The Housing Bubble

someone in yesterday’s thread wants to throw ALL the people in jail - no room and I don’t want to pay. so once again - permanently tattoo LIAR or THIEF on their foreheads…

Prudent Borrowers…

http://online.wsj.com/article/SB119733436109620199.html?mod=todays_us_personal_journal

WaMu Cuts…

http://biz.yahoo.com/ap/071211/washington_mutual.html

Housing Market to Stay Ugly in 2008
Motly Fool
http://tinyurl.com/2uyzpy

Yet, realtor BS has put another customer in fantasy land:

“Our realtors think 2008 is going to be much better than 2007. If people are less scared to make a commitment then the market will start taking off again,” Stice said. “Until then, it’s not a bad place to hang out.”

Yun and crowd are in the heads of many with their optimistic real estate forecasts.

Edmonton housing starts fall dramatically — down 42.1%
http://tinyurl.com/2uknld

“Despite earlier concerns about the potential impact of the financial market storm on Canadian housing demand, home building remains a pillar of strength in the Canadian economy,” said BMO Capital Markets economist Robert Hogue. “With strong job creation and favourable interest rates still providing support, residential construction is carrying good momentum into 2008.”

Sounds like Canada’s version of Yun.

http://money.cnn.com/2007/12/11/news/economy/cnn_mortgage_poll/index.htm?cnn=yes

Americans split on mortgage bail-out. I was surprised by these numbers as I had read citizens were overwhelmingly against it.

I couldn’t find the link but this morning on CNN they did a story on the increase in student loan defaults.

I am also surprised at the stock market. But someone here posted about the market doing a drawn out head fake so as to drain the last drop from unsophisticated individual investors.

a $34 billion cash fund closes:

Investors running for the exits have caused the closure of one of the largest U.S. short-term funds catering to institutional clients.

Columbia Management is shutting its Columbia Strategic Cash Portfolio, it told clients late last week, after facing major withdrawal requests from large investors. The fund, which held $34 billion at the end of November, has been split in two. Of the total, $21 billion has been put into accounts for the large investors who are seeking to cash out. An additional $12 billion remains in the fund, which will be wound down.

the money quote: “Only some investors will be able to get their cash out. Several of the fund’s biggest investors are being redeemed “in kind” — that is, they have been given their share of the underlying securities, rather than a cash payment.”

http://online.wsj.com/article/SB119730710066819543.html

chinese inflation at 11 year high:

Dec. 11 (Bloomberg) — China’s inflation accelerated at the quickest pace in 11 years and the trade surplus swelled, adding pressure on the central bank to raise interest rates and let the currency appreciate faster to cool the economy.

Consumer prices rose 6.9 percent in November from a year earlier after climbing 6.5 percent in October, the statistics bureau said today. That was more than the 6.5 percent median estimate of 21 economists surveyed by Bloomberg News.

Surging food and fuel costs and a record $238 billion surplus in the first 11 months have prompted the government to name inflation and overheating as the biggest threats to growth.

http://tinyurl.com/273hhv

Hey, are any Philly-area HBBers interested in a holiday/New Year’s get-together? We can’t let the New Yawkers have all the fun

I also frequent the Lehigh Valley (you might have guessed) and Wilmington, Del. areas, in case anyone would like to meet up in those locales.

E-mail me at “ricercare2001 at yahoo dot com” if you’re interested.

Regards,
LehighValleyGuy

NAR debunked again

http://bigpicture.typepad.com/comments/2007/12/anotehr-wtf-mom.html

“Since peaking in September 2005, the size-adjusted median price is down 15.8 percent for single-family homes and 18.3 percent for condos.”

http://tinyurl.com/36muja

Price declines in San Diego have accelerated since mid Summer after drifting downward since mid 2005.

But . .. but . . . but . . . there’s no bubble in Dallas! Isn’t it on the list of “safe” real estate markets for next year?

http://www.dallasnews.com/sharedcontent/dws/bus/stories/121107dnbusdfwresales.17ade72.html

H&R Block 2Q Loss Soars on Mortgage Meltdown; Final Results Delayed Until Friday
http://tinyurl.com/2kppar

Of that loss, $366.2 million, or $1.13 per share, came from discontinued operations, including much of its Option One Mortgage Corp., which has suffered as an increase in borrower defaults and a drying up of credit markets caused dozens of lenders to disappear.

Disappear? Houdini would be proud.

I wonder how many ‘homeowners’ think that the rate freeze will extend their interest-only period?

Mortgage ‘Rate-Freeze’ Does Not Delay Loan Resets

Oh, according to the guidelines, there is no need to sign an agreement in order to get the rate freeze, the servicer can freeze your rate if he thinks you qualify. However, since you did not sign, your rate can still go down, if it would have under the original mortgage, because you did not agree to your interest rate being frozen.

Quote of the year:

“‘I don’t know why people aren’t buying. Interest is good. There’s plenty to choose from out there,’ Cotten muses. ‘It’s a buyer’s market. They should be buying.’”

Hey, Ben. Any chance you’d be willing to look into an email subscription option for blog comment followup? I run Wordpress 2.0 as well, and there’s a nice plugin (free, and very easy to install) that lets you check a box upon writing a comment that will send you a follow up email if people reply.

I find that on my higher traffic blogs, the email actually decreases load on the server since people don’t have to repeatedly refresh the blog to see if anyone replied.

I’d be willing to pitch in a donation towards that being implemented.

HELPING SUBPRIME?

Fannie Mae, the giant government-sponsored mortgage investor, last week raised costs for many borrowers by quietly adding a 0.25% up-front charge on all new mortgages that it buys or guarantees. On a $400,000 mortgage, that would mean an extra $1,000 in fees, almost certain to be passed on to the consumer. Freddie Mac, the other big government-sponsored mortgage investor, is expected to impose a similar fee soon, according to a person familiar with the situation.

Loan applications have been so slow lately, says Lou Barnes, a mortgage banker in Boulder, Colo., that it feels like “our client base today is limited to people who don’t read the newspaper or watch television.”

The fee is the latest in a series of moves by Fannie and Freddie that raise the cost of credit for some borrowers. Late last month, they imposed surcharges that affect mortgage borrowers who have credit scores below 680, on a standard scale of 300 to 850, and who are borrowing more than 70% of a property’s value. For example, someone with a credit score of 650 would pay a surcharge of 1.25% of the loan amount for a mortgage to be sold to Fannie. On a $300,000 loan, that would mean extra fees of $3,750. The fee could be paid in cash or in the form of a higher interest rate than would normally apply.

Fed on Target
http://www.stockmania.com/index.php?showimage=110

Who knows how these guys come up with this stuff? I certainly don’t think it is as scientific as they would have us believe.

We just had an ice storm in the Midwest. The roads are wet but drivable. I noticed that along with the schools most of the government offices are closed. Why is it the private sector manages to stay open during winter storms but government seems to be quick to take the day off?

Club Fed:

http://www.minyanville.com/articles/C-MBI-UBS-wm/index/a/15165

and my $$$ is safely on it’s way from Wamu to Goldchain Silverknife as Jas likes to call it.

H&R Block 2Q Loss Soars on Mortgage Meltdown; Final Results Delayed Until Friday

KANSAS CITY, Mo. (AP) — H&R Block Inc., the nation’s largest tax preparer, said in a preliminary earnings report Tuesday that it expected a huge second-quarter loss as it continued to wrestle with its disintegrating mortgage arm.

In a securities filing, the company said it was submitting its quarterly report late, citing a decision earlier this fall to change accounting firms. The company was scheduled to file late Monday.

But it said it expected a net loss of $502.3 million, or $1.55 per share, for the quarter ending Oct. 31, compared with a loss of $156.5 million, or 49 cents per share, during the same period a year ago.

Pensacola News Journal , Pensacola, FL
“Subprime-related securities probe sought”

http://tinyurl.com/2bkoxk

Santelli: The idea that these huge write-offs are allowing the institutions to get beyond the problems and move on is flawed.

Institutions don’t front-run their accounting. It’s the nature of the beast to always be behind the curve.

Txchick:
You think you met the dumbest person in America here online? Well, the guy who bought the house next door to me certainly qualifies, too. Paid 700k for a five bdrm mcmansion on a lot so tiny, he doesn’t have a yard. It’s the highest priced home ever sold in the neighborhood, by more than 250k. It’s almost a three story home in a wooded neighborhood with very few two story homes.
Apparently has no money left for curtains, either. Every morning and evening I get to watch him or his wife take a bath,or do their hair in the mirror. I can see them from my kitchen. My ‘welcome’ gift is going to be a list of real estate blogs like this one, and a coupon for Bed and Bath miniblinds. The neighborhood folks are taking bets about how long they’ll last.

Hey, I just “Goldilocks” being pulled down the street in a “Radio Flyer” wagon by Ben Bernanke, the wheels look a little wobbly, but…if she makes it over “desperation summit” …it’ll be all down hill to the harbor & the “Good-Ship-Lollipop” … I guess we’ll find out if all things made in China… can last the high velocity plunge

Ha!

https://image.minyanville.com/assets/FCK_Aug2007/File/fedspxbig.jpg

On the local news here in Phoenix - Plastic surgery is down due to the slow down in home sales and reduction of prices.

House two doors down from me - Starting price about 8 month ago 239K - then 229K - then the house accross the street sold for 215K. New price 212K - now 195K. If they had listed for 215K to start it would have sold. TOTAL GREED!

here’s a little anecdote for all the “hard money loan crowd”

I am 4 days away from establishing a lien on a lovely Prevost bus conversion to the tune of 14k (plus another 2k for storage). The owner of the bus walks into the biz and starts to tell me he has hard money loans tied up in Canada, and cant get the moeny out to pay the bill on his engine overhaul from August.

So he brings out the pictures of his toys…. Harley Davidson Panhead he says is worth 15k, or a ford failane thats all nice and tidy…. I just chuckle, and tell him cash will do just fine.

The reality of the bubble is starting to hit people right in the mouth, and the sale of all the goodies is only just beginning. So get ready people… if you ever wanted “stuff” its about to be firesale time.

Dismal scientists join the herd of gloomsters preaching recession risk. My guess is that the recession has already arrived, or else these guys would not be talking about it.

http://online.wsj.com/article/SB119725543833319010.html?mod=hpp_us_whats_news

Marketwatch: “13 reasons Bush’s bailout won’t stop recession”

http://tinyurl.com/25q4ua

An interesting editorial in this morn’s FT.

“….The credit squeeze is having new effects on bank capital. First, many loans have been turned into securities, and now have to be marked to market. Whereas 20 years ago banks would sit on a dodgy mortgage until it actually defaulted, now they have to mark it down in line with market expectations of default. That means that pressure on bank capital is starting earlier than in previous downturns.

Second, under the old Basel I capital adequacy rules, banks needed a fixed amount of capital no matter the point in the cycle. A $100m corporate loan required $8m in bank capital. Yet under the new Basel II rules, designed to stop banks gaming the system, the capital required depends on the probability that a loan will default. That probability goes up in a downturn – and so does the capital requirement.

Third, the old reasons to raise capital in a downturn are even more important when rumours ricochet around the world in seconds via the internet. Capital reassures nervous depositors and allows strong banks to exploit a competitive advantage over their weaker peers. Balance sheet flexibility can make cheap acquisitions possible.

Finally, if for all of these reasons banks expect their competitors will want to raise new capital, it makes sense to get in first. Sovereign wealth funds may have swallowed up shares in Citi and UBS, but even their appetite may be satiated if there is a rush of offerings in 2008.

There is little evidence so far that subprime losses are creating capital constraints for banks. Nor will there be, as long as they can raise as much new money as they want at reasonably attractive prices. But given the strong forces pushing up banks’ demand for capital, even as the economy turns down, it may become a problem next year.”

http://tinyurl.com/247krh

Wall Street Journal

Finance jobs expected to rise next year -

“…To avoid repeating history, lending institutions, hedge funds and investment banks are likely to invest more in departments aimed at offsetting such problems, says Michael Woodrow, president and founder of Risk Talent Associates LLC, a New York-based recruiter that places senior professionals in credit, market and operational risk-related positions as well as quantitative and compliance finance jobs. Annual compensation packages range from $75,000 for junior risk analysts to more than $1 million for chief risk officers, he says.

Mr. Woodrow notes that a global commercial bank hired the search firm last month to find a director of risk management for its commodities division. Normally, finance companies hold off trying to fill senior positions until after the New Year because many professionals want to secure their year-end bonuses, he says. But this firm offered to include a bonus equal to what the winning candidate would lose, as well as compensation that is 40% higher than the job’s average pay package of $450,000. “The skill set is in high demand, and it’s a value proposition,” he explains. “If you’re taking millions of dollars worth of risk, you need the right person in there helping you understand that.”
http://tinyurl.com/2mw64b

“H&R Block said its second-quarter pretax loss from discontinued operations was $551.2 million, which included losses on the sale of whole mortgage loans, impairment charges on mortgage-related assets, and restructuring charges.”

H&R “blockheads” is more like it. Tax return preparation for mostly low income, unsophisticated filers on one hand, and high risk market gambles to maximize profits for the crooks at the top of the company on the other. Guess it backfired on them and their shareholders. Time to cast anchor for the Cayman Islands Mr.Blockhead.

“By changing the way it handles delinquent mortgages backing the securities it guarantees, Freddie Mac is avoiding immediate recognition of market losses that it believes understate the salvageability of such loans, thereby preserving capital.

The government-sponsored enterprise said Monday that capital concerns had prompted it to raise the bar for buying past-due loans out of securitized pools. Before, Freddie would generally repurchase loans after four months of delinquency; now its policy is to do so only under more extreme circumstances, such as a foreclosure or modification.

Freddie must advance principal and interest payments on nonperformers that remain in its pools to bondholders. The GSE said it would rather do that than take a mark-to-market hit when it puts a delinquent loan on its balance sheet. Most such loans are eventually cured or prepaid, Freddie said, while the market losses deplete capital — something it is trying hard to shore up right now.

Freddie’s move follows a recent decision by Fannie Mae to stop including mark-to-market losses on repurchased delinquent loans when calculating its loss ratios. (On Monday, Fannie would not discuss its policy for purchasing delinquent loans.)…

Freddie has complained that market values for delinquent loans do not reflect its expectations for losses on such assets. “We think there’s a lot of panic affecting those markets at the moment,” said Sharon McHale, a spokeswoman for Freddie.

However, she downplayed the role that factor had in Freddie’s decision to change its buyout policy. “That’s not really what’s driving this,” she said. “We’re not getting rid of the loans, we’re just accounting for them differently.” …
americanbanker.com
American Banker
11 December
Free registration

I just got the January issue of Chicago Magazine in the mail yesterday. Some interesting tidbits in the “Deal Estate” section:

1. Susan Crown’s (of the billionaire Crown family) Gold Coast mansion sold for $5.3 million, down from an asking price of $7.5 million.

2. Blair Hull’s (failed Senatorial candidate) Lincoln Park mansion sold for $1.73 million. He bought it in 2003 for $2.75 million.

3. Saving the best for last. Construction has been halted on the 41,000 square foot Burr Ridge mansion being built by Nick Memeti of Freedom Mortgage. He was the idiot all over the radio calling serial refinancing the “biggest no-brainer of all time”.

REIT.
http://www.marketwatch.com/news/story/general-growths-shares-fall-after/story.aspx?guid=%7B35185AFB%2D0AC1%2D49CE%2DAF12%2DBD8748978C89%7D&dist=hplatest

I’ll see you in my American Dreams

And then I’ll hold you in my dreams

Someone took you right out of my a.r.m.’s

Still I feel the thrill of your charms

Ships sink all the time

Legal tender once did shine

It will give many a nightmare tonight

I’ll see you in my dreams

http://www.youtube.com/watch?v=MCrOZLFyxH4&feature=related

Why oil will not drop below $70/BBL

Rise in costs puts pressure on returns

By Javier Blas in Abu Dhabi

Published: December 4 2007

“Exploration companies need oil prices of $70 a barrel to match the returns they made at $30 a barrel just two years ago because of the sharp increase in costs and higher government licence fees, according to analysis by a leading consultancy.

The research, from Wood Mackenzie, the Edinburgh-based oil consultants, helps explain why non-Opec oil production is failing to accelerate its annual growth significantly in spite of record prices. Oil prices have been above $70 a barrel only since September….

Governments have also driven up costs as the price of exploration licences for new acreage in prospective basins has surged. One of the main reasons for this has been the greater use of public bidding rounds in which some oil companies have bid aggressively in order to secure rights to explore….”
http://tinyurl.com/3b5g9y

“…higher government license fees” a stealth tax imposed as a result of higher prices. The government loves inflation. Oil exploration and finds have dropped 43%. (600,000 BBL/day)

What does anyone thing about the weakness in copper? It bounced off $3 last week and FCX seems to be bullish, buying back stock, but the fact is it’s off 25% from its highs at the beginning of the year and inventories are piling up. More of a demand problem (global construction) or a supply glut?

http://bloomberg.com/apps/news?pid=20602013&sid=aepZ9C1C37KU&refer=commodity_futures

Whither goes the dollar?

Adjustment or affliction? Why the dollar’s drop is failing to rebalance the world

By Chris Giles

Published: December 10 2007

“…The tensions that Mr King, eurozone officials and US politicians refer to when they talk about currencies all relate to the ad hoc global system of currency regimes that has developed over the past decade. In a set-up often dubbed “Bretton Woods II”, after the fixed exchange rate system that ran from the second world war to the early 1970s, advanced economies operate floating exchange rates while emerging countries manage their currencies’ value, generally against the dollar.

Trade surpluses in China and among oil producing nations are ploughed back into US assets to prevent the currencies from rising; the system, much to many economists’ surprise, has proved enduring and comfortable. The flow of savings to the US fosters low worldwide real interest rates and high US consumption.

Everyone knows it is not indefinitely sustainable. As the Organisation for Economic Co-operation and Development warned last week, foreign investors will not put up with low returns on their US holdings for ever and their willingness to fund US borrowing will wane as the country becomes a smaller part of the global economy….”

FT
http://tinyurl.com/373mzo

There are some excellent graphs and well worth reading the entire comment.

Ya’ll should relate to this.

http://www.minyanville.com/articles/index/a/15167

here we go again, already looking forward to the next meeting and pricing in more rate cuts!?!!??? why dont they just drop it to zero and get it over with!!!!!!

Fed Expected to Cut Interest Rate Today
Tuesday December 11, 11:14 am ET
By Martin Crutsinger, AP Economics Writer
Fed Expected to Cut Interest Rates for 3rd Straight Time to Address Mortgage Crisis

WASHINGTON (AP) — Faced with a spreading mortgage crisis, the Federal Reserve is expected to cut interest rates for a third time and hint that even more rate cuts could be forthcoming.

http://biz.yahoo.com/ap/071211/fed_interest_rates.html?.v=11

Falling into the liquidity trap

Commentary: Economy’s problem isn’t lack of money; it’s lack of confidence
By Dr. Irwin Kellner, MarketWatch
Last update: 12:04 a.m. EST Dec. 11, 2007

http://www.marketwatch.com/news/story/falling-liquidity-trap/story.aspx?guid=%7B06D7C105%2D44C5%2D4251%2D8BF4%2D225AFF376CF6%7D

Americans split on mortgage bailout

Only a slight majority of Americans want to see special treatment for those at risk of default; most blame borrowers for woes.

http://money.cnn.com/2007/12/11/news/economy/cnn_mortgage_poll/index.htm?source=yahoo_quote

ben, you will like this one.

Toll Scorched in Arizona

http://www.thestreet.com/_yahoo/newsanalysis/businessinsurance/10393798.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

Freddie Mac expects $10-12 billion credit losses
Tuesday December 11, 11:53 am ET

“We have seen a ton of foreclosures but we have not seen a lot of pictures of people standing in front of their house with their furniture on the front lawn saying ‘What am I going to do?” he said.

“As that starts to happen, and it will happen, I am afraid of the impact that this has,” he said, citing a risk that a public concern over the housing market could curtail consumer spending.

“Household wealth in housing is about $21 trillion. It does not take a big shift in consumer confidence, in consumers worrying about things, for it to have an effect on the economy. I think it will get worse before it gets better,” he said.

http://biz.yahoo.com/rb/071211/usa_subprime_freddie.html?.v=4

Sub prime losses update
UBS: $13.5bn
Freddie Mac: $12bn
Citigroup: $11bn
Merrill Lynch: $8bn
Morgan Stanley $3.7bn
HSBC: $3.4bn
Bear Stearns: $3.2bn
Deutsche Bank: $3.2bn
Bank of America: $3bn
Barclays: $2.6bn
Royal Bank of Scotland: $2.6bn
Credit Suisse: $1bn
Wachovia: $1.1bn
IKB: $1bn

Source: Company reports

“The sole goal of the freeze is to prevent owners of mortgage-backed securities, many of them foreigners, from suing U.S. banks and forcing them to buy back worthless mortgage securities at face value - right now almost 10 times their market worth.

“The ticking time bomb in the U.S. banking system is not resetting subprime mortgage rates. The real problem is the contractual ability of investors in mortgage bonds to require banks to buy back the loans at face value if there was fraud in the origination process.

“The goal of the freeze may be to delay bond investors from suing by putting off the big foreclosure wave for several years. But it may also be to stop bond investors from suing. If the investors agreed to loan modifications with the “real” wage and asset information from refinancing borrowers, mortgage originators and bundlers would have an excuse once the foreclosure occurred. They could say, “Fraud? What fraud?! You knew the borrower’s real income and asset information later when he refinanced!”

From the San Fran Chronicle
http://tinyurl.com/343tc2

insanity is a $570,000 beach hut

“In my opinion, the number one priority in resolving today’s mortgage crisis is to bring the housing market back to equilibrium. Equilibrium means prices that are in line with incomes, with supply and demand in balance. With equilibrium prices, houses could be readily bought and sold. When houses can be readily bought and sold, mortgage loans are backed by valid collateral. When mortgage loans are backed by valid collateral, investors will once again be able to trust securities backed by pools of mortgages. Only when we reach that point will the “subprime crisis” be behind us.”

http://www.tcsdaily.com/article.aspx?id=121007A

Hey, Hoz. Here’s a risk job on Craigslist. Kind of a funny place for it.

http://dallas.craigslist.org/acc/466143105.html

“…The Senior Credit Analyst will be working in the Chicago office supervising two Credit Analysts. …”

No wonder it is not filled. A piddling risk management job in Chicago. If it was with Fortis or CLSA in Hong Kong, a different story…
Good catch TX!

uhm….anyone looking at the market right now. Straight drop of 210 points.

Federal Reserve Cuts Key Interest Rate by One-Quarter of a Percentage Point to 4.25 Percent

http://biz.yahoo.com/ap/071211/fed_interest_rates.html

Dow down by 197 points….

Craigslist report…. here we are, it’s Christmas time… and the local Craigslist (Hampton Roads / Norfolk VA) is JAMMIN’ with loads of houses for sale. There are offers of new construction with free BMW leases. I can smell desperation in some of the ads. “Seller willing to rent as well!”

So much for the market tapering off until the superbowl!

Could someone with a calculus background please explain in nontechnical terms what is meant by “discontinuous first derivative?”

http://www.marketwatch.com/

MARK HULBERT
Fed’s pushing on a string

Why contrarian bond analysis sees another rate cut as inflationary.

http://www.marketwatch.com/news/story/contrarian-analysis-bond-sentiment-ahead/story.aspx?guid=%7BFB20633E%2D4121%2D433A%2D92D5%2DAB0CF1A4D370%7D

“Milk and cocoa costs drive up chocolate prices

…The price of most commodities have risen sharply in recent months, thanks to several factors including inclement weather and strong demand from emerging economies such as China and India. This has sparked a swath of price rises from retailers, affecting products from bread and butter to pizza and beer….”
Guardian

And single malts are up 25%!

So for you milk lovers, I am raising the price on milk next month and if you can’t afford it, China can! I am not going without my chocolate, beer and Single Malt from Islay.

Flight to quality noted in T-bond yields…

Notes/Bonds
COUPON MATURITY
DATE CURRENT
PRICE/YIELD PRICE/YIELD
CHANGE TIME
2-Year 3.125 11/30/2009 100-11¼ / 2.94 0-14 / -.231 15:38
5-Year 3.375 11/30/2012 100-07+ / 3.32 1-01¾ / -.233 15:38
10-Year 4.250 11/15/2017 102-06 / 3.98 1-14½ / -.178 15:38
30-Year 5.000 05/15/2037 108-15+ / 4.48 2-14 / -.144 15:38

http://www.bloomberg.com/markets/rates/index.html

I’m in Orlando this week for my usual one week/month visit to the Sunshine state for business.

The crime down here is unbelievable! Before I see the stats for 2007, it’s anecdotal, of course, but just from watching the 5:00 news it’s amazing what’s going on: A snake-cake deliveryman shot to death, two bodies found (one in pieces!) and the Apopka Wal*Mart is currently locked down while they search for two gunmen.

In Sunnyvale, CA, where i spend most of my time, there’s nothing like this happening. And the population density of the Peninsula is roughly the same as Central FL

As the economy gets worse, it’ll get worse here. The folks here STILL don’t think they’ll start seeing boarded up houses, despite houses sitting empty everywhere. Entire “Specuvestor” developments in Lake County, FL, seem like ghost towns.

After a year of leaky roofs in an empty house (with the shitty construction here, even brand new leak), it’ll probably be so mold infested it’ll have to be bulldozed. And there will be THOUSANDS of homes like this in a year.

Central Florida will look worse than Newark, NJ or the South Bronx ever did!

San Diego county “Will entertain” range pricing has achieved entertainment status. Got popcorn?

Bedrooms: 4
Full Baths: 2
Partial Baths: 0
Square Feet: 1,411
Lot Size: 8,712 Sq. Ft.
Year Built: 1971
Listing Date: 09/05/07
On Market: 97 days
Type: SFR
Status: ACTIVE
MLS #: 071071080

Description

Seller will entertain offers between $449,900 to $500,000. Meticulously maintained & completely modernized! 1 story on a huge lot! Minutes to the best of escondido. Ideally situated on a cul-de-sac, w/charming curb appeal. Remodeled from floor-to-ceiling, huge backyard w/outdoor kitchen, covered patio, & rv parking.

Clients who viewed this home also viewed:

1464 ESPERANZA WAY
Escondido, CA 92027
Beds/Baths: 4/2 Sq.Ft: 1,680
$299,000

602 MAYWOOD ST.
Escondido, CA 92027
Beds/Baths: 4/2 Sq.Ft: 1,653
$379,900

414 ROBIN HILL LN.
Escondido, CA 92026
Beds/Baths: 3/2 Sq.Ft: 2,009
$310,000

Things are looking up Leigh!!

When is the fund (formerly known as Prince MLEC) no longer a “Super SIV”?

“A banking industry fund to bail out structured investment vehicles exposed to troubled subprime mortgages may only be $30 billion in size, down from recent estimates of $60 billion, CNBC reported on Tuesday.

Bankers working on the fund said “if they’re lucky” they may get $30 billion in assets in the fund, CNBC reported. SIVs are off-balance-sheet funds used by banks to buy high-yielding assets like U.S. mortgages.”

Reuters

–
Defending the Fed decision…

I just listened to Chuck Lieberman, on Boob-berg, who claimed that the housing can’t drag the economy any longer. And what was his reason for saying that? Because, “the [housing] prices can’t go to below zero”! He further said that we are not going to start to tear down buildings because prices have gone down.

What a moron. If housing prices go down 70% from the peak, let alone to zero, the financial system will collapse because at least 30M “homeowners” will be below water. Once the total defaults reach 10M homes in the US the financial system will be insolvent and the economy will be in depression.

These bubble-meisters don’t know when to stop the bullish propaganda.

Jas

Dollar falls sharply as US stocks dive
December 12, 2007

THE Australian dollar dropped sharply after Wall Street tumbled amid concerns the Federal Reserve’s cut in interest rates should have been deeper.

The local currency was at US87.19 cents in early trade, off a low of US87.14 cents but down from yesterday’s close of US88.67. Overnight, it had almost reached US89 cents.

The Aussie dollar had been at US88.94 cents just before the Fed’s announcement.

The US Federal Open Market Committee (FOMC) voted 9-1 to cut interest rates by 25 basis points to 4.25 per cent and analysts said it had left the door open for further reductions.

But Wall Street stocks tumbled after the Fed’s decision, which was widely expected. Some investors had expected the US central bank to cut rates by half a percentage point.

http://www.theaustralian.news.com.au/story/0,25197,22911364-643,00.html

The Short View: So much for the Bernanke put
By John Authers in New York

Published: December 11 2007 20:19 | Last updated: December 11 2007 20:19

So much for the Bernanke put. The Federal Open Market Committee did what everyone expected, and cut the Fed Funds rate by 0.25 percentage points to 4.25 per cent.

But the market reacted with crushing disappointment. The S&P financials index dropped 4 per cent in instant reaction, and bond yields plummeted. Most importantly, the money market suggested that the Libor rate, at which banks lend to each other and which usually closely tracks Fed Funds, would rise significantly this morning.

http://www.ft.com/cms/s/8e8f604e-a825-11dc-9485-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F8e8f604e-a825-11dc-9485-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus

Pantry raid…

Concerns over food inflation as harvests fail
By Javier Blas and Chris Flood in London
Published: December 11 2007 19:49 | Last updated: December 11 2007 19:49

The global economy is facing a second wave of food inflation after the US agriculture department on Tuesday warned of significant falls in stocks of corn, wheat and soyabean and heavy demand.

Officials forecast US wheat stocks would shrink to their lowest level in 60 years, dropping from 312m bushels to 280m by the end of the 2007-08 crop year.

http://www.reuters.com/article/InvestmentOutlook08/idUSN1120700420071211

Warren Buffet, Bill Gates, Dennis Washington, Buss, Pickens, Waltons…. they aint bailin out the banks…

its the who? Petro Sheiks?

Whose to buy Rio Tinto…isnt that Australia?….CIC. the Chinese Soverign fun… I wonder what a Chinese flag ship gets to do when it shows up in Sydney?

does the fun ever start?

Fed set to revamp liquidity support
By Krishna Guha in Washington and Michael Mackenzie in New York
Published: December 11 2007 19:17 | Last updated: December 12 2007 05:01

The Federal Reserve is set to overhaul the way it provides liquidity support to financial markets, following a negative reaction to Tuesday’s interest rate cut.

US stocks fell sharply after the central bank cut rates by only 25 basis points to 4.25 per cent and failed to offer a clear signal of more to come.

The overhaul, which could be announced as early as Wednesday, is likely to take the shape of a new liquidity facility that will auction loans to banks. This would allow the Fed to provide liquidity directly to a large number of financial institutions against a wide range of collateral without the stigma of its existing discount window loans.

http://www.ft.com/cms/s/0/6bcfd8ee-a80d-11dc-9485-0000779fd2ac.html

Can rate cuts really prevent a recession? If so, how come Japan was in a recession from 1990-????, despite rate cuts all the way to zero?

Asian markets disappointed with Fed rate cut
By Andrew Wood in Hong Kong

Published: December 12 2007 01:11 | Last updated: December 12 2007 04:48

Shares fell across the Asia Pacific region on Wednesday as investors seemed worried by the US Federal Reserve’s statement that the US economy was slowing, and were concerned that its 25 basis point cut in interest rates may not be big enough to prevent a recession.

http://www.ft.com/cms/s/0/c25d3b94-a84d-11dc-9485-0000779fd2ac.html

Executive confidence
Doom and gloom
Dec 11th 2007
From Economist.com

WHAT holiday cheer? The latest quarterly poll of chief financial officers conducted by Duke University, Tilburg University and CFO magazine, a sister publication of The Economist, makes for grim reading. Of the 1,275 finance chiefs quizzed, those in Europe and America were more gloomy about their regional economies than ever before, with pessimists far outnumbering optimists. A third of companies in both regions, from a wide range of industries, said that they were directly affected by the recent credit-market turmoil. Optimism is relatively higher in Asia.

http://economist.com/daily/chartgallery/displaystory.cfm?story_id=10276403