Bits Bucket And Craigslist Finds For January 9, 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.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
November 2024 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
A Fresh Jolt…
http://www.businessweek.com/investor/content/jan2008/pi2008018_503594.htm?campaign_id=rss_daily
All this bad news is a clear indication that housing is about to bottom out.
I disagree. The MSM may have figured it out, but J6P still thinks RE is the only way to riches. When the guy next door, the gal at the check-out stand, and the dude that changes your oil are all convinced that RE is the worst possible investment, then we’ve approached what we might call a bottom.
xnnv, Mr. Stucco is just being humorous
Sorry my sarcasm was not obvious, xnnb — I was just razzing the serial bottom caller brigade…
My bad - the result of an uncaffeinated posting.
http://www.latimes.com/news/local/la-me-towers9jan09,0,846288.story?coll=la-home-center
This should go on the CA Thread but interesting story on Westside>Century city( LA) deal between developers of planned hi-rise units and several westside home owners groups. More on this on CA thread.
BTW i have a good knowlege of present/future traffic /area impacts of that project in Century city, and it will be less than what everyone thinks. SFH’s/neighborhoods in Westside actually have more adverse impacts on Westside traffic congestion as their residents use their cars constantly, whereas apt/ condo owners in Cent city /Bev hills more likely to walk or stay put in their abodes. They willl need to make Cent city a Bit more walker-friendly but maybe the recent improvements along Santa Monica blvd are designed to do that.
Have not been in that area since early 2007 so if any recent changes plse let me know.
MIL lives in those chateau condos in CC. There’s not much traffic until you go out on Pico or Olympic or up towards the mall.
“MIL lives in those chateau condos in CC. There’s not much traffic until you go out on Pico or Olympic or up towards the mall. ”
Olympic blvd faster than Sm blvd for getting into or leaving CC. IT is in fact a relatively faster thoroughfare thru westside than the standard westside rtes of Wilshire and SM blvd. CC itself pretty light traffic wise within the immediate hi-rise area as all office workers walk out to dine at lunch. Constellation ave from ave of stars to cent park west surprizingly underutilized in area traffic flows.
Traffic movements are heaviest in that area from 405/CC east to Bev hills along Wilshire or SM blvds both in morning and afternoon commute times. Adding several hundred more CC hi-rises won’t have much more neg impact in westside traffic flows, as those owners will stay put most of time within their abodes.
The moneys extracted by those homeowners(7.5 MIl)from the developer should be put to use making CC more pedestrian/bike friendly. The entire westside/city of LA could stand Better safer Bike baths and less cars.
Sorry to put this post so high up, otherwise, won’t find the answers you post…
What do you guys know about eminent domain and statute of limitations or?
Father just told me of land he owned in Phoe AZ which was taken and now he is interested in finding out if he can get $.
Well, here is the ’shoulda had a V8 hit the head moment’, this land is where the Speedway is, taken in…..drumrollll
1960 or thereabouts.
Well, I think he is nuts to suddenly come up with this one, day late, lots of dollars short..
But, just to satisfy my curiosity, Eminent domain, and Statute of limitations for lack of ??
Thanks so much.
Meds must be getting to him.
This media report Is Huge (to my mind.)
What is amazing to me here is that in December of 2006 when the estimate of 20% foreclosures among sub-prime loans was published and the mortgage implode-o-meter went into overspin-broken-needle mode as (unspoken) realization spread, that 20% of sub-prime estimate was treated as the wacko fringe in the media.
Now we have Deutsche Bank reported in the media saying that a more real “worst case” in sub-prime is 40%. And the 20% estimate is held out as kind of a best case where home prices only decline 5 - 10% further in the next 2 years.
—
“Deutsche Bank’s Hooper says the future direction of home prices may be determined by whether subprime homeowners—those with riskier credit histories and mortgage payments that are resetting to higher levels —can avoid foreclosure. Under a worst-case scenario, 40% of subprime mortgages could foreclose, and house prices could drop 15% to 20% over the next two years. If foreclosures are confined to 20% of subprime borrowers, prices could fall 5% to 10%.”
—
So what are the current “unspoken assumptions” that lead them to make public such a large revision in banker’s thinking since last years crackpot prediction. What (if any) was the home price depreciation assumption in that original report? Now that actual “historically unprecedented” national home price depreciation has actually happened?
Media Report on Center for Responsible Lending (CFRL) warnings, SF Chronicle, Dec.20 2006:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/12/20/BUGK2N2M011.DTL
Way To Go Doug Duncan, Mortgage Bankers Association!
“They’re picking the most pessimistic scenario to draw their conclusions,” said Doug Duncan, chief economist for the Washington group. “We don’t share that degree of pessimism.”
I guess he took over when David Lereah left that august institution?
This media report of the CFRL studies says:
“The Center for Responsible Lending said its research is based on an analysis of more than 6 million subprime loans issued between 1998 and October 2006. The group used housing appreciation forecasts from Moody’s Economy.com to calculate foreclosure risk.”
OK, now I get it: They used actual data. No wonder no one agreed with them then.
I won’t even bother looking at “Moody’s Economy.com” to see how much housing DEPRECIATION was estimated, at that time.
So assuming the wacko fringe 20% subprime foreclosure forecast assumed rosy estimates of appreciation, perhaps the revision in bank thinking from 20% worst case to 40% worst case has only to do with the effect of depreciation worsening the subprime sector. Perhaps.
OR maybe the real unspoken assumption these days is a sober realization that alt-a and prime is going to make it even worse.
How much, if any, of the real bad news is reflected in the Deutsche Bank numbers so far? No wonder no one will loan money.
Hmm… I guess that selling everyone houses they can’t afford with loans that blow up in a few years causes some problems a few years later! And never mind the loss of “wealth” effect as people no longer can hit the housing ATM for more debt - I mean “money” - to use to buy junk.
Yes, I think “toast” is an appropriate description.
This silly article assumes that all price declines must arise from subprime defaults. No notice of rent being cheaper!
It’s still “subprime all the time” even though it clearly isn’t. Prices will revert to historic means or maybe lower if wages remain stagnant. The number of subprime or other foreclosures may affect how quickly we get there, but not whether we’ll get there. In this case, foreclosures appear to have a greater impact on how quickly prices will fall and less on how far they will ultimately fall.
price declines result from the lack of price increases, not mortgage defaults…. hold on, i’m not retarded. let me explain.
inflated housing prices were based on the idea that the house was desirable as an investment. as long as capital appreciation was occurring at a certain rate above say bond yields, the principal price was going to increase proportionally, in a positive feedback loop.
subprime defaults may be correlated with a halt to capital appreciation, but they are not the same thing. it is the lack of capital appreciation that will cause price declines, with the same positive feedback mechanism in the opposite direction. this will happen, as stated above, until it reaches the rental equivalent. where the house is valued for its utility, not as an investment.
the investment premium lives or dies by the delta. if prices are not changing, there is no reason to pay more than the rental equivalent.
just one man’s opinion.
KB is certainly losing money on land writedowns, etc… but are apparently still cash-flow positive. This says a great deal about what it really costs to build a house. And this also explains why builders continue to build in the face of the housing crash.
Imagine what happens to the construction guys, after these last few pyramid schemes are completed, or funding runs out?
They go from being hands-on can-do workers, to the possibility of almost no work.
Who is going to build anything else new?
Who is going to remodel their house, or add on?
‘Who is going to build anything else new?’
That is sort of a “future shock” isn’t it?
I doubt many individual houses were built in 1931-39…
Why does this site eat posts?
Major retailer in the UK reports awful same-store numbers. So much for the US economy decoupling from the rest of the world.
http://www.marketwatch.com/news/story/marks–spencer-tumble-drags/story.aspx?guid=%7B70B3A50F%2DA964%2D4122%2DAD1A%2D71C26C8B6941%7D
Yep, China is bubblish too.
http://www.bloomberg.com/apps/news?pid=20601109&sid=asHHCFxqtoM0&refer=exclusive
“They have been growing aggressively, with the view that if they don’t buy now, it will be more expensive for them later” to acquire land, Lau said.
Yup, buy now or get priced out. How do you say FB in Chinese?
Pronunciation is ‘my fang zer’. Some of them have so much mortgage that are called slave of the house in Chinese ‘fang noo’. By the way, most mortgage requires more than 20% down payment and 2nd house for 50%.
U.S. Will Escape Recession as Consumers Hold Up, Economists Say
http://tinyurl.com/26keaf
Economists put the odds of a recession developing within the next year at 40 percent, according to the median estimate. Nine of the 47 economists responding to the question put the odds at about even and five said the economy would contract.
At least there are 5 of 47 that can tell it like it is. All these others are just wishing and hoping since the happy homeowner’s spending patterns will continue to contract.
One of the blog wordsmiths characterized the eternal optimists of Wall St and BernankeBushPaulson as the Axis of See No Evil. He was spot on. Ignore the growing grassroots agitation and make believe it will go away. I got a bulletin for these incompetent AssHats.
WARNING: recessions are much closer than they look to economists that just use the rear view mirror
Forward thinking is so 20th Century.
Did you know you can drive with the steering wheel hooked up backward? Engineering anecdotes of a test where the grad student drove around quite successfully for 30 minutes.
Leaving the test site, however, he drove his street car off the road
WARNING: recessions are much closer than they look to economists that just use the rear view mirror
Yha, but fears of 9/11 killing the economy is a lot of what got us into trouble. Sure, travel took a hit and .com needed to deflate… but consumption didn’t really slow down…
The case could be made that trying to fix a problem that was misdiagnosed is much of what created the credit boom.
The 9/11 boogeyman has worn so boringly thin.
“…trying to fix a problem that was misdiagnosed…”
That critique has a far broader scope than the credit boom…
I agree that the quick fixes from Greenspan and Bernanke have only made the mess bigger. Economists and central banksters think they can have the economy party forever by pumping more money every time a slight recession looms. They are going to find out the hard way that they are wrong. Trouble is they will only recognize that after the damage is done (if ever …).
Similar to saying the Titanic will stay afloat if the gaping holes below the waterline will magically heal themselves. The “consumer” is done, consumed from within by his own greed and stupidity and from without by the debt pushers.
Sunny Florida Losing…
http://www.washingtonpost.com/wp-dyn/content/article/2008/01/08/AR2008010803890.html
From the article, “Patty Duncan, 44, one of the stylists in York’s shop, worked as a real estate agent during Florida’s frothy boom. Then the market went bust. “It turns out I like this better,” she said. “You’ll always need haircuts.”
Good for her, at least she found something she likes.
Talked to a man from TN working in Lake Havasu City, AZ. He planned to move to FL as soon as his job in Commercial Construction was done. Thing is he bought a house. Lake Havasu City has 1,800 homes for sale in a town with about 56,000 people.
Way too many SoCal speculators in that AZ town so prices should be coming down in 2008 and beyond.
I think she will soon learn that haircuts, like maintenance, can be deferred to half their “normal” levels
although as someone earning an honest living she shouldn’t be grudged.
I always thought a barber’s business was recession-proof until I went for a haircut the other day. My barber said business was down significantly in spite of all the snowbirds in town. He claimed his customers were going two months between cuts instead of one month and the construction workers have disappeared. FL recession is here I’m guessing.
Years ago when we didn’t have a lot of money I learned how to cut my husband and 2 sons hair. We have saved a bundle over the years. I, however, still have to get mine done. I don’t think I’d trust my husband with a pair of scissors.
I’d be more concerned giving my wife a haircut and then later letting her cut my hair. For some reason I sense a stabbing motion after the terrible haircut I’m sure my untalented self would give her.
At least she’s contributing something to the economy, which is more than can be said for everone from true “flippers” to doped-out executives at investment banks. I think we need a little less CON in our economy going forward!
“I think she will soon learn that haircuts, like maintenance, can be deferred to half their “normal” levels”
Indeed. My last haircut was in 1987.
Oh I didn’t consider the possibility of underwater FB’s tearing out their hair when they see the bills
I can atest this. I was there in December and the number of for sale signs was out of sight.
I have a friend with a house for sale in Lake Havasu AZ. I’ll let you know how she does.
get yerself a set of electric shears. haven’t had a haircut in two years now. i just set it to 3mm and i look… well, i look as good as i did with a haircut i guess….
“Campbell McGrath, a Miami Beach-based poet and the author of “Florida Poems,” blamed the slowdown largely on real estate prices. But he echoed many who see the despoliation of Florida’s landscape as a source of the disenchantment.
Ridiculing some of the large condo projects that rose on the beachfronts during the boom as “Soviet Union rejects,” he opined that “when you put a 70-story building on every square inch, it’s no longer a kooky, open-ended paradise. It’s an overbuilt junk heap.”
Amen, Brothah! Gulag architecture has taken over the landscape. Must have something to do with globalization. Bring everything down to a nice, dull, ugly sameness. We can all be equal. Isn’t that nice?
If they build it, will anybody care?
Fields of American Dreams
alad, what was it you were saying a while back about development ruining the land for agricultural purposes? Even if development are bulldozed, I think you said the land has been made worthless for growing anything for a very long time.
Happy New Year palmy…
That’s what I was told by a friend that has a few fruit trees, 8,000 of them.
alad, d’you know how long the land is useless? How many years? Forever?
I think you can bring the land back to growability, but it takes heavy machinery and cost to do it, and there is no shortage of other land to grow things, in the Central Valley.
So the land just sits, packed dirt.
Top o the mornin Palmy and Alad. I read a blurb about this particular subject sometime ago and promptly forgot the exact timeframe but it’s the topsoil that is the problem and it takes decades for a good topsoil to form. Organic material like deciduous leaves,etc need to break down and add the necessary minerals/nutrients, which plants and trees pull up from deep in the ground, in order to have decent fertile ground. Apparently the fertilizers that have been used in abundance (carbon based) eventually burn up these minerals as well. I think I read where it takes dozens of years per inch of topsoil, it’s not a good situation.
Add to that what the industrial fertilizers do to the water table. If you have a location where the salt build up can not drain out (like much of the central valley), it’s ever worse.
The CV used to be lush farmland until we overworked it.
High density housing replaces much larger swaths of suburbia, preserving open space for agriculture and natural preserves. It’s unfortunate that urban condos are built in such bubblish manias instead of well-planned in concert with mass transportation options.
As it turns out, that was tried in Portland and they couldn’t get developers interested because no one really wanted to live in condos and apts near the light rail depots.
Like it or not, people do not like living like ants in an anthill, jammed next to their neighbors so they get to enjoy their loud “music,” trash, and general stupid behavior.
What would make alot more sense is smaller homes on decent-sized lots that are preserved in such a way to encourage things to grow: keep trees (protect the roots!), keep the topsoil, etc. It would also be better for people’s mental health if they were not so cut-off from nature. I can’t imagine that living in lifeless, dense urban housing or giant McMansions jammed together on tiny lots is really good for one’s well being.
First, who cares what people “like?” Wonder what is going to happen when 2.5 billion chinese and indians decide they too “like” suburbans sprawl and three cars per family?
And second, come to Hawaii if you want to see what your vision of suburban sprawl come to life. 5000 sqft lots with cheaply constructed 1200 sqft homes, packed tightly together. They’re “houses,” but you still get to enjoy the neighbors’ loud “music,” trash, and general stupid behavior.
That’s because American mid rise condos are built like crap. Spending a few $$$ on high quality construction, with materials like concrete rather than wood will get you a really nice, (largely) soundproof home no different in comfort than many SFHs. That’s not counting the conveniences that may also be available (doorman, high speed elevators, underground parking - on the rare occasions you need to drive, convenience stores nearby…). The problem is the use of cheap materials unfit rather than the concept of high rise living itself.
Hm. Don’t oversell the condos. You will hear your neighbors when they are loud, even with the best materials. However, not all of us need or want a yard to deal with, fence, whatever. Heating will be cheaper in a complex. I prefer the anonymity of an urban condo over an intrusive HOA or even regular neighborhood relations. Honestly, I’d rather live as a hermit in a mountain, but the reality of our modern society is such that we need to live close to each other for convenience, and perhaps the urban high-rise condo is the most efficient way, especially when coupled with mass transit. Suburban sprawl definitely is not the answer.
“Ridiculing some of the large condo projects that rose on the beachfronts during the boom as “Soviet Union rejects,” he opined that “when you put a 70-story building on every square inch, it’s no longer a kooky, open-ended paradise. It’s an overbuilt junk heap.”
Plenty of turkeys like that one put up all over LA/OC/IE .
here are some darwinian awards for building design and planning /location>
1 Anaheim( OC )Platinum triangle has two to mention:
3 Chapman ave. Condo/apt projects jammed into a narrow triangle between the 5 , 57 fwys and chapman blvd.
Stadium lofts corner Katella off state college blvd. Nice views of a bulldozed flattened former industrial landscape. China- style urban eradication and leveling at it’s best.
2. Vero lofts 1234 wilshire . Stuck at far west edge of dwtn smack into pico-union (gutted third world illegal- alien safe haven district), Next to new high school which will provide plenty of target practice for the abundant gangs in that area.
3. Fusion on Aviation ave in LAX area. Complex sited smack in middle of industrial area of El Segundo/lax.
4. Playa Vista conso off lincoln /jefferson. Looking from the west they resemble massive hydroelectric generators.
5. Cheap condos on Western and arlington in Torrance,
Destined to be section 8 even before the first foundation was poured.
6. Pomenade lofts in dwtn LB. Putting up milliin $ lofts in dwtn LB where 80% of population barely make the minimun wage.
This s is very short list. No mention of IE because it would wear out my eyes and fingers to post the hundreds/1000’s of eyesore landscape- destroying crap projects put up all ove r the IE.
Of interest, the Disney company fought tooth and nail against a developer that wanted to build condos within the Disneyland “resort” district (on Katella). IIRC the developer suddenly backed out of the fight, perhaps realizing that they wouldn’t be able to sell the condos they planned on building. Again, IIRC, the land will be used instead for commercial/hotel space, which Disney is much happier with.
You are forgetting all the condo/lofts stuff where “they are trying to fix the old town areas in Anaheim (4 projects near Harbor and Lincoln), Brea downtown, one near Orange Circle and Fullerton.
Then there are condos/lofts right next to the train station refered to as transit close: Anaheim (3 in Anaheim where the train crosses roads), a couple in Orange, one in Fullerton right at the station (actually bought on of the old homes and moved it to a nearby location), aparently some going in in Yorba Linda and Corona, Irvine and a few other places. I lived next to the tracks in Anaheim, the wife and I loved it. We would lipsync with the whistle and bust up laughing, it was especially funn at 0500 when we were just getting up. Then people would complain that they wanted trains to no longer use the whistle when crossing streets, hell you should have know trains whistled when they moved in.
Every morning I got through Craigslist RFS. It’s really amazing. Even though you can’t turn on a television or pick up a newspaper without reading about the housing crash, I would say that 75-80% of the listings are still way overpriced. People just don’t get it.
People still think their house is a lottery ticket. Sure, most lottery tickets are losers but the particular lottery ticket they hold is a big big winner. (you just don’t get it).
Until you spread your wings you will never know how far you can walk!
De-nial. Its not just a river in Egypt.
Even if they ‘get it’ I suspect most simply have no choice. They are underwater, and can’t afford to sell for less and bring a check to the closing.
Yep. The only other alternative is leaving the keys on the table. So may as well take a stab in the dark first and see if you get lucky.
For some people anyhow. Many I’m sure it’s just a pride and stubbornness thing, combined with some ignorance of the real state of the housing market.
I’d say it’s about half and half. Half are underwater and half think they’re entitled to make a 200% profit. Either way they’re both going to lose. The underwater group will go to foreclosure and the entitled ones will either foreclose or ride the price wave all the way to the bottom and in the end get less than they paid.
I frequently compare craigslist listings in tampa to the tax records. So many of the houses listed were purchased in the last 3 years and have $100,000 added to what they paid for it. Most of the craigslist “sellers” are delusional. But in the last week or so I have seen some listing prices that are closer to original purchase price. Of course, several of those are advertised as short sales, too.
I compare the asking price on craigslist to the zestimate on zillow. If the asking price is way too high, then God bless and good luck. If the asking price is more than $10,000 below the zestimate, I helpfully update Zillow’s data and mark the property as “for sale”. All this you can do as a 3rd party on Zillow.
It’s win-win-win. Zillow gets more accurate data, the seller gets free advertising from my labor, and I feel like I’m speeding up the slow-motion train wreck. Unless, of course, it’s win-win-screwed, but it’s neither me nor Zillow getting screwed, so F it.
I also check craigslist and zillow frequently. I rencently found a 2/2 condo in S. Beach that is priced $180K below Zillow estimate. The problem is I don’t know if Zillow is incorrect or is there something wrong about that condo/building that I don’t know about. The same building has another comparable unit for sale that is also almost $200K more. It is the biggest difference between asking price and Zestimate price I have seen so far.
I do the same thing here on L.I. and it’s not just the house prices. My hubbie and I have been looking for a house rental for a few months and what cracks me up is the amount of FBs that are trying to rent their houses at 2500-3500 a month. As if! they advertise everyday, the same stupid post for weeks and weeks. I can’t help but wonder what kind of idiot do they think they’re going to get in there. three or four generations of illegal aliens? College students?
I see that too. I called one idiot on it, a property manager, and she told me the “investor” “needed” to get the ridiculous rent amount. I then asked how much the “investor” is losing by having the place sit empty for 6 months instead of renting it at a market rate. No answer.
“I don’t think that word means what you think it does…” applies equally to “investor” and “needed”
‘I then asked how much the “investor” is losing by having the place sit empty for 6 months instead of renting it at a market rate. No answer.’
LOL
danni where on li are you? $2500 to $3500 better be in old westbury or manhasset!
li is toast and everyone knows it except some fb’s
Seaford
My hubbie and I went to go see a house that was falling apart to rent, the guy owns the house outright and was asking for 1800+utilities. We said 1500 and the realtor says that I wasn’t being realistic. I told her he can feel free to rent to someone like the last renter who hadn’t paid in three months and trashed the house.
He’s now trying to sell it for 349k.
Oh, and we said we would only rent it if he fixed the roof and updated the kitchen which was a nasty hellhole. The bathrooms were newish.
How about Mill Neck 11765, the most expensive zip code in the USA?
I went on Craigslist and Allspaces.com and couldn’t find a single listing for Mill Neck however a couple of places in Oyster Bay and Bayville (both within a couple of miles of Mill Neck) showed house rentals at 4000/mo.
It doesn’t matter where you are. I’m in a nice suburb here in Detroit, MI but my next door neighbor, an investor’s empty house, is sitting for sale or rent. Sale price is $680k and rent is $3,700/mo. The house has been sitting now for almost 3 years! No budge in price and no budge in rent. What a joke!
“My hubbie and I have been looking for a house rental (on LI) for a few months and what cracks me up is the amount of FBs that are trying to rent their houses at 2500-3500 a month. As if!”
Danni,
I’ve seen similar prices on newer homes for rent here in the Syracuse area where avg income is probably a lot lower. But I think they are getting it because the listings soon disappear. Due to a very low rental inventory, all that’s left is the run down areas with little or no yards and scary neighbors (like a guy that set his apt on fire last year because his neighbors wouldn’t talk to him) for $850 - $950.
Of course there’s always what I call the metal box option for $750 ish if the coin op laundry thing isn’t too overwhelming after having your own 1st or 2nd floor laundry area.
I told my husband in jest that the kids and I are gonna go rent in some bubble zone. Then he can just fly out and see us on the weekends. He didn’t think that was very funny, though.
Syracuse? Good Grief!
But ya know, the listing for it might disappear because the fb decided to hand in their keys….I find alot of times the “rental” thing is a last ditch effort to save the house but when no one is willing to rent for such an assine price….well, end game.
I don’t think there are many reasons for someone to pay $2,500+ per month for rent in Syracuse. You can buy a hell of a nice place there for that kind of money. Besides, there are few there that can afford that kind of rent anyway. Here in PBG FL that gets you a nice place. In Syracuse it should be a mansion.
Wonder if you or others have seen the Craigslist housing forum recently? There are still people bullish on RE! If you’ve been missing the trolls that used to come here, you can find them on Craigslist HoFo. There’s one especially good one that goes by “elite_homeowner .” LOL
I’ll add this to the bullish on real estate.
http://bostonreb.com/2008/01/08/can-i-have-a-job/#comments
there are more jobs paying more money today, yet the housing market is in the doldrums.
Yeah but what he doesn’t take into account is that someone got a $200 a month raise. Gasoline expenses jumped $200 mo, food $150mo, taxes $150 more a month, utilites up $100 mo, house payment $1500 more a month. All of sudden they’re in the hole $1900, but hey they got a raise, right.
Yeah, I take that idiot on from time to time when I am really bored. I also have fun flagging off realtor ads and foreclosure scammers, “investors” and the like.
Thank goodness we still have optimists left. The stock market optimist shortage of late 2002 killed an unprofitable company I was with at the time.
Oh, they are sellers. Forget I spoke up.
Was it Allegiance Telecom?
Nah, small racing video game company morphed into a “web portal”! (That seem so 2002-ish). But we did contribute to WorldCom going under - I think the company died owing them $70k for bandwidth.
FUNNY STORY
saw on the news last night some fb in florida is offering 4 tickets for hannah montana concert (maybe tops $1000) free with her 300k home
just lower the damn price already s%%T for brains sheesh!!
I still haven’t understood why Hanna is so incredibly popular. Sure, she’s a nice kid, she can actually sing and has a popular TV show, but she’s not the Beatles. I guess Disney marketing did their homework.
For the same reason Romney is getting a lot of votes, lots of Disney $ spent on marketing and a friendly, vanilla product people feel safe with.
People are underwater and have just decided to wait out the foreclosure process. Foreclosures, IMO, always lag the market.
Went to an open house Sunday. Before I went in, I calculated the selling price, putting myself in the mind of the seller. I came up with $285k, about 50% overpriced for the condition of the property. Just seeing the place from the outside, the place clearly needed work.
What was the price on the brochure? $289,900. This for a circa 1945 frame cottage with a slapdash 1988 addition that was erected with 1970s era materials. One acre. The inside was ROUGH - every room needed work.
The realtor was spieling the other open house attendee, starting by schmoozing her about her kid. Then the pitch began: VISUALIZE, he kept repeating. He told her where the bearing walls were located, and which ones could be knocked down.
All I could think was I hope that lady is VISUALIZING 200k just to get the place habitable, and a parade of contractors in and out of her house for the next six months. Because that’s what it would take.
Oy
One of my biggest pet peaves of the bubble was the fact that fixer-uppers were getting fixed-up prices by ignorant buyers. How is it that people can ignore the costs of renovations?
How is it that people can ignore the costs of renovations?
I don’t know. And whatever you get quoted, add 20%. The yuppies moving in around here must be living off the Bank of Mom and Dad, or maybe they just haven’t run the numbers.
Whenever you watch This Old House, do any of the crew talk about real costs? No, it’s just swing a hammer here and run some electric wire there and before you know it you have the Doll House of Your Dreams.
All I could think was I hope that lady is VISUALIZING 200k just to get the place habitable, and a parade of contractors in and out of her house for the next six months. Because that’s what it would take.
Well one thing’s for sure. She won’t have any trouble finding a contractor.
Maybe it is a regional thing. In Austin/San Antonio we spent 6 weeks checking Craigslist on a used car…
First you have to deal with all the dishonest people and worry about such things as post-Katrina flood cars (especially SA and Houston).
But the bigger thing I noticed was that used cars were just holding their value too well. Why pay 80% of new when car already has 60,000 miles and no warranty (say a 2004). Honda, Toyota, Saturn and other quality smaller cars were all overpriced.
As much as a used car has some economic value… you have to face ow other idiot consumers influence things [just like the housing market of past years]. I came to the conclusion that people who couldn’t afford a new car price were paying ANY discount, no matter how small. Pretty stupid to buy used with warranty gone and only save 20%.
So we got basic transportation: Scion xB (Toyota) for $16500 [yes, we drive Stick, more fuel efficient and cheaper to repair]. Although marketed at 20-something ricers, it is a decent reliable transport that us 40 year olds like for all the space. Plastic but basic.
(I saw many dealerships selling certified and non-certified used cars for more or equal to new car deals I could get. Nuts)
“I came to the conclusion that people who couldn’t afford a new car price were paying ANY discount, no matter how small.”
I would agree with your conclusion. It is pretty much for the same reason that “loosie” cigarettes sell for $1.00 apiece - people can’t come up with $7.00/pack (Chicago) but they can come up with $1.00 or two for a few smokes.
The consumer is kaput.
But the bigger thing I noticed was that used cars were just holding their value too well. Why pay 80% of new when car already has 60,000 miles and no warranty (say a 2004). Honda, Toyota, Saturn and other quality smaller cars were all overpriced.
Chalk it up to good marketing. People really believe that a 3 year old Toyota/Honda/Subaru/etc. with 60,000 is almost as good as a new one. Truth is they are only worth about 50-60% of new car price, and only then if they are very clean and well maintained.
Wife and I bought a 2004 subaru in the summer of 07 for $12,100. New it would have been about $19k after tax. Seemed like a pretty good deal to me, 37% off the cost of new. But, I imagine in 2012 or when we have enough cash saved, we’ll get our next Subaru brand new.
bought it with 64k miles. running well, no regrets. i’ve heard that the steepest depreciation on an auto is within the first three years. not sure if that applies to the fancy imports, though.
I’ve been driving my ‘96 for nine years now. Finally had to get the clutch replaced, at 107K miles. It’s an excellent rig for snow country. I hear they will last forever.
Our ‘94 volvo wagon gave way after 130k miles. Since we don’t have a mortgage we have all this money lying around and decided to splurge on a new car. Ended up getting a Mazda CX-9 fully loaded, for $300 off invoice. Not only that, but it was zero down and zero interest for 36 months. The car will be fully paid off by that time; only problem is the monthly payment (including the 4-yr additional extended warranty we bought) comes to $1100 which is more than half our rent!
I took the almost 40k required for this and put it in a money market fund yielding 5%. That’ll earn me about $4000 over the 3 years (while I’m making the payments from it), amounting to a 10% discount on the car.
The problem with the new car market is similar to housing. Current average transaction is approx. $27,000, which is about 30% too high for the average joe, IMO. The market will bring this down to an extent as people choose smaller, more fuel efficient cars [as in the xB -- hope you got the 150 hp engine], but look out for big rebates, starting in the spring at the latest and then, MSRP reductions.
I was talking to someone at a Big Six automaker yesterday, and she said their over $40,000 vehicles are in serious trouble.
This is my opinion, based on covering the industry for over three years. But the PWB laughed when I told them sales were going to return to the 15 million a year range [down from 17 mil], so wait for the experts to say it’s true. After it’s already happened, of course.
The market will bring this down to an extent as people choose smaller, more fuel efficient cars [as in the xB — hope you got the 150 hp engine], but look out for big rebates, starting in the spring at the latest and then, MSRP reductions.
I assume you mean the smaller engine from 2007 that has only 103HP. Actually I didn’t… I got the 2008 with 158HP. The 2007 vs 2008 xB really are two different cars.
I work at home (telecommute) and only drive 2 days a week… probably only 500 miles a week. And stick shift driven properly really can beat the estimated millage a lot. Plus, sometimes fun to have the speed when you live out in the country
Plug in hybrid is almost here, already working on an open source project with a guy who drives a self-modified Prius. I really want a mostly-electric… as almost all my trips are 80 miles or less (grocery runs, out to entertain a couple times a week).
The 2008 xB is really big, you can camp in it. http://images.motortrend.com/roadtests/intellichoice/369_0507_roadtests_s+2006_scion_xb_suv+interior_cargo.jpg
I didn’t buy it just for the MPG, it is a compromise like most other purchases.
Wife and I bought a new Scion xA (the really little one) a couple of years ago for under $15,000–cash. The Scion line is a tremendously good value, compared to the “regular” Toyotas. They come fully equipped and with Toyota quality. We’ve been very happy with the car and plan to run it for many years.
What I don’t get is people financing cars that cost $50,000 or more. If you can’t afford to write out a check for such a car, you really ought to consider a car that you can actually afford. Oh, but I forget, some people are just “entitled” to drive a BMW or Mercedes.
My last car was an ‘04 model on the lot when the ’06’s came out. It had 300 miles on it and it was pretty sharp looking. They had no reason why it didn’t sell, so we bought it at a $12,000 discount and full warranty. We’ve had it 2 1/2 years and never a problem. We’ve always looked for cars like this and every time we’ve found one. Full warranty, hardly any miles and then we drive it 10 or 12 years.
Preach it, Chick! Same thing’s going on in Tucson.
Was in the airport last week. While I was waiting for my ride back to the Arizona Slim Ranch, I picked up Long Realty’s oh-so-glossy magazine showing local homes for sale. Talk about overpriced properties. That mag was full of ‘em!
“I would say that 75-80% of the listings are still way overpriced. People just don’t get it.”
In the Tampa Area, 75%-80% of the listings are from Real Estate Brokers. I have commented in the past that they should take their crap off “craigslist”.
It shows true desperation when Realtors(tm) are using guerilla marketing tactics to get a showing.
Question for those who know - what happens if you have a short position in a company that goes bankrupt?
Seriously - I have some CFC shorts, and am wondering if I’ll be able to cover, or will they linger uncoverable, or what. I’m thinking of covering at about 3 in order to avoid the latter, but wondering if I’d be good just to ride it down.
(BTW in case you can’t tell - I think it’s a foregone conclusion that, save being bought which may happen, CFC will go bankrupt)
when a company files bankruptcy, the stock usually trades in the 2-10c area for months until a plan is filed and the fantasy that shareholders will get anything is extinguished. It is during that time you should cover. Why wait for zero when you can cover at 3c. It’s just stupid.
I’ve made excellent money buying stocks in companies filing bankruptcy on the first morning and selling that afternoon or a day later. I got WCOM at 6c and sold it several hours later for 20c. 100K shares.
TX,
Just out of curiosity, who do you like for online brokers? I have some play money sitting around, and might like to try trading some of this housing stuff as we accelerate towards the bottom. I looked at ETrade and TD, any input on either of them?
Thx.
Try Interactive Brokers, ThinkorSwim or MB Trading. MB has a very nice direct access interface that is free or very low cost and their commissions are scandalously low. I don’t like either one of the two you mentioned, and hate Scottrade and Ameritrade too. They all rip you off. And don’t even mention Schwab.
Saw your post yesterday regarding being stopped out. Wasn’t sure if you bought back at the close. I have tight stops once again. If the S&P wants to bounce it’s gotta happen here. Fed needs to wave the magic wand. Were’s Cramer when you need him
I’m really bullish here unless we get a serious break of the triple bottom at which time, I give a big hug to my old friend, the bear. I do whatever I have to do to make money (in the market! no comments from the peanut gallery)
They all rip you off. And don’t even mention Schwab.
Who do you think rips off their customers LESS - Fidelity or E-Trade? (If that’s the only choice.)
How does Scottrade rip you (us, me… yeah, I use them) off?
I selected Scottrade because it was cheap and they gave me some free trades to get started (plus tossed a few to my friend who referred me). But, I am willing to listen to experience and change my broker.
they all used to sell order flow. I don’t know if they still do, so I should have said they “used” to rip you off. Probably still do.
OK, so that probably doesn’t affect me because I have so few shares of anything I can squeak in at my price all the time. I’ll let them rip me off like that until I have an account that is large enough for me to actually worry about that.
Sorry if this shows up twice, I hit and SQL error.
Right on queue - Cramer demanding a rate cut. Need the fed to wave the magic wand.
Tx, I just want to say thanks for the thinkorswim recommendation many moons ago. I switched to TOS and couldn’t be happier. Excellent platform. I have pretty much abandoned all of my shaky Excel spreadsheets.
Scratch E*trade, they may go under soon. I stuck it out with them for 15 years and finally pulled the plug yesterday. Take a look at their stock price and analyst reports. Not good. Plus they made a huge bunch of HELOC’s that are still on the books. Yesterday Cramer (I know) called their portfolio the most toxic he’s ever seen.
TDAmeritrade is good, low trade prices and nice options interface, but not very good rates on cash. I ended up going to Fidelity with most of my stuff for now and opening a small TDA account. Fidelity has good cash returns, decent commision structure for what I do, and other full service features if I need them. I may move more assets over to TDA when I get back into trading a lot. I cashed out of everything 2 weeks ago. This is going to be bad.
Thanks for the advice. I don’t have the kahunas to trade penny shares, but sounds like it’s safe on shorts to wait until it gets down to pennies.
Trade of the day today>
Buy CFC big time at a gap down open.
Do I have the huevos to try this?
Probably not, but maybe.
I thought about doing that yesterday when the bk rumors were rolling but had to go get my hair done and didn’t want to leave it unattended. Stops are fine but when they halt the SOB you are SOL.
I’m getting the Ciena back that stopped me out yesterday. That ATT news should not have tanked it the way it did.
Is this the BAC balz-out strategy you are talking about?
This real estate blog sure looks like its turning into the training ground for future Gamblers Annonymous members!
Penny Stocks? Day Trading BK Companies? Outguessing the Trends? At least Vegas gives you a free drink.
Has anyone here taken a look at Canadian banks? They seem ripe to me for shorting (massive property bubble etc.), and their growth has been phenomenal the last four years of so.
CIBC is in the subslime mess.
Short the crap outta them.
Thanks, ugh. Tried CIBC, but came up with nothing. Who are they?
Canadian Imperial Bank of Commerce, 5th largest of the Big Five Canadian banks. They have issues with risk management; took a big hit on Enron a few years ago, resurrected their image only to recently take a hit again with subprime exposure they admit to seems to grow weekly (and was insured with a shaky insurer as well). Just reshuffled a bunch of execs early this week in fact. I am not sure how much downside there is in the other Cdn banks, I believe several are at / near 52 week lows and a couple have stated their exposure is very limited FWIW. I have been holding RBC for 15 years though, so I don’t follow the others too closely. You might find this article interesting:
http://www.theglobeandmail.com/servlet/story/RTGAM.20080109.WBstreetwise20080109110136/WBStory/WBstreetwise
Canadian Imperial Bank of Commerce - one of the big 6 Canadian Banks. Might be a bit late as this one is hanging around the 52 week lows. Ticker is CM on NYSE.
If the company goes BK, the shares may be delisted from the NYSE or wherever, but most likely will continue to trade over-the-counter. You still need to buy and return the borrowed shares, that’s why even bankrupt companies don’t go to zero.
they do eventually but as I said, why wait for that when you can cover at a couple of pennies. And it usually takes a day or so to get booted to the pinks.
I was looking at corporate bond offerings in my ameritrade account, and the crazy 50% YTM CFC bond that I saw yesterday is no longer available, along with a bunch of others. I take it this means ameritrade got rid of these bonds.
Odd News… Dead Man…
http://news.xinhuanet.com/english/2008-01/09/content_7393428.htm
Weekend @ Virgilio’s…
Two men wheeled a dead man through the streets of New York City in an office chair to a check-cashing store Tuesday and attempted to cash his Social Security check before being arrested on fraud charges, police said.
David J. Dalaia and James O’Hare pushed Virgilio Cintron’s body from the Manhattan apartment that O’Hare and Cintron shared to Pay-O-Matic, about a block away, spokesman Paul Browne said witnesses told police.
This is how our politicians would behave had they not been born into the “right” families.
I wonder what incentives sellers have these days? Foreclosures are still a relatively small part of the market, even though that is increasing. If the owner isn’t distressed, what incentive do they have to drop prices?
I don’t think we’ll see housing prices go down substantially over the short term unless the economy takes a hit. If unemployment stays low, then then housing prices will only drift down slowly.
Hey troll, good trolling to you.
You must have missed yesterday’s report that November sales in Cali were 46% foreclosures.
Maybe it’s just me, but I’d call that a “significant” portion of the market.
BTW, my own locale 93552 has show a 50% increase in NODs between Nov. and Dec., so we ain’t puttin’ on the brakes yet…
I’m telling you…. the koolade was very concentrated. The barking real estate moonbats forgot that you cannot profitably buy retail and make money selling…… retail.
‘The barking real estate moonbats’
Nice phrase there, ex.
It sounds like a good band name, too!
Does a foreclosure count as a sale only if it is bought by a third party? Or is it counted as a sale even when it is just the bank taking possession of the home? Someone asked this yesterday and I can’t find out the answer.
The obvious response it “too whom?” It certainly counts as a transfer of ownership in either case, and will usually be reflected in the property records. The PTB tend NOT to use either as a “comp” for assesments though. Part of the definition is “typically” motivated buyer and seller. In bubbly markets we are arguably approaching a time when foreclosures and short sales ARE a significant market factor, so ignoring them a priori seems dishonest.
Hi Jim,
Thanks for the reply. It is dishonest especially if those 46% CA numbers are accurate. I guess my concern is that bank and third party foreclosure #’s might be used on the one hand to pump up sales totals, but then excuded to prop up average and median sales prices. Who knows these realtors are all liars regardless.
But you do point out something I would not have thought of asking, which is to demand foreclosure sales be included in comps. If I were interested in buying, but I’m not.
How about demanding that they be included in tax assessments?
Here in Florida, when banks “bid” on their own properties and take them back, these repossessions (or are they re-repossessions?) are reported as sales by the real estate hacks, and the papers publish these figures as sales, too. This has been going on for two years now. The Press will report that 20 houses were put up for auction and that 19 were purchased; only later–if ever–does one discover they were “purchased” by the same banks and mortgage companies that owned them in the first place.
With regard to including foreclosures in comps and/or tax assessments, it seems to me that a foreclosure sale has a problem that makes it a bad comp. Specifically, I am under the impression that when a foreclosure auction happens, the house is not available for inspection. It stands to reason then, that any potential bidders would not be able to be informed as they normally could be in a typical sale. If that is true, then the auction price would be likely skewed from the market price, as there is an abnormal level of risk for that specific item compared to the normal amount of risk for other items in that market.
I define “market price” loosely as the price at which something would sale after a reasonable period of time on the market. “Reasonableness” in this case would be dependent on the market. Houses would have a different “reasonable time” then cars or jewelry.
Perhaps that definition should include something about the item being available for inspection in accordance with local traditions for other items in that same market space.
I thought the 46% figure was for Bakersfield, not the entire state?
“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.’” “
Uhhh….46% of the homes for sale are foreclosures? Or 46% of the *sales* were foreclosures? There’s a difference….
And this may come as a shock to you, but not everyone lives in California. Certainly not me. How about nationally?
Greetings from Earth…
Hey, Ben. You mentioned foreclosures yesterday. Is your game plan to buy a bunch of them up for long term rentals? I know several people who did that here in the 89-90 period and they made out like bandits.
It’s gonna depend on what falls where. Some joker said something about having to be rich. I actually got together some people who are interested in going in on projects and we’ll look at it as it develops. Flagstaff is a great rental market, so some multi-unit properties would be nice. There are going to be hundreds of SFH defaults, IMO. Somebody will have to sort that out. I wouldn’t want to be a SFH landlord.
Right, my friend, who was a paralegal (!) bought dozens of condos for 10-12K. She made a frigging fortune.
Same with early 70’s engineers who still had jobs after Boeing laid off 40,000 in the early 1970s in Seattle. I worked for one of the survivors who was apartment house rich.
Just curious - would you be doing much of the maintenance yourself, or paying someone else to do it? I was trying to interest hubby in rentals, until I realized it just didn’t pencil out, and he said NOOO way…even though he knows how to do damn near everything..
We’re also old, too.
That’s my game plan, long term, but I think I need to blow on out of Detroit before I make it happen, and that won’t be for a few more years at least, when the kids are on their own. So for now, school is in.
Do I see this blog turning into the bottom fishers foreclosure bidders investors club?
Not me. I don’t have any interest in RE as an “investment.” I can’t stand dealing with people and I like my feedback loop fast. Hence, I use the stock market as my cash register.
Couldn’t you detect the sarcasm in those posts? We first have to reach and live with the broad realization that “real estate is the worst investment” before investing makes any sense whatever. This point is a ways off, as prices have barely corrected so far.
PB/GS - I’m sure most agree on that - sounds like some are planning on what to do in the future when it finally does bottom out.
Me - even though I’m interested as well, I’m not even going to think about it at this point. The horizon is too far out, and there are too many variables (possibly not excluding the political infrastructure of the U.S.
)
Preach it again, Chick!
As for me, I prefer not to deal with tenants. So, real-estate-as-an-investment is off the Slim list.
Same here. Renting can be very time consuming and a lot of hassle for the landlord. I’d rather make my money some other way.
i think his moniker represents his lack of functioning brain cells
Some sellers have the incentive to unload the tons of foreclosed REO that they have clogging their books. These sellers are known as mortgage lending institutions.
Then there is another group which has tons of new never-lived-in homes they need to unload. These sellers are known as home builders.
FB alert!
P’cola….. you think we can get him to come clean on how far underwater he is?
If you’re gonna talk housing trash talk, you bettor come with your A game.
and on how many properties?
If the owner isn’t distressed, what incentive do they have to drop prices?
LMAO. It’s called “The prisoner’s dilemma”. When you figure out what I mean by that, you’ll have the answer to your question.
“If the owner isn’t distressed…”
If housing is disconnected from fundamentals and the cost of the mortgage is disproportional to rents, and there are no further speculative increases in house prices, then it is an “investment” where you are losing money, a slow drain, month after month.
Course owners will hope this will all turn around and inflation will go bonkers and rents will suddenly increase to catch up to existing prices. And they will live and die on that suckers bet.
NoSingleOne, I am going to give you the benefit of the doubt. Thus, I am going to give a straightforward answer. Yes, it is possible that prices will drift down only slowly. It is also possible that banks will need to clear their books (accelerating the price slide). It is also possible that “investors” who own multiple properties are experiencing negative cash flow on recently-bought properties, and that in seeing the price slide, they will make an effort to take some chips off the table. It is also possible - even VERY likely - that nobody actually “needs” to buy, as rents are much cheaper than PITI; thus the few sellers who really need to get out must compete for a tiny number of speculators who are still buying.
I PITI the fool.
(with apologies to mr. t)
Re: Troll
This AssWipe predicted there will be “brisk sales of lower end real estate”.
I want to know how that works when finance has been cut off from the buyers at the margin.
http://thehousingbubbleblog.com/?p=3884
Uhuh….
yep…. “I don’t think we’ll see housing prices go down substantially over the short term unless the economy takes a hit. If unemployment stays low, then then housing prices will only drift down slowly.”
Guess no one here got your memo.
(1) Sale prices now 36% down from 2004 - 05 peak and that is on (a) the same property or (b) the one next door and that is the same house.
(2) All those $500,000, 800,000 and $1,000,000+ second homes sliding into foreclosure. (This is a mega-summer tourist area.)
(3) 2nd homes are 70% of the real estate listings whcih are also up 200% over Jan. 2006.
(4) The deliquent taxes (the ones the county is foreclosing on) are up 231% y-t-y, and the value of the properties that are delinquent is up 371% y-t-y.
Yeah…..everything is just peachy out here in non-bubble land .
Wow, are you guys so desperate to find a “troll” to attack that you pile on when I dare to suggest that the majority of homes for sale aren’t foreclosures? I guess I must be consulting the wrong sources, but I thought the number of homes for sale vs. the number of foreclosed homes for sale was a ratio of 5:1.
Also, are you folks normally this nasty to someone whose locality isn’t composed mainly of homes in foreclosure (mine is Anchorage)? I’m not denying there is a bubble by any stretch, but I had the general impression that “voluntary sales” (distressed or not) still outnumbered foreclosed properties as a whole. I’m not trolling, but if someone has correct numbers it would be nice to see them, as opposed to just insults….
‘I’m not denying there is a bubble by any stretch’
Of course you’re not. Not even trolls can deny that any more. But trolls waste my time and bandwidth, so are usually banned. A 1 to 5 ratio is complete disaster, so do some research. And if you think these are insults, just check back.
BTW, there is a big, fat, housing bubble in Alaska. I give you permission to use the search function in the sidebar to see for yourself.
Ben, I am a lifelong renter, and I have known there was a bubble in Alaska since I moved here 4 years ago. Most of my friends and the realtors I’ve spoken with suggest that it only became clear to everyone in summer 2007, making this one of the last places in the country to succumb.
I am not in the real estate industry so I don’t know why suggesting 15% of homes is a “relatively small” part of the overall market makes me a troll, when apparently there are more foreclosures on the horizon in 2008. I suppose 2-7% is considered the “norm” for the past decade, depending on the locality. If the number of foreclosures becomes 30-40% when all is said and done then 15% might be considered “the good ol’ days”.
BTW, my searches (including here) mostly turn up mention of declining overall sales and not specifically what ratio of them are foreclosures. Sure would be nice to see some numbers…such as when the number and quality of foreclosures starts to significantly absorb the number of active buyers out there (I’m assuming not all foreclosures are desirable or even livable). With all the statistics out there about housing, I am surprised this is so hard to find.
Anyway, I am not some kind of dumb pollyanna, and the blog would be a friendlier place for newcomers without the shoot-first-and-ask-questions-later attitudes. If someone can tell me when sellers will finally concede that a house won’t sell unless it can compete with a foreclosure, I’m all ears. I think this country is headed for the worst housing correction/recession/crash in history, and there is the very real possibility of taking the rest of the economy with it.
Motives for why sellers would lower prices is a worthwhile discussion.
The answer is: logical analysis of the present market. But as we see that’s not going to cut the mustard, as denial still runs rampant, as does hopes of inflation, or other sorts of bailouts.
So if they want to pay top dollar on mortgages on to a bad investment and follow the market down, yes, that is their right. I’m sure wealthy bankers are appreciative.
SFMechanist, I think you hit the nail on the head. I don’t understand why sellers who watch TV or read newspapers can still be in denial, but I see that the majority of sellers clearly still are.
Jeeez. I think forclosures as a 20% share of the for-sale market is a huuuuge number. One truly desperate seller’s listing is going to play hell with the other 4 listings (who may not be as desparate, but, for a number of reasons, may be anxious/motivated). Not to mention the overall drag any concentration of forclosures puts on a community with an above-average number of them.
There are a lot of folks that the deflating bubble will not make a big difference for - people who are comfortable and can afford the property they are in (and are not in a neighborhood/condo wracked by forclosures, desparate sellers or abandoned property). But for the folks and communities who are - it’s going to be pretty darn painful.
I agree about a bubble in Alaska. I’m in Anchorage regularly. The amount of new commercial/retail that’s gone up in the city and out in Wasilla/Palmer looks quite frothy. The am’t of new housing development isn’t directly visible to me but I have seen an exponential increase in signage for new developments over the past 2 1/2 years.
Job change, divorce (due to money problems?), ARM adjusting-can’t afford payment, commission based salary dropping based on lower sales activity (cars, homes, etc.), small business not doing as well. Lots of reasons to NEED to sell.
If they NEED to sell, their incentive to drop prices is to make the sale, especially given the fact that there are no buyers at their former price given credit market tightening.
In some markets I think you could be right, drifting down over a long period. Pretty painful as an owner. I guess I’ll just keep on renting.
housing bubble update from the Netherlands:
number of Dutch homes for sale reached an all time high last year, 10% over previous year. In my area numbers for sale are up 45-50% over previous year. Realtors claim that sales prices are up 5% from previous year, but according to a large website that tracks listings asking prices are not significantly higher than last year so the 5% gain in sales prices sounds suspicious. Especially the number of apartments for sale is growing quickly as most buyers think they are unattractive and extremely overpriced (but builders and government make more money on apartments, so that’s what they prefer to offer the public). In my own area asking prices are FAR higher than previous year, maybe that explains why inventory is growing much quicker than the national average.
Most Dutch RE professionals and economists agree that despite surging inventory, probably slightly higher mortgage rates, stable or declining real incomes and severely stretched budgets, Dutch home prices will keep rising for the next four years at about 4% yearly, for another 20% climb in prices. With the average Dutch home price already at 8.5x income there doesn’t seem to be much room … The only way to get there is using even more leverage, crazy financing and buyer subsidies but well, why worry? It seems pretty sure that this year Dutch home prices will reach or surpass their all-time inflation-corrected high of nearly 300 years ago.
At the same time, prices in commercial RE keep climbing while there has been severe overcapacity for years and conditions are getting worse every month - probably this is another bubble growing on government steroids and waiting for the needle to prick it.
for US viewers who think the internet will spread the news of the bursting bubble: nobody here is worried about a Dutch housing bust, housing bubbles are something for stupid subprime Americans, can’t happen in Netherlands where home prices always go up (at least they did over the last 29 years).
nobody here is worried about a Dutch housing bust, “housing bubbles are something for stupid subprime Americans, can’t happen in Netherlands where home prices always go up (at least they did over the last 29 years).”
I was watching Lying Larry Kudblow last nite and was quite surprised to hear him concede that the ongoing bust is GLOBAL and no one country will escape. The fact that he admitted serious economic problems was one thing but he took it a step further and stated it was global. Quite a surprise coming from someone who has lost all credibility and is known for his frequent lying, distortion and sanctimonious pandering.
yeah, tulip bubble country seems to be the last stronghold for the Kool-Aid / RE mob. I can assure you, many experts still tell us on TV and in the newspapers that such a housing bust can NEVER happen in the Netherlands, while the pricegains over here were FAR bigger than in the US. I think some of these fools even believe what they are saying…
Probably the Netherlands can hold out a little longer because they have about the most government interference with the housing market and the highest homeowner/renter subsidies of any country
yeah, tulip bubble country seems to be the last stronghold for the Kool-Aid / RE mob.
Yeah? Well most of Canada is still swilling the stuff, too. Unlike the Netherlands, they’re not making any more land in Canada, you know.
They’re not building any more Saskatchewan.
And their population has finally gone over 1,000,000. 3,299 over according to Wikipedia. Woo hoo. Way to go Saskatchewan.
Saskatchewan has a land area that is approximately twice that of the United Kingdom. Population 60 million.
Are we knee deep off the coast of Zanzibar yet?
well, unlike the Netherlands maybe the Canadians are getting some more land they can build on because of global warming
and more potential farm lands! ;^)
wife was out last night so i was watching cnbc- cramer was beside himself telling bb to resign and it would cause the dow to jump 1500pts in a day, what an idiot, i also caught the jacksass flat out lying.
i remember last year i was watching and he was bullish on sbux @ $35 syaing they were exanding in china and it would really take off and then yesterday he said i was bearish on it in the 30’s, what a tool. he them instructs the sheep to wait for 16-18 and pounce
then on fast money they are all praising gold as a safe haven, i though where did i hear that before? oh yeah right here on ben’s blog !!!
when it was in the $600 range .
you could see the panic in these guys faces
Here’s what usually happens on one of these make or break days. Small gap up (check) which will immediately get sold, you get a first hour low on the indices, bounce, retest in the 11-2 CST time period with maybe a slightly lower low and reversal to either flat or slightly up for the day. I can’t ever remember a year starting out this bad. I’m selling the small futs positions I bought yesterday afternoon this morning, looking to buy in around 1375 S&P or a bit lower and hold. I just don’t believe the fed is going to sit there and let the market crash in an election year. Yes, Ben, I know they are pretty impotent over the longer haul but I think there’s a long side trade here if the bulls can make a stand.
One of the other asshats on Fast Money disclosed he was short Countryslide through PUTs. LOL.
Those guys were freakin last night especially Ponytail who seemed to hog the airtime. In all fairness he did say to short GS about two weeks ago while Finerman (sp?) was touting a long GS/short LEH combination which obviously blew up on her.
“…telling bb to resign and it would cause the dow to jump 1500pts in a day, what an idiot,…”
I wouldn’t say he is an idiot. More of a moron or an imbecile.
Try turning the sound off when watching the financial shows, particularly when they are talking about housing. It’s like watching a Kurosawa movie — wide eyed expressions of fear, overreaction, bluffing.
Yeah, mute, then add the chipmunks sound track…
Pretty funny.
what was that show where the movie was on, and you could see two cartoon characters ‘in a movie theatre watching’ the movie making their own wisecracks..
Stumbled on it once or twice and had a few chuckles.
Mystery Science Theater 3000?
http://en.wikipedia.org/wiki/Mystery_Science_Theater_3000
(loved that show!)
Are there still people who doubt the reality of the PPT?
Mr Paulson reactivated it last year, asking the staff to examine “systemic risk posed by hedge funds and derivatives, and the government’s ability to respond to a financial crisis”, he said.
It seems he failed to spot the immediate threat from mortgage securities and the implosion of the commercial paper market. But never mind.
“At this point the debate is not about a soft land or hard landing; it is about how hard the hard landing will be,” said Nouriel Roubini, professor of economics at New York University.
http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=A1YourView&xml=/money/2008/01/07/ccview107.xml
There is NO WAY that these people didnt see the possibility of this happening, so never mind? NEVER MIND? Just pay no attention to that man behind the curtain, the pigs at the dinner table and the red carpet streaching from your house to the financial/liberty guilatine.
For the most part, all I see are sell outs, delusional bloodthirsty people, and opinionless lemmings.
“Are there still people who doubt the reality of the PPT?”
The entire U.S. press corp?
I have yet to see any actions by the “PPT” in the market. They may exist. I do not know; I do not care. 15 years ago, $45B would maintain a market. Today $45B is chump change in the market. The government does not have $45B to ante. Let alone meet a small raise.
I am not sure how one could confirm or refute the occurrence of or nature of actions by the PPT in the market; that is one reason I have tired of the subject. The notion that they control the markets like a puppet on a string is obviously pure strawman hogwash. But I could easily imagine a little tweaking around the edges now and again, allowing noise trader follow-on to do the heavy lifting.
I do find it quite odd that seemingly-reputable overseas newspapers print stories about the U.S. financial markets which the U.S. press corps chooses to blithely ignore.
I don’t deny the possibility of gov’t intervention in the markets, but I wouldn’t take this one article as evidence of anything. From what I’ve been told, Ambrose Evans-Pritchard has played fast and loose with facts before. And he doesn’t cite any sort of source for his allegations in this article. He glosses over them as if they were accepted knowledge.
“…but I wouldn’t take this one article as evidence of anything.”
I don’t. But the lack of interest in the U.S. press corps is deafening.
Didn’t somebody post an article that argued that there was nothing to prevent the FED from loaning money directly to individuals or investment groups. They suggested that if banks did not use the money to goose the economy they could loan directly to Hedge Funds. I suspect Neil Bush is setting up a Hedge Fund for a 10billion dollar zero interest loan from the FED as we speak.
They are not “opinionless’ they are liars who spill swill and Herd mentality all over the place just so’s they can get their pockets filled.
‘brothers keeper’ and all, guess it doesn’t apply in the USA except on Sundays just for show offs sake.
–
Looks like Hillary rally (celebration) on the Street. The Street owns Hillary from the hillbilly days. It has put a market bid on Obama in case he gets the nomination.
The Game will continue regardless of who the nominees are. Wall Street Money rules!
Jas
–
It looks like a battle, or tug of war, between Hillary Cheer and Recession Fear. Let us see who wins.
Jas
Are any lenders still actively making loans to people who cannot afford the houses they are buying? If yes, then how and why?
Yes, govt., FHA it’s someone elses money and because they can.
Isn’t the govt whatsoever concerned that later on, folks will ask them why they set up so many low income households for future foreclosure?
govt. is only concerned about itself and the present. It will deal with future problems when it becomes the present.
RE: Isn’t the govt whatsoever concerned that later on, folks will ask them why they set up so many low income households for future foreclosure?
HUD/FHA flies under the radar.
It was never disclosed to the public the enormous amount of shit they took back in the ‘90/’91 bust.
I often wonder how much of their REO inventory simply turned into crumbling abandoned crack houses.
We have suddenly been getting new credit offers in the mail, for CC’s and mortgages, inc. no-down, no income. My FICA is good though.
inflation acceleration:
Jan. 9 (Bloomberg) — Gold and platinum rose to records as higher crude oil prices and a weaker dollar increased demand for the metals as a hedge against accelerating inflation.
Oil rose to within 3 percent of a record today and the cost of corn, used for food and to make alternative fuel, climbed to an 11-year high. Prices paid by U.S. producers increased last month at the fastest clip since 1981, according to the median forecast in a survey of economists by Bloomberg News.
http://tinyurl.com/363hzk
I keep waiting for deflationists to explain these things but they never do.
I’ve explained it a thousand times, but it doesn’t sink in, huh? If gold had kept up with inflation, it would be close to $3,000. So you are a tad behind there.
Gold has kept up with inflation in real terms (against other goods) and now is catching up in dollars.
it is catching up in euros just the same
Sorry Ben but I’ve got to disagree. “Keep up with inflation” assumes you have a starting point in time. If your starting point is 1970 maybe you are right, but if it is 2000 then you’re way off the mark. I like to think that 2000 is more relevant than 1970.
You are definitely entitled to think whatever you like to think. But 1970 roughly is the relevant starting point — when the Bretton Woods accord ended (never heard of that?)…
Disagree. Why not start in the 30s, when FDR inflated the price of gold overnight, after confiscation?
I’ll throw out a lure
In 1980, when the metals peaked last…
Russia was a net seller of them, as they needed western currency to keep ma & pa on the gulag.
China didn’t have a pot to piss in, literally.
It’s 2008, does the situation look similar?
2008: what are intererst rates telling us?
Various perp walk banks are offering a little over 5% interest on cd’s, with little success, as people have no money.
On the other end, the banks that have money don’t want to lend it.
Interest rates mean nothing, in the pyramid scheme of things…
Interest rates are screaming corporate insolvency.
Government rates world wide are reflecting the flight to perceived safety.
“Interest rates are screaming corporate insolvency.”
Si.
http://www.marketwatch.com/tools/quotes/intchart.asp?submitted=true&intflavor=advanced&symb=TNX&origurl=%2Ftools%2Fquotes%2Fintchart.asp&time=3&freq=9&startdate=&enddate=&hiddenTrue=&comp=tyx&compidx=aaaaa%7E0&compind=aaaaa%7E0&uf=7168&ma=1&maval=50&lf=1&lf2=4&lf3=0&type=2&size=1&optstyle=1013
Damned if I know. But I do have a theory.
Tell me where I’m an idiot:
10-Year treasury notes are puchased now as a low-risk investment yeilding a rate of return. The gov’t must pay out that rate of return. Therefore the gov’t needs the economy to grow at that rate.
Add inflation issues to the mix and from what I can see, you (over-simplified) get this equation:
[Inflation - GDP growth = ^TNX - 10 years]
That is, I predict, based on today’s ten year note, that inflation in 2018 will be 3.8% if GDP growth is zero. Or if inflation is zero, GDP growth will be 3.8%. Solve two simultaneous equations.
For the now, the data we need to see is 1998’s TNX. The 1997-98 year saw a range of 3.8 to 5.2. We all generally understand there is a recession ongoing, or about to get underway at full steam. Recession is defined by a shrinking GDP.
Therefore, interest rates are telling us that inflation is currently running at at least 3.8-5.2% and is likely higher than that, based on how deep the recession is, and how much that 10% ‘normal profit’ margin factors into a government operation.
Ok. Hit me with some arguments.
‘Interest rates mean nothing, in the pyramid scheme of things’
Yeah. it’s always a good idea to dismiss what you can’t explain.
This jigsaw puzzle allows you to only see bits and pieces of the entire image of fraud, like everything we witnessed last year.
The powers that be, know that people would instantly connect high interest rates with 1980-82, the worst recession in most memories.
So they’ve used interest rates as their bully pulpit, manipulated them up and down and all around.
1-3% was sure-fire bait, for cocksure investors full of themselves, that went “all in” on their houses of worship.
Keeping the rates low now and the dow high, is SOMA for the masses.
Ben, it strikes me that you talk in riddle on such topics. Good for generating more blog activity…. but frankly, you aren’t being clear or expressing yourself.
Are you suggesting gold is overpriced at $900? That current low interest rates point toward deflation?
“Are you suggesting gold is overpriced at $900? That current low interest rates point toward deflation?”
The absolute level of interest rates doesn’t matter so much as the direction and rate of change in interest rates. Broadly speaking, they are going up, even though Fed is fighting to lower them. All else equal, lowering rates increases asset prices, providing a wealth effect. But it isn’t just the low level of rates that causes this; it’s the fact that they’re lower than the were. The windfalls make people feel wealthier. But rates can’t keep decreasing forever. There is a limit to this game. If rates are below a true market equilibrium rate, the imbalances caused by the excess debt will sooner or later be subject to gravity and have to reverse. Artificially low rates cause an increase in the broader money supply (in which I include debt). When the debt load starts to take people under, this credit destruction is a destruction of money in the economy and causes… wait for it… deflation (all else equal, and nothing is rally ever ‘all else equal’ but this deflationary force will be one heck of a vector to deal with).
The increase in commodities prices is a delayed reaction to all the money pumped into the economy over the last few years. Extrapolating this trend without acknowledging the cause of it is dangerous.
All I know is this.
Gold is a speculative bet. It is used less as an industrial metal, and is now considered primarily a “store of value” because historically it has been and it’s shiny.
Hedge against inflation? Perhaps, but so is real estate, and it actually has a tangible use.
My view is that this is simply one bubble (real estate) deflating while another is inflating (gold).
Perhaps it’s a great bet, but I think it’s primarily a great bet because an increasing number of people think it is, and not for reasons commonly noted (inflation rearing it’s ugly head, flight to safety, etc.).
My goal in the coming onslaught is to lose as little money as possible, and putting a lot of eggs in a speculative basket isn’t consistent with that goal.
I have a gold dollar from 1864. That was the average day’s pay then. it has 0.048 oz of gold, valued at today’s prices around $40. The average day’s pay now is around $160. $3,000 sounds about right.
Pointing to increasing gold and oil prices right now and saying there is no bubble is like pointing to increasing housing prices in 2005 as evidence that there was no bubble.
Can you say “lag?”
mortgage applications up:
WASHINGTON (AP) — Mortgage application volume skyrocketed 32.2 percent during the holiday shortened week ending Jan. 4, ending three consecutive weeks of sharp declines, according the Mortgage Bankers Association’s weekly application survey.
http://biz.yahoo.com/ap/080109/mortgage_applications.html?.v=1
one has to wonder how many of those loans will close, and how many fall out?
not making any more oil:
LONDON (Reuters) - Oil at $100 a barrel should give exporters every incentive to pump more, but their difficulty in doing so shows the world is struggling to sustain production.
A growing number of leading industry figures — the CEOs of Total (TOTF.PA: Quote, Profile, Research) and ConocoPhillips (COP.N: Quote, Profile, Research) among them — now question mainstream forecasts for supply, suggesting the era of “plateau oil” is nearer than many in the business have admitted.
http://www.reuters.com/article/ousiv/idUSL0725705620080109
at least is does not seem to stop the central banksters in pumping more. Who notices another 1 trillion floating around these days? Only the goldmarket seems to take notic.
In Europe, the ECB has stopped reporting how much cash they are splurging around, they now only report how much they are ‘taking back from the market’. Hilarious …
http://www.hussman.net/wmc/wmc071224.htm
Possibly not. According to Hussman at least, it’s all sleight of hand. What - you really think they understand this situation, and know how to control it? Hilarious…
I have heard that explanation but don’t know what to make of it. For sure the ECB is shifting to longer term credit. With the dubious quality of the collateral for that credit that is not something an EU citizen can be happy with; some of these loans are not going to be repaid for sure.
Clearly EU banks are totally uninterested in getting money from savers, suggesting they are still drowning in credit. I had to do the usual checks this week for parking my money, and the best I could get was 3.7 / 3.9% on large 1/3-month deposits. That is a lousy yield if you have more than the 20K euro government-guaranteed capital in savings (if the bank goes bust you loose everything above 40K and 10% of capital between 20K and 40K euro).
Even official down-manipulated inflation figures in the EU are probably near 3.5% now, and real inflation numbers are probably over 10% (e.g. latest producer price index was up 8%, food prices up 12%, energy prices up near 20% etc.).
ny living this is reality of a recent transplant sans trust fund
http://www.nytimes.com/2008/01/09/nyregion/09about.html?_r=1&oref=slogin
This is a hoot: this “financial adviser” has written a column on how she has increased her net worth by $11,500 over the past year. The implication, of course, is that you can, too, provided you follow her sage advice on budgeting, etc.
That’s exactly how the article starts out. But, then, as you get to the end, you soon discover that the $11,500 gain was the result of a commensurate increase in “home equity” through a misguided purchase of a used home.
Sigh. Will these morons ever learn?!
http://articles.moneycentral.msn.com/SavingandDebt/LearnToBudget/11500DollarsRicherIncalculablyHappier.aspx
Almost their entire net worth is “home equity,” which is subject to change and interpretation at any time. This is pathetic, but unfortunately all too typical.
LOL@ this writer. How do you include hone equity in your financial “figures”, but not mortgage debt? Is she daft, or just thinks that we are?
equity = FMV - mortgage, doesn’t it? that part cancels itself out.
china caps prices: (next come the shortages)
Jan. 9 (Bloomberg) — China will freeze price increases of oil products, natural gas and electricity in the “near term,” Premier Wen Jiabao said, as the government tries to curb inflation at an 11-year high.
The government will cap costs of daily goods when necessary, stop increases of fees for public transportation and school tuition and step up a crackdown on price manipulation
http://tinyurl.com/yrwd8z
If the Chinese really want to stop inflation, instead of just trying to hide it, they can just stop importing it from the US. Unpeg the yuan.
who knows, maybe the Chinese will succeed where all other governments in history failed
Maybe they should study how well this strategy worked in Zimbabwe …
Tangelo’s Final Bow?
http://www.stockmania.com/index.php?showimage=130
Le Tan Orange had always been rather outspoken until a few months ago, and since then… hardly a peep
My crystal ball has a vision of him boarding a stairway to heaven. (or was that the steps up to his Gulfstream V?)
Countries without extradition treaties are really in, nowadays…
Ben, keep us posted about what you see in Flagstaff. I might be interested.
Administration Eyes More Mortgage Help
By MARTIN CRUTSINGER | AP Economics Writer
8:35 AM CST, January 8, 2008
WASHINGTON - Treasury Secretary Henry Paulson said Tuesday the administration was exploring what would be a significant expansion of the program to help at-risk mortgage holders.
…
Paulson in the CNBC interview also called on Congress to quickly pass pending legislation that would reform the Federal Housing Administration, which he said would help 250,000 at-risk homeowners who have adjustable rate subprime mortgages refinance to more affordable loans and another piece of legislation that would expand the availability of so-called “jumbo” mortgages, loans higher than $417,000.
The two giant government-sponsored mortgage companies, Fannie Mae and Freddie Mac, cannot presently back these jumbo loans, which restricts their availability.
http://www.chicagotribune.com/business/sns-ap-paulson-housing,0,3260992.story
Were you all aware of the existence of an ‘underused supply of homebuyers’?
Fannie Mae CEO says no current need to expand portfolio caps UPDATE
January 08, 2008: 02:33 PM EST
…
“Finally, Mudd said policy makers must make renewed efforts to reinvigorate the housing market in general, including by tapping into an underused supply of homebuyers that can be found in populations of new American citizens, armed forces personnel, and minorities.”
http://money.cnn.com/news/newsfeeds/articles/newstex/AFX-0013-22113573.htm
“underused supply of homebuyers that can be found in populations of new American citizens, armed forces personnel, and minorities.”
Isn’t that what the ARM and No-Doc loan people tried to do? And look how well it worked out for them.
Armed Forces personnel generally move around so much that in any normal market they don’t build up any equity before they must move again while the other two groups generally don’t make enough money to actually buy the present overpriced homes as shown by the foreclosures that are happening now.
Lower home prices would help but that would probably devastate Fannie Mae financial situation.
“Armed Forces personnel generally move around so much…”
Exactly! This is why I generally disagree with the view that we are all better off as homeowners. Some people’s life situations dictate that they are better off renting. Isn’t the freedom to choose whether to rent or own a basic part of Americans’ constitutional heritage of basic economic freedoms?
Can anyone offer comment on whether this issue is cleared up? Given the persistent rumor that the GSEs enjoy a U.S. taxpayer guarantee, I would think it would be imperative to clear up this legal cloud hanging over the GSEs before expanding their share of the U.S. mortgage market.
Last updated December 20, 2007 8:50 p.m. PT
SEC starts inquiry of WaMu
Federal panel to study mortgage lending practices
By BILL VIRGIN
P-I REPORTER
The Securities and Exchange Commission is looking into Washington Mutual Inc.’s mortgage lending practices, deepening a controversy over whether the Seattle-based company pressured appraisers to come up with inflated values to justify making home loans.
The Wall Street Journal, citing unnamed sources, reported late Thursday that the SEC wants to know whether “the company properly accounted for its loans in financial disclosures to investors of the company.”
…
The controversy was ignited in early November when New York Attorney General Andrew Cuomo charged WaMu with colluding with an appraisal company in providing inflated property values. Cuomo named the appraisal company — eAppraiseIT, a part of First American Corp. — as a defendant in a suit filed in a New York court, but didn’t name WaMu. Cuomo said federal banking laws limited his jurisdiction over the company, but he urged the Office of Thrift Supervision, the federal regulator that oversees WaMu, to investigate.
…
Cuomo later issued subpoenas to Fannie Mae and Freddie Mac, the two federally sponsored mortgage financiers that provide money to the mortgage industry by buying home loans from lenders like Washington Mutual.
“Fannie Mae and Freddie Mac cannot afford to continue buying Washington Mutual mortgages unless they are sure these loans are based on reliable and independent appraisals,” Cuomo said in a Nov. 7 statement. He asked for information on loans Fannie and Freddie bought from banks including WaMu, and asked for an independent examiner to review all of Washington Mutual’s appraisals and mortgages purchased by the two agencies.
http://seattlepi.nwsource.com/business/344429_wamu21.html?source=mypi
RE: loans are based on reliable and independent appraisals
LMFAO…A $100.00 split fee to HS drop-out’s who can punch in some hackshop’s designated appraiser’s canned comments in a 24 hour turnaround time buys you a heck of a lot of “reliablity”.
State Appraisal Licensing Standards Boards in charge of oversight and quality of work enforcement should all be sued by the Feds.
From Northern Ohio
Realtor sees banner 2008
Howard Hanna Smythe Cramer to promote discounts on homes
By Marilyn Miller
Beacon Journal business writer
Published on Wednesday, Jan 09, 2008
Some area real-estate agents are predicting 2008 to be a banner year in the housing market and say they are lining up a few ventures to spur activity.
Bill Askin, vice president of Howard Hanna Smythe Cramer Realty, gave an optimistic outlook of the market Tuesday to Hanna agents in their West Akron branch office.
”We’re going to do something a little bit
different in 2008. We’re going to treat the housing market like a retail business in terms of marketing and selling and getting our inventory moved by offering discounts,” Askin said. ”Like auto dealers and the clothing industry, we will reduce in price the homes on the market by 10 percent to create some urgency and make room for 2008 listings.”
Without revealing details, he said the reductions will be promoted the last week in January and the first two weeks in February.
”There’s a lot of pent-up demand in this market, sale prices are affordable and interest rates are down. This could be our best year ever in real estate,” Askin said.
http://www.ohio.com/news/top_stories/13554247.html
Lee,
Please just summarize w/ link.
Howard Hanna operates just this side of the gray line. They also have a money back guarantee. They will buy back your house within 1 year if you don’t like it. You get to pay 1% of the sale price for this little insurance policy ($2000 on a $200k house). The catch is you can’t be relocating, and you have to buy another Howard Hanna house from a Howard Hanna agent for the guarantee to be valid. They have made a career of offering deals that have a lot of fine print and are never quite what they seem.
“Tax rebates? Oh please.
Mortgage forgiveness for some? Oh please.
Save our money and our time. We are going to need every penny of this money for the giant checks we are going to have to write to Fannie Mae and Freddie Mac to pay for the losses they are going to absorb.”
http://www.thestreet.com/s/political-gambits-arent-enough-here/newsanalysis/investing/10397717.html?puc=googlefi
Once again, the rumor that the GSEs enjoy a U.S. taxpayer guarantee rears its ugly head. Aren’t these private corporations? Let the shareholders who profited handsomely during the bubble years take the hit, and leave the U.S. tax base out of it.
If they are private corporations, why does Congress need to vote on their by-laws?
Answer: Despite the jibba-jabba, the Congress is treating this organization as a government dependent.
Instead of tough love: selling the dependent’s vehicle after finding a bottle of booze under the seat, Congress is feeling the dependent’s pain, and with that compassion is supplying a case of liquor.
Don’t forget the FHLB’s.
Like the one in Atlanta?
Jan. 9, 2008
Stocks Plunge in Wake of Countrywide Financial Bankruptcy Rumors
By David M. Kinchen
Huntingtonnews.net Real Estate Writer
…
On November 26, 2007, Countrywide stock was hammered on the NYSE, dropping more than 10 percent to a level of $8.64 per share — less than half the share’s value in August when the firm faced bankruptcy rumors — and a fraction of its value in 2006. One proximate cause were reports that the Atlanta Federal Home Loan Bank had extended a large amount of its credit to Countrywide to offset its inability to raise funds in the private market. U.S. Sen. Chuck Schumer, D-NY, called for an investigation as to the prudence of the FHLBB’s action in this regard.
http://www.huntingtonnews.net/columns/080109-kinchen-columnsstocksplunge.html
Crammer back to banging his fist on the table demanding rate cuts!
Because they’ve worked so well so far.
In case you missed in yesterday, prices are down in my Brooklyn hood, five miles from Manhattan.
http://beta.therealdeal.com/articles/8405
hey wt go over to curbed and see the thread on mcarren park condo’s. the funniest pimping by a desperate broker i have seen
yea ny is different
It is different in that people want to be here. But very few can pay the prices that have been asked. So this is all good news — affordable housing — except for those who bought at the peak, HELOCed to the hilt, or built after overpaying for a site.
All it means to me is that maybe my kids will be able to live nearby some day.
–
David Rosenberg, Merrill Lynch:
“ Home prices may have 20-30% downside from here … Which would cut 2.5% out of consumer spending.”
“Quote of the day — Quote of the day goes to Treasury Secretary Paulson who told it like it was yesterday. To wit: “Let me be clear that no single policy or action will undo the excesses of the last few years”. He is 100% correct, in our view.”
“Second lowest rate of growth ever in currency-in-circulation — M1 has not grown one dollar since the Fed first eased the discount rate last summer and the YoY pace is running at -1.4%. Excuse us – how do you build a monetary reflation story out of this?”
Jas
“Home prices may have 20-30% downside from here … Which would cut 2.5% out of consumer spending.”
How much money is cut out of consumer spending by having every last dollar go to an inflated mortgage.
Jas, when was the last time you spotted real currency in circulation? I think it can’t be long before they call the FBI when you try to pay cash at the supermarket … M1 is totally irrelevant, that is why they still publish the number.
M3 in both US and Europe is growing at unprecedented rates (latest figures I have seen are 16% yoy for the US and estimated 14% yoy for Euro zone; probably Euro zone is already above the 16% mark now with the latest 1 trillion ECB credit infusions).
Go to Brooklyn, cash only is the norm… doesn’t matter if drinks are $3 or $12 average… or if food is $8 or $45 a plate… cash only.
Can anyone predict the timing of the WH announcement on GSE expansion? Those who prefer making money by going long ought to think about placing their bets on selected REIC stocks (homebuilders, GSEs, etc) shortly before this announcement is made…
My personal prediction: January 28
Too hard. Rallies on those will be shorted. I’d prefer going back to what people still believe in. Tech, beta. I’m very cynical.
Note for instance, BIDU. It’s 345. It was up yesterday. The last time the S&P was this low, it was well under 300.
Pepe Depew on Minyanville notes that the last time the bullish %s (point and figure) on the indices were this low all at one time was in October of 2002.
Just throwing it out there.
My last visit to the city of angles got me thinking…
These people only know how to live to excess, and when suddenly, wealth and water became scarce…
S.C.U.B.A. economy
Southern California Underwater Barely Alive
http://www.larouchepub.com/other/2008/3502debt_crisis.html
The debt crisis moves to center stage.
–
“The Refinance Index increased 53.9 percent to 2494.2 from 1620.9 the previous week and the seasonally adjusted Purchase Index increased 14.7 percent to 414.0 from 360.8 one week earlier. On an unadjusted basis, the Purchase Index increased 56.2 percent to 251.8 from 161.2 the previous week. “
Who believe these data? Econ-meisters at ECRI.
Jas
————————————————-
http://www.mortgagebankers.org/NewsandMedia/PressCenter/59184.htm
Refi Apps Jump as Rates Decline In Latest MBA Weekly Survey
WASHINGTON, D.C. (January 9, 2008) — The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the New Year’s holiday shortened week ending January 4, 2008. The Market Composite Index, a measure of mortgage loan application volume, was 706.0, an increase of 32.2 percent on a seasonally adjusted basis from 533.9 one week earlier, which was the week between the Christmas and New Year holidays. On an unadjusted basis, the Index increased 81.1 percent compared with the previous week and was up 8.7 percent compared with the same week one year earlier.
The Refinance Index increased 53.9 percent to 2494.2 from 1620.9 the previous week and the seasonally adjusted Purchase Index increased 14.7 percent to 414.0 from 360.8 one week earlier. On an unadjusted basis, the Purchase Index increased 56.2 percent to 251.8 from 161.2 the previous week. The seasonally adjusted Conventional Index increased 34.1 percent to 1015.3 from 757.4 the previous week, and the seasonally adjusted Government Index increased 18.2 percent to 190.4 from 161.1 the previous week.
…
Chick - small sell off in the futures market - how do you see this morning, with special reference to QQQQ’s?
http://www.larouchepub.com/pr/2008/081007bls_fraud.html
Dismal jobs report used statistical fraud to cover up worse reality.
–
Fed President Wm Poole: “Fundamentals of Our Economy Remain Strong.”
Can’t these guys come up with a new language? The above comment is from 1930 (either Hoover or Mellon).
2008-10 will make 1930-32 look mild in comparison.
Jas
More precisely:
‘”The fundamental business of this country,” President Herbert Hoover (1874-1964) announced in late October, “is on a sound and prosperous basis.”
Secretary of the Treasury Andrew Mellon (1855-1937) even saw some good in the Crash of 1929. “It will purge the rottenness out of the system,” he said.’
http://www.orange.k12.oh.us:16080/teachers/ohs/Tjordan/pages/depressionnewdeal.html
“2008-10 will make 1930-32 look mild in comparison.”
If you really believe this, I wonder what you do with your money? I mean if we have something that is worse than the Great Depression, for sure most banks and brokers will fail and FDIC/SIPC or whatever will likely fail too due to US Govt going bankrupt so FDIC insured CDs or buying gold in your brokerage account don’t mean much when your bank/broker can go under and insurance goes kaput. US Treasury bonds also are worthless.
Do you put your currency under the mattress? Buy gold bars/coins and stash in your home safe or what?
as above unless “it’s different this time!”
I key everything off the S&P. The qqqq generally follows along.
futs sold. Now let’s see what happens.
http://www.larouchepub.com/pr_lar/2008/lar_pac/080106rep_davis_morat.html
Chicago congressman calls for 90-day halt on home foreclosures.
So far today it’s a bouncing bull market…
January 9, 2008 9:38 A.M.EST
BULLETIN
Bulls vowing to try, try again
Stocks get off to a modestly higher start.
• Goldman sees 2008 recession
• Weak U.S. retail results seen
• Mortgage applications jump
• New Bush tax cuts in the offing?
http://www.marketwatch.com/tools/marketsummary/
The problem with vertical market ascents is that they are often times followed by vertical market descents…
…and I suppose that is the reason Greenspan’s put was invented — to avoid the downside of bull swings in the stock market.
looks like we’re setting up for another midday or late day dump. Usually these little rallies get sold immediately.
–
Time to buy puts?
Thanks God that I don’t have to time, because I can be pretty bad at that. As long as the mkt is down to 1250 by April I will be very happy with gains without having to trade.
Jas
Different frequencies of the spectrum for different folks!
The marketwatch.com crew could not even begin to crow before a point of inflection was reached…
January 9, 2008 9:56 A.M.EST
BULLETIN
Stocks manage broad gains
Question for investors: Can this latest positive start be sustained?
Party on, bulls! Ignore the signal from the bond market while you enjoy your koolaide…
http://www.marketwatch.com/tools/quotes/intchart.asp?submitted=true&intflavor=advanced&symb=TNX&origurl=%2Ftools%2Fquotes%2Fintchart.asp&time=3&freq=9&startdate=&enddate=&hiddenTrue=&comp=tyx&compidx=aaaaa%7E0&compind=aaaaa%7E0&uf=7168&ma=1&maval=50&lf=1&lf2=4&lf3=0&type=2&size=1&optstyle=1013
“New Bush tax cuts in the offing?”
Brilliant move. Did anyone ask whos taxes will be reduced? Of course not but don’t let that dissuade you from getting behind this “good thing”. The tax whiners, irrespective of income will bow to the altar while chanting their mantra, even though many of them will be burdened by this tax shift. Call it what it is….. a damn tax shift from those who need it least to those who can’t afford to pay more.
The Boy Who Would Be King can speechify all he wants, he’s increasingly irrelevant.
We won’t see much domestic legislation pass before 2009, tax-related or otherwise. Why would Congress move such legislation forward? The majority has no motive to bring any Bush-favorable bills to the floor.
Just as Team Bush is trying to run out the clock on multiple investigations and criminal inquiries (not that it should help them in cases of possible criminal wrongdoing), the Dems will be holding the ball on any non-essential legislation that would seem to help Bush or the GOP.
amen, brother.
I don’t get how reducing everyone’s taxes is a tax shift from anyone to anyone else.
Why play stupid?
Because the total tax bill eventually has to be paid. Bush tax cuts reducing corporate and capital gains taxes mean higher proportion of taxes get paid by the middle class (not to mention tax cuts not offset by spending cuts result in higher deficits, which are paid for through inflation, which kills the middle class).
http://www.larouchepub.com/other/2008/3502brit_mayhem.html
Global Mayhem linked to Financial Crash?
Thanks to all who came to the DC area HBB meet-up. It was a pleasure to meet you all, including: JP, polly, Mike_G, STL, and some of our lurkers.
I had fun, and it was good to get a bit more detailed discussion of some of these topics going. I think we had 8 people show up. Not bad at all for so little warning.
Where are most of the folks who made it last night located? Mostly a DC/NoVa crowd? Any suburban Marylanders in the mix?
Maybe Arlington/Clarendon area would be a good spot in the future - you might get some more of the fairfax country crew - but still close (and metro accessible) for the dc folks.
Just pick someplace near a metro stop. That would ensure a reasonable turnout. Last nights’ meeting was right next to the Union Station metro stop.
I don’t like dealing with traffic and being able to use the metro was a great convenience.
Ug. I planned to post a summary early, but I got slammed the morning. Still working to get my head above water, won’t be able to post today…
Quick stats from memory: Attending were MikeG, Paul, JimA, STL, polly, Xpovos, spook, and me.
Since we were in Washington DC, we proceeded to produce solutions to not only the housing problem, but had time left over to work on health care and taxation. I can just sense the gratitude from our fellow bloggers through the intertubes.
Thanks to all that came, and hope to see more of you next time.
JP
What did you decided to do about global warming and Britnay Spears?
Glad you all had a good time. Maybe you could pass some of your solutions onto the idiots in gov down there.
Of the 8 who showed that I counted I think the stats were 5 from MD, 3 from VA. Oddly enough, or perhaps not, given our constituency around here, no one from the district proper came.
It occured to me that the Fleishman-Pons stuff that I was taling to JP about is similiar to the housing bubble. People believing something because it would be really nice if it was true rather than because the facts support it. It would be really nice if we could have tons of free electricity and it would be really nice if our houses could make us all rich. And those true believers can become quite angry when you try to confront them with facts and logic.
There was a discussion sometime back about a book called Secrets. I believe that is/was the premise of the book…just wish it.
Pay heed to prophesies from policy makers with the power to influence the outcome…
THE FED
Investment professionals blew it, Poole says
Economy strong enough to avoid recession, St. Louis Fed president says
By Rex Nutting, MarketWatch
Last update: 9:38 a.m. EST Jan. 9, 2008
WASHINGTON (MarketWatch) - Investment professionals’ short-sightedness led them to make fundamental errors that led to the mortgage and credit meltdown, St. Louis Federal Reserve President William Poole said Wednesday.
In a speech to financial planners, Poole detailed five key mistakes borrowers and lenders made that have pushed the economy to the brink of recession.
In brief remarks on the economy, Poole said he believed the economy would continue to grow this year, avoiding a recession.
“The fundamentals of our economy remain strong … and 2008 looks to be a year of rising growth,” he said in his prepared remarks.
http://www.marketwatch.com/news/story/fed-investment-professionals-blew-feds/story.aspx?guid=%7B7DFED038%2DF026%2D45D7%2D9E47%2DDFCE6717D47D%7D&dist=hplatest
Here’s a problem with buying financials. Having to raise capital means dilution and arbitraging. I remember things like Broadwing for instance which were held down for years by PIPEs and convertible arbitrage.
http://www.minyanville.com/articles/CFC-ms-ACA-CIBC/index/a/15461
Nice try at washing the Fed’s hands for regulatory negligence.
How many times (historically) have these guys come out and said that the economy is weak and we are probably headed into a recession—about six months before the recession hit?
I was referring to this line:
“Investment professionals’ short-sightedness led them to make fundamental errors that led to the mortgage and credit meltdown,…”
No mention there of the role of regulatory oversight (or the absence thereof).
Watch out, this thing could not only kill the economy but the whole planet…
http://www.livevideo.com/video/trekdom/1...
I read a story a week ago about how some U.S. Car dealers are selling brand new cars to Canadians, despite the carmakers forbidding the practice.
A Suburu dealer in Montana was one of perhaps 1/2 a dozen dealers selling to the northern hordes, despite the risk of being axed out on profit by the carmaker.
“gotta sell em’” I think is what he said.
$33k here in Loonies, vs $55k in Loonies, in Canada.
I saw a sign on a boat dealership in Ontario; “US prices finally here!”
Good morning from The Mile High City!
I need some advice.
As a prospective buyer, when is the best time to approach the involved parties regarding a Short Sale? The action will be held by public trusties in late February, then the owner has 75 days to make good. Should I approach the owner about it, or the bank?
Follow u to that. Since Senior Bush El Guapo signed in the whole tax debt forgiveness thing, does that apply to ALL Short Sales, even if this speculator has multiple properties going back to Mr. Bank?
Thanks fo any help….
the tax forgiveness applies to primary residence only.
However, a lot of people bought multiple properties saying they are ALL their primary residences. Not sure how the govt. would know which of these primary residences is the REAL primary residence.
That would be tough question for me to ask, particularly since I am living in the unit.
Well MD just mandated that everyone fill out a form legally requesting homestead status for their primary residence. Probably won’t catch husbund/wife dual residence or out of state double dippers but it’s a start.
DLB, If you know who the lender is, go to them . . . they ultimately make the call on the price (not the FB and not a Realtor). If it is truly a short sale, there is no 75 day redemption period (as in a foreclosure) - all parties agree to the sale and can expedite the process, plus you are not competing against anyone else.
When you present your case (offer) to the bank, make sure to estimate their holding costs that you will be saving them by taking the property off their hands including maintenance, taxes, HOA, selling commission, etc. Let the bank know you: 1) know the current market value (present comps if you can get them) and 2) have taken these holding costs into consideration when making your offer.
Also do your due diligence to make sure there are no other liens on the property that you will inherit at time of purchase. Get an O&E report on the property from a title company to make sure - they are free. Insist on a warranty deed when you take title.
Good Luck!
Thanks Flatlander, that helps greatly…..
I have a strong suspision that the owner won’t agree and would rather take the foreclosure hit, but who knows.
The units rent for $1300, but most REO lsiitings are $280K??? Go figure that they can’t cash flow and eventually fold. Unconfirmed, but I think it was an equity extraction scheme.
I’ll update at a later date. May you live in interesting times.
I’d like to share some thoughts I’ve been having recently about finding a bottom in a local area. I’ve been doing research on a number of properties in my neighborhood to find pre-bubble prices, but I’m wondering how relevent they really are. 7 years ago my neighborhood consisted of small office buildings and surface parking lots, where suburban commuters parked their cars and walked into the Loop for work. 2 or 3 old warehouses had been converted into loft condos, and those buildings are where I’m getting my historical price data. Most of those parking lots are gone now, replaced by residential highrises (and a few more office buildings), all with ground-floor retail. As such, the neighborhood is now a nice liveable urban area. I’ve been here 3 years and don’t plan on moving. The nice part is that the area is about 50/50 rental vs. ownership, so I have no need to buy to “lock in” living here. Which brings me to my main problem - finding a price bottom. A particular unit I checked out yesterday is for sale at $300k. The current owner bought for $240k in early 2005. The previous owner bought in the late 90s for $120k. I don’t think that $120-150k is going to be the bottom because the area is very very different these days. Certainly nothing above $210k, probably more likely $180K - $200k is what I’m thinking.
This area has grown mainly by conquests from within the metro area. People wanting to reduce or eliminate their costly and lengthy commutes to their existing jobs. I think this is a bit different from most bubbly areas, where the “everybody wants to live here” mantra meant people from other states/cities should be buying. One of my indicators on how long the decline will be for this neighborhood is a 45-floor rental building currently under construction. It should open right in time for the “prime” rental season, and the difficulty (or lack thereof) should probably give a good idea on whether the area is still able to grab people from other parts of the city/suburbs and thus give me an idea on how long it might take before a local recovery.
I’d love some comments or ideas or even ridicule (if appropriate). Save the joshua trees for someone else please.
Brian,
Why not base your decision to buy on the fundamentals, like when purchasing is cheaper than renting, prices have stopped falling, etc.?
“I don’t think that $120-150k is going to be the bottom because the area is very very different these days.”
It all depends on our city’s job situation. Chicago, particularly the northern half of the city and northern metro area, has weathered past storms well. (ask any true southsider about this) Of course today is much different than 1981-2 or 1990-1.
One thing is for certain, whenever I see what someone paid for city condos 1995-1999 and compare it to 2002-2006 prices I want to vomit. So, I guess the question is…how much do you believe the city has left its past behind?
I think your logic is persuasive to some extent, to the extent that the area (the South Loop, maybe?) is much different than it was a decade ago.
But condo inventory is incredibly high in this town — in all but the perpetually desirable neighborhoods (and maybe even there), there are going to be A.) lots of housing options, and B.) developers who’ll undercut private sellers to make some return on their dollars.
It’s actually the Fulton Market area of the West Loop. In my (biased) opinion, it’s much better than the South Loop. More walkable and more transit options.
Barney Frank was on the Comedy Channel (CNBC) this morning discussing Congressional efforts to bailout the FB. He is in favor of raising the lending limits of the GSE in areas where housing prices are highest such as Mass. even if it exceeds a million $. He likes tax cuts for the middle class and lower class. I would expect an increase in the unearned tax credit is in the offing.
Nothing beats a massive wealth transfer from the U.S. heartland (KC included) out to the wealthy coastal areas. It’s the American way — rob the poor and give to the rich.
Why is he so fired up about keeping houses in his district unaffordable to his constitutents?
This is looking more and more like Tucson’s answer to Enron:
..Tucson’s own little Enron:
http://www.azstarnet.com/sn/biz-topheadlines/219679
Comments:
http://regulus2.azstarnet.com/comments/index.php?id=219679
–
Crow Alert!
Just updated portfolios. Puts up 3%. Financials helped out a lot in addition to AMZN, BA, PCU, JNPR, etc.
Also, approx 4% puts, by $s, got sold on GTC orders (GS, MER & XLF). I always have orders to buy and sell long-term puts. Most of the days no orders go thru.
It is better to be lucky than to try trading in and out (I ma not very good at that game). Tracking the Housing Bubble and the recession have helped immensely in buying puts on right Scams at right times.
Jas
I always have orders to buy and sell long-term puts. Most of the days no orders go thru.
———————
That’s how I do it. Keeps the emotional trading in check. I review and adjust the buy/sell prices when it looks like things are about to change, but try not to day-trade, as I tend to get too emotional and make stupid decisions. So far, it works.
Congratulations to you, Jas!
Hight potential for dumpage–right here, right now on breaking the 1,390 level!
starting to bid for April index calls now.
No April series, going to have to be June.
I’m thinking about playing the turn/snapback but want to wait till after AA has their ER tonight.
Kass says the fed is going to ease “momentarily”
I am long all three indices.
Sorry but paying attention to the terminal. I hate the FED!!!
“Kass says the fed is going to ease “momentarily”
I am long all three indices.”
Yeah just saw that too. Sold out my soon-to-expire Jan RYL puts for a tidy profit. Still have my Apr/May puts and will hold them for now. Plan to dump some of my losing long positions as soon as Fed action happens as that impact is only temporary and buy some more puts on the usual suspects. Nothing is going to bail us out of a recession.
I agree but I’ll bet a lot of people have piled on shorting in the past two or three days. They need to be punished before we can go lower.
txchick,
I have been following your trade; you call the reverse right at the money.
I was going to short around 2pm EST but I said to myself, nah. txchick says it will bounce.
what is your thoughts on sp500 for next couple days in terms of support/resistance level?
thanks
It does look like it has that double bottom “W” look but I’m not believing it until it breaks back above resistance/support.
Can you see a dubya in any of these charts?
http://www.marketwatch.com/quotes/quotes.aspx?symb=tol%20kbh%20len%20ctx%20dhi%20fnm%20aapl%20goog%20bzh%20phm%20sbux%20peet,cfc
Over last two days–yesterday’s low is one point and today’s low is the other low point.
I”m sure that another attempt will be made to break the lows but I’ll be buying that.
I’m out.
Probably be a big dump this afternoon now that I’m out. LOL.
there’s $$$ to be made going back up.
Okay, it’s nearly 1 CST. Expect the push through 1375 and even possibly through the 52 week low on the s&p. I’m bidding on the long side. See ya’ll at 3.
Is it time to buy the dip yet?
The market is writhing violently today…
The last hour has been gettin’ fugly anymore…
I have whiplash
Kill-the-shorts covering?
Merger mania strikes U.S. stock exchanges…
NYSE in talks to buy American Stock Exchange: WSJ
By Sue Chang
Last update: 12:22 p.m. EST Jan. 9, 2008
SAN FRANCISCO (MarketWatch) — NYSE Euronext is in talks to buy its smaller rival, the American Stock Exchange (Amex), the Wall Street Journal reported Wednesday on its Web site, citing people familiar with the matter. The privately-held Amex has been exploring various options, including a sale to exchange operators in Canada and Germany, the newspaper said. The deal could be worth as much as $350 million, according to the article. End of Story
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BFC50AA3B%2D16FC%2D4D35%2D92D0%2DA006C7290204%7D&siteid=mktw
MARKET SNAPSHOT
U.S. stocks rise and fall amid recession forecast
By Kate Gibson, MarketWatch
Last update: 12:06 p.m. EST Jan. 9, 2008
NEW YORK (MarketWatch) — U.S. stocks on Wednesday bounced up and back again with a recession forecast from Goldman Sachs tempering optimism fueled by a raised 2008 forecast from chemicals giant and Dow industrials component DuPont.
…
“The recent data suggest that the U.S. economy is falling into recession,” Goldman Sachs said in a note early Wednesday, in which it also predicted the Federal Reserve would cut interest rates further in response.
http://www.marketwatch.com/news/story/us-stocks-mixed-again-economic/story.aspx?guid=%7B515FFAF5%2D1407%2D4BE5%2DAEAF%2DEFB7D8DFAEE8%7D
Here ya go
http://www.minyanville.com/articles/Bernanke-Paulson-Fed/index/a/15471
“Ultimately and eventually, intervention won’t work, it’ll simply buy time.”
Time is up, Wile E. Coyote is in free fall, any pause in mid-air will be merely look up and see the huge boulder above.
Beep, Beep
Bear market? Nah — ’tis a mere flesh wound.
http://www.marketwatch.com/tools/quotes/intchart.asp?symb=INDU&time=20&freq=1&comp=&compidx=aaaaa%7E0&compind=&uf=0&ma=&maval=&lf=1&lf2=&lf3=&type=2&size=1&txtstyle=&style=&submitted=true&intflavor=basic&origurl=%2Ftools%2Fquotes%2Fintchart.asp
On close inspection, that DJIA chart makes the runup to the Oct 1987 crash look a bit smallish…
Can anyone take a serious look at that graph and claim AG did not systematically inflate the U.S. stock market? Or is that twenty-five years of astronomical economic growth staring you in the face?
Have any of you seen price drops in landscaping/concrete materials? I live in Colorado and I haven’t seen a drop in any these materials yet. How do you think this bust will have an impact the landscaping industry?
http://www.nahb.org/generic.aspx?genericContentID=527
Framing lumber prices over the last several years.
We saw this movie in mid-August. If the fed does something wacky in the a.m., everyone here will be bitching that “they” knew about it ahead of time.
Mais oui madame. The Fed Guns of August, a wonderful film. All about staving off the Euros sweeping over the Alps to crush the defenseless dollar while our allies in the far East stuck it to us with hot lead toys.
txchick…what do you think of NT ?
I don’t follow it any more. What a horror story.
Here’s a nice Ron Paul video for you on gold followed by a video about Countrywide
http://www.thestreet.com/video/index.html?bcpid=1348279749&bclid=1137812485&bctid=1370962978
Took a flyer and bought Countrywide $4.77 (with profits from yesterdays purchase) - day trade only. be out of it on the squeeze tomorrow. Not for the feint of heart and only because I’ve seen this movie before.
Just got in to hotel from work day on road. Covered my short hedges and loaded up this morning when I saw that Asia/Europe had shrugged off U.S. decline. Was pleased but not surprised when I heard market movement on radio. Just now checking details - damn good thing I wasn’t around to trade it or that dip would have certainly cost me.
Blind Luck Department: one of the shorts I had was BBY. Found a flyer in my box last weekend touting 20% off sale at Bed Bath and Beyond. Knew they were hurting so I shorted a couple hundred shares Monday - or so I thought. Used the wrong symbol - discovered a day later I was short Best Buy, which was getting hammered even worse than BBBY, stayed short another day, and then covered this morning.
So let’s get this straight: The economy is expected to continue growing strongly and not go into a recession, but just in case, all sorts of stimulus packages are under consideration to goose its growth even further than its already resilient level?
And don’t monetary policy changes take maybe eighteen months to impact the real economy? Maybe stealthy helicopter drops of liquidity have a quicker effect than the traditional announced FFR rate cuts, though?
Recession S.O.S. - goosing growth
Lawmakers are considering a host of options to stimulate the economy, and some may mean more for your bottom line.
By Jeanne Sahadi, CNNMoney.com senior writer
January 9 2008: 12:27 PM EST
…
Some Washington observers are saying only the Federal Reserve has any real chance of steering the economy away from recession and that any moves from lawmakers would be only for the sake of politics in an election year.
What skeptics on both sides of the aisle express concern about is how quickly the measures chosen will take effect and how temporary they will be in nature.
“We’re suspicious of stimulus packages because a lot of the time by the time Congress acts it’s too late to have an effect on a recession,” said Josh Gordon, senior policy analyst at the Concord Coalition, a bipartisan deficit watchdog group.
http://money.cnn.com/2008/01/09/news/economy/stimulus_pkg_advances/index.htm
voz had to call on an ACH deposit that did not manifest today.
papers go in tomorrow.
expect ACCELERATION EVENTS TO COMMENCE…..
I dont like this part of the stimulus package, Im startin to get concerned…now pay up.
the margin call is comin tomorrow…
Help is on the way for almost everyone who needs it except for renters…
Tuesday, January 8, 2008
Listen to the show
‘Prime’ homeowners may get help too
Treasury Secretary Henry Paulson at NYSE
Treasury Secretary Henry Paulson said today the Bush administration may expand a program currently aimed at subprime borrowers to assist those with conventional, or “prime,” mortgages. John Dimsdale reports.
…
JOHN DIMSDALE: So far, the government’s program to deal with the housing crisis — called Hope Now — has focused only on some 1.8 million mortgage holders struggling with subprime adjustable rate loans. The program encourages lenders to either refinance mortgages or freeze the interest rates. But now the administration is considering help for many more homeowners with conventional — or prime — adjustable rate mortgages. For Tom LaMalfa of the mortgage research company Wholesale Access, the Treasury Secretary’s proposal is an ominous sign.
Tom LaMalfa: Secretary Paulson’s suggestion indicates how rattled, how concerned both he and the administration are over the likelihood that the economy is headed into a serious recession. A stem-winder probably like we haven’t had since the early 1980s.
The Treasury Department won’t say how many prime mortgage holders may need help. Currently, just over a million prime-rate borrowers, with both adjustable and fixed mortgages, are 30 days or more behind on their mortgage payments.
http://marketplace.publicradio.org/display/web/2008/01/08/home_sales/
“how rattled, how concerned”
If I do not recieve the 14k ACH deposit tomorrow…..
I am about to buy a PREVOST for 14k….they trade in the 70’ssss
hard landing just arrived.