulk of the money in the fund comes from GE’s pension trust and other GE employee benefit plans.
http://online.barrons.com/article/SB119499399633791914.html?mod=googlenews_barrons
“…Unlike savings accounts or government bonds, money-market funds are not insured.”
Mr. Bear…”They” wouldn’t want too make the “depositors” anxious about the safety of “their” hard earned cash now would they?
After my dad passed away this summer, the small life insurance settlement was kept in an account operated by the life insurance company that yielded 5%. Since my mom is into CDs, we left it there. This week we got a statement that showed the new yield is 3.6%. Time to take the money out and try to find a higher yield for mom.
WRT MMFs, we’ve stashed a sum in Fidelity’s cash reserves (FDRXX). In reading the prospectus over the past week, they have 25% in “financials”. Thinking seriously about going to their govt reserves (80% govt debt, though the other 20% can be in GSEs & other “safe” investments).
While it sounds like a good problemt to have, the fact that so many of us are trying to simply protect what we have is a bad sign.
“The massive, frustrated energies of a mainly young, disillusioned electorate that has long since abandoned the idea that we all have a duty to vote. This is like being told you have a duty to buy a new car, but you have to choose immediately between a Ford and a Chevy.” (1973)
Hunter S. Thompson
Do you think all the Realtors quoted in this article have any clue about the connection between the end of crazy lending and the huge dropoff in residential sales transactions which is winnowing the ranks of their profession?
Cleaning house
Risky lending policies junked as lenders return to the basics
By Emmet Pierce
STAFF WRITER
November 18, 2007
Cristina Martinez Byvik / Union-Tribune
Veteran real estate agent Ray Brown welcomes the tighter mortgage underwriting standards that have been imposed on consumers following spikes in home foreclosures here and around the country.
The freewheeling days of risky low-doc, no-doc, interest-only and payment-option loans are over, “and that is good riddance,” Brown said. “We are returning to the basics. You have to have good credit.”
Money no longer is being loaned to borrowers who are at high risk of defaulting when low “teaser” interest rates adjust upward, said Brown, co-author of the “Home Buying for Dummies” real estate primer.
These days, borrowers need to have “a little skin in the game,” said Ed Smith Jr., vice president of governmental affairs and industry relations for the California Association of Mortgage Brokers.
That means requiring down payments “even for customers with great credit,” Smith said. “Gone are the days of 100 percent financing and very flexible credit criteria.”
http://www.signonsandiego.com/uniontrib/20071118/news_mz1h18mortga.html
“Gone are the days of 100 percent financing and very flexible credit criteria.”
So, the armored car showed up at the 3bd 2 bth sfh… to refill the empty ATM… only there wasn’t any money in the bag?
Daffy: “That’s Desssssssssssssssspicible!” …page 13… Daffy gets blasted again!”
Taxpayers, watch out for your wallets when this Mr. Smith goes to Washington!
How would midwestern taxpayers feel about helping hapless Californians who bought $1m+ homes on the golf course which they cannot afford to fend off foreclosure?
And why does this newfangled Mr. Smith’s organization think it is a good idea for Congress to give a green light for GSEs to expand their portfolios when a scandal has enveloped their balance sheets with a stink cloud of doubt? In the interest of U.S. taxpayers, it seems important for New York State Attorney General Andrew Cuomo’s appraisal fraud investigation to run its course before any action to expand GSE portfolios is approved. Otherwise U.S. taxpayers will suspect the likes of Senators Dodd and Schumer are trying to stick U.S. taxpayers with the tab for a mess they should not be required to clean up. After all, Fannie Mae and Freddie Mac are both private corporations. Let their shareholders eat the balance sheet problems, and leave the taxpayer-funded guarantee out of it.
These days, borrowers need to have “a little skin in the game,” said Ed Smith Jr., vice president of governmental affairs and industry relations for the California Association of Mortgage Brokers.
That means requiring down payments “even for customers with great credit,” Smith said. “Gone are the days of 100 percent financing and very flexible credit criteria.”
…
While tighter lending is a good thing, the new standards are making it harder for distressed borrowers to refinance their way out of expensive loans, Smith said. His organization is lobbying Congress to allow Fannie and Freddie to raise the conforming limit. Declaring California a high-cost housing state would place it among select regions where the conforming rate is about 150 percent higher.
Smith said thousands of recent home buyers with adjustable loans in California could be forced into foreclosure if Fannie and Freddie aren’t allowed to raise their loan limit.
“We are going to have billions of dollars in adjustable-rate products that are resetting nationwide within the first quarter of 2008,” Smith said. “California will take a large share of that hit.”
During the recent U.S. housing boom, the Federal Housing Administration was a minor player because its lending ceiling of about $363,000 was too low for many buyers in costly markets. Some lenders are calling for the government to raise that ceiling to ease the credit crunch.
How does one value net equity in a falling price market when little is selling? And does the calculation factor in home equity extraction through cashout-ATM financing of recent years?
NATION’S HOUSING KENNETH HARNEY
Home equity stays healthy despite downturns
November 18, 2007
WASHINGTON – With the daily din of bad news about the state of the housing market, it’s easy to lose sight of larger economic realities: Despite declining prices in many markets, homeowners still control near-record equity holdings.
In its latest quarterly “flow of funds” statistical report, the Federal Reserve calculated that American homeowners’ equity accounts totaled $10.9 trillion by mid-2007. That was the net difference between total home mortgage debt ($10.1 trillion) and the total market value of home real estate (about $21 trillion).
http://www.signonsandiego.com/uniontrib/20071118/news_1h18harney.html
“American homeowners’ equity accounts totaled $10.9 trillion by mid-2007. That was the net difference between total home mortgage debt ($10.1 trillion) and the total market value of home real estate (about $21 trillion). ”
Now. revert to the norm. Median income = $50K. Normal median house prices = 3 x income = $150K. Current medain house price = $225K.
(225-150)/225 = 33% drop
$21T * .67 = $14T
So, $7T of that $11T equity is about to be raptured….
If we bottom at, say, 10% below the norm, say $135K….
(225-135)/225 = 40% drop. $21T *.6 = $12.6T. $8.5 trillion of our $11T equity… poof… gone!!!!
What if… I know it is unlikely…
but what if we happen to have a recession and unemployment ticks up and household income declines (Yes, yes, ignore all those sotries we saw in the last week about rising unemployment rates. That is just bad press. Recession Can’t Possibly happen, right?)
But, wait… at least $1 trillion (that was my prediction a year ago, but I’m getting ready o up it to $2T) of that real estate debt will be wiped out in coming foreclosures.
I can’t beleive the butt-wipes on TV continue to talk about $200B-400B. Puuuuuuuuuuuulease. No way is this going to be under $1T.
(Yes, yes, ignore all those sotries we saw in the last week about rising unemployment rates. That is just bad press. Recession Can’t Possibly happen, right?)
Here’s one vote that things go…the “other” way:
“…but more importantly over the long term: the American middle class will have a truer understanding of what it can and cannot afford; a truer sense of what’s really happened to its paychecks; and a more realistic view of where and to whom the economic gains of the last dozen years have actually gone.
http://robertreich.blogspot.com/
Yes, Darrell. The banks are now pushing home refinancing as a way to steal what little worth remains in peoples’ houses before they depreciate further. And you know, people are just stupid enough to fall for it.
Darrell — what do you extrapolate from a $2T loss? I keep trying to sort out “What is the worst that actually might happen?” relative to house prices. While I wouldn’t think that prices of used houses or unsold bubble spec ones would plummet below the cost to build a new one, is it possible? Or is it possible that building costs will drop even further? I’m not talking about end-of-the-world scenarios — just what do you see as increasingly likely to happen?
I originally came up with “minimum of $1 trillion” based on half of the MEW that happend over the last 4 years. Surely not ALL the MEW would be lost, right? For example, my wife had som uncovered medical bills which we used HELOC to pay for… but if you take the 2003 purchase price and adjust up for inflation, our balance is only about $10K greater than that. 2003 in PHX, prices hadn’t really gone up much.
Well, then it hit me. MEW rate is NOT the total debt growth. Let’s say a house bought in 2000 for $130K house is sold in 2005 for $200, then $30K of that $70K is used to buy a $300K house(that should be worth $200K). MEW is $40K. Total debt above “worth” is $170K.
I’m upping the guess to $2 trillion because of numbers like in this article. $10 trillion in total mortgage debt. 100 million total households… So that is $100K mortgage debt per household. BUT, with home ownership at 70%, 30% don’t own houses. So that is $150K per house that owns.
Oh, and something like 30% of houses are owned free-and-clear (no mortgage). So, of the 100 million households, 70% don’t own and 70% have mortgages (100 * .7*.7 = bout 50 million with mortgages.
SO, now we’re up to $200K of mortgage debt per “household with a mortgage”. The American medain household can only afford $150K of debt. $150K * 50 million = $7.5 trillion of mortgage debt we can afford… but $10 trillion mortgage debt outstanding.
Some will point out that a lot of families below medain income are the same people that don’t own. Yeah, but a lot of the people with above median are the people that own free-and-clear. Besides, add on another $2.5 trillion in non-mortgage debt.
So… even if the median income for the mortgageholding owner is $70K so they can afford the $10T in mortgage debt, they can’t afford their share of the other $2.5 trillion in debt.
I’m 40. My generation is SOOOO toast. We’re deep in debt. Our wages are not keeping up with inflation. We have no penaions. We can’t afford to pay Social Security at current rates, which is going to have to go up if beneifts aren’t cut. Add on Mediacare we can’t afford. Many Baby Boomers will find that pensions they thought they were going to get, have no money to pay them… so they are NOT going to allow Social Security or Medicare to be cut.
Interest on the National Debt, already crushing, will soar if interest rates go up even a little.
But, wait. We’ll grow our way out of the problem. GDP growth will magically make everything better. Debt as % of GDP is not that bad. Maybe not everything is bleak.
Oh, but our GDP is 100% dependant on the consumer going deeper and deeper into debt…. and we’re maxxed out and the debt pyramid is collapsing and that will take DOWN the GDP with it.
Oh… yeah, everything is bleak afterall.
Darrell — thanks. Sorry for the late acknowledgment — had to go out for a few hours.
I wonder if we will see a very large, though slowly growing, increase in the number of multi-generational households, completely aside from the ones formed by immigrants who are accustomed to the lifestyle. Saw it in Europe 20 years ago and they took it for granted. I suppose if I am going to live in a neighborhood full of Waltons, I’d prefer it to consist of larger than a 50 x 80 foot lots.
Darrell — thought I posted a “thanks.” If not, here it is.
Awesome post. Figures don’t lie, but liars sometimes figure, while oftentimes they don’t even bother doing the math, assuming we will take their opinion without checking whether it is reasonable!
“…what if we happen to have a recession and unemployment ticks up and household income declines…”
Under that scenario, I predict a flock of black swans will fill the sky and temporarily block out the sun’s light, leading to global cooling, economically speaking.
“Despite declining prices in many markets, homeowners still control near-record equity holdings.?”
See, the sky isn’t falling…now about those listings in the “Business for Sale” …which one’s look good:
1. Furniture maker
2. Real Estate Agency
3. Mortgage Lender
4. Scrap Booking supply shop
No one knows what market value is these days, only the Fed. Not surprising, because the guy who chairs its board does not even know his own household bills, or he would have a different view on inflation.
This article is misleading.
The problem is that the $10.1 trillion of debt is not supported by the entirety of the estimated home equity of $21 trillion since a good portion of homeowners (40%?) do not even carry mortgages.
Better to look at the value of the underlying assets that are financed by the $10.1 trillion of debt to determine if the situation is healthy.
Was flipping channels last night… TLC was running a rerun of the Pomona episode of Property Ladder…. there HAD to be fraud in THAT flip.. anyway, I couldn’t watch it again.
CNBC had Deal or No Deal, the contestant was hot so I watched a bit… it is next to MSNBC, so during a commercial break I flipped over..
Suzie Orman is on the line with a Realtor that is at risk of getting foreclosed on. (A Realtor, a real estate professional HAS to call Suzie Orman for advice????????)
Realtor’s income was $137K last year. If her 1 pending transaction closes, she might make $40K this year.
So, how much do you owe on your house, and how much is it worth? Worth $450K, owes about $500K.
Suzie mentions that she’s going further into debt every month since she’s making minimum payments on her Option ARM.
What are your payments?
First mortgage is pay option ARM with minimum payments of $1700. Second HELOC is $700 a month. THIRD mortgage tekn out 1 year ago to put in a pool is $500…. So, $3000 a month.
(Her MORTGAGES are $3K a month and she MAY make $40K this year… OUCH!!!!!)
So, are rents in your area similar to your house payments?
Oh course not. I could rent something similar for a bit over half my rent.
At this point I flip back to Deal or No Deal… Seriously, what choice does this lady have. The holder of the 3rd mortgage is NOT going to sign off on a short-sale, and she can’t afford to bring ANY money to closing. Worse, she’s not going to be able to really get the $450k. In today’s market, people are forced to take offers well below market value. Prices are falling fast enough that if she waits 6 months for spring, she’s going to be another $30K-50K underwater.
There is ONLY ONE decision. Stop paying and live there until the Sheriff shows up.
Wonder what old Suz told her.
Suze told her to try to short sale or foreclose. She told her to get a rental because her house was not a home, it was a “hole.”
i saw this show also, and was hoping that alot of people in her situation was watching. when she told her to walk away from the mortgage’s i think that would have had to open up alot of peoples eyes!!!
“This is a great time to buy and/or sell real estate. Your holdings can easily double, even triple.” lol
http://www.astralreflections.com/html/next.html
Got Debt Cord?
fire in the hole!
Debt cord — good one — might not register with everyone here, though.
careful with those explosive words, $low fuse and all.
“Debt Chords”
Voices in unison, all owing a bundle…
I’ve saved much of the best quotes in a “memorables” file. I need to include more of the pure wit/quips like this. Noticed that my file includes your Adlai quote from September.
Ben,
Maybe put a Local Market Observations on Sunday as well as Saturday. Then people can report what they see at open houses or the classifieds? In the Washington Post more and more often there are ads noting much higher comps. Such as today there’s an ad for $569K. 1st line of ad is “Same model sold for $640K.” This is for a nice 2 bedroom in Kalorama. A close-in upscale neighboorhood.
Hmmm, Kalorama is a very nice area. Its been several years since I was last there but in the parts I’m thinking of that might be a good price. Unless they’ve extended the name to other adjacent areas (wouldn’t be surprised), like I say its been a while.
Far from good. I would not pay it. Prices here in DC doubled from about 2000 to 2005 and are now about 20% off the top. The property is condo with parking.
FOREclosure
(Enter 11/14/07, then click on the Get Image button)
http://www.cagle.com/politicalcartoons/pccartoons/archives/beeler.asp?Action=GetImage
Senator Charles Schumer (D NY) wants jumbo loan limits raised to $1 million; Schumer’s top campaign contributors are Wall Street banks and investment firms (duh). I am a Democrat but I am disgusted with what big money is doing to both Dems and Repubs.
The only hope for our country is major campaign finance reform.
“… In a 2003 survey of business executives (”Political Finance,” pg 31), the World Economic Forum found that respondants in democracies with strong campaign finance rules like Finland, Sweden, the Netherlands, and New Zealand gave their countries a low corruption rating when asked about the policy consequences of legal political donations, while the US is the only industrialized country whose respondants gave it a high corruption rating. It turns out restricted campaign expenditures and public financing (among other “novel” things like universal voter registration and weekend voting days) often result in the election of candidates that more accurately represent the people, resulting in more policies that benefit social welfare in health, education, energy policy, trade, labor, and more…” http://www.theseminal.com/2007/08/07/funding-the-beast-free-speech-v-campaign-finance-reform/
Careful what you wish for. Campaign finance restrictions could also be used to shut down blogs.
A much better approach, a la Ron Paul, is to do away with the Fed altogether (along with gov’t guarantees for Fannie, Freddie, etc.) This way we wouldn’t have to worry about pinhead PhD’s like Bernanke screwing things up any more than they already have.
“Senator Charles Schumer (D NY) wants jumbo loan limits raised to $1 million;…”
More precisely, the proposal is to have the Federal government offer guarantees of GSE-securitized debt up to $1m. There was a Kabuki Dance at the Senate’s Bernanke hearing last week in which Schumer asked BB what might be a “reasonable” upper limit on the size of a GSE-securitized loan to be eligible for a govt guarantee, and BB threw out a figure of $1m as though off the top of his head. That seemingly-innocuous remark was sufficient to satisfy Schumer, who presumably is looking into drafting a measure to pass this into law.
Never mind that the GSEs are under subpoena from NY state attorney general Andrew Cuomo for a possibly purchasing fraudulently inflated loans from WaMu, raising serious questions about exactly what the U.S. taxpayer would be asked to guarantee. For instance, if loans of $1m were made with a sizable portion of the loan balance in the form of fraudulently-overstated appraisal, would the U.S. taxpayer be on the hook for the fraud premium?
I just found this in Yahoo Finance. More bad news for the Dollar and good news for precious metals. We’ve been reading Kitco columists warning about this for months (even years):
http://biz.yahoo.com/ap/071118/opec.html
OPEC to Consider Non-Dollar Reserves
RIYADH, Saudi Arabia (AP) — Iranian President Mahmoud Ahmadinejad said Sunday that OPEC’s members have expressed interest in converting their cash reserves into a currency other than the depreciating U.S. dollar, which he called a “worthless piece of paper.”
His comments at the end of a rare summit of OPEC heads of state exposed fissures within the 12-member cartel — especially after U.S. ally Saudi Arabia was reluctant to mention concerns about the falling dollar in the summit’s final declaration.
The hardline Iranian leader’s comments also highlighted the growing challenge that Saudi Arabia, the world’s largest oil producer, faces from Iran and its ally Venezuela within the Organization of Petroleum Exporting Countries.
“They get our oil and give us a worthless piece of paper,” Ahmadinejad told reporters after the close of the summit in the Saudi capital of Riyadh. He blamed U.S. President George W. Bush’s policies for the decline of the dollar and its negative effect on other countries.
“All participating leaders showed an interest in changing their hard currency reserves to a credible hard currency,” Ahmadinejad said. “Some said producing countries should designate a single hard currency aside from the U.S. dollar … to form the basis of our oil trade.”
Oil is priced in U.S. dollars on the world market, and the currency’s depreciation has concerned oil producers because it has contributed to rising crude prices and has eroded the value of their dollar reserves.
Saudi Arabia’s King Abdullah had tried to direct the focus of the summit toward the question of the effect of the oil industry on the environment, but he continuously faced challenges from Ahmadinejad and Venezuelan President Hugo Chavez.
Iran and Venezuela have proposed trading oil in a basket of currencies to replace the historic link to the dollar, but they had not been able to generate support from enough fellow OPEC members — many of whom, including Saudi Arabia, are staunch U.S. allies.
Both Iran and Venezuela have antagonistic relationships with the U.S., suggesting their proposals may have a political motivation as well. While Tehran has been in a standoff with Washington over its nuclear program, left-wing Chavez is a bitter antagonist of Bush.
During Chavez’s opening address to the summit on Saturday, the Venezuelan leader said OPEC should “assert itself as an active political agent.” But Abdullah appeared to distance himself from Chavez’s comments, saying OPEC always acted moderately and wisely.
A day earlier, Saudi Arabia opposed a move by Iran on Friday to have OPEC include concerns over the falling dollar included in the summit’s closing statement after the weekend meeting. Saudi Arabia’s foreign minister even warned that even talking publicly about the currency’s decline could further hurt its value.
But by Sunday, it appeared that Saudi Arabia had compromised. Though the final declaration delivered Sunday did not specifically mention concern over the weak dollar, the organization directed its finance ministers to study the issue.
OPEC will “study ways and means of enhancing financial cooperation among OPEC … including proposals by some of the heads of state and governments in their statements to the summit,” OPEC Secretary General Abdalla Salem el-Badri said, reading the statement.
Iran’s oil minister went a step further and said OPEC will form a committee to study the dollar’s affect on oil prices and investigate the possibility of a currency basket.
“We have agreed to set up a committee consisting of oil and finance ministers from OPEC countries to study the impact of the dollar on oil prices,” Gholam Hussein Nozari told Dow Jones Newswires.
Iraqi Oil Minister Hussein al-Shahristani said the committee would “submit to OPEC its recommendation on a basket of currencies that OPEC members will deal with.” He did not give a timeline for the recommendation.
The meeting in Riyadh, with heads of states and delegates from 12 of the world’s biggest oil-producing nations, was the third full OPEC summit since the organization was created in 1960.
The run-up to the meeting was dominated by speculation over whether OPEC would raise production following recent oil price increases that have approached $100. But cartel officials have resisted pressure to increase oil production and said they will hold off any decision until the group meets next month in Abu Dhabi, United Arab Emirates.
They have also cast doubt on the effect any output hike would have on oil prices, saying the recent rise has been driven by the falling dollar and financial speculation by investment funds rather than any supply shortage.
During his final remarks, el-Badri stressed he was committed to supply — but did not mention changing oil outputs.
“We affirm our commitment … to continue providing adequate, timely, efficient, economic and reliable petroleum supplies to the world market,” he said.
It is more and more likely that this lame duck President will order the invasion of Iran within the next twelve months - with the Democrat-led Congress’s permission. Bush will use this as the real reason, but the public reason will be more evidence of support of terrorism.
We had 6 years of experience in learning about rabid Islamic fundies in the mid-east. Special forces have no doubt been in Iran for years picking up intelligence about where to strike. 6 years is enough time to learn about ‘em. 2008 could be the year precious metals peak…if this is a short concise war. And I doubt Putin will lift a finger to do anything to thwart the U.S.
Credit check on Landlords?
With so much inventory heading toward the rental market, does anyone have any suggestions on ways to protect deposits and stay clear of properties headed for foreclosure? Is there a way to run a credit check on a potential landlord?
Thanks.
KC,
Also, I go to Craigslist to look at rentals then I do a check on the mls. This way I know which rental is also up for sale.
test
I look at Zillow.com in my primary zip code (85044) and see that there have been recent sales. In one case I saw a house sold in 1998 for $144,000, then in 2004 for $199,000 then in July of 2007 for $308,000 (same house). Unbelievable. A whole bunch of knifecatching continues. The one who bought in 2004 and sold this July had pure dumb luck. In that year I knew that something was out of wack in real estate. The 2004 buyer found a greater fool. $hift happens. My calculator showed me $144,000 * (1.035 to the 9th power) = $196,000. That is the proper value of this particular house. Hopefully the party who sold is renting now. His gain and the current buyer’s loss. $109,000 profit minus the cut to the broker. Tax free. That was one of the last good deals (for the seller, not buyer).
Support for SIV superfund grows
By David Wighton and Stacy-Marie Ishmael in New York
Published: November 18 2007 22:03 | Last updated: November 18 2007 22:03
The plan for a $75bn superfund to buy assets from cash-strapped structured investment vehicles appears to be gaining support among sceptical institutions, amid concern that SIVs might start dumping bank debt.
Such forced sales could increase the risk that the credit market turmoil could hurt the broader economy.
“Yields on bank debt are already high and it could put further downward pressure on the economy. The [superfund] could help prevent that and it is gaining wider support,” said an executive at a Wall Street bank that has not been part of the plan.
http://www.ft.com/cms/s/0/af99a008-9608-11dc-b7ec-0000779fd2ac.html
Opec unites behind higher prices
ByEd Crooks and Javier Blas in Riyadh
Published: November 18 2007 09:01 | Last updated: November 18 2007 09:01
Opec leaders meeting at the weekend summit in Saudi Arabia have differed sharply over the group strategy and purpose, but have united in defence of high oil prices.
Hugo Chávez, the left-wing president of Venezuela, opened the summit welcoming oil prices at close to $100 a barrel, describing them as “fair”. He called for the group to be “an Opec for geo-politics, an Opec for revolution”, adding “Opec was born as a geo-political actor, not as an economic or technocratic bloc.”
He also reiterated his warning that oil could hit $200 a barrel if the US attacked Iran.
http://www.ft.com/cms/s/0/08d2f274-95ae-11dc-b7ec-0000779fd2ac.html
GE pension fund knocked by losses of $200m
By Francesco Guerrera in New York
Published: November 15 2007 02:54 | Last updated: November 15 2007 20:41
General Electric’s pension fund suffered an unrealised loss of about $200m and saw outside investors rush to take $600m out of a short-term bond fund whose bets on mortgage-backed securities went sour.
The redemption will result in a total loss of about $24m for 10 institutional investors investing in the $5bn bond fund alongside the US conglomerate.
http://www.ft.com/cms/s/0/7a7da00c-9321-11dc-ad39-0000779fd2ac.html
Dollar vs Euro: More Collapse or a Rise on the Way?
http://www.investmentu.com/IUEL/2005/20050414.html
i found this article from 2005. is there any truth to it???
The story you link to concludes “don’t buy Euros now” (at 1.35, they are now 1.46).
The USD decline may very well be about money supply. Lending created new money that never exited before… and now we are watching that leant money blow up. But that money didn’t really make it into wages as much as houses,flat screen TV’s, etc. So what happens next? More money dumped into the system, this time more targeted toward wages.
We could be in for serious inflation. Increased money supply. That is going to drive the dollar down _outside_ the USA. Within the USA, short term it will be praised (wages going up! Unemployment down!)
Nov. 19 (Bloomberg) — Goodman Fielder Ltd., Australia’s largest bread maker, fell the most in 10 weeks in Sydney trading after saying profit growth may stall this year because of surging wheat, food oils and dairy prices.
Profit before one-time items is “likely to be around the same level as for the previous financial year,” Sydney-based Goodman Fielder said in a statement today. The stock fell 11.5 cents, or 5.5 percent, to A$1.985 at 11:27 a.m. in Sydney.
Chief Executive Officer Peter Margin is trying to increase prices and focus on his most efficient plants as the worst drought in Australian history cuts the nation’s wheat and dairy output. Commodity costs will rise about 40 percent, or A$180 million ($161 million), the company said today.
Today’s forecast compares to the A$223.2 million average of six analyst estimates compiled by Bloomberg.
Wheat prices surged to a record on Sept. 28 of $9.6175 a bushel as global demand outpaced supply and as drought cut production for a second straight year in Australia. Futures for March delivery fell 16 cents, or 2 percent, to $7.705 a bushel when last traded Nov. 16 on the Chicago Board of Trade. The commodity has gained 54 percent this year.
Graeme Hart, New Zealand’s richest man, sold his 20 percent stake in the company for A$2.12 a share last month, exiting the food business to focus on packaging.
Goodman Fielder last month announced a A$10 million charge against earnings to close a bakery and sack 90 workers.
Shares in Goodman Fielder began trading in December 2005 after Hart sold shares in an initial public offering. Burns Philp bought the Goodman Fielder assets in 2003.
MONDAY, NOVEMBER 19, 2007
FOLLOW UP
CDO Dumping Ground Still Sinking
ACA CAPITAL, A LEADING INSURER OF SUBPRIME mortgage-bond securitizations, is drawing relentlessly closer to “bagel-land” — that dismal place where a stock’s price is zero — with its shares sinking in recent months from around 7 to a low of 1.51 late last week.
The proximate cause of this slide was the disclosure on Nov. 9 that Standard & Poor’s had put ACA (ticker: ACA) on negative Creditwatch and might cut its credit rating from the current single-A.
In the third quarter, ACA insured $7 billion in shaky collateralized paper.
Such a reduction would be catastrophic for ACA. Any rating below single-A-minus would force the insurer to post margin of $1.7 billion or more on its $25 billion book of subprime collateralized mortgage obligations, to reflect the mark-to-market losses that it has already acknowledged on this portfolio.
http://online.barrons.com/article/SB119525687935796340.html?mod=googlenews_barrons
Six more hard years tipped for subprime fallout
Benjamin Scent
Monday, November 19, 2007
The US subprime crisis will continue for years to come and America may be facing a permanent decline as an economic power, famed investment guru Jim Rogers said over the weekend.
“The situation is going to continue to deteriorate,” he said in Hong Kong.
“When you have a bubble, it normally takes years to work out all the ramifications.”
The subprime crisis is not over, Rogers said.
“I think we have a long way to go before it’s finished,” he said later at a conference. “When you have a bubble like this, it usually takes five to six years to clean it up.”
http://www.thestandard.com.hk/news_detail.asp?pp_cat=11&art_id=57158&sid=16358811&con_type=1
YOUR MONEY: A WEEKLY GUIDE TO PERSONAL FINANCE: TAKING STOCK
No doubt Lowe’s hit by subprime
Andrew Leckey, a Tribune Media Services columnist
November 18, 2007
Q. Is the housing market the reason why my shares of Lowe’s Cos. are now poor performers? How long will this last?
http://www.chicagotribune.com/business/yourmoney/chi-ym-leckey-1118nov18,0,2474569.story
How many subprime short plays did they line up before this announcement was made?
Goldman Sachs warns on surge in loan troubles
THE GUARDIAN, NEW YORK
Monday, Nov 19, 2007, Page 10
The subprime mortgage crisis in the US could lead to the opening up of a US$2 trillion black hole as banks and financiers stop lending money because of mounting losses, the leading Wall Street bank Goldman Sachs warned on Friday.
Goldman Sachs chief economist Jan Hatzius, who is regarded as an expert on the domestic housing market, warned that losses on outstanding loans could balloon to US$400 billion as borrowers struggled to repay debts.
That figure is well ahead of the US$50 billion or so losses already announced by major banks including Citigroup and Merrill Lynch, and well ahead of the Federal Reserve’s own estimates. In July Fed Chairman Ben Bernanke estimated that losses on loans could be up to US$100 billion.
http://www.taipeitimes.com/News/worldbiz/archives/2007/11/19/2003388592
No wonder there’s so much fraud in the financial markets…no enforcement. Oh, Jas…
“Sanctions imposed by the U.S. Securities and Exchange Commission fell to the lowest level since 2002 as the agency brought fewer billion-dollar accounting-fraud cases and operated under new policies for fining companies.
The SEC, led by Chairman Christopher Cox, extracted about $1.6 billion in fines and illicit profits in the year ending Sept. 30, compared with more than $3 billion in each of the previous three years, according to a report the regulator released Nov. 15. In 2002, when Congress passed the Sarbanes- Oxley corporate governance law, the total was about $1.4 billion.
“The cases they’re bringing these days are much smaller,” said James Cox, a securities law professor at Duke University in Durham, North Carolina, who isn’t related to the SEC chairman. The commission has adopted “a new ethos about penalties,” based on the concern that “savaging” companies with fines amounts to punishing their investors, he said.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aJKCRZoXEz7I&refer=home