Bits Bucket And Craigslist Finds For January 6, 2008
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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I just want to say don’t buy a house in any bubbly area! Rent or relocate! I am leaving FL for PA and staying there till houses become cheap elsewhere then I can decide if I want to relocate again.
Hi there Bye. It’s been awfully cold in PA this week. On Thursday at 2 pm it was 21 Fahrenheit near Valley Forge.
They are forecasting a high of 58 in Franklin, PA. It was a little cold even here in Florida last week due to the arctic front.
I checked north Georgia prices and it’s ridiculous! Theres no real jobs in the GA mountains so those prices need to drop 60% off. 7000 new houses built and only 58 sold. Those $200k 3/2 1600 square feet homes are really worth about $80k.
The bubble has caused a real mess and it’s unfair for first time buyers. Many of us are being forced to rent or relocate. Oh well by 2012 we will be at or near the bottom and I will have lots of different affordable locations with under $100k houses that used to be $200k to $300k. I can then decide if I want to stay in NW PA or relocate elsewhere.
Many of us are being forced to rent or relocate
“Forced to rent”? Were you “forced to rent” a car on your last business trip, because it didn’t make sense to buy a car and sell it a week later? Shelter is just like any other service, you choose the means that is most cost-effective for you. It’s not a matter of being “forced”, it’s a matter of market choice. Market choice is a good thing, and people should get it through their heads that there is nothing inherently better about owning a house, a car, or anything else.
“…or anything else.”
How does that old saying go — “If it f__s f___’s or f___’s…”?
BTW, while I find the saying humorous, I seriously question the conferred wisdom. So far as I know, nobody ever caught the clap from renting a home, boat or airplane.
“forced to rent” means that one has what should be the economic means to buy a house: good income, stable job, good savings, but because of the Bubble, one is forced to either: rent until the Bubble pops, buy a stupidly overpriced house and ruin one’s finances, or move to some far-off place in the hopes that prices are better. In most cases, staying put and being stuck renting is the best choice, but it is being “forced” in many ways.
I guess it’s a matter of personal perception, but Google says that Franklin is 70 miles from Erie. The alternate spelling for Erie is Cold, IMO. Today through Tuesday look like near-record temps there, but check out the rest of January’s forecast - daily highs in the 30’s.
Wonder if you found Florida intolerably hot? To each his/her own.
Yes, heat is another reason to leave south Florida. Ideally, I would like a climate of north GA, TN, NC, VA and a few other states but house prices are not sane there(yet) and also if people hated the cold so much, why do 5 million live in MN and 12 mil. in OH and PA each? I am gonna guess affordable housing being the main reason.
Well, I moved from Philadelphia to Chicago years ago because I got an interesting job with better pay, prospects and benefits than where I was working in Philly. The weather was not an improvement.
The link for my reply re 58 being an anomaly:
http://www.weather.com/weather/monthly/USPA0572?from=36hr_topnav_undeclared
It’s quite a hike from Franklin to Valley Forge!
What will you do in Franklin, besides fishing?
Ill go for a walk, the hills, streams, lakes and forests are beautiful! I may buy acreage and grow a wonderful garden and orchid. Theres a wonderful .66 acre lot at the bottom of a nice hill with a 1500 sf house on the lot. They want $80k for it. If it’s still there when I relocate(possibly this summer) I will offer $60k outright.
The attic needs to be finished(not a big project, just needs a ceiling and maybe wall covers. The basement sucks though. There is a very nice 2 car detatched garage and it’s one of the best lots ive seen. Theres a hiking trail uphill and the forest and hill is amazing! The lot is big enough to grow a small orchid. It’s more beautiful than south Florida. Shopping isn’t everything and besides theres enough stores in NW PA to satisfy me.
I had a nice 12 acre farm a few miles south of there when my kids were growing up. Went to Grove City College. I agree it is a beautiful area.
You will enjoy the area. I’m an Allegheny College alum and it is in Meadville.
Check out the smphony in CLeveland Ohio. It is still one of the top ranked symphonies When I was there, Lorin Maazel was the conducor and it was Number 1 in the US.
Forecasting mid-60s here (Willow Grove) next week. I think it’s been a very mild winter. While most have been pleased with that, I’m a little bummed. Call me crazy, but I rather enjoy few months of cold and snow!
RE: I am leaving FL for PA and staying
At least you’ll have potable water.
This will be the criteria for re-settlement in this century
If it’s not too much to ask, could you rent a couple school buses and take some more with you. About 3 million more. Yeah, that will make living in FL much better. This state has become too populated.
Surge…
http://www.atimes.com/atimes/Global_Economy/JA05Dj04.html
The gold bugs are going to have something to say. They look at silver as an industrial metal. I would expect the Lad has an opinion on this one.
Yep…
Gold will benefit from this turmoil because it is the only money without counterparty risk - its value is not based on the promise of some financial institution,” and that, “This attribute of gold will become more widely recognized in 2008, significantly increasing worldwide demand for gold.”
‘without counterparty risk’
Oh, really? So you can turn gold into whatever it is you need without a transaction?
Ben I think what Magambo is say is that there is no risk of default with an once of gold.
We used to discuss some difficulties with gold on my M&M’s blog. It can turn into a very illiquid market. I have seen it myself, with big transaction fees. Things may be better with the internet, but that doesn’t mean it can’t happen again.
The only time i’ve ever seen an illiquid market in metals, was in the early months of 1980.
Every day, Silver would be down limit, until it hit $11, after peaking @ $48, a few months before.
You couldn’t sell any silver, as there was there no buyers.
(just like houses will be, soon)
Silver was in a gigantic bubble, perpetrated by the Hunt Brothers and some Saudis.
There is no bubble in Gold, right now.
It’s early in the game, and all conditions are perfect for it’s continual rise.
When the gubmint makes gold illegal to hoard for about 40 years (from 1934 to the 70’s), kind of puts a damper on owning any.
But, all it takes is a good black market to get things rollin’ again.
A misconception…
You could buy and sell all the pre-1933 Gold Coins, your heart desired, but you couldn’t buy gold in ingot form, from 1934-74.
This law was easily gotten around, by restriking older dated coins, like Austrian 1915 100 Coronas, 1 & 4 Ducats, Hungary 1908 100 Koronas and many more.
It’s strange that during the years when gold backed the dollar it was the one thing that the dollar couldn’t be exchanged for by US citizens.
Point I was making was that owning gold bullion was illegal during those times. I wonder how aggressive a police state would be to ensure that citizens did not possess gold when they nationalize and reclaim all forms of the good stuff. Stasi like FBI sweeping neighborhoods with metal detectors? Rewards for outing neighbors suspected of ownership?
I think the gubmint has pretty much freed itself from the gold standard. There is no incentive now for them to make it illegal for you to own gold. It isn’t part of the currency scheme.
More likely they will focus on stopping you from hoarding dollars. The teller at my friendly local bank mentioned to me that it was actually not legal for me to put dollars in my safety deposit box. Crimes against the economy!
A case can be made that it is not the amount of currency in existence that facilitates the workings of the economy but rather it is the CIRCULATION of the currency in existence the does the job.
A big problem during the depression was that those who had money weren’t spending it. The lack of money circulation led to a freeze up of commerce.
Something similar is beginning to happen today; witness the reluctance of banks to circulate their hoardes of money.
The problem I see is that if too many citizens free themselves of the dollar and exchange commodities in a black market with gold, platinum or silver, the gubmint might feel compelled to intervene to preserve confidence in the dollar and its usage as a medium of exchange, as like 1934. If enough people had the means to exchange gold for food and commodities, I see no reason why a rational decision wouldn’t be made to enforce the usage of dollars as the de facto medium, by whatever means possible (even by scare tactics such as imprisonment or worse). The media could spin the argument that using gold is destructive to the economy.
“You couldn’t sell any silver, as there was there no buyers.
(just like houses will be, soon)”
I suppose I will have to continue holding up my side of this debate until the day I die, but I claim the market problem of ‘no buyers / no liquidity’ is a myth. The reality is that there are few if any sellers willing to realign their sale price expectations to present market reality, embodied in what buyers currently in the market are willing and able to pay. This happened in the U.S. stock market on Black Monday (October 19, 1987) and (IMO) is currently happening in local U.S. housing markets formerly referred to as ‘a bit frothy.’
Rumors of nonexistent bailouts can exacerbate the situation, by encouraging sellers to wait and see whether some form of govt cargo drop of liquidity will be put into effect to use other peoples’ money (e.g. taxpayers who are neither buyers nor sellers of homes) to distort the level of demand above where market forces have left it.
“There is no bubble in Gold, right now.”
That is a sentiment. There are some arguing points on the other side. When you are all-in it is hard to examine the other side. When the sentiment of many is that they will make huge profits from holding gold, then it is not a stable store of wealth, the element of greed and speculation becomes a factor. Where there is speculation bubbles are likely, as are busts.
The gold bug newsletter that I subscribe to stated in the January issue that oil was in an obvious bubble (which would deflate), yet that gold was “performing” wonderfully (as it should). Where is the logic in that?
I do own the stuff, in proportion to my percieved risk of a really bad scenario. I admit to holding lead as well.
Capitalizing gold kind of diefies it, don’t ya think?
Oops diefy = deify
The Silver Bubble is an Excellent metaphor for the Housing Bubble…
The key difference being, that nobody really needs Silver, but everybody needs a place to live.
But America is almost broke, so who’s going to pick up the slack and be a $word $wallower, buying up homes on the way down?
Impasse…
One thing that defines every Gold Investor, is this…
They must be savers, it comes with the territory.
I know very few people in my life that have any money saved, aside from a few wise people. And the fact that we now have a negative savings rate nationally, bears me out.
When you buy physical Gold, you pay in entirety.
This eliminates any possibility of the hoi polloi getting in on the physical action, where I think all the action, will be.
Add on the fact that nearly every government (ours included: we “leased” out a bunch of Gold to the financial majordomos, i’m sure they’ll be good for it, when we hit them up for the money) has sold off their strategic stockpiles of mellow yellow (The UK got rid of 1/2 of it’s wealth @ the bottom of the market, way to go Brownie!) and the vast amount of it, is now in Strong individual hands…
Contrast that with the Housing Bubble, please.
“When the sentiment of many is that they will make huge profits from holding gold,”
i think you misunderstand gold bugs. By definition you never make “profits” in gold. It is simply a way to hedge a devaluing currency. The price of gold doesnt go up, its the value of the dollar that goes down.
And wasn’t it England that got everyone on a gold standard, when they held all the cards?
I don’t think the kind of transactions I make (pay physical cash, get gold coin in hand) are dominating the market. It is the financial majordomos you mention. I believe there is significant speculative activity and leveraged too.
Compare to housing bubble?
“It can only go up.”
“They aren’t making any more of it.”
“It is going to make me rich.”
“It’s four times the price of just a few years ago, but there is no bubble.”
Infomercials tell the common man how to get rich quick buying gold.
Again, I am not against owning gold. I’ve even got some of that GB stuff!
I do wonder though about you having all your stash burried in a foreign land. It’s not exactly “taking possession”. What will you do if the SHTF and you can’t get it?
Some countries, like Australia, rely wayyyyyyy too much on the mining industry to nationalize gold. That’s why Zimbabwe gold is much cheaper than Australian gold, the former has a much greater chance of nationalizing it.
David,
So, must you believe that noone does or ever has speculated in precious metals to be a gold bug? Fear and greed do not apply to gold? No wonder it is capitalized. Is silver capitalized too?
Then aladinsane is not a gold bug.
Yo, Yo:
I’m not really sure you understand that all Gold is worth the same, no matter where it comes from, after it’s the finished product?
“There is no bubble in Gold, right now.”
There can never be a bubble in gold, because it has no yield. Its price is purely arbitrary - or dare I say by fiat. It has no fundamental value. Apart from industrial uses (the value of which has always been far below the market price), it’s only good for exchanging for something which has actual utility.
“…because it has no yield.”
It ain’t necessarily so. You are only considering nominal yield — i.e., you have implicitly chosen fiat currency as the numeraire. For example, if the price of gold triples while the price of housing falls by fifty percent, the house-denominated yield on gold is 500 percent:
(3/(1/2)-1)*100 = 500
http://economics.about.com/cs/economicsglossary/g/numeraire.htm
That’s exactly my plan of action…
Trade over-valued Gold for under-valued Real Estate
It’s a game that requires patience and timing.
“Trade over-valued Gold for under-valued Real Estate”
It would not be necessary for those trying to save up for a downpayment on a home to speculate in gold if they could rely on the Fed to protect the dollar’s role as a store of value.
They’ve been remarkably able in their ability to not do so.
PB, your spot on. Who can rely on the Fed? I do have much of my proposed down payment into PM (all things considered it may turn into a cash purchase). To be honest I hate renting because I always have a desire to rip out a wall and remodel, however it has been a better financial decision to fence sit (take that Gary) than to plunge into the RE abyss at this time.
Anyone with financial sophistication who is sufficiently concerned about inflation can hedge by buying stocks, FOREX, PMs, canned food, etc. But the prospect of the Fed throwing out the $US’s reserve currency status in order to bail out Wall Street is rather concerning.
I hate renting because I always have a desire to rip out a wall and remodel…
Seems like that’s not a rare weakness. It’s one I do not understand. However, an average of 8 hours per week of my current lifestyle is spent traveling, so maybe I have no time for hobbies. It pays better these days to rent at a fraction what it costs for PITIM - the “m” standing for maintenance. That should be far more than enough to crush this strange “desire to rip out a wall and remodel.”
Selected text of the executive order expropriating gold:
“Section 2. All persons are hereby required to deliver on or before May 1, 1933, to a Federal Reserve Bank or a branch or agency thereof or to any member bank of the Federal Reserve System all gold coin, gold bullion and gold certificates now owned by them or coming into their ownership on or before April 28, 1933, except the following:
(a) Such amount of gold as may be required for legitimate and customary use in industry, profession or art within a reasonable time, including gold prior to refining and stocks of gold in reasonable amounts for the usual trade requirements of owners mining and refining such gold.
(b) Gold coin and gold certificates in an amount not exceeding in the aggregate $100 belonging to any one person; and gold coins having a recognized special value to collectors. of rare and unusual coins.”
http://www.presidency.ucsb.edu/ws/index.php?pid=14611
Add confiscation risk to the list of risks to physical ownership of gold.
When a country as modern as the United States nationalizes gold, it can be a scary experience. If the dollar hyperinflates and the government can rally those who have been burned by hoarders of the yellow stuff, your own brother might sell you out for some financial security. Police don’t need a large contingency if the people will act on their behalf, especially when broke and hungry.
This of course is a worst case scenario. Owning gold offshore at a secure location that is an unlikely target for nationalization (Perth Mint, for example) is probably the best bet if one had to flee the country if the SHTF, since the government would likely not let you leave with anything other than the shirt on your back.
“your own brother might sell you out for some financial security. Police don’t need a large contingency if the people will act on their behalf, especially when broke and hungry.”
Take a look at what happened in East Germany. People found out who and how often they were spied upon.
“Take a look at what happened in East Germany. People found out who and how often they were spied upon.”
Most highly recommended:
Das Leben der Anderen (2006)
http://www.imdb.com/title/tt0405094/
I sold 52.5 pounds of silver at the coin store in Alhambra, CA yesterday. You should have seen the looks I got when I lugged that box into the store. They did me right there. I wouldn’t say the same for coin store in La Verne, and I’m a loyal customer there.
“They did me right there.”
Mental note for NYCityBoy: “Never sell any silver in Alhambra, CA.”
Sounds like Zed’s pawnshop in “Pulp Fiction.” Did they bring out the gimp for you?
All things being equal…
Silver went up 13% last year
Gold went up 31% last year
The trend is your friend…
until it ends.
I agree, no one needs silver/gold, well gold is useful in computers and technology, other than that it’s useless for jewerly or to lug around.
I have a few gold planted things and a couple vials of gold flake(theres maybe 25 cents of gold) would this become illegal or will they exempt tiny amounts of gold, perhaps maybe a half ounce per person? How would rare gold coins and sentimental jewerly be exempted? Would you need to get a permit/register your gold collectables?
Nothing is illegal to own, in terms of precious metals.
If it comes to that, it’s time to leave the country…
(full disclosure: 99% of my Gold is safe, overseas)
Gold trading in China starts next week…
I expect quite the fireworks display
The WSJ had a good article yesterday about the speculative bubble in gold, which reinforces your point that there is currently a wide gap between the spot price and the fundamental price based on demand for its use in computers or jewelry. The article also explores the technical factors which underlie the circular loop in demand currently driving the gold price skyward.
I personally doubt the Fed views the gold bubble with the same fondness it had for the housing bubble, as it is much harder to sell a bubble in gold prices as a “wealth effect” for the greater good, and much easier to interpret it as a sign of rampant inflationary pressures and absence of faith in a credible commitment by the Fed to contain them (a la 1979).
ETFs Stoke Investors’ Gold Fever
New Way to Trade Adds Luster to Fabled Metal;
Jewelry Demand Drops
By PETER A. MCKAY and DIYA GULLAPALLI
January 5, 2008; Page B1
Gold’s place in the financial system dates back centuries, but it is enjoying a modern-day renaissance, thanks in part to new vehicles that allow investors to buy and sell the precious metal as easily as a share of Google stock.
http://online.wsj.com/article/SB119949017783168719.html?mod=todays_us_nonsub_money_and_investing
Faux’s Gold will certainly help us out…
The only way for the great unwashed ones to play, is buying computer blips, pushing up mining stocks & the spot price all the while.
Which country would you relocate to? How do you know America won’t force the whole world to outlaw gold?
What about diamonds? Howcome no talk on making that illegal too while they are at it?
I recall reading an article about how sweatshop workers keep their savings. In the bank? Nope. Cash stuffed in a mattress? No. What do the young girls in factories do with their cash on payday? They buy gold jewelry.
How do you know America won’t force the whole world to outlaw gold?
Well maybe because it can’t stop Mexicans from walking across its southern border, or Columbians from growing cocaine, or Bin Ladin from staying at large, or any other of a galaxy of things that Uncle Sam doesn’t like?
I mean, really.
Australia cares not what the US tells it to do, and the US would never be able to force or otherwise compel them to take down a fundamental business, and a war with Australia would be unthinkable and score high casualties for both American and Austrlian troops. Having holdings a the Perth Mint owned by the government of Western Australia and backed with over 100 years of security is probably the best offshore account you could have.
Thanks for the advice, Yo Momma. BTW, do you play the cello for a living?
http://finance.yahoo.com/q?s=hl
Helca Mining (one of the oldest publicly-traded stocks on the NYSE) did very well, as I recall, during the Depression years, even after the private ownership of gold was banned.
Supper with Ron E. Paul…
http://www.wrisley.com/comment.htm
Everyone should watch these clips of the debate last night http://www.youtube.com/watch?v=fHs6uY85xuw http://www.youtube.com/watch?v=CcbApfNV0Co
Ron Paul is the only one speaking truth and common sense. Watch the debates both republican and democratic and then you Ron Paul haters can tell me how crazy he is and why. In my Opinion, he is the only one speaking about the real issues, the only one who understands economics and American history. He makes the others look like (not so smart) kindergarteners.
I find his competitors smirks and smarmy looks refreshing, when he dares utter the truth…
They are so disconnected with what’s going on, clueless.
Here is an oldie but a goodie. I sometimes watch it when I forget what to think
Sorry
Here is an oldie but a goodie. I sometimes watch it when I forget what to think. http://www.youtube.com/watch?v=vSk4SUpWVuY
This is for all of you Florida folks. You need to help this boy out. I would like to know about two condo developments in Florida. They are:
- Paradise Cove at Palm Beach Lakes (West Palm Beach)
- Emerald Lake Condos (I think it’s in North Naples)
I would love to know any details I can get. Are these nice? When were they built? What kind of shape would I be in if I bought in the summer of ‘05? Could I rent them out and come anywhere near covering my nut? Don’t worry. I have no plans of buying. I would like to know how screwed somebody is. Thank you for your help.
I can help you out. One condo development had a big sign saying $229,000 then oneday the sign said $149,000 and recently, it was dropped to $139,000. Prices will bottom out at around $70k. I saw one speculator having a short sale on a 2/1 condo for $89,900. I remember at the peak the only condo below $100k was a fixer upper tiny 1/1 in a questionable neighboorhood. That condo is worth maybe $40k max.
Please do not relocate to Florida before 2012, then you will be able to get a nice big house for around $100k or a condo for around $50k
What development? Thanks.
I don’t know specifics, but please understand that a Florida condo is like no other condo, especially when compared to condos in Northeast cities. I lived in a condo down here for 1/2 a year and it was the worst housing experience of my life. Aside for the sentient issues, much require crazy upkeep and assess like crazy; almost none have reserves and there are a bunch of Floridaisms you have to deal with: the pool guys quit, the sewer backed up and #30 flooded, the delivery guy clipped the carport.
I lived in a condo in upstate and had zero assessments when I lived there. The place down here was out of control and was constantly hiring/firing people because of mismanagement.
I would consider living in a Florida condo for free, but I’d want to meet my neighbors first.
Typical. People here in FL doesn’t seem to have the same pride in other places I’ve lived. I live in a rental condominum, and I feel sorry for the owners. Aside from being a previous apartment complex, the poeple party all the time. There are numerous christmas trees laying around where people threw them outside and didn’t care to take them to the trash. There are constantly people peeling out in cars and trucks all night. The neighbor in the next unit played electric guitar yesterday.
Last week at the mail a guy asked me how to get a gate code. I told him to call his landlord. He looked at me in disgust and said “I just bought it”, and I replied “Im sorry” and walked away.
Palm Beach Lakes is a road in WPB, and is in a bad to horrible neighborhood. I have a pretty good idea of where those condos are, and, imho, you would not want to live in either one of them. They are near all the older condos (off of village blvd) which is NOT a nice area to live. Any condos selling in that area should be in the 50-70/sq/ft range before I would feel comfortable buying them. The area is just too marginal (and, imho, going the wrong way).
Thanks Michael. I was hoping you would chime in.
Not to be snobbish but you couldn’t actually pay me to stay the night in any condo on Palm Beach Lakes or the general area. Condos in that area as late as the middle to late 90’s were going in the $40,0000-60,000 range. By the way the front page of the Palm Beach Post declaring record homicides for Palm Beach County. The Mall on Palm Beach Lakes actually as guard towers in the parking lot. They are just missing the .50 sticking out!!
I live in palm beach county and have shown my parents many times how bad the crime is. I can’t wait to leave and move to safe NW PA
To the DC-area HBBers:
It looks like we will have our first outing this Tuesday, at Capitol City Brewing Co on Capitol Hill (2 Mass Ave NE). The list of interested folks is:
zeropointzero, gt, polly, Xpovos, Hondje, clue phone, and me (JP)
(Sniggle? you started this on Friday’s post.)
Proposed time is 7pm, unless we have other opinions by Tuesday. So post here if you’re interested or have an opinion.
I will try to make it, but my office is in the Fairfax area, so it can be hard for me to make it in to DC during evening rush hour.
Thanks for organizing the get-together…!
Same here. Work in Fairfax, so making it to DC can be a bit of a pain during evening rush hour.
Unfortunately on Tuesday I will be reporting for Jury Duty in good old Jefferson County, WV.
Suggestion for next time (hopefully there will be one, maybe when the spring selling season has been declared dead), make it a happy hour time, say 5:00 PM.
Enjoy, and wish I could make it.
I can’t make it either - already have some unbreakable plans Tuesday. I am sure meeting you folks would have been more entertaining.
Have a swinging time. Don’t be shy with the wait-staff — service can be slow at that place in my experience.
As I replied on the previous thread, I’ll repeat here. I’m a contractor so off by 1630 at the latest, but I can easily cool my heels and catch up on some of my reading until 1900.
Recommendation: we might want to set a slightly more specific meeting locale than just the building, such that we’re not all wandering around looking for one another. Nametags?
Nametags would work.
It’s been a while since I was last there… do you know if they had upright tables? I would just bring an 8×11 that says “It’s Different Here” or somesuch pithy saying and put it on the table. (Somewhere I even have a signholder if I can locate the hardware.)
I love that (it’s different here sign). But are there servers? Can you ask someone up front to send people over to the HBB table/area?
LOL. So you find the idea of waiting for your beer pretty scary? Me too. I’ll give a call later today if I can.
I am interested and will be there. Looking forward to it!
It sure looks like inventory is increasing again. Right around the end of the year I noticed that listings were going down. I watch the listings on my hometown on Zip. The number of listings went from a high of about 220 down to 192. That is still incredibly high. Today they are already back up to 202.
I noticed the nationwide numbers on Zip also appear to have bottomed. The number is going back up this week. People are trying to beat the spring rush. This year people didn’t want to wait until the Super Bowl. They couldn’t even wait until the kickoff of the Redskins/Seahawks game.
–
The inventory declines precipitously during Nov-Dec and bottoms on 1/1. It starts increasing in the first week and keeps on going into the summer. We could have “a long hot summer” in housing inventory.
BTW, Jun’07 was the price peak in last of the holdouts and across the nation (all 25 metros tracked by Radar Logic). We should see huge YoY declines in Case-Shiller and other indexes when we get Jun’08 data in about eight months.
Jas
The latest real estate “victim” story in The Orlando Sentinel:
Family looks to stay afloat during real estate slump:
“With four mortgages and six mouths to feed on one shrinking paycheck linked to the weakening Florida real estate market, Amy and Randy Rainey need to make dramatic money moves fast.
They spend more than they take in, have amassed a significant pile of debt and are underinsured.
Like a lot of families who were swept up in the real estate boom, the Raineys are faced with a need to sell some assets at a time when property values are falling. And their situation is compounded because Randy is a construction worker who has seen business drop off sharply.”
Oops…the link above is broken. Sorry about that. Here is the correct link:
http://www.orlandosentinel.com/business/orl-ymmakeover0608jan06,0,3675871.story
or
http://tinyurl.com/2v3gzt
Your link didn’t work. Try this one instead:
http://tinyurl.com/2v3gzt
“They also have a boat and an all-terrain vehicle for those excursions that are worth an estimated $31,000 combined.”
and an investment rental, and an investment piece of land…
yet they qualify for taxpayer funded “low income” healthcare for their kids!
And a swimming pool:
http://tinyurl.com/2zjo6u
I didn’t notice that the girls were named Brittany, Lindsey and Lacey. Why does white trash try to give their kids sophisticated names? We have way too many Brittanys and Lindseys running around.
Soft names make soft people
http://youtube.com/watch?v=k2NEzmzfXho
“Why does white trash try to give their kids sophisticated names?”
Read “Freakonomics.” There’s an entire chapter dedicated to the topic.
This story made me reach for my pitchfork…
How many f—ing problems can you find with that article?
First off, Randy appears to be a moron. He’s a construction worker that isn’t constructing anything. He bought into his own real estate delusions. He is 47 and has $20,000 in retirement but an ATV, a boat and a $200 per outing fishing habit. Time to grow up dude.
“You need to turn that boat into something that can keep you afloat,” she said. “Strangely, that boat is sinking you.”
I say blow up the boat.
At least the oldest daughter hasn’t missed any meals lately.
The mother is still in pretty good shape. She might be able to work a pole or two at the local dance club. She needs to lay off Randy’s pole, anyway.
The article says they are okay because they have $180,000 in net worth. Bwahahaha. It’s all based on phony real estate appraisals. Good luck selling that land for $60,000. Better throw in a few lap dances and a happy ending or two. The “expert” tells them to do a cash out refi to pay down debt. How is creating debt going to pay down debt? Just stupid.
They make $39,000 per year. How the heck do 4 people live off of $39,000 per year? Oh yeah, that’s right, you refinance and max out the credit cards. Thank god they didn’t fall into that work hard and save trap. That is so 1950.
NYCityBoy bottom line: F-cked Borrowers
“They make $39,000 per year. How the heck do 4 people live off of $39,000 per year? ” Even worse, NYCityBoy, 6 people, not 4 (4 kids and parents).
My first post does not seem to have made it, so apologies if the following appears twice.
My first thought was - the family is committing financial suicide. The article does not mention the mother’s skills/qualifications, but I seriously doubt she will get more than the minimum pay if she is only willing to commit three days a week and evenings. And good luck with getting the wishing price for the land and the boat and the SUV. Also, with renting choices abound, what is the chance their good renter is going to stick around if they decide to raise rent? The financial planner says they have “a net worth of $180,000″? Please. How did she determine the price of the real estate the Raineys own? Isn’t it wishing again? And with this kind of problems, the planner suggests “they go back to their mortgage broker and search for a lender who will give them as much cash out as possible to refinance their main home”? Good luck with that too.
My second thought was - poor kids, they are not to blame for their parents’ stupid decisions, they do not deserve it.
My third thought was - a severe lesson early in life may be a good thing that will teach them financial responsibility and the wisdom of delayed gratification.
I remember how my daughter, age 5, 6, 7, during the poor as hell first years of our first immigration, would pass a toy shop window and just quietly ask for my permission to look at a doll she wanted for one minute (she never got the doll nor many other toys she wanted since I spent every shekel I could on her education instead). She is all the better for it, a sensible, intelligent girl, totally devoid of the consumerist instinct, graduating from college summa cum laudae next spring and making us proud (she is pretty, too!).
I think that “net worth” number was just a sop to their “self worth,” seriously.
He’s wearing the Inevitable Ball Hat. Like I couldn’t ahve guessed it before looking at the pic. There must be 50 million of these guys out here.
Where’s the ebola virus when you need it.
http://www.youtube.com/watch?v=upyewL0oaWA
The march to IDIOCRACY continues.
“‘You’re in a bad place, but you can fix this,’ she said.”
Does Suzanne (This listing is special, John) have a sister in FL?
My first thought was - the family is committing financial suicide. The article does not mention the mother’s skills/qualifications, but I seriously doubt she will get more than the minimum pay if she is only willing to commit three days a week and evenings. And good luck with getting the wishing price for the land and the boat and the SUV. Also, with renting choices abound, what is the chance their good renter is going to stick around if they decide to raise rent? The financial planner says they have “a net worth of $180,000″? Please. How did she determine the price of the real estate the Raineys own? isn’t it wishing again? And with this kind of problems, the planner suggests “they go back to their mortgage broker and search for a lender who will give them as much cash out as possible to refinance their main home”? Good luck with that too.
My second thought was - poor kids, they are not to blame for their parents’ stupid decisions, they do not deserve it.
My third thought was: a severe lesson early in life may be a good thing that will teach them financial responsibility and the wisdom of delayed gratification.
I remember how my daughter, age 5, 6, 7, during the poor as hell first years of our first immigration, would pass a toy shop window and just quietly ask for my permission to look at a doll she wanted for one minute (she never got the doll nor many other toys she wanted since I spent every shekel I could on her education instead). She is all the better for it, a sensible, intelligent girl, totally devoid of the consumerist instinct so prevalent here, graduating from college summa cum laudae next spring and making us proud (she is pretty, too!).
Why are they even news-worthy?
Popcorn lovers’ delight?
This family must be genetically predisposed to becoming Fools of Randomness.
Amy needs to get a job, Randy needs to part with some expensive toys, they need to boost their rental income and sell off a parcel of vacant land they’ve been clinging to as an investment, Lapin said…..
Next, Amy needs to work at least part-time for an employer that will offer health insurance……
(1) Doubt she will find anything that pays more than $1 or so more than minimum wage.
Too many people hunting for too few jobs for an employer to pay a substantial wage rate to someone who only wants to work part-time and who has been out of the workforce doing the kid thing.
(2) Health insurance??? For a low wage employee????? For a part-time employee????
Ha ha ha ha ha!!! It is NOT going to happen. Sounds like she doesn’t exactly have a lot of qualifications so she is looking at low level work - and 78% of the time, such employees are not offerred coverage or offerred coverage that they can afford.
Part-time employees are the last to get employer coverage.
In fact, if they have an income of $39,000, she may not be able to make much of anything or the kids will lose their SCHIP health coverage. The cap on those programs is either 200% Federal Poverty ($55,220 for a family of 6) or 250% FPL $69,025. If FL is using 200% FPL, she can make more than around $16,000 gross.
Buying non-group coverage would not be an option. Figure around $9000/year for the kids or $14,000 for the family.
Enjoy your posts, Ann.
http://news.galvestondailynews.com/story.lasso?ewcd=fd302aca042768f5
Another lumber store bites the dust, in a way it is very sad.
sorry about the link, I will look for tiny url again.
(repeatedly hit by lightning) and still recovering.
Galveston is starting to see a lot of problems.
“While we were saving your husband a lumber mill burned down.”
D’ohhh!
Gotta love those “cheap” DFW houses:
http://dallas.craigslist.org/lgs/529470457.html
To answer TXchick, my dad says only buy built houses, that way you can inspect before you buy. Have you found your nice $99,900 house yet? Ive found many in your neck of the woods.
“We purchases a brand new home in McKinney, TX in August.”
- Too bad they didn’t purchases some grammar lessons.
“Can anyone help?”
- I seriously doubt it.
Hint to Realtors: There are very few prospective buyers who did not drink the koolaide already in 2005, and anyone who had the intestinal fortitude to ignore friends, family and Realtors who tried to convince them to “buy now or get priced out forever” is certainly not in a hurry to buy at the moment, as news to the effect of “real estate always goes down in the short run” screams out from national headlines. Trying to use the “There has never been a better time to buy” line right now is about as promising for boosting sales as is kicking a dead horse for getting a ride.
On the other hand, there is no shortage of would-be sellers. Why not redirect some of your NAR lobbying dollars into a campaign to talk sellers down from that permanently high price plateau where they are currently huddled? “Lower the price now or get priced in forever.”
Smart move. The realtors won’t get a comission if sellers price too high. While a high priced house means more comission, it’s better to sell 10 cheaper houses than one expensive house.
I am guessing maybe some of those realtors are also FB’s oops!
Ya gotta make six percent of a number larger than zero in order to feed the alligator.
6% of no sales = bwahahaha!!!
“I am guessing maybe some of those realtors are also FB’s oops!”
Yep.
Another Realtor buyer scare tactic that needs to be permanently laid to rest is the story that you had better hurry up and buy now before interest rates go up again or else you will never qualify. The relevant question is what is the product of purchase price times interest rates, as that determines what your interest payments on a loan will be. Unless crazy loans come back into vogue soon, this product will continue falling for the foreseeable future, as a reinstatement of prudent mortgage loan underwriting practices leads loan packages to realign with household-level shelter budget constraints. If interest rates go much higher, then fundamentals dictate that housing prices will go much lower to adjust to household budgets.
Even Fed research economists have acknowledged that interest rates are a fundamental determinant of housing prices, and (at least implicitly) that higher interest rates would lead to lower prices. For an interesting reference that explores this relationship, see this one:
Are Home Prices the Next “Bubble”?
by Jonathan McCarthy and Richard W. Peach http://www.ny.frb.org/research/epr/04v10n3/0412mcca.pdf
In case you don’t have time to read the entire linked article, the executive summary is well worth the time to read it:
• Home prices have been rising strongly since the
mid-1990s, prompting concerns that a bubble
exists in this asset class and that home prices
are vulnerable to a collapse that could harm the
U.S. economy.
• A close analysis of the U.S. housing market in
recent years, however, finds little basis for such
concerns. The marked upturn in home prices is
largely attributable to strong market
fundamentals: Home prices have essentially
moved in line with increases in family income
and declines in nominal mortgage interest rates.
• Moreover, weaker economic conditions are
unlikely to trigger a severe drop in home
prices. Historically, aggregate real home
prices have fallen only moderately in periods
of recession and high nominal interest rates.
• While such conditions could lead to lower home
prices in states along the east and west
coasts—areas where an inelastic supply of
housing has made home prices particularly
sensitive to changes in demand—regional price
declines in the past have not had devastating
effects on the broader economy.
And before everyone reaches for the Joshua trees and flamethrowers, note the date on the article…
Fair disclosure:
“FRBNY Economic Policy Review / December 2004″
Another Blast From The Past:
Home Price Analysis for Dallas-Fort Worth-Arlington, Sep/Oct 2005
- Price declines in the local market are unlikely according to our stress test.
- The local housing market will experience a price decline of 5% only under extreme unlikely scenarios of much higher mortgage rates. For example, mortgage rates rising to 19.5% in combination with 73,000 job losses could lead to a price decline.
—
So basically, now that the local market median price is down (barely below zero in 2007, IIRC), I don’t have to sorry about a -5% drop until the Fed raises the home interest rates to 19.5%.
Here is a case in point of the scare tactic discussed above from today’s San Diego Union Tribune sdhomes BUYING GUIDE:
The right time to buy
By Lupe Soto, Branch Manager, McMillan Realty
You man be one of the many buyers wondering whether now is the right time to buy or if you should wait for a better opportunity sometime in the future.
The answer can be found by asking yourself the following question: Why do I want to buy real estate?
…
You need to take into consideration that while you wait for the prices to change, the interest rates can also change which may end up costing you more money in the long run or maybe putting you in a position where you may not be able to qualify. There are hundreds of buyers today that were waiting for prices to change and now cannot buy because the financing programs that were available then are no longer available today.
Today is a great time to purchase real estate. As a buyer, we have the luxury of having plenty of inventory from which to choose, which was not the case 2 years ago. Make the best of the opportunity to own real estate now. It is truly a “buyer’s market.”
“You
manmay be…” (Must clean glasses!)This reeks of someone offering unlicensed financial advice- I can’t wait till some enterprising (or hungry) lawyer starts holding these a$$holes accountable for their public statements- maybe then we’ll finally hear the last of this “its a great time to buy” nonsense!
The sad thing is that while the Sunday edition Realtor essays on why “there has never been a better time to buy” have survived the San Diego housing market downturn, intelligent and square looks at present market reality from Dean Calbreath are nowhere to be found in this Sunday’s paper. I am thinking about dumping my dead tree subscription to the SD Union Tribune in protest. They waste far too many trees on Realtor shillery.
Florida
Reminder that Florida has the big vote coming up on January 29th to make SOH portable. There were three articles in the Pensacola News Journal today. Obviously portability is being pushed by the REIC and specifically the Realtards who depend on transactions.
One point that seems to be overlooked to a greater or lessor degree is that if SOH becomes portable there could be a flood of equity rich homeowners bringing houses to the market who will significantly undercut anybody and anyone that bought in the last three years. This should result in even lower home prices, an increase in foreclosures, and lower property taxes as values decline.
I support any measures that will increase the number of affordable homes on the market and increase the benefits of SOH and therefore endorse the proposal despite the obvious short term benificiary being the Realtards.
I support any measures that will increase the number of affordable homes on the market and increase the benefits of SOH
The only “benefit” SOH confers is for old-time owners to get a free ride on property taxes by loading all spending increases onto new buyers and out-of-staters. If property values collapse they won’t be able to do this anymore and they will end up with - gasp - people paying the same taxes on the same houses no matter who owns them.
Enjoy.
SOH???
State of health?
Society of Homeopaths?
Save our Home?
Please help?
Google is full of goodies.not helping with SOH.
“Save Our Homes”
Pretty sure that is it.
If you cannot afford the property taxes at the time you purchase your home than you shouldn’t be purchasing in Florida and would probably be better of renting. No big deal.
On the other hand people who purchased their homes twenty years ago should not be subject to property tax increases due to an artificial increase in the value of their homes which is the direct result of a bunch of idiots with no skin in the game bidding up housing values using borrowed money.
Well said, P’cola. Agree 100%.
(California renter who fully supports Prop 13 and other similar measures)
Not surprising when you have porous borders and a military which costs $600 billion.
http://business.timesonline.co.uk/tol/business/economics/article3137506.ece
But good for the Brits.
Tally-Ho, Red Leader!
I like to do road-trips, as it gives you a feel of what’s what.
Old America is decrepit. Winslow, Arizona being a good example for Ben’s neck of the woods. We drove on dirt roads in town. (money for repaving a big section must have never showed?) The only bits of prosperity, is the usual corporate fare, clinging to the interstate.
New America(Sedona) looks good, but it’s a vast Potemkin Village of debt.
And if you don’t keep appearances, the facade of doing well is exposed.
May you live in interesting times…
From the article:
“It says that GDP per head in Britain will be £23,500 this year, compared with £23,250 in America, reflecting not only the strength of the pound against the dollar but also the UK economy’s record run of growth and rising incomes going back to the early 1990s.”
Its been a few years since I’ve been to the UK, but I’m willing to wager that £23,250 buys a lot more in the US than £23,500 buys in the UK. I’m still getting over the prices I saw over there 5 years ago. $10+ for a Burger King combo meal, and it didn’t even include free refills on the coke. A quick stop at a Tesco store was also terrifying.
Anything in the UK is DOUBLE or + what we would pay.
Tshirt. 25 pound = 50$ +
In other words you are correctamundo. $50k in the US buys what 23,500 does in the UK.
It is damn expensive.
I have in-laws that live over there. For the life of me I cannot imagine how they can even afford to eat over there.
Illogical reporting. Equal GDP/capita does not mean same “standard of living” if things cost more in one place than the other.
Forecasts aren’t us.
THE FED
Academics pan new Fed transparency plan
By Greg Robb, MarketWatch
Last update: 3:08 p.m. EST Jan. 5, 2008
NEW ORLEANS (MarketWatch) — The new Federal Reserve plan to publish more economic forecasts in a bid to increase transparency received poor reviews from experts attending the American Economic Association meeting, held Friday and Saturday.
Under the plan begun late last year, the Fed is releasing quarterly summaries of the economic forecasts of its individual members and bank presidents.
While the plan was well received on Wall Street — under the theory that anything is better than the slim pickings seen during the prior regime — academics came down hard against it for several different reasons.
One paper, by Christina Romer and her husband David Romer of the University of California at Berkeley, politely suggested the economic forecasts of top Fed officials were not worth too much.
They delivered a paper reviewing individual Fed members’ predictions since the 1970s and argued that the forecast prepared by the Federal Reserve staff was far more accurate and useful. The implication was that top Fed officials should stick to making decisions and leave the forecasting to others at the U.S. monetary authority.
http://www.marketwatch.com/news/story/academics-not-impressed-new-fed/story.aspx?guid=%7BBF235180%2D8AE9%2D4B49%2D9F19%2DE43EC1F01AB3%7D
There has never been a better time to buy the dip.
MARKET SNAPSHOT
Stocks to weigh recession vs. rate-cut hopes
Economic data, kick-off of fourth-quarter earnings season also in play
By Nick Godt, MarketWatch
Last update: 12:01 a.m. EST Jan. 5, 2008
NEW YORK (MarketWatch) — Stocks will likely see more turmoil next week, as investors digest dismal news on employment and oil at $100 a barrel, while trying to assess whether the Federal Reserve can cut interest rates more forcefully in an attempt to prevent the economy from sliding into recession.
“The big question is which way the Fed is leaning,” said Ken Tower, market strategist at Covered Bridge Tactical. “On Wednesday, the minutes from the last Fed meeting still revealed some skepticism over more rate cuts, which marks a difference of opinion with the market.”
http://www.marketwatch.com/news/story/us-stocks-weigh-recession-vs/story.aspx?guid=%7B286B1A32%2D2509%2D4C1D%2DB33D%2DC17F6D45E199%7D
“…revealed some skepticism over more rate cuts, which marks a difference of opinion with the market.”
The Oracle at CNBC:
“…They know NOTHING!….NOTHING!” …Cramas$
I’m almost afraid to ask, but prices have come down a lot in Vero Beach, Fl. The crime is low for Florida, and there are a lot of “old Florida” type properties. Tarpon Springs, on the other side of the state, seems to have the same things going for it. Has anyone out there been to both places? Is it worth buying in either one? I’ve never been to either, but am interested in investing in one or the other.
Don’t buy before 2012, prices have a long way yet to drop. Ive noticed big price drops in many parts of Florida as well. But it doesn’t matter as im leaving FL as soon as this summer where a few tens of thousand gets me a nice house.
Finance & Economics
The euro area
Déjà vu
Jan 3rd 2008
From The Economist print edition
The euro area is not immune to the ills that afflict America and Britain
Illustration by Satoshi Kambayashi
…
The first policy summit of 2008 is very likely to end with a decision to keep rates on hold, just as the January 2001 meeting did. Indeed the ECB is more minded to lift rates than cut them, judging from comments made by Jean-Claude Trichet, its president, following the bank’s last meeting on December 6th. But if events keep playing out just as they did seven years ago, the ECB will be forced into lowering rates later this year.
Much depends on the economy’s response to malfunctioning credit markets and the gathering economic gloom in America. An optimist would argue that the euro zone will prove resilient, because it does not have America’s legacy of struggling subprime borrowers, its current-account deficit or its housing bubble.
A closer look prompts a less sanguine assessment. Europe has its own property hotspots. House-price gains in Spain and Ireland have been far greater than in America over the past decade. Both markets are now cooling. Even if Ireland’s economy is too small to be a big part of the ECB’s reckoning, Spain does have enough clout to alter the course of the euro area. Thomas Meyer at Deutsche Bank reckons that in the past five years, Spain accounted for more than one-third of the growth in consumer spending, more than half of the increase in investment and nearly two-thirds of the job gains of the euro area’s big four economies.
http://economist.com/finance/displaystory.cfm?story_id=10431089
Wow, you know things are going to be bad when Bill Buckley weighs in on the side of regulation:
“The politics of the matter are at least this clear. The federal government being the only agent that can possibly intervene, it needs to do so, by forbidding the liquidation of mortgages until the disparity between true value and hypothetical value is pounded away by time and inflation — and a revitalization of the functions of the marketplace.”
http://author.nationalreview.com/latest/?q=MjE0Ng==
I have always loved his ivory tower writing style.
by forbidding the liquidation of mortgages until the disparity between true value and hypothetical value is pounded away by time and inflation
————————————————————————
isn’t that the Japan model? How did that work out for them?
Wow, you know things are going to be bad when Bill Buckley weighs in on the side of regulation:
That’s not regulation. Regulation means making rules on what can be put into contracts, not changing contracts ex post facto.
Buckley is advocating central planning.
‘Buckley is advocating central planning.’ Even more amazing.
–
The Scam Market…
The coming week will mark three months since I called the Market Top in real-time on HBB (10/11/07). Major indexes are down 10% since then and S&P500 and Dow never breached the highs reached on 10/11/07.
I see no reason for the Market Top call to not to stand for years, if not decades.
Recession has been confirmed with multiple economic data series and depression is highly likely. Under such economic climate 20-50% decline from the peak is very likely in 2008. And much more to come during 2009-10.
Jas
Worldwide stock market slump or just US ? You know Bernake is going to release the hounds of inflation and where the money bubbles up is the next Black.
Lot of $$$ to be made trading up and down between the top (if that was the top, which I am not as sure as you that it was) and now though.
Funky!
http://philadelphia.craigslist.org/rfs/529236596.html
It looks like they forgot to finish this house. Very weird.
http://philadelphia.craigslist.org/rfs/528043565.html
Um, yes, what do they call that style?
I can’t believe a roof like that is good in snow country or anywhere you get hard blowing rain storms. Sheesh.
they’re just like these lovelies.
http://www.bakersfield.com/hourly_news/story/327149.html
http://property.timesonline.co.uk/tol/life_and_style/property/overseas/article3118740.ece
Luxury living rises from the slums
— India is the only country where house prices have risen by more than in the US
— Flats in south Bombay cost about three times their equivalent in Shanghai
Somebody mentioned themls.com the other day, which is a good website. My parents sold their house in Hacienda Heights, CA back in 2002 for $235,000. By 2005, the house across the street sold for $500,000. This was distressing to me because it meant I couldn’t afford to buy a house in the neighborhood I grew up in (at least not without getting a suicide loan), despite my 6-figure income.
But now on themls I see a house down the street from my parents’ old place that is bank-owned with an asking price of $379,000.
Good to see prices crashing and becoming affordable again, even though it’s happening in slow motion.
test
non test
LOL.
I have posted some links and they keep getting deleted after they show up.
The spam filter eats links. You could try it without the www and com such as go to “realtor” and someone will find the site. I use that site to search for homes.
Hi-Test !
Voters seem determined this election cycle to throw media pundit predictions into the trash bin of history.
Polls: Obama, McCain hold edge in New Hampshire
Democrat John Edwards tells NBC he’s in White House race for the long haul
By Kate Gibson, MarketWatch
Last update: 1:25 p.m. EST Jan. 6, 2008
NEW YORK (MarketWatch) - With just two days to go before New Hampshire’s primary, two polls of voters in the state have Barack Obama and Hillary Clinton in a virtual dead heat, while John McCain appears to be edging ahead of Mitt Romney.
http://www.marketwatch.com/news/story/new-hampshire-polls-put-obama/story.aspx?guid=%7B65FD6865-E2EA-4433-B755-34639D1A3EA2%7D
January 06, 2008
The ‘c’ word
Change is suddenly all the rage here in New Hampshire. All the candidates for the presidency have evidently decided that Barack Obama won in Iowa because he has captured the word “change”. Now they all want a piece of it.
…
The conventional wisdom among the journalists here is that both Romney and Hillary are in deep trouble - and that McCain and Obama are the likely victors in Tuesday’s primary; and in the subsequent races for the Republican and Democratic nominations. Being a conventional sort of guy, I share this view.
http://blogs.ft.com/rachmanblog/2008/01/the-c-word.html
01-03-2008 18:52
Bailout Plan Due for Credit Delinquents
People wait for their turn for debt counseling at the Credit Counseling & Recovery Service in Myeong-dong, central Seoul, Thursday.
/ Korea Times File
By Park Hyong-ki
Staff Reporter
The presidential transition team said the upcoming administration, if necessary, will come up with state funds to support millions of credit delinquents nationwide.
“We believe it is essential to help out the financially distressed,” said Chang Soo-man, a member of the team.
http://www.koreatimes.co.kr/www/news/biz/2008/01/123_16683.html
Why does this opinion piece leave me unconvinced about the author’s key point?
Serious Money: No recession in 2008
Posted Jan 2nd 2008 11:03AM by Sheldon Liber
Filed under: International markets, Forecasts, Rants and raves, Market matters, Serious Money, Federal Reserve
All this recession talk has not convinced me that we are destined to have one, and I see plenty of signs that 2008 might surprise to the upside. There are plenty of problems within the US economy, and I could make a case that there is a possibility that the economy might catch cold but remedies also exist. I see the cup as half full for the stock market. This is not to say that individuals will not have to deal with hard times, they will - but the market might shine. This can happen because the market is global.
Many widely followed investment icons have a different perspective, including renowned international investor Jim Rogers in the December issue of Fortune who said, “In my view, the U.S. economy is in recession. I know the government says we’re not. But as I look around, we know that automobiles are in worse than recession. The same thing is true for home-builders. Much of the financial sector is in worse than recession. So many parts of America are in worse than recession, and yet the government says we’re not in a recession. I don’t know what’s so strong that it’s offsetting these major weaknesses in the American economy. I just assume that the government is lying.”
I can agree that the government is lying, but I can’t agree that the economy is void of positives.
http://www.bloggingstocks.com/2008/01/02/serious-money-picture-no-recession-and-2008-better-than-2007/
Feh. Trying to make a name for himself by making a Garzarelli-like call. Boring. Next.
If he keeps making this call for the next ten years or so, he will eventually be able to claim success.
Thank you, Aladinsane …
I took your excellent advice and checked out from the library the book “Ten Lost Years”, by Barry Broadfoot.
An outstanding read.
Glad you enjoyed it…
Every story in it is so poignant~
Check out his WW2 book “Six Lost Years”
Will do. Thanks.
er, “Six War Years” is the correct title…
HOUSING SCENE LEW SICHELMAN
Mortgage brokers’ background a click away
January 6, 2008
WASHINGTON – An important new consumer safeguard launched this month when seven states went live with a Web-based, nationwide mortgage-licensing system.The National Mortgage Licensing System, in development since 2004, is designed to increase and centralize the information available to state regulators, the lending community and borrowers about the people and companies that originate and fund home loans.
California has not yet committed to joining the system but state residents will still be able to check out brokers licensed elsewhere. Details are available at stateregulatoryregistry.org .
“This is the most significant innovation in mortgage-industry supervision to date,” says Steve Antonakes, Massachusetts’ bank commissioner.
http://www.signonsandiego.com/uniontrib/20080106/news_1h06sichel.html
Crazy like a fox…
Renegade Paul’s funding, results a surprise in race
By Finlay Lewis
COPLEY NEWS SERVICE
January 6, 2008
NASHUA, N.H. – It was four degrees above zero – not counting the wind chill – and two young women, bouncing slightly to stave off frostbite, stood defiantly holding huge Ron Paul signs outside a Hillary Rodham Clinton rally in a local airport hangar.
“I’m a New Hampshire voter, and our motto is ‘Live Free or Die,’ ” Emma Cating, 20, a college chemistry major, said Friday. “I am sick and tired of seeing presidents who ignore the Constitution, who take away our freedoms, who declare wars. I mean, that’s not the president’s place . . . It’s time for a change – and Ron Paul is making a stand for freedom and the primacy of the Constitution.”
Cating and her partner, Muriel Crabbs, a lawyer, are true believers in a growing legion of voters and a broad base of contributors who have fueled one of the biggest surprises of the 2008 election season.
Launching a long-shot campaign as an obscure Republican congressman from Texas, Paul has tapped into a deep vein of anti-establishment sentiment and libertarian thought to leave an improbable imprint on the race for the White House.
Recent New Hampshire polls show him drawing about 8 percent of the likely vote in Tuesday’s first-in-the-nation primary, and Paul won 10 percent of the tally in Thursday’s Iowa caucuses – well ahead of former New York Mayor Rudy Giuliani and only three percentage points behind Arizona Sen. John McCain and former Tennessee Sen. Fred Thompson.
Even more startling, Paul raised nearly $20 million in last year’s final quarter – a three-month haul second so far only to former Massachusetts Gov. Mitt Romney’s first-quarter total of $20.8 million among GOP candidates.
http://www.signonsandiego.com/uniontrib/20080106/news_1n6paul.html
Clinton in scramble to rescue campaign
By Andrew Ward in Manchester, New Hampshire
Published: January 6 2008 16:44 | Last updated: January 6 2008 18:51
…
“We are seeing clear movement in Obama’s direction,” said pollster John Zogby. The Republican race was too close to call. But Mrs Clinton sought to fight back over the weekend by arguing she was better equipped to deliver the change voters wanted. “There’s a big difference between talking and acting, between promising and performing,” she said on Sunday.
In a televised debate on Saturday, Mrs Clinton raised her voice and jabbed her finger as she declared: “I’m not just running on a promise of change. I’m running on 35 years of change.”
http://www.ft.com/cms/s/0/dcb9a716-bc75-11dc-bcf9-0000779fd2ac.html
“Mrs Clinton raised her voice and jabbed her finger”
My wife hates it when I do that. I wonder how New Hampshire voters feel about the angrier, meaner Hillary?
From today’s SD Union Tribune Home section:
“COUNTRYWIDE CHIEF TO SPEAK
Angelo R. Mozilo, chairman and CEO of Countrywide Financial Corp., will be the keynote speaker Jan. 22 at a conference sponsored by the Unversity of San Diego’s Burnham-Moores Center for Real Estate. Information: (619)260-4231 or usdce.org/bmcre/conference .”
Who would pay $195 to hear Mozilo speak?
SPF 195
Economists say 2008 will be a year to forget
Analysts at American Economic Association now see recession as a given
By Greg Robb, MarketWatch
Last update: 1:26 p.m. EST Jan. 5, 2008
NEW ORLEANS (MarketWatch) — Gathered in this city struggling to regain its footing after Hurricane Katrina, a group of leading economists said the U.S. is getting hit by another damaging storm: the global credit crunch.
Many analysts gathered at the American Economic Association’s two-day annual meeting spoke of a recession as almost a given but differed over how severe it will be.
“The recession is likely to be a serious one,” said Dean Baker, co-director of the Center for Economic and Policy Research.
He estimated losses in prime mortgages will be two to three times the $160-$200 billion hit seen in the subprime sector. This, he said, will lead to large losses at banks and difficulty for Fannie Mae and Freddie Mac.
University of Chicago professor of finance and former chief economist at the International Monetary Fund, Raghuram Rajan, said questions in the media over whether the U.S. economy will fall into recession are really only about semantics.
“We are going to have very low growth in the first two quarters of the year. Whether it is negative or zero, it is going to feel like the same thing,” Rajan said.
But he added that it remains an “open question” whether an even more serious slowdown develops in the second half of the year.
“One of the big issues is the extent to which the credit crunch initiated by the subprime crisis starts spreading and how much does it affect smaller corporations and poorly rated corporations,” he said. “Do we have a bank credit crunch which starts impacting on retail credit for small and medium enterprises? There is some uncertainty.”
http://www.marketwatch.com/news/story/economists-say-2008-year-forget/story.aspx?guid=%7BF1BD8B30%2DB628%2D4AA3%2D853E%2D1FDD8D54A33E%7D&dist=TNMostRead
“…questions in the media over whether the U.S. economy will fall into recession are really only about semantics.”
I keep mulling over this statement made by a (presumably) tenured professor of finance. What is the size of the U.S. jobs base at the moment — maybe 130m? So a 1 percent increase in unemployment would result in 1.3m job losses, 2 percent increase 2.6m job losses, etc. Of course, none of these newly unemployed workers would be tenured professors of finance at the University of Chicago. Job security is great, if you can manage to achieve it.
Kinda late but here’s an update on some overpriced condos in Missoula and a look at the nabe. Heheh
I found out there are two places still doing 100% financing here and one of them is my bank. Gulp.
Fed should stop rate cuts, says fund chief
By Deborah Brewster in New York
Published: January 6 2008 20:06 | Last updated: January 6 2008 20:06
Ray Dalio, the billionaire fund manager who was among the experts to advise the US Federal Reserve in recent months, has said interest rate cuts are not the solution to the turmoil in the credit markets.
Rather, Mr Dalio, founder and chief investment officer of money manager Bridgewater Associates, said the longer-term solution would involve currency policies – such as a revaluation of the Chinese renminbi – to address the US’s trade imbalance.
http://www.ft.com/cms/s/9eb761d6-bc90-11dc-bcf9-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F9eb761d6-bc90-11dc-bcf9-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus
Why America must have a fiscal stimulus
By Lawrence Summers
Published: January 6 2008 18:27 | Last updated: January 6 2008 18:27
http://www.ft.com/cms/s/3b3bd570-bc76-11dc-bcf9-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F3b3bd570-bc76-11dc-bcf9-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus
Someone across the pond is doing a great job of paying attention to the U.S. race for the WH…
December 21, 2007
Is Hillary doomed?
Is Hillary doomed? You might begin to wonder, from some of the recent coverage of her campaign - featuring reports of bad opinion polls, demoralised staff and a panicky candidate. Bill’s recent description of his wife as a “world-class genius” is touchingly inarticulate - but also sounds a little desperate.
Certainly the momentum is with Obama at the moment. He has sneaked ahead of Senator Clinton in the opinion polls for the Iowa caucus on January 3rd. And a USA today poll, out today, has Obama and Clinton neck-and-neck in New Hampshire. Just a month ago, she had a double digit lead in New Hampshire. If Obama wins the first two contests, then Hillary’s national lead might begin to evaporate as the candidates head for the most populous “delegate-rich” states.
http://blogs.ft.com/rachmanblog/2007/12/is-hillary-doom.html
Trading places…
http://iemweb.biz.uiowa.edu/graphs/graph_DConv08.cfm
Most bearish poll yet in thestreet.com’s Real Money Barometer, a good contrarian indicator, with bears ahead of bulls almost 5-2.
http://www.thestreet.com/s/why-the-dollar-matters-in-real-estate-stories/newsanalysis/media/10397129.html?puc=_tsclsii
Scroll to end to get poll. In fairness, last week’s Sunday night reading was very close and just slightly more bearish than bullish, so sentiment did call the market correctly last week. But it has been wrong at least 3 times out of 4 in my unscientific data-keeping. No headline on cbsmarketwatch.com saying which way market will go this week, another good contrary indicator.
“No headline on cbsmarketwatch.com saying which way market will go this week, …”
Perhaps they are hindered by foot-in-mouth disease?
ASIA MARKETS
Asian stocks crumble on Wall Street sell-off
By V. Phani Kumar, MarketWatch
Last update: 7:51 p.m. EST Jan. 6, 2008
HONG KONG (MarketWatch) — Asian markets took a tumble early Monday after Wall Street reacted to concerns of a U.S. recession, with Japanese stocks extending their steep losses from the previous session on exporters such as Nintendo Co. and Toyota Motor Corp.
http://www.marketwatch.com/news/story/asian-stocks-crumble-wall-street/story.aspx?guid=%7B7D2A5991%2D51EB%2D40F6%2DB10F%2D9D93EB195A94%7D
NOW they tell us not to put all our dough into the stock market…(other than almost all of your retirement money, which should be in the stock market because stocks always go up, in the long run).
Big stocks, little stocks, growth stocks, value stocks, stocks stocks stocks… Keep pumping in the long retirement money so da boyz can fleece you when the market tanks, then suck you back in on the Fed-fueled rebound for more fleecing!
Tighten Your Belt
Cut expenses even if you’re not in danger of losing your job and use the extra money to pay down credit-card debt, says Nolan. If you do get laid off, it’ll make life easier. “Eat out once a week instead of three times. Buy a slow-cooker pot, and in a year you’ll probably have a 1000% return on your investment.”
If you carry a card balance, comparison-shop online to check if your rate is competitive. If it isn’t, ask the issuer to lower it. Many card issuers will comply.
If you bought your house in 2005 or 2006 in an area where values have since plummeted, petition your county tax board to reduce your property taxes. If you can show that the house is assessed at more than its current value, you may trim your tax bill.
Review Your Investments
Money you’ll need within the next few years should be in CDs or a money-market fund. It should not be in stocks, bonds or a no-interest checking account. “You can get 4% to 5% on your savings today,” says Nolan.
Make sure your longer-term investments are well-diversified. Your retirement accounts should include at least four types of mutual funds: big company U.S. stocks, small company U.S. stocks, international stocks and high-quality bonds. And don’t keep more than 10% of your investments in the stock of your company or industry. It’s risky to keep your paycheck and your nest egg in the same basket!
http://www.parade.com/articles/editions/2008/edition_01-06-2008/Feel_Secure_About_Your_Money