Bits Bucket And Craigslist Finds For December 30, 2007
Please post off-topic ideas, links and Craigslist finds here.
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
Please post off-topic ideas, links and Craigslist finds here.
He feels ou pain:
1:11 a.m. December 29, 2007 AP
CRAWFORD, Texas – President Bush tried Saturday to assure many families that he knows they are struggling to pay bills, even as he again defended the economy’s strength.
“Some of you worry about your ability to afford health care coverage for your families,” Bush said in his weekly radio address, recorded at his Texas ranch.
“Some of you are concerned about meeting your monthly mortgage payments,” Bush said. “Some of you worry about the impact of rising energy costs on fueling your cars and heating your homes. You expect your elected leaders in Washington to address these pressures.”
How reasurring!
Look, you’re a Republican, and believe in self reliance and the free market. Shouldn’t you be saying “most of you are in this situation because you are losers, failures and less moral, and are getting what you deserve?”
That’s what he would have said if he was in New York.
Frustrated Couple to Raffle House:
http://tinyurl.com/yod24h
What a bunch of worry warts we are! Excuse me while I reach for my bottle of lotion…
BAHAHAHAHA
“You expect your elected leaders in Washington to address these pressures.”
A glaring indictment of our wonderous consumer age.
No. It’s the words of a Republican acting like LBJ - concerned with those who have not had the discipline to save, create wealth, and pull them up by their bootstraps. Ron Paul is my last hope in the Republican Party. After I vote in the Arizona primary (my permanent residence is there) I am going to immediately switch to the Libertarian Party. I’m well beyond tired of that hand-wringing Wesley Mouch in the oval office.
“You expect your elected leaders in Washington to address these pressures.”
Yes, ‘Captain Obvious’, we do.
However, all we seem to get is bunch of people, like you, who outline what the problem is, and then fail to give concrete examples of what they’re going to do about making it better.
I don’t need a man whose lips move as he’s reading, to point out the glaringly obvious, months after the fact, with no solution, airy-fairy or not.
Almost the whole world in a BUBBLE!
http://www.youtube.com/watch?v=xDRpsch4fTg
Repeat until you feel better:
ALL REAL ESTATE IS LOCAL
ALL REAL ESTATE IS LOCAL
ALL REAL ESTATE IS LOCAL
…
P.S. Half-a-decade or so back when I was still in grad school, a post doc from Spain and I used to discuss the housing bubble. I was quite awestruck when he informed me that the Spanish property market bubble was worse than the California bubble.
I’m convinced the Spanish bubble is the worst in the world.
Now to go onto newer threads when my comments might actually be read.
Got popcorn?
Neil
Wow. That makes Florida look good.
A gardener + a secretary = 200,000 Euro mortgage
Combined they make 1,900 Euro per month. I would guess they pay taxes like we do. Call it a hunch. Their mortgage payment will rise to 1,000 Euros in the near future. That math just doesn’t add up for me.
Talk about F$cked Borrowers. They spent this much for 65 square meters. I guess that exchange rate on meters isn’t looking so good.
I love the end when the narrator states that, “if their real estate bubble bursts the entire economy could take a beating”. Is everybody still so high on China and the other decoupled economies? This will get so ugly.
“That makes Florida look good.”
Also brings to mind the story of the California strawberry picker with $20,000 annual income losing his $700,000 home.
They pay a lot more in taxes than we do.
La propiedad de la sociedad…….
http://www.youtube.com/watch?v=xDRpsch4fTg
All Men Are Created Equal… I don’t know if anyone read this yesterday but it is well written I think. At the bottom of the page…
http://www.dailyreckoning.com/
“All over the world, local customs, styles, manners, accents are disappearing. As the scale increases, with the expansion of the globalized market economy, people are being homogenized, leveled. Their food, their music, their clothes - all are becoming standardized, mongrelized.”
And that’s what totalitarianism, whether it be communism or corporated fascism, is all about. Great article. Thanks for posting. That’s why I say globalization is THE WORST. IDEA. EVER.
The globalists love to talk about the wonders of diversity, but the only diversity they want is the diversity of the Mall Food Court where you eat factory made “ethnic” food served by people in colorful national costumes but who all drive home in their Honda and watch American Idol to distract themselves from the next reset of their ARM loan.
Absolutely. They are all for diveristy when its makes good press, otherwise they expect the minions to be clones of each other.
And that’s what totalitarianism, whether it be communism or corporated fascism, is all about.
Except that for the most part, it’s a voluntary homogenization. I can’t argue it’s oppression if people choose to bring it themselves.
I agree for the most part with the article except for the “woe, there’s nothing we can do it about it” tone. On a personal level, it’s actually it’s pretty simple: shut off the TV, most of your magazine subscriptions, and newspapers. Turn your attention to places like this blog and local government. Our contentment level went way up when we made that choice as a household. The reality is I personally can do very little about assassinations in Pakistan, even if they may result in WWIII. I can do something about my city council and to a lesser extent the Federal government.
At any rate, we are already in the process of a decentralization and diversification of media “experiences” anyway. When I was growing up it was a nightly ritual to watch the evening news. Only 3 channels plus PBS - very few choices. Now, all sorts of news channels, the Internet, pod-casts, etc. There was more “standardization” then of experiences then there is now.
OK i will disagree today with you….Yes we have more choices but todays kids are far less informed then back in the old days with only 4 choices.
Instead of reading logs like this, or urbansurvival.com and others
they waste their time with TMZ.com and other “entertainment” websites.
Seriously have any of you found say a 21-22-23 year olds website/blog who was really informed about today’s monetary issues?
—————-
Only 3 channels plus PBS - very few choices. Now, all sorts of news channels, the Internet, pod-casts, etc. There was more “standardization” then of experiences then there is now.
My 19 year old daughter and 21 year old son.
you teach them well kiddo……but i have dj’ed quite a few HS dances over the years…and the stupidity level today is unbelievable
Since Reagans 80s the educated level has gone way down for these past 30 or so years. The USA has lost its edge by a long way because our corps and gov decided Then that the US education of its children wasn’t as important as making money for WS and shareholders. Now we are in a bad situation when India, China etc are leaps and bounds over the education level of the US. So when the plans were put into place for our gov to assist in educating and Democratizing us, the reaganites etc decided they didn’t want the US to be smart and knowledgeable or else they couldn’t Lie or Cheat the US citizen out of as much as they do.
Kiddo’s kids are a rarity.
good job.
Another example, Jay Leno’s “jaywalking”. have you ever been more embarrased by our countrymen/women?
Sheesh.
I agree Vermontergal. Are we all so weak that we can’t tell people to f-ck off? Let me give a couple small examples of fighting back. For 5 years or more I have been pressured into getting a flat screen TV. I have told people I don’t need it. “You have to get one”, they say. I reply, “no, I don’t”. We live in small apartments in New York City. Why do I need a 42″ TV set? I don’t. But all of the sheep have them. I just say no and live with my decision. Our 15 year old 25″ TV set is still sitting here. It does just fine. I’m not so sheeplike that I have to buckle at the first sign of pressure.
I have people telling me I have to get a DVR. No, I don’t. I tell them I don’t want something that will encourage us to watch more TV. We have cable. We have HBO. It’s not like we are living like the Unabomber. I have no intentions of getting a DVR at this time. If I change my mind I will get one. But I will do it when I want it.
The other day I bought a radio. I just wanted something for my office so I could listen to classical music on public radio or listen to the news if I please. The total cost with tax was $32.50. My co-worker pointed out a high-def radio for only $229. I just laughed and told him he was crazy.
We live our life how we want and not how others expect us to. We don’t give in to peer pressure. What really confounds our “peers” is that they know we could pay cash for a TV set, a vacation or even a car if we wanted to. None of them could. They don’t understand that the reason we can do such things is that we choose not to follow their herd. We all love part of the herd. That doesn’t mean we have to join them.
does that tv have rabbit ears or a tin foil antennna?
i hear you but i must admit i have a 42inch flat hdtv and dvr in my place. we stay home alot and like our few tv shows and sports (btw all paid for in cash)
i drive a 5.5 year old car which is all paid for and do not splurge much besides the above mentioned items
misery does love company which is why many “owners” say we are throwing money away on rent
i was at a friends home for x-mas and his dad said we are not building any equity. i said yes i am in my 401k-maxed out- roth ira- and large cash position in tax exmept money market account. is that not equity?
most people have this image of renters as these losers who live paycheck to paycheck and have no savings
good they wont ask to borrow money from this loser
We had a co-worker that bought a condo in Princeton, NJ. We work in Midtown. That gives you an idea of the commute that he bought into. He bought 6 months ago. Immediately the commute was killing him but he thought he was a smart “owner”.
One night a bunch of us are ready to hit happy hour in Midtown. He says to one of the guys, “I’d love to go with you but my commute is so long.” Annoyed this other guy says, “yeah yeah, go build some equity”. I think that is a great anecdote for all of these dumba$$ equity builders.
The equity builder quit because he couldn’t stand the commute. Oh, and he had cashed out his 401k to get the condo. F—ing shrewd.
holy crapola its $331 for a monthly ticket to princeton nj…..
He thought it would be about $100. Jenius.
I love this
My wife and I had no TV for a year or two. It drove our friends nuts. One of them to the point of giving us his old TV set and VCR. Then we accepted the TV but never got and antenna. We just used the VCR to watch movies. Again our friends went nuts. Now we get the comments about not having a flat screen or HD TV. My plan is to wait until someone gives us one.
I still have my 26 inch Mitsubishi color TV I bought in the late 1980s. It works great! But that’s in AZ. Here in Maryland I bought the cheapest color TV I could find - a 13 inch $100 model. Could have waited a month and got a throw-away one for $50 but I wanted cable/internet right away - would have paid $50 bucks using the Kinko’s internet otherwise.
mgnyc - you have the right attitude. Your cost basis in your mutual funds is probably comfortably low. I’m not worried about month to month or even year to year NAVs in my mutual funds. Even the “erudite” sharpest critics of the current real estate mess don’t understand that investing in stocks is investing in the creativity of man, which is limitless.
EVERYTHING. SUKS. REAL. BAD.
Great find!
We haven’t watched tv for 12 years now. what a relief to not have the literal bombardment of our brains with advertising and celebrity news and sports. If I’m at a bar or something when I turn my gaze to a sports event on the boob tube I find it truly boring and assaultive. Basketball-back and forth back and forth. Football- mind numbing hits! ah well to each his own I’d rather read a book. Another recommendation I read here to pass on, a great book on the beginning of ww1. Guns of August. thanks to whoever recommended that!
someone here has recommended a youtube bbc series on the Century of the Self/ Tracing the history of the mass psychology of advertising and mass man. I found it very illuminating. Thanks for that linque!!
http://video.google.com/videoplay?docid=-2637635365191428174
OK i admit I watched last nights football game…. Not because i like football, but because it really turned out to be an exciting game……….I can’t remember the last time i ever watched a superbowl…
Instead what i do is look for the morons who have their EBAY auctions end in the 3rd 4th quarter of the superbowl ….you would be surprised at some of the great deals i got..
What an awsome idea! I love that. Thanks for the tip.
It looks very good. However, only the first 2 episodes have sound:(
Last part is funny!
http://www.youtube.com/watch?v=UG3J9XtfZT0
The auction price has little to do with “the amount of money they have in.” But it has a heck of a lot to do with the credit crunch and a rediscovery of traditional lending standards.
Stupid part: Trying to force a buyer to make a purchase decision “right now.” This may work just fine if you are trying to sell tomatoes, but not so well for selling the biggest-ticket asset.
The universe is trying to tell them that their wishing price is way higher than current market value.
Bubble top purchase price = $422,500
Upgrade costs = $50,000
Amount they “have in” = $422,500 + $50,000 = $472,500
Current market value = $398,500
Pixie money = $472,500 - $398,500 = $74,000
http://www.doubletongued.org/index.php/citations/pixie_money_1/
… and $74,000 flies off to “money heaven”.
Roidy
I personally doubt it flew any higher than into part of some investment banker’s annual bonus.
I thought that WAS money heaven. Did I miss something?
Roidy
“Did I miss something?”
No — I did![;-)](http://thehousingbubbleblog.com/wp-includes/images/smilies/icon_wink.gif)
But wait, they have a plan B - they’ll rent the place out, how original.
Broker Blog calmly discusses fraud.
” got an agreement of sale today from a realtor looking for a prequal on a shortsale , the buyer lives next door , he has a current mortgage for $800,000 on a home he purchase in 2005 with no money down , the home he has under contact is right across the street from his present home , the offer is for $500,000 and it looks like the bank will accept it
The borrower plans to buy it as a primary , once he moves in , they will stop making payments on the $800,000 loan that they have with CW
He qualifies full doc and has a 770 FICO , he figues letting his credit tank is not a big deal when he is lowering his mortgage debt by $300,000 .”
Follow the stimulating threads as posters see nothing wrong with this senario and offer ways to protect this fraudsters credit. Amazing!
http://forum.brokeroutpost.com/loans/forum/2/192289.htm
No one can do what Countrywide can.
Bwahahaha.
“People are smart.” Bwahahaha. “Call Di-Tech now.”
“Angelo sees the Prison’s Front Gate in ‘08″, is my wish for the New Year.
Did the guy lie on the mortgage app? If not, how is this fraud? Sure it sounds like he’s going to intentionally default on his mortgage and the bank will come after him for it, but i don’t think this is criminal fraud as lying on a mortgage app is.
Some bank is going to mortgage a new home before the old one sells in this market. A no down do doc mortgage on the first one. Can he “qualify” with both payments?
SKF: to infinity, and beyond!
And that is why I laugh when people tell me that credit has already tightened up. Credit won’t be tight until the lenders don’t make a loan unless they can determine that borrowers with good credit can pay the fully amortizing, maximum interest rate payment while taking into account their current debt load.
As long as any lender will make a loan without that analysis without a gigantic risk premium (regular interest rate for a prime borrower plus 10-15%), credit is still loose and it is way too early for a good credit risk to buy.
If this practice catches on things could get even uglier than imagined. Since it’s being discussed on a public forum, it probably will. There’s an incentive for the brokers involved in this scheme to encourage it. It provides a commission for the real estate broker and mortgage broker involved. At a time when many of these brokers are starving for business, I could see this scheme getting popular.
The short sale for $500,000 creates a new lower comp for the area, helping to bring down values and letting the $800,000 mortgage go into foreclosure adds to the lists of foreclosures and another hit for the lender. This scheme will sow the seeds for further destruction. I can see this catching on in 2008, accelerating the collapse of house prices.
I know 2 people personally who did just that in CA, it was and still is considered smart financial planning, I don’t get it I guess I just don’t have the right attitude so will always be living small.
Yep. This “strategy” was popular in the mid 90s housing bust, especially after the Northridge earthquake. I personally knew several people who did this. Hopefully the lenders will wise up to this but I think it will take a while for them to catch on.
“The borrower plans to buy it as a primary , once he moves in , they will stop making payments on the $800,000 loan that they have with CW”
Maybe by the time this plays out, BB’s proposed “temporary” $1m limit on the GSE mortgage guarantee will be in place, and CW can dump the trash on to Fannie’s balance sheet.
The Future of Mortgage Rates and the Mortgage Industry - OC Register
“In this election year, politicians of every stripe will be climbing all over themselves to offer at least the appearance of a bailout for subprime borrowers. ”
“We have the Fed, FTC, OCC, HUD, OTS, FSLIC, FHLBB, FDIC, and I don’t know who I’ve forgotten. Indeed, part of the problem is that there are so many agencies involved in this that they have always been pointing to someone else and saying, “It’s not MY job, it’s HIS job.”
http://mortgage.freedomblogging.com/2007/12/29/the-future-of-mortgage-rates-and-the-mortgage-industry/#more-741
“In this election year, politicians of every stripe will be climbing all over themselves to offer at least the appearance of a bailout for subprime borrowers.”
WRONG! Go Mike!!!
Election 2008
Huckabee Talks Tough on Mortgage Bailout
http://www.npr.org/templates/story/story.php?storyId=17265301
Hmm, didn’t know that. PB, I’m a little shocked that you’re pulling for Huckabee. Too bad he’s starting to slip to Romney in Iowa and other places.
http://www.realclearpolitics.com/epolls/charts/2008_election_primaries/republican_primaries_chart.html
Well, OK, there is one politian (that we know of) that doesn’t want to bail out the banks, the finance companies, and the FB. All the rest are going to do what they can (which is nothing) to get this thing worked out.
“PB, I’m a little shocked that you’re pulling for Huckabee. Too bad he’s starting to slip to Romney in Iowa and other places.”
You misunderstood my comment. I did not mean to endorse Huckabee — I differ with him on many issues (in particular, I am not a Bible-thumping Baptist)– but rather to applaud his firm, principled stand against mortgage bailouts.
And BTW, unless I am misreading the chart in the article linked below, you have your polling results backwards, as Huckabee overtook Romney’s lead in Iowa within the past month (although Romney appears to be closing the gap).
Perhaps Romney could further narrow the gap by clarifying where he stands on mortgage bailouts. If he wants to claim the conservative mantle of Ronald Reagan, then he had better respond to Huckabee’s position on this important issue.
http://online.wsj.com/article/SB119890104865157383.html?mod=googlenews_wsj
“PB, I’m a little shocked that you’re pulling for Huckabee.”
Politics breeds strange bedfellows.
Though I am quite certain I do not line up 100% in my views with Huckabee or any other of the major candidates, I am strongly impressed by anyone who dares to stand appart from the crowd and take a principled stand on the bailout issue. As a bonafide resident of Richistan and former CEO of a venture capital firm, I have to wonder whether Romney’s Wall Street ties will outweigh his Mormon principles when it comes to the immorality of mortgage bailouts. Huckabee’s outsider status may be better for the country than what the rest of the plain-vanilla crop of bought-and-sold insiders has to offer.
At least one of his sons is a real estate developer too.
Romney will quite literally say anything to make the audience he thinks is looking/listening at that moment pleased. He was pretty liberal when running for govenor of Massachusetts. He’s talking more conservative now. If you want to know what he would do as president, you just have to figure out what would be most likely to get him elected to a second term. That is the only analysis he will be making.
Hint to Romney: Stop talking about your religion, and start defining your positions on issues voters care about.
Hear, hear PB -though there’s a certain, skincrawlingly embarrassing, comedy value in watching them all scramble for the mantle of ‘Holiest of Holies’.
Last I heard, there was still a separation of church and state in the US.
Stop talking about how pious you are and get busy with the mundane world.
I’m not voting for my vicar, but for my POTUS.
Try not to confuse the two appointments….;-)
“He’s talking more conservative now.”
Apparently, at least on the topic of mortgage bailouts, Huckabee has outflanked Romney. I wonder how Iowa voters feel about the use of their federal tax dollars to bail out California flippers and the lenders who enabled them?
Where is it written, that one man has to pay for another mans health care, housing, and gambling debts?
On the inside of a certain presidential candidate’s brassiere?
Ba-da-dum!
“Where is it written, that one man has to pay for another mans health care, housing, and gambling debts?”
Ask Joe Momma when he gets back from his latest Carmela Cl!nton fundraiser.
Where is it written, that one man has to pay for another mans health care, housing, and gambling debts?
Not in the U.S. Constitution. Maybe the Democrat Party platform, which the Dumbos mistake for the U.S. Constitution.
Health care - the Bible.
Housing - ?
Gamblng debts - nowhere.
hth.
Since the Bible is based on subjectivity, by no means should it be used as the basis of government. Our Republic is based on reason - objective law, not subjectivity. The drivel that some punk on LSD with a paper and a pen is as much sense as anything else based on imagination or faith, - with no tie to reality.
Show me a link to an article with him calling for an end to America’s imperialist pursuits, an end to all the American military bases around the world, an end to the practice of borrowing hundreds of billions of dollars a year to pay for a military budget that is far too big, and he may have my vote.
arlingtonva. Just cruise to http://www.ronpaul2008.com and you have it.
In general I think it’s immoral to take money from one guy and give it to another. This applies to not just government bailouts in the financial industry but spending taxpayer dollars on anything - like wars. If Americans have some paranoia that people are out to get them for the freedom - instead of the real reason - we support corrupt governments and put military bases in their backyard - why should I be forced to pay for that?
This is the difference between anarchism and minarchy. Small government libertarians are aligned with the U.S. Constitution, which explicitly states that the government must provide for the common defense. Also that the government establishes justice. Implicitly in that you have the administrative expenses. So by Constitution we have a justice system and military paid by some sort of taxation, whether tariffs on imports or perhaps lotteries (while I’m writing this blurb, the libertarian song “Freedom of Choice” by Devo is on. Cool!). All the other government programs are illegal (unconstitutional), and there are hundreds of them, costing taxpayers trillions of $.
Bill, How can you support Ron Paul then. Every speech he talks about the difference between military spending and defense spending. There is a difference. Our foreign entanglements and 180 foreign bases do not defend me. Just the opposite; they make us less safe. How would you like a French military base in Katy, Texas?
Hey you go Bill, Top 100 Recipients of Federal Money:
http://www.fedspending.org/fpds/tables.php?tabtype=t2&subtype=t&year=2007
You’re telling me this is what Thomas Jefferson had in mind?
This is related to the talk about our financial house of cards in our country. Where is all the borrowed money being spent?
http://www.fedspending.org/fpds/tables.php?tabtype=t1&subtype=at&rowtype=f
Dept. of Defense: $294.9
Total Federal Spending: $415.0
The Defense budget is the Federal Budget.
Huckabee is a total fraud. He talked tough on illegal immigration, too, but that’s all it was - talk. We don’t need another genial idiot in the White House.
(To Aladinsane,
you mentioned recently a post where you had listed 10 reasons to own physical gold. Would you be kind enough to repost this? Also, do you consider safe deposit boxes in eg WAMU to be safe?! I bought bullion from CNI and they are pushing the Saint Gaudens really hard. Any thoughts?
Thanks, always enjoy your posts
Pete)
Hi Pete,
Couldn’t find the original post, sorry.
99% of my Gold is overseas, to give you an idea of my faith in the system…
Google: “patriot act safe deposit box” to see what might happen.
Saint and Libs are ok, but I wouldn’t buy anything graded higher than low grade uncirculated(MS 60-62), and not pay much of a premium over melt, either.
As Gold climbs through $1,000, numismatic value will mean nothing for MS 63 grades of either coin, and they’ll trade for around the content of the metal.
When Gold gets to $2,000, MS 65 Saints will trade for the around the content of the metal.
“99% of my Gold is overseas…”
Perth mint??
I would not trust any organization to hold gold for me. At best, if I had my metals overseas, it would still be in a safe deposit box in an English-speaking country (New Zealand, Australia, Ireland, some island nations south of Florida). But I’m not worried about keeping my gold here in the U.S. I actually have less trust of foreign governments to defend the individual rights of Americans than I do of this government. No other nation was founded on the priniciples of reason.
Since the 80s our nation is allowing all it can to get rid of
“principles of reason”.
Name me a nation where reason and individualism is more cherished than in America.
France
Good points. If you’re buying gold coins because you think gold is going up, buying high-grade St. Gaudens is not smart. Buy something like XF/AU Liberty $5 on eBay from high-feedback dealers. (There are many other possibilities. Go to http://www.pcgs.com to get exact details on coin gold content as well as other useful information.) Also, if buying jewelry, safest bet is 14K wedding bands - and spend $20 on an acid-testing kit.
Many thanks, and also to SDREBear for the heads up on WAMU safe deposit boxes on yesterday’s Bits Bucket! I’ve been re-reading Studs Terkel’s ” Hard Times ” and the parallels become daily more apparent
Best Wishes to All
Pete
Thanks Aladinsane, and also to SDREBear for the heads up yesterday on the Bits Bucket regarding WAMU ‘ Safe ‘ deposit boxes!
Best Wishes
Pete
Housing Woes Continue to be Uncontained.
Dec. 29 (Bloomberg) — U.S. stocks fell and were poised for their first fourth-quarter decline since 2000 after government reports on durable goods and unemployment reinforced speculation the housing-market collapse will push the economy into recession.
Citigroup Inc., JPMorgan Chase & Co. and Merrill Lynch & Co. dropped after Goldman Sachs Group Inc. analyst William Tanona predicted the firms may write down an additional $34 billion of assets linked to subprime mortgages. KB Home and Macy’s Inc. led builders and retailers lower after falling home prices and sales heightened concern that sinking property values will slow consumer spending.
Lower-than-forecast orders for durable goods in November and an unexpected rise in jobless claims last week added to evidence that the housing slump is spreading to the broader economy. The Standard & Poor’s 500 Index has declined 3.2 percent since the end of September, paring its 2007 advance to 4.2 percent.
“The Standard & Poor’s 500 Index has declined 3.2 percent since the end of September, paring its 2007 advance to 4.2 percent.”
That is a nominal dollar gain. Subtract inflation and what do you have left? It was a great year to own foreign currencies and/or PMs — not so good to own U.S. stocks (despite the best efforts of the PPT to make sure the stock market keeps always going up).
Not good. If you bought a CD at the beginning of 07 your advance would now be 5.3%. And your investment would have been a heck of a lot safer, insured by the FDIC.
Where is the risk premium for the stock market?
I got 5.5% on my CD last year. That got chopped to 4.75% upon renewal (thank you Fed). I still like it better than jumping into the Dow, even if perma-bull Charles Payne thinks the Dow will go to 16,000.
That’s what my dad did (acting on my advice) — bought CDs yielding more than the S&P 500. I also told him to fire his stock-pimping investment advisor (he did).
All Precious Metals are not created equal…
This year Silver was $13.01 on the 2nd of January, $14.76 at the close of trading on Friday.
This year Gold was $640.75 on the 2nd of January, $838.80 at the close of trading on Friday.
Silver netted a 13% gain, while Gold netted a 31% gain.
Silver is almost an industrial metal and barely a precious one…
Almost exactly reversed results of silver and gold for 2006.
Platinum started 2007 with a price around $1,125 and finished $1539, about a 36% gain. I have the indication that you put most of your wealth in precious metals. If you did, congratulations. You outdid the broad stock indices. However, if you put most of your wealth in VEIEX you’d be up 39.41%, year to date.
http://www.kitco.com/charts/livepalladium.html
Palladium is the last good deal left in precious metals, IMO. I’m loading up the truck on North American Palladium (PAL) at these prices, too.
Annus Horribilis
I suppose if the San Diego housing price decline accelerated enough beyond its recent year-on-year rate of 11 percent to lead to a price free fall accompanied by seller capitulation, then prices could bottom out by the end of 2008. But I personally don’t expect this, especially given policymakers’ propensity to pass “save our home lenders” measures that slow the rate of the price correction.
Rather, I expect the chorus of serial bottom callers to swell, and to keep predicting a housing market bottom “by next year” for the next three to four years going forward. But the spillover of the national housing market recession into other economic sectors of importance for San Diego (e.g., tourism) could indeed accelerate the rate of price decline.
How does this economic logic sound? “People are realizing that if they’re going to buy, now is the time, because mortgage rates are only going to go up despite the Federal Reserve’s interest rate cuts and home prices are going to start to churn again by late spring.” The only churning I can envision with higher interest rates, mortgage-strapped consumers with no savings and widely perceived recessionary conditions is further housing price declines. Of course, the “now is the time to buy” BS won’t do mortgage brokers much good so long as there are virtually no qualified buyers at current seller wishing prices.
Weighed down
San Diego County’s woeful housing market is dragging other economic sectors to the depths of despair
By Dean Calbreath
STAFF WRITER
December 30, 2007
For San Diego County, 2007 was a horrible year for the real estate market, when it seemed that everything that could possibly go wrong did.
As 2008 dawns, even the most optimistic economists say the housing market will continue to decline over the next six months, leading to more layoffs at construction and real estate firms and more belt-tightening by mortgage-strapped consumers.
But while some economists say the slowdown in the housing market will last several years, others say the market could hit bottom by next summer and start to recover by early or mid-2009.
Roxie Chilcott, former president of the San Diego chapter of the California Mortgage Brokers Association, said the real estate market is beginning to show some signs of life after being moribund for a number of months.
“Phones are beginning to ring again,” said Chilcott, a mortgage loan originator at Bank of America. “People are realizing that if they’re going to buy, now is the time, because mortgage rates are only going to go up despite the Federal Reserve’s interest rate cuts and home prices are going to start to churn again by late spring.”
http://www.signonsandiego.com/uniontrib/20071230/news_lz1b30weighed.html
All I got for Christmas was a load of credit debt
By Dean Calbreath
STAFF WRITER
December 30, 2007
To ordinary people like you or me, the shoppers scurrying around the malls in places like Mission Valley and Grossmont are just normal everyday folk scavenging for after-Christmas bargains on clothing, gadgets and toys.
But to economists, these shoppers are true Titans, demigods of the global financial system, who – with the help of their checkbooks and credit cards – have been pulling the economy through rough waters with the ease of Gulliver towing the Lilliputian fleet.
http://www.signonsandiego.com/uniontrib/20071230/news_1b30dean.html
The serial bottom callers should form an organization, to make sure their voices are heard above the sounds of crashing home prices. Too bad that happy talk can only get the market so far when there is a severe shortage of qualified and willing home buyers.
P.S. Doesn’t Kenneth Harney (”NATION’S HOUSING”) know that there is no national U.S. housing market? All real estate is local.
NATION’S HOUSING
KENNETH HARNEY
Bad year got worse, but there’s some hope
December 30, 2007
WASHINGTON – Queen Elizabeth II once famously referred to her “annus horribilis” – a horrible year during which almost everything went badly, from royal family scandals to a raging fire that destroyed parts of Windsor Castle.
The American housing market experienced its own form of annus horribilis in 2007 – a year when all the sins and excesses of the prior six years were visited upon nearly everyone in the system:
…
Enough. Everybody knows these tales of woe – and more. It’s been a lousy year. Could 2008 be better?
I think the odds are reasonable that it will.
http://www.signonsandiego.com/uniontrib/20071230/news_1h30harney.html
http://en.wikipedia.org/wiki/Annus_Horribilis
Why is it a horrible thing for houses to be affordable by our children?
Harney’s employment clearly depends on taking positions that mesh with the REIC party line.
I’m not confused. Instead, I am quite awestruck by how well this blog has thus far predicted the course of the bursting housing bubble. MSM sources which questioned whether the bubble existed no more than twelve months ago have joined our consensus.
A chaotic economy confuses the experts
December 30, 2007
Confused? So are the best and brightest on Wall Street as they try to make sense of a housing recession and credit crunch that many experts failed to anticipate.
http://www.signonsandiego.com/uniontrib/20071230/news_1b30marks.html
I’ve been reiterating this blog’s economic forecasts to a colleague of mine for the last two or three years. At the beginning, we’d go to a good precious metals bullion dealer during lunch and buy gold when the spot price was $450. Then he started chanting “Bob Brinker hates gold” or that his own real estate in Florida and Iowa only goes up and he dumped his gold. I bought 4 ounces from him when spot was $560. Earlier this summer I thanked him for selling me his gold. LOL. But I got scorned for buying gold and for investing in savings bonds. It’s as if I am attacking him on two fronts: It’s a vote of unconfidence in the direction this country is going, as well as a vote against his own overweighting in real estate. Meanwhile Miami real estate keeps dropping lower and lower. Eventually his tenant in the condo on Biscayne Bay will have to renew the lease. It will be economical for his tenant to find a lower priced rental, and that could be in the same condo complex. So my colleague will have to keep looking over his shoulder. He did tell me at one point in one lucid honest moment that he has high blood pressure and does not want to hear me talk about real estate. That was enough to indicate that he is worried sick about the bubble bursting. I did not feel sorry for him since he kept insulting me for renting - he kept calling me a rent slave so I had to keep being a pest. I learned more about economics from being on this blog. Particularly, I learned more about real estate and how important it is to understand the documents you are signing, or to at least hire a reputable real estate attorney who will be in charge of explaining what you are getting into. If one cannot do either of those things, one has only himself to blame for the steaming bucket of shinola he is about to get into.
My big conundrum for 2008 is what could possibly top 2007? I was a huge bear on this market since 2004 and finally I am getting the “You were right” speech from some of my bubble denying friends. Now that everyone is on board with it being a bubble and the credit crunch has finally hit I can’t imagine how it could get worse. The crash has only been really going for a year and a half though, how could this thing last two more years with the pace at which home prices have been rocketing downward?
I guess when own/rent ratios return to profitable territory we’ll be at the bottom. Which means at least a 50% drop in price from the top — more in bubble areas. When buying homes with a full doc non-primary residence thirty year fixed becomes profitable after taxes, maintenance, management, and insurance I think that the market couldn’t conceivably go any lower but that’s far far below todays prices. Even further than a 50% drop from the top in a lot of markets.
I remember reading an article about Templeton, who was an investor who made a lot of money buying stocks at the stock market bottom in 1932, saying to buy real estate when the prices had fallen 90% from the top of this bubble.
“My big conundrum for 2008 is what could possibly top 2007?”
Easy: Larger- and faster-than-expected real estate price declines while a small pool of potential buyers watches and waits from the sidelines.
Wait until the implosion to the economy really gets going, when the derivative issue hits (just exactly what are those things actually worth?), when the RE related unemployment ripples throughout the rest of the economy, when deflation kicks in.
Deflation? Have you bought gasoline recently? Have you bought groceries recently?
The prices of stuff you want are going down, but the prices of stuff you need are going up.
As I said, wait until the economic implosion really gets going, when it starts to feed on itself, when the sheeple begin to “get it”.
That’s when demand for things will decline, when drivers will cut back on their driving, for example, and gas prices will come down.
Patience.
Maybe demand for Plasma TVs, but demand for food, energy and healthcare won’t change.
I am not so sure about gas prices coming down. You still need to drive to work. And since there will be fewer HELOC funded trips to Hawaii and Disneyworld, I think that a lot of families will be piling into the minivan or SUV and will be driving to visit grandma instead.
When cash money becomes scarce people will be forced to cut back. Circumstances will dictate their decisions, not personal preferences.
It’s not so much that YOU stil need to drive to work. It’s that Chinese, Indians, Pakistanis, Vietnamese, Malaysians, Thais, Filipinos, Koreans, Brazilians, Mexicans, etc., etc. are JUST NOW needing to drive to work.
“and gas prices will come down”
If it does it will be short lived due to the recession but if you look at the global use of gasaline as stated by Paul in Jacksonville gasoline supplies are only going to tighten. Buy on the dips!! It is also a great hedge against inflation due to oil being priced in devaluating dollars!! High gas prices are here to stay-unfortunately!! If you want to do some research on this, check into what oil companies are paying for exploration VS the amount of proven reserves they are replacing. Those stats are not pretty.
ReCoupling or the failure of DeCoupling
You can tag and bag Goldilocks.
This is gonna be the story. The fanfare associated with the emerging market phenom as it relates to the Chinese stock market is gonna be the bloodbath story heard round the world.
People are not yet satiated with the idea that by making the world flat the fate of the emeging market is in the crosshairs. As a sense of Nationization takes hold of the masses, and a solution coming forward from the people to take the USA back from the evil hands or Corporate Globalitstas.
Modesty and Simplification become a mainstream fashion statement.
The rent vs. buy equation is now starting to narrow albeit slowly after many years of widening….Its the widest disparity that I have ever seen…Low interest rates being the main driver narrowing the gap….If rents continue to increase (Jobs) and the tax deductions for home ownership remain in place along with the slow decline in prices then we could see a bottom in a year or two ….
Does this have something to do with a larger plan to coerce those without low downpayment mortgages (e.g., moi) into helping keep those with low downpayment mortgages to continue paying through the nose to hang on to homes they cannot afford?
Deduction stays
December 30, 2007
Congress has extended the federal tax deduction allowing homeowners with low-down-payment mortgages to deduct the cost of their government or private mortgage insurance premiums for three more years. Borrowers can claim the deduction on insured mortgages originating between 2007 and 2010.
http://www.signonsandiego.com/uniontrib/20071230/news_mz1h30topper.html
Michigan Realtors struggle to stay afloat
By Nathan Hurst
THE DETROIT NEWS
December 30, 2007
STERLING HEIGHTS, Mich. – Thousands of Michigan real estate agents are getting squeezed out of the business, casualties of one of the worst housing slumps in state history.
Agents who prospered a few years ago, when consumers’ appetite for real estate seemed insatiable, now are struggling or switching careers.
Michigan agents say a lack of home buyers for the glut of houses on the market is driving them from the business. Those who do manage to move a property are realizing lower commissions as a result of dampened real estate prices.
In the last year alone, the Michigan Association of Realtors has lost 10 percent of its membership, or about 3,500 agents. Membership now stands at about 30,000, the trade group said. An untold number of agents have taken second jobs to weather the slump or have put their licenses in “escrow,” basically not using them until the market turns around.
http://www.signonsandiego.com/uniontrib/20071230/news_1h30detroit.html
“…lost 10 percent of its membership…”
A better headline would have been:
MI Realtors Decimated in 2007.
A better headline would have been - “3,500 People With Absolutely No Practical Skills Are Back in the Workplace”.
Telling bald-faced lies with a straight face is a practical skill.
Mabey they can become experts or economists.
IMO, you will see a 30% + nation wide decline in membership @ NAR…..It’s happened before….
Helicopter money could eventually make buyers like Mr. Rota look pretty smart.
Foreign buyers discover bargains galore
Add weak dollar to soft housing market
By Leslie Wines
ASSOCIATED PRESS
December 30, 2007
NEW YORK – Panden Rota, a Nepalese producer of fine rugs, is about to become a Manhattanite, the owner of a sumptuous apartment in the luxurious downtown neighborhood of Battery Park City.
His primary residence will remain Katmandu, but his new home will allow him to spend more time at U.S. showrooms that display his rugs and with a brother and sister in New York. “I looked at many places and I decided that a Manhattan apartment will always hold its value,” he said.
http://www.signonsandiego.com/uniontrib/20071230/news_1h30foreign.html
do not forget about all those wealthy irish carpenters snapping up all those snazzy condos in manhattan
I won’t even comment on this f—ing idiot.
You just did…![:)](http://thehousingbubbleblog.com/wp-includes/images/smilies/icon_smile.gif)
Now it’s international buyers coming to save NY real estate? I really doubt that. What I see is an indirect admission that the global economy /global financial markets are not just an “unknown” but are actually grossly misunderstood. This guy buying a NY apt may or may not come out ahead. He is saying that his local real estate is not looking good, and so he buys in a location (NY) that he doesn’t understand nor has ever lived at. Typical and irrational.
Recall Easy Al Greenspan commenting on the “conundrum” of falling interest rates as the Fed raised it’s rates? This is a warning that global structures are not understood. Decisions are made without knowledge of the possible consequences. Bad, really bad. It gets worse! They don’t even know what they don’t know, AND the Fed, WS, Chinese, etc. are not trying to find out. Smart guys? No, just arrogant.
Roidy
“They don’t even know what they don’t know, …”
low concept: Dubious and far-fetched ideas.
The Poetry of D.H. Rumsfeld
Recent works by the secretary of defense.
By Hart Seely
Posted Wednesday, April 2, 2003, at 1:03 PM ET
Rumsfeld’s free-speaking verse
…
The Unknown
As we know,
There are known knowns.
There are things we know we know.
We also know
There are known unknowns.
That is to say
We know there are some things
We do not know.
But there are also unknown unknowns,
The ones we don’t know
We don’t know.
—Feb. 12, 2002, Department of Defense news briefing
http://www.slate.com/id/2081042/
Thanks, Prof B. I had forgotten Donny’s eloquence. He was so .. natural in his expression and elocution. It’s too bad he’s gone. Donald Rumsfeld was such a superlative idiot among idiots.
Roidy
I would like to repeat it yet another time - foreigners buying apartments in NYC, SF, LA and BOS is NOTHING new. They have always done that.
… as in foreigner’s desire to own US real-estate is not a new thing. It had been the case for got knows how long ( just like rich Americans owning buying houses in France, Italy, UK etc ). The idea that an occasional Russian billionare buying a penthouse on Fifth Ave would keep NYC up is absurd.
brown warns of bleak year ahead:
Gordon Brown today issues a bleak assessment of the world economy as he braces Britain for a year of belt tightening in the wake of the credit crunch.
In a strong warning, which sets the backdrop for a campaign to revive his premiership, Brown tells Britain to prepare for ‘global financial turbulence’ in 2008. ‘Our strong economy is the foundation,’ Brown writes in his new year message. ‘With unbending determination in 2008, we will steer a course of stability through global financial turbulence. The global credit problem that started in America is now the most immediate challenge for every economy.’
http://observer.guardian.co.uk/politics/story/0,,2233303,00.html
Brown is already “reviving” his premiership?
1 oz of Gold now buys me 263 Gallons of Gasoline, the most i’ve ever been able to obtain, per troy ounce.
Sounds like the real price of gasoline may be falling…
Gold is a strengthening currency.
It would have bought over 800 gallons in 1980.
I call total BS on that statement, unless you’re a teenager.
1 oz of Gold now buys me 263 Gallons of Gasoline, the most i’ve ever been able to obtain, per troy ounce.
Looks like a young “Flipper” losing steam in Bay Area, CA.
http://sfbay.craigslist.org/sby/rfs/523236178.html
http://sfbay.craigslist.org/sby/rfs/523253860.html
Can you say…Jumbo Loan problem or a 20% down?
Big problem in the Silicon Valley.
Silly con Valley?
“The Joshua trees that once extended their tangled arms into the desert sky by the thousands have all but disappeared.”
“Scientists already are considering relocating Joshua Tree seedlings to areas where the trees, a hallmark of the high desert and namesake of a national park, might survive climate change.”
“They could be wiped out of California depending on how quickly the change happens,” said Cameron Barrows, who studies the effects of climate change for the Center for Conservation Biology in Riverside.”
http://www.summitdaily.com/article/20071228/NEWS/145006952
“The Joshua trees that once extended their tangled arms into the desert sky by the thousands have all but disappeared.”
I saw thousands of Joshua trees and thousands of empty-looking tract homes on a trip across the high desert back home to SD two days ago.
“The Joshua trees that once extended their tangled arms into the desert sky by the thousands have all but disappeared.”
For sure large spreads of Joshua trees, or yucca trees, have been destroyed in the high deserts areas of victor valley and palmcaster as urbanization and housing tracts have spread all over the high deserts beyond the Mountains ringing the LA basin. Have been thru many hi-desert areas and have seen large open sagebrush lots w/yuccas within desert semi-developed and developing areas simply uprooted and plowed and scarred by the plundering greedy homebuilders and developers.
In the north Mohave hi-desert regions of Palmcaster and Victor valley the joshua trees are actually called Yucca Trees , which are usually smaller and less magificent than the Taller stately Joshua trees of which there are still magnificant virgin stands in Joshua tree NP. To see still vast expanses of these hi-desert JT ‘forests’ intermixed with teddy bear cactus, ocotillo, Pinion pine, desert willows, and sagebrush, from the top of a JT rock outcropping, is still a magnificent vista.
“Cameron Barrows, who studies the effects of climate change for the Center for Conservation Biology in Riverside.”
Guys like this depend on grants to eat and pay their bills. How much would he get if he didn’t hyperventilate hysterically? Not much.
climate change? And Boston is posting a higher than average snowfall total for the month of December. I think the Pacific Northwest is in the same situation. Maybe it’s getting colder and snowier in the northwest and New England states. And what about the upper midwest?
i would like to wish all hbbers a happy and healthy new year
things should really get interesting this year
my conundrum for 2008 do i renew my lease?
“my conundrum for 2008 do i renew my lease? ”
Yes.
Yes, unless you can find a cheaper place. Just beware of FB landlords who are about to be foreclosed.
This is New York City. You don’t really have FBs owning the apartments at this point. I understand mgnyc’s conundrum. We have the same situation. Do we renew or look for a greener pasture? I want to move up towards the Village or Midtown. We will wait and see.
I expect to negotiate very hard with landlords this year. Their 6% increase is no sure-farging-thing.
It has to “start” somewhere, why not begin here.
“…There are also concerns that capital inflows from the Gulf, a substantial source of investment in Pakistani state assets and real estate, may also dry up.”
Bhutto murder threatens to derail Pakistan markets
http://www.reuters.com/article/ousiv/idUSKLR32889820071230
They do this when the market goes up as well
“Brokers expect the stock market to fall to the limit of five percent of Monday. Under market rules designed to prevent panic selling, daily movement in the index is restricted.”
Sales of New Homes Even Worse Than Expected in November; Plunge Is Worst Since April 1995
http://biz.yahoo.com/ap/071229/economy.html
this is funny
http://www.miamiherald.com/885/story/359826.html
“In Washington, President Bush proposes to ease the subprime-mortgage crisis via a two-pronged program consisting of interest-rate freezes and waterboarding. Outraged congressional Democrats promise to pass a nonbinding resolution containing language so strong that nobody will be able to look directly at it without sunglasses.”
thanks chick, I needed that this morning….got the fever down?
sorta. It depends on how many advil I think my liver can take![;)](http://thehousingbubbleblog.com/wp-includes/images/smilies/icon_wink.gif)
“On the economic front, the dollar continued to lose value against all major foreign currencies and most brands of bathroom tissue. There was a major collapse in the credit market, caused by the fact that for most of this decade, every other radio commercial has been some guy selling mortgages to people who clearly should not have mortgages. (”No credit? No job? On death row? No problem!”)”
“On death row” = still breathing…
That is the paragraph that got me going too.
Also this one:
In sports, the Anaheim Ducks defeat the Ottawa Senators in a Stanley Cup playoff series watched, worldwide, by most of the players’ parents.
“It got so bad that you couldn’t let your dog run loose, because it would come home with a mortgage. The subprime-mortgage fiasco resulted in huge stock-market losses, and the executives responsible, under the harsh rules of Wall Street justice, were forced to accept lucrative retirement packages.
So they did OK. But for the rest of us, it was another bad year.”
… and yet the only truly memorable phrase emitted in any political context was “Don’t tase me, bro!”
ROTFLMAO!!!
You find some pretty good stuff Chick….
This is for Sammy Schaudenfraude (hope he’s around today) and anyone else who has a sense of humor:
http://www.getboulder.com/30th/30yearsago.html
‘Tom then transported the still slightly woozy me to a somewhat classy massage parlor called The Pleasure Chest. We enjoyed a eucalyptus-scented steam bath and sauna while chatting casually with some yuppies from IBM.’
LMAO
That was a nice story, txchick.
Good thing that Brigitte stayed thin unlike these plump spring-chickens running around these days that’ll never keep a man around longer than an evening.
Great story, TxChick. The People’s Republic of Boulder has its share of flakes and nuts, but also some genuine people, too, even if they live on a different planet than I do. Thanks for posting this.
You guys see this?
http://www.feedisclosure.com/
And this one is funny too. Surprised David Learah and Funyun didn’t make this list.
http://www.buffalobeast.com/122/50mostloathsome2007.html
Funny stuff everywhere. “Tramplings Were Disappointingly Scarce this Year” I was complaining about that too! LOL
http://www.buffalobeast.com/122/blackfri.htm
chick, you are killing me…
consumo-tard crashing Black Friday, this really is the face of America.
I can’t bear to read such evidence that our country has been taken over by a Fed-bred zombie culture of consumer zealots.
I think this might be a good time for a quote from my Jones Pure Cane Soda Root Beer 8 pk carton:
“Only dead fish go with the flow.” - Brian
The sellers still want it both ways. They want to buy at reduced prices and sell at premium prices. This is going to take “years” for home prices to come back to 2-3X wages
“David and Jeanine Blake find themselves on both sides of the selling fence. The couple just bought a house in Belleair and feel they got a good deal because of the slow market. Now, though, they have to sell their old home and fear it will take a while. They worry, too, whether they’ll get a price they can live with.”
“‘We’re prepared for it to take 90 to 120 days,’ David Blake said. ‘We have equity, but we’re not going to give it away just because we have equity in the home.’”
Earth to idiots:
““‘We’re prepared for it to take 90 to 120 days,’ David Blake said. ‘We have equity, but we’re not going to give it away just because we have equity in the home.’”
Sure you will.. you already got two mortgages.
http://www.syracuse.com/articles/business/index.ssf?/base/business-11/119900856367201.xml&coll=1
“Mallards Landing is a well-heeled neighborhood in the town of Manlius, where the smallest homes cost more than $300,000 and the biggest cost around $2 million.
Residents pay plenty of property taxes from $10,000 a year to more than $35,000 a year.
Now comes an enterprising home builder to Mallards Landing who has found a way to develop single-family homes with taxes 40 percent lower than neighboring houses of equal value.
His secret? He registered them as condos.
“My $300,000 buyer is going to pay about $4,000 less a year in real property taxes,” said builder Daniel J. Barnaba, president of Eldan Homes.
Barnaba is among a growing number of builders across the state who are taking advantage of condo laws to dramatically reduce taxes for their buyers, while providing them with what look like traditional, free-standing What’s a condo? A condominium is a system of real estate ownership in which a property is owned by more than one person. Each owner has two types of interest in the property:
A fee-simple ownership interest in a defined space (the “unit”). In the case of The Villas at Mallards Landing, owners will own their houses and the lots they occupy.”
**********************
With NY state tax receipts reportedly decreasing due to the market slowdowns, I’m thinking this loophole is going to get closed pdq.
http://apnews.myway.com/article/20071230/D8TRVJ6O0.html
Someone please explain to me why we’re spending $620 BILLION this year on “defense,” while we’ve got incipient ethnic cleansing campaigns going on in our own cities.
We’re spending 620billion on guns because of all the boogeymen out there. Ya know. Mohammed Magooblyboo, Ali-baba and the 40 street thugs.
The MSM will largely look the other way, provided no white man was involved in perpetrating the attrocities.
Banking system’s problems at heart of the bear case
Published: December 30 2007 16:47 | Last updated: December 30 2007 16:47
Contemplating the year ahead is, when you come to think of it, a slightly pointless exercise. It is not just that forecasts are generally wrong. More seriously, we tend to worry about stuff that never happens, while getting blindsided by events that nobody foresaw.
But financial markets are discounting mechanisms and forecasts are implicit in prices whether we like it or not. So here is my version, starting with a disclaimer.
I am naturally of a bearish disposition. This is not because I have the least aversion to wealth creation. Rather, I put it down to early training as an analyst in Edinburgh. The Scottish approach to investment is traditionally that of the surveyor rather than the estate agent: never mind the sea views, check the dry rot and subsidence.
With that in mind, the big bearish question for next year strikes me as whether the banking system’s problem is one of liquidity or solvency. The central banks can fix the former.
The latter can only be addressed the hard way.
http://www.ft.com/cms/s/7fe83980-b6f3-11dc-aa38-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F7fe83980-b6f3-11dc-aa38-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus
The HOA loan. The make a payment if you feel like it loan.
http://finance.yahoo.com/expert/article/mortgage/59190;_ylt=AuP0ucHDXMCLJmBONxYTWKq7YWsA
How much did the Clinton campaign have to bribe the FT writers to come up with this spurious “prediction”? The FT writers speak as though a D-ratic victory is a foregone conclusion, ignoring D-ratic candidates’ normal tendency to self destruct. No self-respecting American male could possibly vote for HC.
President Clinton, Google grows, $100 oil, but no US recession – this is 2008
Published: December 30 2007 17:48 | Last updated: December 30 2007 17:48
The FT’s crack corps of pundits had great success in predicting the events of 2007. Once again, therefore, we have urged them to throw caution to the wind and risk humiliation in the pursuit of glory.
Last time, Edward Luce foresaw Barack Obama’s political trajectory with near-clairvoyant accuracy, beaten only by Christopher Brown-Humes, who called the turn in the credit cycle. Give that man a $1m bonus. John Thornhill predicted Nicolas Sarkozy’s victory in France’s presidential race and David Gardner said there would be no US attack on Iran.
…
Will the credit crunch continue?
Yes. The good news is that banks and policymakers are now taking the necessary action. But even if the problems remain limited to subprime mortgage debt – and that is a big “if” – it will take several more months for losses to work through the system. After all, these subprime losses are extremely large, running at $200bn or more. And as they hit the balance sheets of banks, financial institutions will face pressure to cut lending in 2008.
But the really big uncertainty is whether further contagion will occur. Defaults are now emerging on other classes of mortgage, as well as credit card and commercial property debt, and this could create another $200bn of losses. The nightmare scenario, however, is one in which risky companies start to default on their loans. Thankfully, there is no sign of this occurring yet. But if the US economy goes into recession, the chance of corporate defaults will rise – which could produce more losses for banks, and thus a second chapter in the credit crunch story. Gillian Tett
. . . causing a bear market in equities?
Stock markets may well fall in 2008 from their levels at the end of this year, but they would need to drop 20 per cent from their recent peaks for there to be a full-blown bear market. The first half of the year will be challenging, as equities continue to be hit by credit market ructions, fears of recession in the US and UK and downward revisions to earnings forecasts.
But there are positives, too: the prospect of lower interest rates in the US and UK, mergers and acquisitions activity supported by strong corporate balance sheets, and further moves by sovereign wealth funds to bail out banks and companies in distress. Equity valuations, relative to bonds, should also be supportive. These factors should be enough to allow equities to weather the credit gloom – and they may even make modest gains over the year as a whole. Christopher Brown-Humes
…
Will Hillary Clinton be the next US president?
Most likely, yes. Barring a remarkable upset, the Democratic nominee will win the election, so great is the unpopularity of this administration – and Mrs Clinton will be the nominee.
Barack Obama’s surge in Iowa and New Hampshire shows voters grow to like him more the better they know him. Americans want a change, and he is fresh. Also, there are signs of Clinton fatigue. For all her talents, the former First Lady is not new – and leaning on her husband’s popularity whenever her campaign misfires underlines the fact.
Even so, Mrs Clinton’s grip on the nomination is tighter than the Obama bounce suggests. If the nomination contest were fought primary by primary Mr Obama might be favourite to win – but it is not. In February the elections arrive in a rush, and the candidates are spread thin. Mrs Clinton will not give up if she loses the first two votes: her drive and ambition forbid it. Her lead among Democrats is big and well-entrenched. Overturning it is likely to be beyond even Mr Obama. Clive Crook
http://www.ft.com/cms/s/0/eb14b4b2-b6fe-11dc-aa38-0000779fd2ac.html
because we are watching Amerikcan Idol and don’t know, are too exhausted, or too diverted, or too powerless to even care if their democracy is steered by powerful lobbyists in the halls of congress.
“The Masters make the rules,for the wise men and the fools.”
sorry my post was in response to Sam the Scheudenfrued’s query
Someone please explain to me why we’re spending $620 BILLION this year on “defense,” while we’ve got incipient ethnic cleansing campaigns going on in our own cities.
Well I’m outside Syracuse. We’ve been known to experience record breaking snow accumulations. Right now we’ve got nothing! None in the hills to the south, and none to the north in the lake effect snow belt. Lights on the Lake in Onandaga Lake Park in Liverpool…all the wires were sitting in puddles the other night. Out toward Toggenburg ski (hill) resort and all the nearby fields are a dull green instead of white.
Supposed to go under Bill’s question about snow away from North East coast.