January 8, 2008

A Record-Breaking Day In California

KGET 17 reports from California. “A new real estate report paints another bleak picture of property values for home sellers in Bakersfield. ‘The median price of a home has dropped 20 percent since it’s peak in 2006,’ said appraiser Gary Crabtree. ‘Forty-six percent of all single family houses sold were actually foreclosure properties.’”

“Real estate agent Jon Vaughn walked TV-17 through one of those homes Monday. The four bedroom, 3,000 square-foot house might have sold for more than $600,000 two years ago, but Monday, it was listed at just under $406,000.”

“‘You’ve got to be lowest priced one in the area in order to sell it,’ said Vaughn. ‘I remember back in ‘03 and ’04, a lot of people saying, ‘I just can’t afford a home. Well, these days, it’s so much more affordable.’”

The Modesto Bee. “Monday was a record-breaking day for foreclosures in California. A staggering 5,238 properties were scheduled to be sold in auctions on courthouse steps across the state, including 145 in Stanislaus County.”

“‘This is the single largest day ever for foreclosures,’ said Sean O’Toole, (who) tracks mortgage defaults throughout the state. By comparison, 400 to 500 auctions a day were scheduled statewide a year ago, O’Toole said. That average rose to about 2,500 per day by the end of 2007, but he said there’s never been nearly as many auctions as happened Monday.”

“David Absher, president of Dual Arch International, which does most of the foreclosure auctions in the county, said that during the past six months, typically 60 to 80 auctions were scheduled a day, but ‘the volume is mounting.’”

“About 10 people showed up Monday to watch the auction in downtown Modesto, including a few who came with money to buy. But during the first 90 minutes, none of the auctioned homes attracted bids.”

“That means those lenders are stuck owning the properties they foreclosed on. Most of them, whose defaulted mortgages were issued mostly in 2005 or 2006, are owed more than the houses now are worth.”

“‘No one wants to buy this stuff because they don’t know where the housing market’s going,’ Absher said. ‘When the prices are continuing to slide down, how do you know you’re getting a good deal?’”

“Antonio Lima was looking for a good deal at Monday’s auction, but the Modesto house he came prepared to bid on had its foreclosure postponed. He’s seen the inside of that home, and he’s convinced it’s a nice three-bedroom house. That Norman Way property, however, has an outstanding mortgage of nearly $300,000.”

“‘I know for sure they’ll never sell it for that much,’ Lima said. He plans to make a lower-priced offer on the house through a real estate agent.”

From ABC 7.com. “At a packed house in Temecula, first-time home hunters and savvy investors were hoping to buy one of the roughly 80 foreclosed homes on the auction block. All are bank-owned properties.”

“Colleen Rutledge of Fallbrook bought a two-story Perris home as an investment at a foreclosure auction for $250,000, plus a $12,000 commission. She spent about $25,000 more fixing it up.”

“With similar properties selling in the low-to-mid-300s, Rutledge thought she’d make a quick profit. She initially listed it for $369,000 when it was the only foreclosed property on the block. Now the home next door, and several others on the block are in foreclosure, and prices continue to fall.”

“She’s lowered her price several times and now has it listed for $274,000. She says she’ll be lucky to walk away with any profit. Rutledge admits she got caught up in the foreclosure auction frenzy.”

“‘You really do have to know your numbers, know what your maximum bid is, and you’re done when you’re done,’ said Rutledge. ‘And you got to know what you’re getting into or you’ll lose a lot of money, unfortunately.’”

The Los Angeles Business Journal. “The state of California lost nearly 16,000 jobs last year due to the stumbling mortgage industry, by far the most of any other state, according to a survey released Monday by MortgageDaily.com.”

“Countrywide eliminated nearly 12,000 jobs across the country last year, far more than any other company, the survey said.”

The Orange County Register. “Orange County lost more than twice as many mortgage jobs last year as any state except its own, California. O.C. lost more mortgage jobs than 49 entire states.”

“The state with the second-highest number of mortgage job losses, after California, was Florida with 2,507, according to MortgageDaily.com.”

The Contra Costa Times. “It may be a new year, but 2008 is starting out with plenty of pain for East Bay mortgage and housing-industry workers.”

“Banks and mortgage lenders of varying sizes continue to chop jobs in Alameda and Contra Costa counties, according to a review by the Times. And some home-loan finance employees who have lost their jobs say the outlook for their industry looks bleak.”

“‘This is going to get worse before it gets better,’ said David Miles, an Oakland resident and mortgage worker who lost his job with Wachovia bank in December. ‘The mortgage industry hasn’t hit bottom yet.’”

“In the 12 months that ended in November, housing-related industries shed 10,300 jobs in the East Bay.” The grim totals include a loss of 7,100 jobs in residential and specialty trade construction and 2,400 jobs in credit intermediation, an industry category that consists primarily of mortgage agents and loan officers.”

“A growing number of former mortgage workers who lost their jobs have decided to seek employment outside of the field in which they had worked for years. ‘I’m keeping my fingers crossed that I can find something in the mortgage area,’ said Robin Stutzman, a San Ramon resident who lost her job with Bank of America in late 2007. ‘But if I get anything, it will probably be a temporary job.’”

“Stutzman also is seeking a job as an executive assistant, she said. ‘I’ve never seen anything like this before,’ Stutzman said. ‘I never thought that getting into the mortgage industry that it would decline this badly.’”

The Voice of San Diego. “With prosecutors nationwide illuminating real estate fraud schemes undertaken during this decade’s heated housing market, at least one of the state’s legions of real estate professionals face new training requirements.”

“California’s Office of Real Estate Appraisers raised the bar last week for would-be appraisers wishing to join the 19,500 appraisers already licensed and working around the state.”

“Some appraisers this decade were pulled into shady schemes in which agents and loan officers and buyers colluded to rip off banks.”

“Buyers would, based on artificially inflated appraisals, convince the banks to lend them more than the house was actually worth, kick cash back to the parties involved, and then foreclose, leaving the lenders holding a house worth less than the mortgage.”

“Some longtime professional appraisers, real estate and mortgage agents and brokers have complained loudly that the barrier to entry into their professions is too low. They lament the young or novice workers who entered the business to get rich quick, did sloppy work and since have left the old-timers to try to dust off their reputation.”

“‘The problem before was that any idiot could get a license,’ said Todd Lackner, a residential real estate appraiser in Mission Valley. ‘[Now] it’s going to really weed out the bottom end people.’”

“Sara Schwarzentraub is a local appraiser who teaches some of the required classes for new licensees. The state should incentivize the mentoring of new appraisers by established professionals, she said.”

“‘The training area — that, still, nothing has been done about,’ she said. ‘Training people falls to fee appraisers, and when they’re training somebody, they’re not making any money.’”

“And, without a close relationship with a mentor, the temptation rises to appraise a home at a higher value than it’s worth, or to otherwise engage in real estate fraud schemes, Schwarzentraub said.”

“When prices were rising, lenders often didn’t lose money even on homes abandoned after the cash-back schemes. But now, the lenders that are still making loans, and their backers, are saddled with so many foreclosed homes and have taken so many losses that they are exponentially more careful with the money they lend.”

“Lackner said he feels a bit vindicated by the market conditions, though his office sees about a third as many requests for appraisals as they did a couple of years ago.”

“‘People always made fun of me, they said I was conservative,’ he said. ‘They called me ‘Lowball Lackner.’ Call me what you want but I’m accurate.’”

“Pete Ogilvie, president of the California Association of Mortgage Brokers, said his organization supports increased requirements for professionalism across the board in real estate professions.”

“‘The only people we can’t make more professional are borrowers and investors,’ he said.”

The Press Enterprise. “The city of Moreno Valley could suspend a planned increase in fees charged to developers and home builders.”

“The Building Industry Association of Southern California’s Riverside County chapter has asked city officials to postpone a planned 2.6 percent increase in development-impact fees, saying it would only prolong the struggling housing market’s recovery.”

“In the current market, home builders are drastically discounting the price of newly built homes, which, in turn, drives down prices and property values on the re-sale market, he said. The BIA is asking the city to require payment at the time of occupancy, which can be six months later, Winckel said. That would reduce home builders’ costs and allow them to sell homes at more competitive prices, he said.”

“‘You don’t raise prices on goods when you’re not selling them,’ BIA Executive Officer Borre Winckel said.”




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160 Comments »

Comment by aladinsane
2008-01-08 16:35:18

Mark to Modesto

“About 10 people showed up Monday to watch the auction in downtown Modesto, including a few who came with money to buy. But during the first 90 minutes, none of the auctioned homes attracted bids.”

Comment by BottomFisher
2008-01-08 21:13:35

Potential buyers shrugged…..then went across the street for ice cream and rented videos.

 
Comment by Fidelus
2008-01-08 22:22:03

Ouch! That’s called realty reality therapy.

 
 
Comment by CA renter
2008-01-08 16:36:46

To the bearish HBB traders:

GO BEARS!!! :)

 
Comment by aladinsane
2008-01-08 16:38:11

No one can can employees, like countrywide can.

“Countrywide eliminated nearly 12,000 jobs across the country last year, far more than any other company, the survey said.”

Comment by Dan (from SoFla)
2008-01-08 19:03:48

I have friends at C-wide.

They hope the company can survive.

It may … in some form or other.

 
Comment by GL in OC
2008-01-08 20:59:09

I’m feeling sorry for a former co-worker at this point. Just last week he started work for the countrywide insurance division doing disaster prediction and analysis…. Then again, if he’s the kind of guy they’re hiring for that job, no wonder they didn’t see this mess coming!

 
Comment by BottomFisher
2008-01-08 21:26:18

Great CD rates while waiting for the bottom….backed up by FDIC….just stay under 100k of course.

 
 
Comment by txchick57
2008-01-08 16:40:58

This makes me happy. The flipping thing has to be eradicated totally before this market can bottom.

“She’s lowered her price several times and now has it listed for $274,000. She says she’ll be lucky to walk away with any profit. Rutledge admits she got caught up in the foreclosure auction frenzy.”

Comment by cayo_ron
2008-01-08 17:28:55

“She says she’ll be lucky to walk away with any profit.”
WTF?
$250,000, plus $12,000 commission plus $25,000 fixing it up? She’s spent $287K and is listing it for $274K. Even if she has no closing costs, last time I checked, $287K - $274K is a $15,000 loss! How is she going to be lucky to make a profit???
Bad enough that she’s a knife catcher, but she can’t even do basic math? I think we’ll see almost as much stupidity on the downside of the curve as on the upside.

Comment by Mr Vincent
2008-01-08 17:36:03

I noticed the same thing. Her loss will be even worse.

The place has not sold yet. Every week she holds that place it costs money. Who’s mowing the lawn?

 
Comment by Hoz
2008-01-08 17:41:03

The $25,000 is what she paid herself for painting the walls in the kitchen. She was already calculating ways to defer taxes on her flipping profit.

Leigh are you around?

Comment by dude
2008-01-08 20:57:51

Not leigh, but I’m really glad to see you back after the holiday Hoz.

I hope to see a post or two pre-market tomorrow, OK?

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Comment by are they crazy
2008-01-08 22:03:48

Welcome back, Hoz. Hope you had a lovely break.

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Comment by ex-nnvmtgbrkr
2008-01-08 17:46:50

And you failed to calculate the 15K commission she’ll pay on the sale (never happen). Oh, and her split of the title/escrow fees, so throw in another coupke grand.

Colleen, you ignorant slut (Dan Aykroyd impersonation off)

 
Comment by Groundhogday
2008-01-08 17:50:21

Notice that with comps at low- to mid-300’s, she initially listed at $369k. WTF! Abundant inventory and falling market, so you list ABOVE the comps?!

If this genius had listed below the lowest comp initially, she might have still escaped with a very small profit, or at least broken even. Greed, greed, greed….

 
Comment by MMG
2008-01-08 18:00:02

I think what she meant by loss was not taking too many joshua trees :mrgreen:

 
Comment by peter m
2008-01-08 18:42:18

“Colleen Rutledge of Fallbrook bought a two-story Perris home as an investment at a foreclosure auction for $250,000, plus a $12,000 commission. She spent about $25,000 more fixing it up.”

What a stupid ‘investor’, if even she deserves that title. Foreclosed properties in Perris should be by now around $200,000 even for brand new 4/3’s 5000-6000 lots in nice areas
of Perris, and i use the word nice in context because Perris is 3+ hrs commute to LA/OC and is rather bone dry and barren in most spots, rather like the Mongolian steppe but less scenic.

She will not recover her costs and will likely lose money, make that will loose money on it. No one with any brains is buying now in Perris nor elsewhere in the IE because folks are now more concerned about recession and layoffs.

What an idiot!

Comment by Desertdweller
2008-01-08 20:45:42

Perris?
YIkes. always a dump. A blip in the road/hwy.

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Comment by BackToTheBank
2008-01-08 23:13:43

Vive La Perris!

 
 
Comment by GH
2008-01-08 23:04:52

Town with many payday loan and dollar stores if I recall. Nothing there worth over 80K

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Comment by ex-nnvmtgbrkr
2008-01-08 17:40:21

But we’re already seeing the wanna-be foreclosure vultures making the news. LMAO!! This JT’s for you you stupid bag! We all knew these fools were hosed when they starting making the news last summerith their “savvy” investments. I just didn’t think we’d see ‘em in the news so fast.

Oh, and she’s definately hosed beyond belief. I told the story last week of a friend who lives in Perris not being able to short-sell his 3/2/2 for 199K. He moves this weekend…….with the keys remaining on the counter.

Comment by aladinsane
2008-01-08 17:54:14

Forget Perris.

Comment by M.B.A.
2008-01-08 19:58:22

we’ll always have Perris….

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Comment by SaladSD
2008-01-08 22:54:26

Perris burning.

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Comment by sdnewbie
2008-01-09 11:50:16

Perris je tame . . . lol

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Comment by cayo_ron
2008-01-08 18:00:07

Just as we saw the full-page ads promising real estate riches with no money down on the way up, I am starting to see full-page ads for how you can make money doing forclosures. One of their selling points is that you are actually doing the FB a favor.

Comment by sm_landlord
2008-01-08 18:49:14

I guess that favor would using a smaller JT?

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Comment by Neil
2008-01-08 19:01:48

lol

Yes… a favor. Taking on their debt. ;)

Who was it here who said it would be a down cycle of wash, rinse, repeat… For that is what is happening.

The real estate emotions are getting ready for a change… not yet… Ok… not even close. But soon. Then we’ll really know low sales volumes!

Got popcorn?
Neil

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Comment by Curt
2008-01-08 20:43:23

“With similar properties selling in the low-to-mid-300s, Rutledge thought she’d make a quick profit…..”

I don’t think those other homes were selling!

 
 
Comment by SoCalRugger
2008-01-08 16:46:13

Interesting new bench advertisement in the ‘oh so desireable Marina Del Rey’ area yesterday (corner of Sepulveda and Mindanao Way) stating - ‘Don’t lose your home to foreclosure’.

First one I’ve seen down here. Nice to see us keeping up with the Jones’.

Comment by are they crazy
2008-01-08 17:04:57

What have they done to the Marina? I heard they were going to ruin it with delusions of fanciness. Lived down there 2000-2003 - Mariners Village.

Comment by sm_landlord
2008-01-08 18:00:39

Yep, they tried to fancify it. Gutted a bunch of apartments and converted to con-dumb-minimums. Many new overpriced condos for FBs to be. And the Marina itself is supposed to be a profit center for the County, don’cha know. The new built condos are on land leased from the county, just to add to their value…

And the traffic is out of control, especially with the new crap they built in the Culver Outback (Playa Vista).

Comment by are they crazy
2008-01-08 19:34:27

I loved Mariners Village - it was like living at Disneyland in the 70s and was easy walk to the beach. And the Marina was really fun in the 70s - it was singles city and pretty wild. Ah the good old days of partying.

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Comment by Joe Rentor
2008-01-08 20:35:13

“When in doubt, pinkies out.”

- Patrick Star

 
 
Comment by Sammy Schadenfreude
2008-01-08 17:08:12

I didn’t see that park bench advertisement, ’cause LV Landlord was sleeping on the bench.

 
Comment by Tracedog
2008-01-08 18:55:48

Sepulveda and Mindanao??
I left Marina del Rey and CA in 1996. When did those two streets get connected? Last I rememeber, they were a million Culver City miles apart. Did you mean Lincoln, or has things really changed that much out there?

Comment by peter m
2008-01-08 19:46:53

“left Marina del Rey and CA in 1996. When did those two streets get connected? Last I rememeber, they were a million Culver City miles apart. Did you mean Lincoln, or has things really changed that much out there”

Sepulveda blvd going north right after it passes thru the airport(LAX) becomes lincoln ave. Same street ,and they are both dsignated as route 1, the pacific coast hwy route .

Note: Lincoln blvd going north after it passes Washington blvd in the Marina becomes rather seedy thru Venice(Itself seedy i many spots) and even Santa Monica till it hitches up with the 10 fwy and becomes the true scenic coastal 1 hwy as U hit the world-famous Santa Monica/Malibu beaches and bluffs.

Comment by Jimmy Jazz
2008-01-09 08:19:10

Not technically accurate. Sepulveda continues north past the airport. Lincoln splits off from Sepulveda and goes northwest. Sorry, but I drive it every day :)

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Comment by txchick57
2008-01-08 16:49:17

Countrywide. And look at where we are after all this fed intervention. Shows you how impotent they realliy are.

http://www.thestreet.com/s/rumors-crush-countrywide/newsanalysis/financial-services/10397600.html?puc=_tscfoc

Comment by climber
2008-01-08 17:08:12

You’ve just got to ask if we’re better off without them. There are plenty of banks. I don’t need a big bank, I need a well run bank. All this talk of “too big to fail” is crap, the truth is they have already failed.

Comment by pismoclam
2008-01-08 17:51:16

Try Downey S&L, down 7% today. My PUTs are screaming but there is plenty of room to get in. The more the merrier! DSL has more ARMs than WM .Check it out Bloggers.

Comment by mikey
2008-01-08 18:36:24

NAR/REIC and the Gov’t have Housing rigged. The Gov’t and the PPT have the stock market rigged. You play that hand, I’m going to have a beer until the dust settles in this mess :)

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Comment by Professor Bear
2008-01-08 19:43:37

One should carefully distinguish between efforts to control markets and the ability to control markets. Keynesian fiscal and monetary interventions have been employed since the 1930s to smooth business cycles. But as I have often pointed out here, humans are mammals, and mammals habituate. At some point, expectation for policy stimulus at the first sign of weakness encourages financial strategies that assume limited downside risk. Once a critical mass of high-powered financial players is utilizing such “no downside” strategies, the system is broken beyond the potential for future interventions to fix it. At that point, the monetary authority is pushing on a string. The housing bubble debacle epitomizes this scenario.

 
Comment by Dan (from SoFla)
2008-01-08 20:19:07

One of the major problems with a “moderate” monetary stimulus in a grand scheme of things is that it can be effective when the debt levels are close to their average and the vetting process ends on its own or just in time with the 9-12 month Fed lag.

Then it looks as if the stimulus delivered the goods.

But the ability of central banks to monetize the debt by diluting the unit of currency gets lower and lower as the debt levels get higher and higher.

Most economists work off models that was based on moderate recessions that were preceded by a moderate creation of credit/debt in a 3-5 year cycle.

However in 2007-08, we’re seeing the end of at least a 10 year and perhaps a 25 year cycle that started with a monetary expansion of 1983 (up in 1983, down in 1986, up in 1987, down in 1990, up in 1995, down in 1997, up big in 1998, down in 2,000, up and through the roof in 2001-05).

That left the economy burdened with such horrific levels of indebtedness and such low savings rate, that a little monetary and/or fiscal stimuli aren’t going to do sh**.

The mathematic models however don’t reflect what is becoming a “perfect storm” scenario until after the fact.

 
Comment by Anonymous Coward
2008-01-08 20:29:37

Well said, PB. The organized support designed to prevent a 1929 crash worked very well… until one day it didn’t. There were just too many people running for the exits.

 
 
 
Comment by Desertdweller
2008-01-08 20:49:23

Whenever my co says NO WAY, Not in the plans etc.. I know, a few days later..poof.. there it is.
Same with CW…just wait. BK

Comment by BackToTheBank
2008-01-08 23:22:15

Right. They said they weren’t “planning to file for BK”. They didn’t say they weren’t considering it.

Besides, all the crap they say are lies. When they talk, you kinda have to put the noise canceling headphones on and go around and see what they’re holding behind their back.

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Comment by Rich
2008-01-08 23:53:15

Countrywide REO now over 4,000 in Cali.

Here in Stockton most of the addresses askin prices have fallen dramatically since I last looked (1.5 mo?). They are all easily still $50-150k more than they are worth. Funny think is most of the areas I like for rentals are about $50-70k to expensive, bad but not the $200k over value of 05′.

Funnier thing is the shittier the area the more over priced the homes apper to be, ie. areas really not worth $100k listed at $200k plus. In fact a lot of the homes in shitty areas are listed for much more than those in decent places. This goes to show how deep and wide the fraud ran in the bad hoods. There was much more fraud potential getting a $250k loan on a $100k home than in more desirable. Typical appraiser crap was to use comps from nicer areas to value shit in the ghetto.

 
 
Comment by friar john
2008-01-08 16:51:35

Congratulations Everyone! Affordability is rising and moving into the 30th percentile. Not to be a downer though, but affordability still has to get up to the 60th to 70th percentile. Gimme an A! Gimme an F!…Gimme a Y! What does it spell?!? 1998 prices.

“‘You’ve got to be lowest priced one in the area in order to sell it,’ said Vaughn. ‘I remember back in ‘03 and ’04, a lot of people saying, ‘I just can’t afford a home. Well, these days, it’s so much more affordable.’”

Comment by climber
2008-01-08 16:59:25

That’s what I was thinking. $400k is way beyond what I’m able to spend for a house. “More affordable” doesn’t help if I still can’t afford it.

“Real estate agent Jon Vaughn walked TV-17 through one of those homes Monday. The four bedroom, 3,000 square-foot house might have sold for more than $600,000 two years ago, but Monday, it was listed at just under $406,000.”

“‘You’ve got to be lowest priced one in the area in order to sell it,’ said Vaughn. ‘I remember back in ‘03 and ’04, a lot of people saying, ‘I just can’t afford a home. Well, these days, it’s so much more affordable.’”

Comment by potential buyer
2008-01-08 17:34:19

And how is it more affordable? Did we get back to pre-2003 prices? Not in my area, we didn’t.

Comment by CA renter
2008-01-08 19:15:44

We need pre-2001, if not 1998 prices, especially in California.

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Comment by Desertdweller
2008-01-08 20:53:25

Bought foreclosure in Palm Springs -’93@ $78k
..
now that would be a good price in 08.or completely remod @ #125k voila.

 
 
 
Comment by neon kitty lips
2008-01-08 18:58:02

would it be more affordable, or less not affordable? In REIC-speak, it’s negatively unafordable.

 
Comment by are they crazy
2008-01-08 19:04:42

My thoughts, too. Since when is $400K affordable? Isn’t median family income in US about $50K? Even in LA, I thought it was about $65K - still don’t see where $400K becomes affordable.

 
 
Comment by crispy&cole
2008-01-08 17:07:14

The area this used house salesperson is talking about is littered with forecloures (many by you know who). These homes will be $250k when all is said and done!

 
 
Comment by American_Screamer
2008-01-08 16:51:42

Colleen Rutledge of Fallbrook bought a two-story Perris home as an investment at a foreclosure auction for $250,000, plus a $12,000 commission. She spent about $25,000 more fixing it up.”

“With similar properties selling in the low-to-mid-300s, Rutledge thought she’d make a quick profit. She initially listed it for $369,000 when it was the only foreclosed property on the block. Now the home next door, and several others on the block are in foreclosure, and prices continue to fall.”

“She’s lowered her price several times and now has it listed for $274,000. She says she’ll be lucky to walk away with any profit. Rutledge admits she got caught up in the foreclosure auction frenzy.”

Oh, boo hoo. Idiot.

Comment by Arizona Slim
2008-01-08 16:58:06

My former landlady bought a foreclosed property at auction back in December 1998. She had to come up with the full payment within 24 hours, and she did not have the right to inspect the property before the auction.

She spent many years and many dollars getting that place up to snuff. And she’ll laugh in the face of anyone who says that it’s easy to get rich with foreclosures.

Comment by Sammy Schadenfreude
2008-01-08 17:10:42

Some wise & experienced poster in here once said foreclosures are bad juju. I agree.

Comment by az_lender
2008-01-08 17:52:04

Counterexample. In 1994 I bought a REO condo in Glendale CA. The FB’s had gotten mad and stolen the stove, ripping up half the kitchen floor (vinyl tile) with it. I’m not very handy, but I can do a vinyl tile floor and buy a new stove. Although the housing market continued to sag, I sold that place at a small net gain in 1996. Well, I can’t say I got rich! just lived for free for a couple of years.

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Comment by Tom
2008-01-08 18:21:28

And you can’t beat that. A good investor looks at several different ways to make an investment a good one. Kudos to you.

 
 
Comment by BuyerWillEPB
2008-01-08 22:41:23

True story.

Several years ago, I was in China for some time and while there did a little house (only condos in China) shopping. One time as the sales guy showed us around the different models I asked him to show me the ones with bad Feng Shui. He looked at me strange and asked why I would want a home with bad Feng Shui. In all seriousness, I told him, “because the Feng Shui only works on the Chinese, not us barbarians, and then I could pay half price for the home.” Man, we all laughed after that. Only afterwards did I realize how funny that came out. Finally the salesman claimed that none of their units had bad Feng Shui. :)

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Comment by de
2008-01-09 04:05:26

Another counter example:

I bought the house I’m currently living in for

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Comment by takingbets
2008-01-08 17:01:27

i just love reading stories about the flip-n-burn’s.

Comment by Deflationary Jane
2008-01-08 18:04:09

I have one I’m watching. It’s a victorian, bought 07/21/04 for $349,100. Foreclosed and sat for 324k. Went to auction in July 07 and sold for 262k with commision. They slapped paint on it, picked up some Costco cabinets and furniture and listed it in Sept 07 for 424k. It’s now down to 389k, bleeding all the way down. Now lots of victorians and craftmans are starting to appear on the market for 200 to 300k. I hope this guy knows how screwed he is.

There are other REOs that were picked up early in the game and on the market after some basic rehab. Nothing is moving except the bargin basement deals and even those are few and far between.

Comment by SaladSD
2008-01-08 23:09:24

There’s nothing like a restoration of vintage homes ala Home Depot and Costco. When I lived in an older area I begged neighbors not to replace their wood framed windows with vinyl. It’s like restoring a classic car with Bondo.

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Comment by Blacque Jacques Shellacque
2008-01-08 18:32:38

Oh, boo hoo.

I hope it sells for way under $200K.

 
 
Comment by smf
2008-01-08 16:57:05

“Rutledge admits she got caught up in the foreclosure auction frenzy.”

Yes, and so have many others. These homes are part of the ‘phantom inventory’. Which I understand may be about 50% of the houses sold lately.

This cannot end good.

Comment by Sammy Schadenfreude
2008-01-08 17:14:18

The first wave of knife-catchers is getting burned. By the time the delicious aroma of scorched, second-wave crispy critters reaches this vulture’s perch, the fools will have long since stopped rushing in. Our time is coming round, but not just yet.

Comment by OCDan
2008-01-08 18:28:52

If Bubbles were here he would say…

“No home in the hand is worth more than two upside down.”

Stay the course. Our time will come when no one wants to buy.

Comment by Neil
2008-01-08 19:06:08

Oh, it shall come. Its still, in the areas I want, years away. Buy when a mortgage is a pain to get (due to the paperwork). Buy when J6P screams ‘RENT.’ Its happened before. But the hurd turns slowly. But once it spooks…

Get comfy and watch the show!

Got popcorn?
Neil

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Comment by SanFranciscoBayAreaGal
2008-01-08 21:17:28

My mouth is watering and my stomach is rumbling ;)

 
 
 
Comment by aladinsane
2008-01-08 16:59:25

“Gov. Arnold Schwarzenegger will use Tuesday’s State of the State address to propose a constitutional amendment that would give him more power over state spending.”

http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2008/01/08/state/n103030S80.DTL&type=politics

A neo-fascist arty ex-pat Austrian strongman leader-type, power grab?

So BlackVader of him…

Comment by az_lender
2008-01-08 17:55:15

I guess he knows the legislature is never ever ever going to bank any surplus but always use it to create more state jobs.

Comment by sm_landlord
2008-01-08 18:15:07

Agreed. Property tax income has just barely started to fall, and already the state is looking at a $14 Billion shortfall in this year’s budget. All of those fat years of the .com boom plus the last nine years or so of the RE boom and the state is as good as broke.

Maybe if we reduced the term limits to 15 minutes we could stop the pols from doing any more damage, but I doubt it. All of those billions gone, and now it’s time to fix the bridges and roads. That’s 9.8% of my income plus my property tax plus my business franchise tax gone, with nothing to show for it but overflowing prisons, bad schools, decaying infrastructure, and water rationing coming next.

Comment by rms
2008-01-08 18:47:57

“That’s 9.8% of my income plus my property tax plus my business franchise tax gone, with nothing to show for it but overflowing prisons, bad schools, decaying infrastructure, and water rationing coming next.”

But think about the great weather!

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Comment by HARM
2008-01-08 19:02:20

And don’t forget all the “taxpayer incentives” handed out to “guest workers”!

 
 
Comment by are they crazy
2008-01-08 19:08:33

But he said we’re doing just fine. Revenues aren’t down, they’re just flat. There’s no recession, but he wants power to change budget mid-year if there is a recession. Strangest speech I’ve heard yet. He even utterd a “duh” at some point.

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Comment by HARM
2008-01-08 20:17:27

“Remain Calm…all is well!”
–”Chip Diller” (Kevin Bacon), Animal House right before he’s flattened by panicked crowd

 
Comment by are they crazy
2008-01-08 20:55:15

One of my all time favorite movies. When the chips are down, watching it always makes me feel better. It’s so inane.

 
Comment by SanFranciscoBayAreaGal
2008-01-08 21:22:03

One of my favorite to watch when the chips are down is Back to School. Loved Rodney Dangerfield and Robert Downey Jr in the movie.

 
Comment by are they crazy
2008-01-08 22:08:13

Caddy shack, Groundhog Day, Stripes, Ferris Bueller’s Day off, Risky Business.

 
Comment by cmhappyrenter
2008-01-08 22:29:35

Princess Bride, Big Trouble and Dumb and Dumber

 
Comment by SaladSD
2008-01-08 23:12:02

Tremors.

 
Comment by bkiddo
2008-01-09 09:51:31

“All I need is this lamp. And this chair…”

The Jerk

 
Comment by WaitingForREO
2008-01-09 13:56:57

“run away! run away!”

Holy Grail

 
Comment by jjinla
2008-01-09 14:04:37

You are missing his point. Arnold said clearly that California does NOT have a revenue problem. We do have a HUGE spending problem.

The top 10% of wage earners (over $119K) in this state account for over 80% of the tax revenue. Too much emphasis is placed on the wealthy having a good year. If it were up to the dems, we would be paying 100% of the taxes.

I agree, this state has nothing to show for all of the taxes I pay them. I’ll be damned if I give them another dime.

Want to empty the prisons? Deport the illegals. Want to make schools less crowded? Stop giving free education to the children of illegals. Nearly all of our problems are as a result of the intense burden put on our state by those that pay no, or nearly no taxes.

 
 
Comment by Jerry
2008-01-08 19:37:44

That sunshine tax is pretty expensive along with over crammed beaches, traffic tieups with smog, taxe increases all make a “perfect day” in California.

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Comment by M.B.A.
2008-01-08 20:14:14

agree 100% - why stay there?

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Comment by Hold out in LA
2008-01-08 20:56:26

Property taxes under Prop 13 rules will roll back to pre bubble levels and won’t come back until the market returns.
Sales taxes will be circling the drain this whole time.
The Pols from both parties up for re-election won’t touch tax increases and each and everyone will fight every cutback aimed at their district.
They will try to pull a rabbitt out of the bond racket and come up snake eyes.
Look for massive increases in penalties and code enforcements (stealth taxes) from every corner of the state and local governments.
Oh and I forgot to mention that somehow we have to take a 40% haircut off the budget to remain solvent and functional.

Look for lots of bills and amendments to pillfer any remaing funds in any bond measures with money in them.

And don’t get me started on the State Revolving Fund Loans. You think Freddie Mack is a problem. What happens when all those towns and counties in the central valley and the IE bounce their checks to the Governator.

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Comment by peter m
2008-01-08 21:45:20

“Look for massive increases in penalties and code enforcements (stealth taxes) from every corner of the state and local governments”

The local municipalities will be calling on their PD’s to step up traffic ticketing enforcement. Look for speed traps set up al over CA along favored roads in which the speed limit is 35-40 MPH on empty wide thoroughfare lane and U are going 45 or 50 mph and boom, motorcycle cops is set up in a hidden turn- off with radar gun and hits U for speeding over 10 mph. $200 ticket min and increases exponentially for each mile over the posted speed limit. Add $33 for court fee and $20-40 for traffic school. Red light cameras even better for city revenues :$400-450 per ticket including school and court fees, which is why U are seeing them everywhere now.
Cities are calling on the local PD’s to be revenue fee collectors extracting money from normally law-abiding citizens who may ocasionally rush thru traffic late for work or race thru that light turning from yellow to red. Especially in Car-crazy SCal 9 in 10 drivers goes 5-10 mph over speed limit on fwys and roads.

Meanwhile 40 % of LA city drivers ,many of them immigrants, drive without auto insurance.

CA state and local gov’ts only exist to screw law-abiding taxpayers out of their hard-earned income while the state employee unions , CA bureacrats ,political hacks and assorted pasasites are all sucking off the gov’t dole, and sticking it to the average middle class citizens and small business owners.

 
 
 
 
 
Comment by arroyogrande
2008-01-08 17:06:52

Yet another update from the Cali central coast…

One of the cities in the area (a city not bordered by ocean) has a medium size (maybe 40-50 lots) housing development. We first visited it almost exactly 2 years ago, and in that time, it appears that they have sold 3 houses (ie closed, money in builder’s hands, family living in house). Approximately 4 more are under contract or in escrow, leaving about 15 more BUILT AND SITTING EMPTY.

To add insult to injury, it looks like the builder has already framed and stucco’d around 6 or so houses of phase 2.

The original sales flier stated that the houses would be priced in the 800s and 900s. However, now the sales person at the development is quoting prices in the 600s.

She also states that typically prices go up in the next phase, and said that phase 2 would probably go for the 900s to over a million.

After touring the 3 models (in the 2000 to 3000 sq. ft. range), we just smiled, thanked her, and left.

Some builders and commercial lenders are just SO screwed.

BTW, say “buh-bye” to Countrywide for me.

Comment by crispy&cole
2008-01-08 17:09:12

Atascadero???

Comment by arroyogrande
2008-01-08 17:56:26

Oh heck, let’s not beat around the bush…it’s in Nipomo…here’s the (older) satellite view:

http://maps.google.com/maps?f=q&hl=en&geocode=&time=&date=&ttype=&q=nipomo,+ca&ie=UTF8&ll=34.999901,-120.445744&spn=0.005502,0.007972&t=h&z=17&om=1

Note - I don’t know when the satellite imagery was taken, but even at that time, you can see the extent of the houses already framed.

Comment by fiveseals
2008-01-08 18:20:44

Nipomo? The only thing worthwhile there is Jocko’s.

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Comment by Desertdweller
2008-01-08 21:00:25

Looks just like the graded devs around the Palm Springs airport in the alluvial plane where the sand doth blow and the wind doth rage.. just empty sort of greenish lots.Lots and Lots of em

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Comment by vozworth
2008-01-08 18:29:52

bout the only thing Atascadero is good for is cooking up speed in a McTrailor.

Comment by vozworth
2008-01-08 19:20:04

I worked for the “financier” back in 98.

havent heard much as of late aside from emails inquiring as to whether Im interested in gettting in on some cheap new construction, over the grade.

I passed.

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Comment by Blacque Jacques Shellacque
2008-01-08 19:55:09

And for gathering all the nutcases in one place.

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Comment by Stretch002
2008-01-08 17:18:07

The article says: “Forty-six percent of all single family houses sold were actually foreclosure properties.’”

So we need to actually REMOVE those foreclosure “sales” to get a look at the true sales volume. Imagine the sales numbers if they decided to stop counting foreclosures as sales and instead only counted house sales to real buyers!

In this case, just subtract 46% of recorded sales to see what is actually selling.

Holy crap!

Comment by az_lender
2008-01-08 17:57:02

Are you sure you are calculating this correctly? That the “sales” were only re-pos and not actually bought by some 3rd party?

 
 
Comment by ChillintheOC
2008-01-08 17:24:55

Shares of Countrywide, run by CEO Angelo Mozilo, have lost nearly 90% of their value since last year due to the collapse of the mortgage market.
—————————————————————————-
Wow! This years “Enron” - maybe Mozilo can share a cell with Skiling one day!

Comment by Mr Vincent
2008-01-08 17:50:51

WHen Countrywide folds, that will add a whole bunch of people into the “looking for a job” pool.

The mortgage business is very labor intensive, even with the new technologies used.

Real Estate was the main job growth engine since 2000. A rise in real estate adds so many different job types from roof nailers to Home Depot workers.

Get ready for a deep recession. If you have the cash and are looking for a home, your time will come in a couple of years when prices get back to 2001 or 2002 levels.

What many do not understand is that owning your home is not really an investment per say. Owning a home is part of the American dream with great tax beenfits, but it is also a money pit. The price you pay is only part of the cost and prices must return to trend.

Comment by Neil
2008-01-08 19:11:19

Real Estate was the main job growth engine since 2000. A rise in real estate adds so many different job types from roof nailers to Home Depot workers.

Yep… for most states. And those ‘workers’ spent in a way a drunken sailor only wished he could. They bought homes and then HELOC’d a hummer, BMW, skis, jetski, boat, boob job, expensive booze, and don’t forget the vacations. Man could those people spend on trips. Heck… we’ve seen that restaurants have had trouble selling high end liquor for over a year…

Sadly, there are a lot of hard working people losing their jobs. Just look at tourism trends in Mexico. Kaput.

Got popcorn?
Neil

Comment by Cinch
2008-01-09 00:21:33

I beg to differ. Skis don’t cost much. A poor man can get a good pair of skis and a few lift tickets at his local slope. Ski vacation is a different story. A 5 day ski vacation for two to the Swiss Alps can go anywhere from $3K to $10K easily.

Cinch

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Comment by hllnwlz
2008-01-09 10:53:18

Are you kidding? Last I looked, lift tickets to Heavenly $85. Kirkwood? $80. Mammoth? $90.

Affordable? I think not, even when I have free digs at the g-rents. And, BTW, I’m in the top 7% of income earners in this country.

It’s my FONDEST wish that lift tickets tank with the drying up of HELOC money. I miss the half-pipe at Kirk.

 
 
 
 
Comment by Dan (from SoFla)
2008-01-08 19:14:31

Unfortunately, Greenspan won’t be joining them.

 
Comment by aNYCdj
2008-01-08 21:18:24

The GOOD NEWS about Mozillo:

He has HUNDREDS of THOUSANDS of Underwater options at $9.94

Whoo hoo…

 
 
Comment by aladinsane
2008-01-08 17:29:21

Real Houselives of Orange County

“Orange County lost more than twice as many mortgage jobs last year as any state except its own, California. O.C. lost more mortgage jobs than 49 entire states.”

Comment by Hoz
2008-01-08 18:05:11

Aladin Sane,
Is it because the OC housewives became mortgage brokers to refi their own house(s)? Thus they have only themselves to blame for being in lousy loans. lol

Comment by aladinsane
2008-01-08 18:10:05

Hoz,

Behind the Orange Curtain lurks more monetary mischief, than can be imagined…

Comment by Desertdweller
2008-01-08 21:03:17

republican terroritory

sorry, it just slipped out ;>

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Comment by housing hanky panky
2008-01-08 18:21:52

Hi there Hoz,

how was your xmas break?

Are you ready for the year 2008……….gunna be interesting.

Comment by OCDan
2008-01-08 18:32:38

You guys better not get me started on the Orange Curtain. Land of fluff an’ stuff. Hollyweird’s got nothing on South OC. We are truly the most ridiculous place on Earth. When the shtf here it is going to be bad. Infact, where I work in local goobermint we are already a million in the hole w/6 months left. Not sure how it will work out, i.e. jobs or materials cut. We’ll see, but all I can say is that there is no happy ending for OC.

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Comment by Neil
2008-01-08 19:13:45

Good luck OCDan.

Its pretty obvious its bad there. We wish you luck.

Below I see Ouro Verde is asking about boats for sale. Anyone else think the national shortage of boat slips just came to an end?

Got popcorn?
Neil

 
Comment by Hoz
2008-01-08 19:19:45

Please tell me about the fluff an stuff! I can dream. When the young ladies come into the taverns wearing 40 lbs of winter gear and snow mobile helmets, it is hard to get excited. No fluff an stuff. (Although it can be a lot of fun when the heated pool is open.)

Most of the young ladies I saw over the holiday had mustaches. Fortunately I was considered an infidel, a heathen, an American male.

Hey Luvs_footie I am as prepared for 2008 as I can safely be. I think interesting is to tame a word. I think terrifying may be more appropriate.

 
Comment by SaladSD
2008-01-08 23:39:35

My ‘hood is a little bit beach and a lot OC. Regarding the women folk, you have your two dreams. In one corner, the earthy chic who wears flipflops and gauzy clothing, healthy skin with little makeup and jewelry of international origin, in the other corner the uber-groomed ever-pubescent woman in designer branded garb, a French mani/pedi and 2 K diamond ring. DDs on Size 2 chassis are a popular option.

 
Comment by CA renter
2008-01-09 00:26:35

I think terrifying may be more appropriate.
———————

Hoz,

When you say stuff like this, it scares me…

What would you do if you were emperor of the US?

 
Comment by Troy
2008-01-09 01:34:37

OC, home of Wally George.

 
 
 
Comment by vozworth
2008-01-08 18:32:55

interesting things happenign the liquidation market of the toys, seems as though so many hard money lonas are tied up that nobody can afford the Prevost, the 6 Harleys, all the old timey shiny and nice great American made metal from ages past.

good thing too, Im almost ready to trade up my 79 Mazda.

Comment by Isabel
2008-01-09 10:20:31

I have been watching the Prevost market with interest. A lot of the ads for the used ones are now “Make an offer” I am tempted because my husband and I want to do quite a bit of traveling when we retire, however I think the maintenence and upkeep on those babies have to be deal breakers unless one of your relatives owns an RV service store or is a diesel mechanic. Just a guess though. Isabel.

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Comment by Ouro Verde
2008-01-08 18:42:07

Single females in the mortgage and related markets are screwed.
If they have a husband with a job its not as bad.

I heard about a mortgage guy who was making 300k a year in OC.
My family friend says he got an email from this guy announcing he is selling his office furniture.

I wonder how many boats are up for sale in Newport Harbor.
Anybody?

Comment by jbunniii
2008-01-08 19:12:51

Single females in the mortgage and related markets are screwed.

Why single females in particular? As long as they have the recommended 18-36 months’ worth of expenses in liquid savings, they should be able to ride out the storm. Same is true for anyone, regardless of gender.

Those who don’t have such a safety cushion will receive a valuable reminder of exactly why conventional wisdom is both conventional and wise.

So they actually win either way!

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Comment by Ouro Verde
2008-01-08 19:36:22

“recommended 18-36 months’ worth of expenses in liquid savings”
In Newport 36 months times 10k a month is a lot of money.
My friend’s wife said her single realtor women friends are in trouble.
They are used to living the fancy Newport way of life. Hopefully they didn’t invest in high risk hedge funds.

 
Comment by cayo_ron
2008-01-08 21:12:15

This brings up an interesting point. How many completely unessential jobs are going to go by the wayside as people stop buying crap like spinners for their Escalades and neon faceplates for their cellphones?

 
 
Comment by are they crazy
2008-01-08 19:17:05

Those faux bioches are going to be one angry bunch of women. What will they do with their time when they can’t sit around and show off to each other? Problem is we’ll all suffer - packs of angry formerly nouveau riche women on the roads in their A-B beaters (car just good enough to get you from A to B). What will their kids do in the car without movies to watch and all the activities? People that go from perceived rich to real poor are nothing but frustrated and angry and looking for someone to blame besides themselves.

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Comment by Desertdweller
2008-01-08 21:06:32

What about all the guys that are in the middle of getting their hairs replanted?
It won’t be pretty for either sex. Heres looking at em!

 
 
 
 
 
Comment by fred hooper
2008-01-08 17:58:12

Spot gold at $890:
http://www.kitco.com/charts/livegold.html

To the MOOOOOOOON!

Comment by fred hooper
2008-01-08 18:11:23

BTW, I had the misfortune of being in Bakersfield on New Years eve. Never heard so much gunfire in my life. It was truly scary. Semi and AR too. I’ve always said, if giving CA an enema, stick it in Bakerspatch.

Comment by Sammy Schadenfreude
2008-01-08 18:17:55

You, sir, are culturally insensitive! Celebratory gunfire is a cherished South-of-the-border tradition…viva la boom boom!

Comment by Mike G
2008-01-08 22:09:36

LAX rerouted their air traffic to approach and depart over the ocean after 11pm on New Year’s Eve — to avoid celebratory gunfire.

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Comment by Aqius
2008-01-09 00:03:28

I see yer Bakersfield gunshow & raise you a Fourth Of July gunfire show in Del Paso Heights. (home of the infamous Western Ave. foreclosure debacle. one street down, in fact.)

Del Paso Heights is a northern suburb of Sacrament, and lemme tell ya, back in 1992 the ex-wife & I had to huddle in an interior closet inside a 4-bedroom house just to escape the flying bullets.
A few weeks later the newspaper ran a campaign asking the gangbangers to stop firing their guns into the air. I believe a few people got beaned from the falling bullets. No scumbags, of course, just a few innocent bystanders.

When I flinched later at muffler backfires, people would ask: ” Gulfwar veteran ” ? I’d reply ” No, I live in the Heights.”

They would nod in instant understanding . .. !!

 
 
Comment by Professor Bear
2008-01-08 18:17:02

To infinity — AND BEYOND!

Comment by fred hooper
2008-01-08 18:29:50

Infinity…. How much money can banks create if fractional reserve lending allows demand deposits to go to zero? Now this is alarming: Demand deposit reserves in the FRB system have held about $40-45 Billion for many years. Now, they’ve suddenly plunged to about $12 Billion.
http://wallstreetexaminer.com/blogs/winter/?p=1314#more-1314

Comment by M.B.A.
2008-01-08 20:28:34

yes, most of them are now borrowed….this is disturbing.

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Comment by tuxedo_junction
2008-01-08 19:46:33

Start thinking about taking some of your chips off of the table. I wish I knew when, but gold over $1000 early in the year will remind me of $740 gold in Spring 2006. Just think that if you cashed out some over $700 you could have bought it back at under $600.

Comment by BubbleViewer
2008-01-08 20:09:51

Geez, you make it sound so simple. The problem is, when gold goes down, it goes down HARD! Very, very, very, very few people (perhaps 0.5%) have the intestinal fortitude to successfully carry out such a strategy. I know, I know, it sounds simple and makes sense, but it leaves out one important thing: human psychology. Our brains give us a million and one reasons NOT to buy back in. By the time we get our act together, gold has made up most or all of its drop and is off toward new highs.
The best strategy IMO (and easiest from a psychological viewpoint) has been to consistently accumulate gold. Just buy some every month. Some months you will pay more, some months you will pay less, but overall, you will do well, with a lot less stress.

Comment by frcp_23_b_3
2008-01-08 21:21:03

Only one thing to add…physical….must buy the physical. It’s hard to buy these days since I’m now paying 100% more than I was just two years ago but there is no other place suitable to store cash. The time will definitely come to cash out, but that day is still far off (price wise…not necessarily time-wise). You’ll know when it is time to get out of gold when the dollar hysteria is at its peak and there is nothing but doom and gloom everywhere. It’s misleading to use charts or recent number to gauge when to sell…this is all mass psychology at work and I’m convinced gold will be the next bubble. When you see Ed McMahon peddling St. Gaudens on TV, then you’ll know it’s time to get out.

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Comment by SanFranciscoBayAreaGal
2008-01-08 21:30:57

Bubbleviewer,

Sounds like this is dollar cost averaging.

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Comment by Anthony
2008-01-08 20:09:51

I noticed Silver is finally outperforming gold. It should, as a commodity, Gold is absolutely useless. It costs far more than its intrinsic value, plus that is where all the “hot” speculative money is going these days.

 
 
Comment by palmetto
2008-01-08 18:05:11

“Los Angeles-based KB Home, one of the nation’s largest builders, reported a fourth-quarter loss of $772.7 million versus a loss of $49.6 million in the year-ago period.”

Don’t worry. They’ll keep building and make it up on volume.

 
Comment by Professor Bear
2008-01-08 18:15:50

‘The median price of a home has dropped 20 percent since it’s peak in 2006,’ said appraiser Gary Crabtree.”

“Real estate agent Jon Vaughn walked TV-17 through one of those homes Monday. The four bedroom, 3,000 square-foot house might have sold for more than $600,000 two years ago, but Monday, it was listed at just under $406,000.”

(406/600-1)*100 = -32.3 percent drop — much worse than expected?

Comment by Troy
2008-01-09 01:38:10

Fresno’s seen the same 30% drop from peak. $417K limit is a real bitch now, I don’t expect to see it survive the year.

 
 
Comment by Blacque Jacques Shellacque
2008-01-08 18:25:23

“Well, these days, it’s so much more affordable.”

This is relatively speaking, of course….

 
Comment by GPBlank
2008-01-08 18:58:04

Well here’s a “bear” that didn’t fare well today…Cayne is out.

http://biz.yahoo.com/ap/080108/bear_stearns_ceo.html

 
Comment by Cliss
2008-01-08 19:27:36

“‘The median price of a home has dropped 20 percent”
“46% of all single family houses sold were actually foreclosure properties.”

OMG…the blood has really started pouring.
ALREADY the number of foreclosures is up to 46%? That number shocks even me, the most jaded & cynical of them all.
The reason why it’s so scary is, this meltdown has just started. We are really at the beginning phase of this thing.
It’s been gathering strength, but it’s been fairly slow.
I’m not sure if slow is the word. I think things have been happening under the surface, but public awareness has not been completely there.
I think at this point, it’s going to start gathering strength. Like a snow ball that’s rolling down hill.
Bigger & bigger as it rolls.

Comment by OCdan
2008-01-08 19:34:45

Don’t want to overpredict, but jubunniii may be spot on about the 18-36 months of savings. If this gets as bad as some have predicted, well, let’s just say souplines may come back into vogue.

Got Depression?

Comment by Ouro Verde
2008-01-08 19:43:57

Today I am ready for recession.
I’m scared but I’m ready.
What kind of people buy the 10 year bond?

Comment by M.B.A.
2008-01-08 20:33:31

I am not sure if we are ready for this one

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Comment by frcp_23_b_3
2008-01-08 21:24:11

I don’t think anybody could be ready for what’s coming, save for a few multi multi millionaires who have planned accordingly. What’s coming, what’ imminent, is going to be very painful - even for gold bugs. Hold on…

 
 
 
Comment by are they crazy
2008-01-08 21:01:29

The other part of the plan is low overhead, particularly for those that don’t have that much savings. If all you have to worry about is day to day living - no credit card debt, no car payment and reasonable rent and utilities, you can make it on much less moolah.

 
 
Comment by Professor Bear
2008-01-08 19:49:37

As noted above, at least one home in Bakersfield has already dropped 32.3 percent from the last sold value… further drops lie ahead with the death of subprime and a recession weighing on prospective buyers’ purchase decisions.

 
 
Comment by charlesH
2008-01-08 20:25:21

I have >$17,000 in an etrade account I have been trying to close since the middle of October. I cannot get etrade to send me the money. Is anyone else having trouble getting money out of etrade or any other bank?

I have called 7-8 times and sent 4-5 secure emails but still no money. The check is always “in the mail”. Now I’m quite sure I know what is going on. etrade is strapped for cash and management has instructed everyone to drag their feet on account closure requests.

Does anyone have any ideas how I can put pressure on etrade to give me my money back? Can I get the FDIC to to something?

Comment by Bloz
2008-01-09 05:33:56

Etrade’s strategy is to keep the account going for as long as possible and keep leaching fees. That was my conclusion from having an account with them a few years back.

Never did close the account, it just sort of evaporated.

 
 
Comment by housing hanky panky
2008-01-08 20:26:08

Found this on another site……… :smile:

Structured Finance Explained

Jack’s wealth is professionally invested
In a safe managed fund who collected the fees
That invested in a fund of funds who collected the fees
That bought an exotic and inexplicably high-yielding AAA-rated security with no questions asked
And then five more on credit
And then bought twenty-five more using the ones they bought on credit as collateral
That were issued by a structured investment vehicle
That was created to evade bank credit risk regulations
By the bank where Jack’s cash sits, insured by Jack’s taxes
That was owned by the securities dealer who collected the fees
That created the synthetic CDO
That was rated AAA by the ratings agency who collected the fees
Out of twenty credit default swaps written against the same single security
Whose default risk and value was derived from a model of the CDO-cubed
That bought the CDO-squared
That bought the CDO
That mixed together different kinds of extremely risky securities to magically remove risk
And whose collateral consisted of credit default swaps, interest rate swaps, and non-performing loans
Plus a little bit of that high-yielding junk-grade mortgage-backed security
That was issued by the mortgage banker who collected the fees
That funded the broker who collected the fees
That funded the huge negam mortgage with the teaser rate
That bought the land
That lay under the house
That Jack built.

Comment by M.B.A.
2008-01-08 20:37:08

that about sums it up perfectly

 
Comment by OCDan
2008-01-08 20:44:49

Something this complex nevers ends well when it falls apart. Too much interlinked.

Good grief this is going to be one ugly mess when it falls.

Comment by implosion
2008-01-08 21:30:01

I guess we’re going to find out how robust this nonlinear system is to some good size perturbations.

 
 
Comment by cayo_ron
2008-01-08 21:29:05

Makes 1929 Wall Street sound like a bunch of amateurs!

 
 
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