Last Year’s Price Was Last Year
Some housing bubble news from Wall Street and Washington. LA Times, “Countrywide Financial Corp.’s future was called into question again Wednesday after it reported another rise in loan delinquencies and foreclosures, fueling fresh speculation that the company was headed toward bankruptcy. The nation’s biggest mortgage lender was ‘withering’ and ‘might falter if it does not receive an infusion of at least $4 billion within the next couple of weeks,’ said Egan-Jones Ratings Co., an advisor to pension funds and other big investors.”
“Weiss Research, which rates the condition of lenders, said the Calabasas company ‘is on a collision course with bankruptcy,’ adding that it ‘exhausted many of its extraordinary financing options last year and is ill-prepared for the rising mortgage defaults and home foreclosures that are widely expected this year.’”
“On Wednesday, some customers at Countrywide Bank’s Glendale branch said they were…trying to determine whether the favorable terms offered were worth the risk. Fred Campi of Silver Lake decided it wasn’t. He was at the bank to withdraw four certificates of deposit, cashing out a total of $60,000.”
“Campi, an administrative aide at Los Angeles City College, said he didn’t want to risk losing access to his funds, even temporarily. ‘I don’t know if it’s worth the crapshoot,’ Campi said.”
The Washington Post. “Countrywide Financial reported yesterday that foreclosures and late payments on mortgages in December soared to their highest levels in five years.”
“Lehman Brothers analyst Bruce W. Harting wrote in a report yesterday that ‘the extent of the deterioration is a surprise.’ Steven Persky, chief executive of a Los Angeles investment adviser, said:’People are recognizing that foreclosures are skyrocketing beyond expectations.’”
“Countrywide, with a $1.5 trillion portfolio of loans, is so large that its failure may cause a crisis on Wall Street, which over the past few years has tied its fate to the mortgage industry by buying so many of the mortgage-backed securities these lenders produce, said Stuart Plesser, an equity analyst at Standard & Poor’s.”
“The housing market would suffer as well, he added. ‘A customer’s ability get a mortgage would be significantly impaired,’ Plesser said.”
“The worst may be ahead for home prices. Treasury Secretary Henry M. Paulson Jr. said yesterday that the housing market has not bottomed out. ‘There’s no evidence that is improving or bottoming, and as a matter of fact, I think the evidence would indicate that it is going to have further to run,’ Paulson said on CNBC.”
From Bloomberg. “Freddie Mac, the U.S. mortgage-finance company that lost a record $2 billion in the third quarter, may be downgraded by Moody’s Investors Service because damage from loan defaults could be worse than the ratings company expected.”
“Freddie Mac ‘may experience higher credit losses than Moody’s previous expectations,’ Moody’s analysts led by Brian L. Harris said in the report late yesterday. ‘In its review, Moody’s will focus on Freddie Mac’s asset quality and the potential that the company may experience an elevated level of credit charges over the near to medium term.’”
“U.S. home prices may fall 12 percent from their peak through 2010 in ‘the toughest housing correction in our lifetimes,’ Fannie Mae CEO Daniel Mudd said this week.”
“‘Credit stress is most likely to occur in the company’s guarantee portfolio,’ Moody’s said.”
“(Freddie Mac) ‘continues to have several options to manage its capital adequacy including raising additional capital, further reducing the dividend, or managing the size of its portfolio,’ Moody’s said.”
“Bank Hapoalim Ltd. became the first Israeli lender to report losses from the collapse of the U.S. subprime mortgage market as it reduced the value of structured investment vehicles and mortgage-backed bonds by $380 million.”
“It also wrote down $90 million related to mortgage securities, which won’t result in a charge.”
“Hapoalim said 98.8 percent of the mortgage-backed securities it owned had the highest AAA credit ratings. The investments were made through the bank’s offices in London and New York.”
The Street.com. “Huntington Bancshares was sliding to a 52-week low Thursday, after the bank said it expected a net loss primarily due to a $276 million charge, disclosed Jan. 3, tied to its relationship with subprime lender Franklin Credit Management.”
“The bank is establishing a $406 million provision for credit losses due to exposure to bad mortgages and is reducing net interest income by $18 million. Huntington also increased its provision for non-Franklin-related credit losses by $106 million.”
“Shares of WCI Communities plunged nearly 30% Wednesday as investors feared a bankruptcy at the Florida condo developer. The decline came after Standard & Poor’s issued a note maintaining its junk rating and negative outlook on the company. The agency pointed out that the homebuilder faces ‘acute liquidity challenges.’”
“‘These challenges include the need to negotiate more liberal terms governing a $700 million secured revolver and a $263 million secured bank loan, including a modification of the company’s fixed-charge covenant,’ S&P said in a note.”
The News Press. “‘If WCI is unable to obtain the amendment or comply with its terms, the lenders would have the right to exercise remedies specified in the loan agreements, including foreclosing on certain collateral and accelerating the maturity of the loans,’ the company said in a release.”
The Orange County Register. “Irvine-based homebuilder Standard Pacific Homes has sold its holdings in two Southwestern U.S. housing markets, saying that the company is adjusting its business ‘to changing market conditions.’”
“The company, which has seen a year of red ink, said it has sold its Tucson division and sold most of its excess land in San Antonio.”
“The land includes finished lots as well as lots awaiting subdivision approvals, according to a press release.Meanwhile, Standard Pacific also sold its Southern Arizona division based in Tucson to a local developer from which it acquired the properties in 2004, according to the Arizona Daily Star and other Arizona Web sites.”
“The Star reported that the deal consists of 700 vacant lots ready for home construction, plus 70 homes near or under construction.”
“Lennar Corp.’s November sale of 11,000 properties in eight states set a price that may mark the bottom for the U.S. housing market: 40 cents on the dollar.”
“That’s how much Morgan Stanley Real Estate paid for an 80 percent stake in the 32 communities, 60 percent less than the price at which the properties were valued just two months earlier.”
“As the U.S. housing slump drags into its third year, sellers will start cutting prices as much as it takes to find buyers, said Marcel Arsenault, a self-described ‘vulture investor.’ Properties will be available to buyers with the financial strength to ride out the slide. Now that a price has been set, all that’s left is the waiting.”
“‘We’re watching Denver, Phoenix, Austin and Tucson, but South Florida is our principal focus,’ said Arsenault. ‘If you’re a vulture, Florida has more carrion. This stuff is lying on the ground. It’s lost life. Some of the stuff in Phoenix is still breathing. Perhaps not for long.’”
“Arsenault said he and his three partners may buy a block of about 50 new, unsold condominiums in Orlando, Florida. They have a price in mind and they’re willing to wait until they get it: 40 cents on the dollar.”
“‘There’s a risk to buying too early in the downturn, but buying too expensive is our biggest pitfall,’ he said.”
“Lawrence Gottesdiener, chairman of Northland Investment Corp pounced last week when Tarragon Corp. offered five apartment complexes in Florida and another in South Carolina for $156 million.”
“‘I could say I bought for 50 cents on the dollar of last year’s price, because I did, but I think that’s a little bit of hyperbole because last year’s price was last year,’ Gottesdiener said.”
“John Levy, a real estate investment banker in Richmond, Virginia, said he’s planning a joint venture with a national builder to buy communities abandoned by bankrupt developers in the middle of construction. ‘That’s where you can buy at the biggest discount,’ Levy said.”
“The next bubble to deflate may be Alan Greenspan’s reputation. Hailed as perhaps the greatest central banker who ever lived when he left the Federal Reserve in 2006, Greenspan is under attack from critics…for his handling of the 2000-2005 housing boom.”
“At stake is not only Greenspan’s legacy but also the future of policies he espoused during 18-1/2 years atop the central bank. Critics blame his aversion to regulation and reluctance to use interest rates to puncture asset bubbles for the boom in mortgage lending and house prices that has since gone bust, threatening to throw the economy into recession.”
“Economist Allen Sinai said the Fed’s experience is leading other central banks to rethink their approach to asset bubbles.”
“‘There is a growing body of thinking in central banking that one should not let these bubbles run and allow them to burst,’ he said. ‘They should lean against them.’”
“In an interview, Greenspan said such criticism ignores limits on what regulation and monetary policy can achieve. Greenspan said that, while the Fed’s bank examiners were hard at work during the mortgage-lending boom, ‘we have to be realistic about what regulators can and cannot do.’”
“‘It is extremely rare to uncover fraud other than through whistle-blowers,’ he said. ‘You don’t get at it through internal audits, you don’t get it through outside audits and you certainly don’t get it through bank examinations.’”
The Rocky Mountain News. “Last week, a woman called me and asked me for the number of the Colorado Foreclosure Hotline. She told me she wanted the number for her neighbor, not herself. She then asked me if there were any counselors who spoke Spanish at the hotline, as her neighbors don’t speak much English. I assured her there are bilingual counselors at the hotline.”
“Then she told me what really was the crux of her call. The couple next door had given a false Social Security number to the lender on their mortgage application. She said although they are hard-working, good citizens, she thinks they are in this country illegally.”
“They are understandably worried that their fraud will be discovered and there would be no help for them.” “In addition to the prospect of losing their home, they fear being deported. I said I didn’t think that would happen. But honestly, I told her I thought they could be out of luck as far as getting help from their lender, since they were guilty of mortgage fraud.”
“After I got off the phone with her, I wondered if I had given her the correct advice, so I called Zach Urban. Urban runs the Colorado Foreclosure Hotline.”
“I asked Urban if the homeowners called their lender, and the lender discovered the phony Social Security number, would they turn the borrowers over to the Immigration and Naturalization Service, or some other agency?”
“‘I have not seen any mortgage company that has any interaction with the INS,’ Urban told me. ‘And we certainly have no interaction with the INS. From our perspective, we are not police officers; we’re housing counselors.’”
“But clearly it is a sticky issue for the counselors. ‘They have presented false information,’ Urban said. ‘As with any type of fraud, they have been dishonest from the start. What gets to the heart of the issue is that it may not have seemed like fraud when they lied, or maybe it seemed so easy, or maybe it seemed everyone was doing at the time, when there were such lax underwriting standards.’”
wow, the I’ll slash rates rally is really big (NOT)
I walked through a dog park yesterday, and afterward had to scrape several pieces of bernanke off my shoe.
People really should pick up their Bernake.
I use my Hilliary to pick it up before I throw it in the Bush.
Enough for now… I have to take a real bad Huckabee
You just have to know where to look for it. Check out http://www.kitco.com. Gold rallies up more than $20 from it’s low at 8:00 am (EST).
I guess the present and future bubble is in gold then, at least if you deal in $US?
“Weiss Research, which rates the condition of lenders, said the Calabasas company ‘is on a collision course with bankruptcy,’ adding that it ‘exhausted many of its extraordinary financing options last year and is ill-prepared for the rising mortgage defaults and home foreclosures that are widely expected this year.’”
We are gathered here…
Countrywide: America’s Answer to Northern Rock.
yep, goose was cooked a while back, now it’s just burnt. how much more has the FHLB “loaned” them since the $51 billion thru September?
and good to see the media quoting a rating agency other than the 3 Blind Mice:
“The nation’s biggest mortgage lender was ‘withering’ and ‘might falter if it does not receive an infusion of at least $4 billion within the next couple of weeks,’ said Egan-Jones Ratings Co.”
B of A to the rescue?
Anybody know how much the FHLB has loaned to Countrywide, and/or what the quality of the collateral is?
“Countrywide, with a $1.5 trillion portfolio of loans, is so large that its failure may cause a crisis on Wall Street, which over the past few years has tied its fate to the mortgage industry by buying so many of the mortgage-backed securities these lenders produce, said Stuart Plesser, an equity analyst at Standard & Poor’s.”
Le Tan Orange does make for a most excellent Ivan Boesky type, to blame things on…
Greenspan is the worst ever. And the fact so many in this country acted like he was a god says a lot about the country!
What fools we are.
“The next bubble to deflate may be Alan Greenspan’s reputation.”
His Legacy:
“Irrational exuberance” precedes: “Rational emaciation”
“Bear” witness to the future.
That is why we must propagate the following truism among our citizens from this day onwards. Hopefully it will get into future English dictionaries.
barnanke = dog sh!t
(reference: see the first post above)
We don’t need Bin Laden, we already have Greenspan.
Never before so few can do so much damage to this nation.
(Never before so few can do so much damage to this nation.)
If you include living beyond your means personally, and voting for those who promise to do so in the public sector, it seems that a large share of the adult population was involved.
True, but I expect greed and cons from my fellow man, and certainly Wall Street. It’s the sick and twisted gatekeeper’s that disturb me the most. He reminds me of Bush in that everything he says is a lie which he expects you to believe as if he was somehow brighter than you, and then pleads total ignorance as soon as the curtain is lifted. He sparked the problems with the rate cuts which was bad but not terrible. It was his refusal to slow the train down when he saw that it was out of control at the request of his friends in the government and on Wall Street that will make him go down in infamy.
At least we have Bernanke now to make everything all right. Hmmmm how do resolve problems created by artifically low rates? Why not try lowering rates? It’s like heroin addiction, you cant heal until you are cut off and go through the withdrawal period. Continuing to inject yourself to avoid the withdrawal symptoms may seem like its in your best interest at the time, but is the quickest way to kill yourself.
Good post, Tim.
Very little could have happened without the implicit/explicit approval of the regulators.
All AG had to do was say:
“I’m really alarmed by what’s going on in the lending industry. There is a huge credit bubble right now, and all assets prices that are largely affected by credit avaiability are in a bubble — especially housing. If I were a borrower, I would not buy a house until home prices move in line with traditional ratios. We will look into the matter and once we determine the exact causes of the credit bubble, will do everything in our power to remedy the situation. Until then, buyer beware.”
McCain Wants Greenspan, Dead Or Alive
“If He’s Dead, Just Prop Him Up… Like ‘Weekend At Bernies’” To Help Fix Tax Code, Jokes Senator
http://www.cbsnews.com/stories/2007/10/05/politics/main3333938.shtml
Weakened @ Bernanke’s
“Lehman Brothers analyst Bruce W. Harting wrote in a report yesterday that ‘the extent of the deterioration is a surprise.’ Steven Persky, chief executive of a Los Angeles investment adviser, said:’People are recognizing that foreclosures are skyrocketing beyond expectations.’”
‘The worst may be ahead blah blah.’
- Upper management is so insulated from Jar Jar Sickpack that it is impossible for them to realize that JJ is flat on his back financially.
I watched Kudlow last night and these jokers are in dreamland totally unaware of the slob on the streets struggles.
“Jar Jar Sickpack”
Are you saying the sheeple J6P are beginning to resemble a boring, poorly computer-animated, difficult-to-understand character in a bad sci-fi movie, where the CGI animators were about as crappy at their trade as Bernanke is at practical applications of economic theory?
If so, I heartily agree.
Bitter much?
(BTW, I agree. I think the site is gone, but for awhile I was entertained by http://www.jarjarmustdie.com)
“meesa broke”
Jar Jar Bernanke: “Meesa clueless dumbass.”
My new moniker for the FED chief is Clockwork Orange…
He utters something stupid and Gold goes up, accordingly.
They really are clueless aboutthe plight of J6P. It reminds of when the NFL had its last strike. A Denver sports journalist was interviewing John Elway. Once the official interview was over, John Boy asked the reporter why the fans were so angry with the players. The reporter told him it was becuase you guys come across as greedy, while we J6P’s struggle to make ends meet. Elway was stunned and refused to believe the reporter, who then challenged Johnny to guess how much he was paid. Elway was off by about 4x, and was stunned again to learn how little ordinary people are paid.
The intelligent folks “in the know” are being “professionally quiet”; weapons inspector David Kay’s silence while Dubya was war mongering comes to mind. Bottom line: the $hit has hit the fan, and everyone’s looking for cover to avoid the scat.
That is what happens when you go from silk-drawer college straight into multi-millionaire for playing a game. A more clueless group would be hard to find. It reminds me of my sister in law who was surprised to find out that not everyone spent $30,000 on a party.
My 401k is in Franklin Funds. any relation?
“Huntington Bancshares was sliding to a 52-week low Thursday, after the bank said it expected a net loss primarily due to a $276 million charge, disclosed Jan. 3, tied to its relationship with subprime lender Franklin Credit Management.”
“They have a price in mind and they’re willing to wait until they get it: 40 cents on the dollar.”
Calling all vultures - Let us prey.
“Make sure all carrion items will fit inside the overhead bins or under the seat in front of you.”
Looking at such an opportunity now. If it works (complications abound), will be buying a new product at about 100x monthly rent…
Rental Watch, I have a question about the buy-to-rent ratio. When they talk about 100 to 120 times rent, does that refer to the price of the house or the amount of the mortgage. In other words, do you include the downpayment in the calculation? I want to be ready with all the info when the time comes.
I think the convention is as a multiple of total cost. I translated to 100x rent on total cost because I think that’s what people on this board understand. I’m actually looking at it from an NOI/cap rate standpoint–this would be ~ a 9.5% cap rate (after expenses, etc.), which, if you use leverage to buy the investment, you can have a pretty healthy current cash flow on your paid-in equity.
Thank you for your response, but excuse my crass ignorance. Does that mean you are adding 9.5% percent to the cost of the property to cover the expenses of holding it?
A 9.5% cap rate means that if the property cost $100, you would get $9.50 in what is considered essentially net cash flow (or net operating income, for the official term), after expenses.
The price of the house. The mortgage does not determine the value of the house.
“Calling all vultures - Let us prey.”
That’s good, really good as a matter of fact. LOL!
Or more properly called “market price.”
Has anyone checked out Zillow today? They just updated how they determine prices (per Diane Olick’s blog on CNBC) and boy-oh-boy have prices changed in my neck of the woods! My house has gone down in value literally by 20% overnight (I just been on Zillow yesterday). I’m a little sad, but then again I never belived the Zillow number to begin with!
Excellent - this is one of the most important things that can happen.
Here is seattle, all the misguided look at their zestimate and think that they are still rich. It will be painful, but will be good in the long-term as they make decisions.
By god you’re right - I’m rich!
I just looked at Zillow and definitely something happened to their calculations. Houses actually seemed to have gone up in my area due to the new “comparable comps” being properties nowhere near the neighborhood of the house being valued. some crazy calculations going on there. Certainly if I was a potential buyer and some realtwhore tried to pull out these “comparables” I would roll on the floor and laugh. Then get up and walk out.
Athena
LOL. The home I rent is now Zestimated at 433x monthly rent, yeah, that’s sustainable…
I got you beat but only slightly since the home that I rent is only zestimated at 463 times monthly rent. This is in San Francisco. Market appears to still be holding up here - a home on my block went on the market in mid-December and went sale pending before New Years.
Madness. I’m starting to see “price reduction” and delistings frequently, and I live close to one of the nicer downtowns on the Peninsula.
If people want to keep buying at 433x rent, that’s fine. In the meantime, I rent. We’re heading into the denial phase too, I think there are lots of folks that can’t sell and are beginning to ask ridiculous rent numbers for their homes. They won’t get them, and the pressure to sell will mount as they begin to burn through their savings…
In Naples we rent a house in which the owner has it for sale at 800 times monthly rent. Zillow shows it at about 600 times. DENIAL.
I sold my house in California, March 2006.
So I looked it up today on Zillow.
It points to a house about a mile away.
The aerial view does not even show the house
my neighbors built 3 years ago next door to mine.
That web site is a joke.
They show a big jump in prices in Brevard County and DeLand. WTH?
Zillow still has my house as selling for 1.8 million instead of 180k. I sent them an email to correct it, but they want you to “register” to give them feedback.
I almost registered today. Then I had to ask myself…”Self, do you REALLY want a crap load of email to fill your box with MORE crap you don’t want to read?”
I didn’t register.
BayQT~
Thanks for this. The new prices seem all over the place, not consistently down, as they should be. Of the houses I’m following: my mother’s old house in Ft. Worth was up $7K; my little condo in Cambridge up $30K; one of the houses I’m following in Santa Barbara down $100K and another two blocks away (same size, same vintage, not as nice) down just $30K. How can this be?
Probably low number of sales is causing the comps to be jumpy. The zillow algorithms are probably a bit simplistic to keep track of stuff.
It probably averages a good bit so you don’t get as fast a response. If there are only a few comps and a lot of olders ones it might weight to the older ones.
Don’t know if they did an age valued weighting on the comps or distance.
Anyhow, the data in times of low sales gets vey skewed.
they are showing my nephew’s foreclosed home as sold!?!~!? he just got thrown out by the bank last month. there has to be a glich because it doesnt show as sold unless you click on it for detailed information. does anyone know if they show a house as sold if the bank takes back possesion of it?
Zillow has our former Seattle area home zestimated 130K more than what it sold for in late 2006. Cyberhomes thinks it’s worth 25K more.
Thanks for the heads up on Zillow. I just happened to look at the site this evening and noticed the new and improved values.
My brother’s house in Tucson went UP….$100,000 !!! Good Lord. Someone close must’ve gotten lucky. And Bro plans to market his this year. Sigh
“U.S. home prices may fall 12 percent from their peak through 2010 in ‘the toughest housing correction in our lifetimes,’ Fannie Mae CEO Daniel Mudd said this week.”
That would have to be 12% PER YEAR, right?
Amen and amen. I know it’s been said a million times on this board, but I am so sick of prices having shot up 20% a year for 5 or 6 years straight, and then realtwhores saying what a great market it is to buy, blah, blah, blah, because a measly 10% reduction so far.
You would think that should be their spin:
“Sure, prices have come down a bit, but only 10%! Over the last few years, your value has increased twice that much at least! You’re still rich. Buy more houses!”
House prices are sticky falling faster in some places than in others and not grossly overpriced everywhere in the United States. Prices will fall an average of 5%/year for 07,08,09,10,and 11.
This guy isn’t very far off by saying nationwide -12% in 2010. However, he doesn’t give you the big picture of an overall peak to trough seeing 25% drop from 225K national median in 2006 to 175K national median in 1213.
The cost of loans will also mitigate the fall. For example when Helicopter Ben drops rates to 2% near year end the cost of mortgage will be 2% interest plus 5% depreciation which is only 7% and about same as the 7% interest back in 2006.
Bernanke is wall street’s whore - what a spineless wimp.
How do we replace him?
“How do we replace him?” Jan 20, 2009 he is gone when the new president takes over. Hopefully, it won’t be Jesse Jackson replacing him.
Wrong. Bernanke’s term lasts till 2010.
Mellow yellow’s up a dozen…
Move the chains!
“Mellow yellow’s up a dozen…”
Big deal, Silver is up 3%. In commodities bull markets, gold typically underperforms silver.
Gold was up 31% in 2007, vs. Silver 13% rise.
Don’t let facts get in the way of fantasy, though.
Liquidated my SLV today. My only direct silver investment is what I have in CEF.
Au is a widely used industrial metal; that’s the problem I have with investing heavily in it. As this economy breaks, so goes industrial manufacturing, and so go the industrial metals. I own a little SLV, but the lion share of my 401 is in GLD and AUY.
“Au is a widely used industrial metal”
Me thinks you mean Ag… Unless you think GOLD is a widely used industrial metal.
Speculation was the primary cause of an unsustainable rise in home prices, leading to the current crash.
But there’s no speculation in PMs, right?
All those fiat dollars need to go somewhere. The day is coming when it will be time to get out of gold, but this bull still has quite a ways to go. There are literally trillions of greenbacks sitting in accounts all over the world that are losing value by the day. Heck, they’re losing value by the hour, and will continue to do so as long as the fractional reserve banking system continues to create credit unchecked.
I’ll be looking for a correction tommorow, it could go thorugh next Wed., for those looking for a dip to buy.
Of course there’s speculation. On the other hand, I don’t yet see:
A $250K/$500K capital gains tax exemption on gold (as opposed to taxing all capital gains in gold at the higher short-term tax rate, regardless of how long it’s been held).
A “President’s Working Group on Gold Markets” to support the gold market in the event of sudden sell-offs.
A tax deduction for interest on margin debt used to buy gold.
A “Federal National Gold Association” and “Government National Gold Association” who use taxpayer money to purchase margin debt used to buy gold.
Thousands of government boondoggles at the federal, state, county, and city level to promote “The American Dream of Gold Ownership”.
The ability to buy physical gold, or to go long on gold futures, on 0% margin. There should be thousands more government programs to “help people keep their gold” and prevent repossession of physical gold when buyers default on their payments.
A “National Association of Goldsters” whose sole purpose in life is to chant “They’re not making any more gold”, “Gold never goes down”, and “Buy gold now or be priced out forever”. This NAG should be one of the most powerful lobbies in America, and their members should be quoted by the media as though they were (1) disinterested and (2) experts.
Individual retirement plans and pensions invested wholly in gold, so that supporting the price of gold becomes a matter of national security. Any hint of a gold price crash should lead to congressional hearings and SEC investigations.
It comes with no strings attached.
I love you guys.
We are now entering a period where the market begins to question whether the Fed can stop the implosion.
Making progress!
“U.S. home prices may fall 12 percent from their peak through 2010 in ‘the toughest housing correction in our lifetimes,’ Fannie Mae CEO Daniel Mudd said this week.”
I’m thinking an average of 20% by some time in 2009 as a national average, the way things are going. More in some places. Plus inflation from the peak to then. Plus more years of inflation as prices staganate, because no one will underwrite a loan for more than the low, and “I won’t give it away” is replaced by “I won’t overpay.”
I think the average (not median) will go down by more than that, because the big bubble states like California and Florida, which have the highest prices, will take the biggest hits and skew the average.
In other words that house in Stockton going down from 400K to 240K affects the national average a lot more than the house in Springfield going down from 200K to 160K.
That’s an interesting point. The change median is more relavant from the point of view of buyers and sellers, but the mean — or more likely the change total housing value — is a better measure of mortgage losses.
In case I didn’t make may anger clear in my earlier posts, I just wanted to say “F__k you, Bernanke! Some us of live our lives in a prudent manner and actually have savings that we’d like to earn a decent rate of return on, you piece of s__t!”
(ahem) Sorry, lost control there for a moment.
I’m with you 100%. I’m seeing my interest income destroyed by these rate cuts which means less spending for me which can’t be good for the economy these idiots are trying bail out. No wonder we have such a poor saving rate in this country, whats the point of saving when you have to spend you money before inflation eats it alive ?
Preach it, Bob! (I’m a saver too.)
Agree completely. That is why gold and silver are doing so well. There is little point in accumulating money in a depreciating currency when the returns are so low. PMs have become the new flight to safety, as the annual yields on Treasuries won’t even cover a months’ worth of inflation. The masses are just beginning to recognize that now.
The local coin store and pawn shops now sell out of Krugerrands almost the moment they arrive. I was talking to the owner of one, and he said a year or two ago they couldn’t get rid of them.
When the taxi driver tells me how much he has made off bullion, I’ll know it is time to sell.
“When the taxi driver tells me how much he has made off bullion, I’ll know it is time to sell.”
Exactly! There literally are several people at my office (I jokingly call them “The Herd” when I’m talking to my wife) that I use as barometers for timing my contrarian investment strategy. When they’ve all gotten out of their equity positions after The Great Sheeple Stock Market Capitulation of 2008-09 ™, I’ll know it’s time to go long again.
Anger clarified….. Rally Bob is on a mission today. Northern CO stay indoors!
Tell us how you really feel.
RE: I just wanted to say “F__k you, Bernanke! Some us of live our lives in a prudent manner and actually have savings that we’d like to earn a decent rate of return on, you piece of s__t!”
Amen to that rant, brother!
Pasta past it’s good-bye date…
“Freddie Mac ‘may experience higher credit losses than Moody’s previous expectations,’ Moody’s analysts led by Brian L. Harris said in the report late yesterday. ‘In its review, Moody’s will focus on Freddie Mac’s asset quality and the potential that the company may experience an elevated level of credit charges over the near to medium term.’”
The couple next door had given a false Social Security number to the lender on their mortgage application. She said although they are hard-working, good citizens, she thinks they are in this country illegally.”
WTF?: good “citizens” in this country illegally?…….HAHAHAHA
“They are understandably worried that their fraud will be discovered and there would be no help for them.” “In addition to the prospect of losing their home, they fear being deported.
I thought I could come up with some snappy coment but I can not top these statements, they already contain all the humor.
Three things:
1. They are not good “citizens” of the U.S.A.,
2. They should be prosecuted for fraud, entering our country illegally and breaking our other laws; and,
3. The should be deported.
Yep. Of course the MSM will insist that we incapable of wiping our bottoms, and thusly illegals are essential to our economy.
And they buy houses, pay taxes, you know. (sarcasm off)
This is one of my pet peeves — hearing how illegals working illegal jobs pay taxes. I’m sure some illegals do pay taxes, but I know from first hand experience that many don’t. In fact, I know a couple who worked 7 days a week for a little less than four years, probably making 8 an hour, who saved a little under 100K then left the US for their home in E Europe. Did they pay any federal taxes on their under the table wages? No.
An illegal making $8 and hour nets more than a US citizen making $12-$15 an hour.
Tell me about it. We just hired a household employee (nanny), we are using a payroll tax service, making sure we’re not running afoul of overtime laws, getting workers comp insurance, etc. (in other words, following THE LAW, paying our taxes, and withholding for our nanny and reporting income).
When interviewing, we were appalled to hear many of the nannies say, “well, what we expect to get paid depends on whether or not you take out taxes”, and many of these people were NOT illegal at all (lifetime residents in the area). And in their prior jobs, they got paid UNDER THE TABLE (with their employers saying things like “we pay enough taxes anyway, we don’t need to pay payroll taxes”.
There are plenty of tax cheats to go around, citizens (wealthy and not), and illegal immigrants. Close the loopholes for the rich, and get all legal citizens to pay taxes, and you’ll see tax receipts go up far more than if you simply make the illegals pay their taxes.
The problem is not just illegals aliens, it’s EVERYONE who breaks the law.
I know a couple who worked 7 days a week for a little less than four years, probably making 8 an hour, who saved a little under 100K
Can a tax-paying couple making 8 an hour save $100K in less than 4 years? NO WAY.
Therefore, crime pays.
Is that a good message to send across to the citizenry? I don’t think so, unless US wants to become another banana republic, corrupt and rotten to the core.
The “illegals” are only essential to the extent that since RR in the 80s has the US catered to corporate elitists and who offshore all their ( halliburton -dubai etc) corp hdqs and then pay NO taxes in this nation that they turn into mush.
Pretty soon, we might see folks going south, but surely our gov/bush etc who ruined Nicaragua etc ruined their nations economies as well, ie; corporate farms vs local farmers etc.
“In addition to the prospect of losing their home, they fear being deported.”
Don’t worry, the mortgage debt remains in the US
Well, eventually, it was packaged and repackaged, and ended up in a CDO that was acquired by a German bank that sold short term paper to Montana Teachers to finance the investment…
So, the loan ended up owned by Germany, and the risk was born by aunt Suzie who was relying on her pension to keep her home wram in the winter…
But Lenders were chasing illegal immigrants as customers as you will all recall. I can’t really think of something more stupid than buying property in a country you don’t have a legal right to be in.
You said it, Mo, they would have been much better off saving the money or sending it back home to buy some property. But the lenders told them everything would be OK, and it was OK for some time, wasn’t it. It seems to me there is plenty of blame to go around in this mess…
Call the Border Patrol. I believe that the number is 1-877-USBP-HELP.
Will they actually show up? I mean, if they want to find illegals to deport, all they have to do is raid the usual places illegals line up to find day work (like a Home Depot parking lot).
I wonder how many of *them* have committed mortgage fraud!
What a contrast. My father-in-law moved to Mexico legally, but was not allowed to borrow even 10% to buy a home there.
I lived 12 years in Mexico City, as a legal resident alien with an FM-2 visa. Illegals are treated better in the US than legal aliens are in Mexico. As a resident alien I:
Had to inform the government if I moved.
Need the gov’ts permission to change my civil state (marriage/divorce).
Had to pay extra surcharges at all levels of education.
Could not own property 100 km from a border or 50 km from the coast.
Could be legally deported for expressing a politcal opinion in a public setting (waving an American flag while demanding my “rights” would have been a very bad idea)
etc.
(1) “Good” citizens do not commit felony fraud by lying on a mortgage application.
(2) “Good” citizens do NOT use other people’s Social Security numbers.
Whose Social Security numbers did this lying thieves use? Whose ID was stolen and whose credit is going to be damaged because of these lying, cheating, stealing scum? Who is going to have to deal with the nightmare of having their identity stolen and their credit wrecked by these trash?
They broke the law when they entered the country and they have kept breaking the law - identity theft and obtaining money from a lender by committing fraud (and that was in an amount that is most definitely a Felony so they will go to jail for a long long time and then get deported.)
ID theft is a real touchy subject with me. I had my wallet stolen out of our RV and it had my driver’s license, Medicare card, Blue Cross card, Social Security card, credit cards, andanythinge else you can think of. And it landed in the hands of ID thieves who sold the information to illegals! It is a nightmare to sort out that kind of thing and even after 7 years, something will still come up.
That’s awful. I, too, have been the victim of i.d. theft — the person did not use my S.S. number, but her own name and pic and MY California driver’s license number. Wrote a number of bad checks. I recently had to get a replacement S.S. card and when it came in the mail, there was a stern warning to NOT keep it on your person or in your wallet.
And the bank or mortgage company that abetted this couple’s crime should be financially liable for huge damages to the SS#’s real owner. There is no way lending institutions and the realtors who promote don’t know when they are doing business with illegals using stolen identities, but as long as they profit, they don’t care.
Multiply this sorry tale by a few million, and one begins to realize the real impact of illegal immigration. It may be great for Big Business and cheapskates looking for slave labor, but it’s horrible for the country, and for tens of millions of legal citizens stuck with paying the bill and cleaning up the mess.
I was just on the phone with a friend talking about this story. What I’ve been wondering is what happens when the discoveries are made that some of these people (who qualify under Bush’s bailout guidelines) have committed fraud? Aren’t the lenders obligated to tell SOMEONE? And if they don’t, won’t they then be an accomplice to the illegal manuevering?
I can’t see how they can legally get around reporting the obvious fraud. I know ethical behavior on the part of many lenders have gone out the window over the last few years, but enough is enough. Somewhere along the line someone has to call a spade, a spade.
BayQT~
My SS number was being used by someone collecting Unemployment. When I found myself unemployed, the unemployment office would not let me file using my own SS number because they said it was being used by someone else. Even after I went to SS and verified that the number was mine, unemployment would not discontinue issueing checks to the theif who was using my number and instead issued me a “temporary” SS number so that I could collect my own unemployment (Wonder who’s number I was using?!). To this day, I don’t think it has been cleared up. Fortunately, I’m not seeing any dings on my credit. But I don’t think there is anything I can do because Social Security shows me as the rightful owner. It’s Unemployment where I need to get the records changed and they wouldn’t do it. :-/
Their job is not to discover/stop fraud. It is only to check the box and move the form.
Geeze, I hope you reported it to the police. Unemployment is taxable income. You don’t want the IRS coming after you for someone else’s fraud.
Actually, I was only 20 at the time. I hadn’t really given much thought to that aspect of it. It was my first dive into the unemployment world and I was naive. Given that it has now been over 10 years, do you think there are still any issues that can arise from this?
No… you’re okay. IIRC the IRS can only audit beyond 7 years in the past if they can prove there was fraud. There was, of course, but it wasn’t you who did it.
Identity thieves should be tried by tribunals on day 1, sentenced on day 2, and hanged on day 3. We do not need this scum in our midst.
Agree, Sammy!!!
Sorry to rain on your immigrant-bashing parade, but nowhere on the news article it says that this family committed ID theft. Most likely they made up a SS# for lack of a real one. If the made-up number had matched one of a real person, the bank would have found out (the mismatch in names). Obviously that didn’t happen, so the bank went ahead with the loan. The best thing this family can do is send the keys to bank and walk out.
By good citizens, the article meant that they are hardworking people. They had to make up a fake SS# because the current anti-immigrant sentiment makes it harder to obtain a legitimate SS#.
IAs don’t need SS#s. They use a taxpayer identification number. TIN. Any non-citizen can get those. And how does hardworking (which the article didn’t say, IIRC) equal citizen, good or bad?
Illegal aliens use ITIN’s for stuff like loans and to open Bank accounts. The ITIN is for immigrants here legally (work visas,etc) to file their taxes. The form very clearly states that it should not be used for ID (as no official check is made of the info put on the form). But, heck, what do rules or notices mean when you talking about “hard-working” illegal aliens.
The stolen SS numbers come into play when an illegal wants to get a job (felony) or free hospital care (other than ER) or WIC stamps or food stamps, etc…etc…etc.
Here in Utah we have a major problem with the illegals making up a number with the 528 start number. In many cases (20,000+ as of now in UT) that number is then given to a newly born child. A child whose parents now have to deal with the hassles of trying to clear up the mess made of their child’s SS # by some “hard-working good citizens”.
Hardly any business and most Banks in this Country will not bother to cross check SS #’s. One child here had over 37 individuals (mosty working in meat packing plants) throughout the U.S. using her Social Security number.
Hey Diego, why don’t you go take a hike.
What’s your position here? Folks that commit illegal activities should get a pass and not be prosecuted because they are just trying to get ahead?
The problem we have is that the immigration laws are not in agreement with economic reality. There are plenty of low- or no-skill jobs that many Americans won’t do, so there’s a strong demand for immigrant labor. And there are immigrants willing to come here and take those jobs, and they even want to come here legally. Yes, legally. But they can’t because the current legal framework is outdated and broken. Say, Joe’s Pizza in Chicago needs busboys for $8 an hour, and foreigners want to take that job, but there’s no legal way for that immigrant to come here legally. So, they are in a sense forced to immigrate without proper documentation.
There are plenty of low- or no-skill jobs that many Americans won’t do, Now this is just like “I can’t sell my home.” If the price is right, it will sell. If you pay enough, people will do it. Now you can argue that if the price of labor goes up enough the jobs will be outsourced. If foreign labor will be doing the work either way, is there THAT much advantage to having them physicaly located here? Besides, illegals are most prevelant in jobs like construction that can’t be sent abroad.
Absolutely! Think of all the automation that would be introduced in this country if cheap illegal labor wasn’t used. The USA would be an even greater leader in technology.
Sorry to rain on your immigrant-bashing parade,
I don’t recall anyone objecting to residents who are here legally documented.
Diego,
you conveniently left the word ILLEGAL out of your defense of the criminals.
“but nowhere on the news article it says that this family committed ID theft.”
Even if it wasn’t intention ID theft, if they happen to make up a number that actually does belong to someone, it’s still theft. That original owner is left with the mess caused by the person (illegal or not) who STOLE their number and used it for unlawful purposes.
Any way you slice it, using something that doesn’t belong to you without the owner’s permission is theft.
“They had to make up a fake SS# because the current anti-immigrant sentiment makes it harder to obtain a legitimate SS#.”
They made up a fake SS number because as illegal aliens they use forged documents and stolen identities, thus compounding the crimes they commit…jumping borders, overstaying visas, working illegally, failing to pay taxes, driving without licenses or insurance, etc.
America welcomes legal immigrants, but no illegal is an immigrant. By definition, they are criminal aliens.
Bug off diego.
The problem we have is that the immigration laws are not in agreement with economic reality. There are plenty of low- or no-skill jobs that many Americans won’t do, so there’s a strong demand for immigrant labor. And there are immigrants willing to come here and take those jobs, and they even want to come here legally. Yes, legally. But they can’t because the current legal framework is outdated and broken. Say, Joe’s Pizza in Chicago needs busboys for $8 an hour, and foreigners want to take that job, but there’s no legal way for that immigrant to come here legally. So, they are in a sense forced to immigrate without proper documentation.
Oh, yes, the word ‘illegal’ that some love so much. Let’s try an example related to driving. Where I live, the speed limit on the freeway is 65 MPH; however, if the roads are not congested, most drivers, myself included, drive in excess of 75 MPH. Now, these drivers are clearly breaking the law, right? Driving over the speed limit is an illegal activity. And illegal is illegal, right? These are criminals! Therefore, they should have their cars confiscated on the spot! Again, illegal is illegal, and we should have zero tolerance for criminals who break our laws, therefore, if you drive over the speed limit, your car should be confiscated. Does this argument sound ridiculous? Of course it does. As ridiculous as calling a human being “illegal” and demonizing him/her for breaking laws that are absurd (absourd to the extent that these laws don’t reflect today’s economic reality).
Diego, why are our border laws absurd? I don’t leave my doors open for anyone to come into my home and make himself comfortable, or even to clean it. It’s MY home, and I have a right to say who can enter. Illegals are tresspassing on OUR property; they are entering OUR home (USA) without permission and making it theirs. They are also bankrupting our public hospitals and schools, trashing our cities, and committing enormous numbers of serious and violent crimes. The cost to American taxpayers is more than just billions of dollars a year: its ruined lives. And having ones identity stolen is a terrible thing.
There are no legal jobs in America Americans won’t do if paid fairly, but illegals undercut American workers, doing great harm to American workers, who cannot compete. That is today’s economic reality. If companies couldn’t hire slave labor from Mexico or outsource to slaves in China, they would have to hire Americans and pay living wages and benefits.
Speeding is illegal, but speeders here legally are not illegals. Equating a ten mile an hour excess with moving into someone else’s home, squatting there, and trying to take it over, demanding they pay for your children to be educated, and for you and your family’s health care, turning the place into a dump, and oh yeah, killing a few people here and there is hardly comparable.
These human beings are illegal immigrants; they came here uninvited and without permission, they abused our social systems, and they treat our laws with contempt. Does that also sound absurd to you? If not, tell us your address, and I’ll be sure to pass it along to homeless people in your neighborhood and tell them you have an open door policy, and to make themselves at home in your place. Let’s see how long you keep beating that idiotic drum.
I spoke to a lady at BOA tonight; she said there were THIRTY MILLION cases of identity theft (involving SS#s) in the USA last year. I guess this gives us some idea of how many illegals are really here.
By the way, another ECONOMIC REALITY is that WE cannot afford to subsidize thirty-to-sixty million poor Mexicans (the number that would have been let in under the amnesty bill). Our government is broke.
Sorry for the rambling, and sentence-structure errors, but I didn’t edit before posting.
So what you are saying is if i got caught jaywalking I should have my legs cut off, or if I shoot someone I should have my gun confiscated. See, I can through out a bunch of stupid nonsense just like you. Maybe Joe needs to pay 9.00 an hour to attract a legal worker. Maybe Joe would if wages were not suppressed by Illegal immigration. I have a feeling there will be plenty of Americans willing to take those crappy jobs as soon as those crappy jobs offer a better standard of living than being on the dole.
Diego seems to be unfamiliar with the concept of law, believing that his idea of “economic reality” trumps constitutional law. But as a matter of law, those who are not legal immigrants are indeed illegal aliens and are named and defined as such in the law. Go blow smoke somewhere else.
Alambka, are you replying to me or to Diego?
I’m not in favor of open borders. But the other extreme, to build a fence, lock the door and throw the key away, is not a solution either. In fact, I’m against illegal immigration: but I think that the solution lies along the lines of reforming the legal system so that it agrees with the realities that American businesses face. In other words, something like the guest worker program that Pres. Bush proposed. We won’t solve the problem by becoming a police state with ID checks in every corner and deporting millions. Demonizing poor people who only want to work does not solve the problem either. These people want to come here legally, but there’s no legal path available for that, even though there are employers here that want them.
You say that immigrants are uninvited. The fact that they find jobs is proof that they are invited by the economy. To say that the problem would go away if businesses paid “high enough” wages is enormously naive: it assumes that businesses have lots of money and “elect” to pay low wages out of greed. The fact is, the market place is very competitive, and most small and medium sized business run on thin profit margins: if the “illegals” were to magically disappear, many businesses would tank, including the jobs of many legal residents/citizens who are directly and indirectly tied to businesses that hire unskilled workers. You should read today’s USA Today cover piece on the anti-immigration laws passed in Oklahoma: businesses there are already suffering, and while it is true that the state may save a few pennies in medical and education costs accounted for by immigrants, it is also true that the state stands to lose countless dollars as the loss of unskilled workers negatively affects the wider economy.
To say that immigrants commit all sort of crimes is a myth. Below is scholarly research that shows (with data) that areas with more immigrants have less crime, and that immigrants, especially newly arrived, have far less criminal involvement than native-born people:
http://www.phil.frb.org/econ/conf/immigration/Piehl.pdf
This other scientific paper disproves that immigration harms the economic prospects of the unskilled or skilled native born workers:
http://www.nber.org/papers/w11547
Finally, I know that this is a blog and we’re not expected to be very refined commentators, but I was nonetheless surprised at remarks such as “idiotic drum”, “take a hike”, bug off”, and so on. Is it so hard to converse rationally?
Alambka: You wrote ” I can through out a bunch…” No doubt you meant to write “throw out”. What country are you from? What is your native language?
DM,
When I moved to the Texas/Mexico border I was an open borders advocate. After living there for 5 years, I came to understand it wouldn’t work. There are 60 million people in Mexico alone that live on $2/per day or less.
But most importantly, I saw that illegal immigration is the release valve that prevents the masses there from rising up and throwing off their oppressive system. You may think your position is helping poor people, but IMO it is doing the exact opposite. Illegal immigration into the US keeps the status quo in place south of the border.
And lighten up. This is a housing bubble blog.
Alambka, are you replying to me or to Diego?
Diego. I thought yours was better Incredulous, But I’m not a real big typer,so I tend to condense.
Thanks Alambka.
As for Diego: Diego, you are absolutely wrong about crime. Nearly 1/3 of all felons in our federal prison system are illegal immigrants; the importation of Mexican gangs has caused endless damage to the American people. Notice that your crime statistics refer to immigrants, not illegal immigrants. There is a VAST difference. Mexican illegals are involved in a great many crimes, not the least of which is identity theft.
Businesses need to operate on a budget they can afford; if they can’t afford to hire people legally, they shouldn’t be in business. It isn’t the job of the American public to subsidize every idiot who wants to open a business. Huge corporations hire illegals because they don’t have to pay them much or provide benefits, and they can’t complain because they’re here illegally. Small businesses hire them for the same reasons. Local governments hire them for the same reasons. But, we, the American people, have to pay the difference. Why should we have to subsidize ANY business? These whining business people complaining because they aren’t making money obviously aren’t qualified to run businesses in the first place. What happens when Mexicans refuse to work for a low enough wage to guarantee profits? Will these businesses start looking for child slave labor? If anything goes in the name of business, why not? Our corporations already outsource to countries where child slave labor is rampant. The money they save is not passed on to consumers, but to their stockholders.
This comment takes the cake:
“You say that immigrants are uninvited. The fact that they find jobs is proof that they are invited by the economy.”
The economy is not a person, place, or thing. This country belongs to its citizens, and they have overwhelmingly indicated they do NOT want illegals here. The greedy, unethical business people luring illegals here to exploit do not represent the American people or the government of anything other than themselves. They have no legal authority to invite them here, and they are engaging in illegal behavior.
Diego,
Where is the line to stand in for where illegals can sneak into this country? I’ve got relatives from communist Vietnam who would like to come into the U.S. legally. It’s unfortunate for them that there’s an ocean separating them from the land of opportunities. There is no shortcut for them. I think the large number of current illegals in this country makes it harder for those in queue to become legal more difficult if not a very slow process.
It really is unfair to those from other countries (third world) trying to come in legally and are applying thru sponsorship with relatives or going thru a “fixed” marriage route but have to wait longer for paperwork processing and validation.
“These people want to come here legally”.
Yeah, and I want a unicorn. Doesn’t mean it’s going to happen. Just because people want something doesn’t mean they are going to get it, or deserve it just by the sheer fact of wanting it. I think this country needs to get itself in check first before it can go on about helping other people.
“The fact is, the market place is very competitive, and most small and medium sized business run on thin profit margins: if the “illegals” were to magically disappear, many businesses would tank, including the jobs of many legal residents/citizens who are directly and indirectly tied to businesses that hire unskilled workers.”
And this is how we should know that there is something seriously wrong with the system. Maybe this is just the wake-up call Americans need to realize it is corrupt and broken. Stop messing with natural progression and let the bodies hit the floor. A great number of things in this country are borked and we will never be able to fix them if we just keep covering them up with quick fixes and “Look over there, some gay person is getting married!” or “Look what Britney did today. Pay no attention to what the Gov’t is doing over here and don’t notice how bad of shape we’re in.”
As to businesses folding if not for illegal labor…
Have you ever considered that illegal laborers undercut American wages, and if employers were to pay a living wage to qualified Americans, they might be able to make more money as their customers (said Americans with better wages) would be able to pay more money?
Pro-illegal immigrant groups fail to understand the DEMAND side of business. All that matters to business is the margins. That can happen by lowering costs or increasing prices. One is done with illegal labor that drains our public resources, the other is done by charging better-paid LEGAL customers more.
I would rather pay more and know that the products/services I use are provided by Americans who are paid a living wage and obey the law.
“Lennar Corp.’s November sale of 11,000 properties in eight states set a price that may mark the bottom for the U.S. housing market: 40 cents on the dollar.”
“That’s how much Morgan Stanley Real Estate paid for an 80 percent stake in the 32 communities, 60 percent less than the price at which the properties were valued just two months earlier.”
Bottom pickers… stinky fingers.
Maybe if Lennar discounted their houses more than 10% last year, they wouldn’t be wholesaling them at 60% off this year.
“…Fred Campi of Silver Lake decided it wasn’t. He was at the bank to withdraw four certificates of deposit, cashing out a total of $60,000.”
“Campi, an administrative aide at Los Angeles City College, said he didn’t want to risk losing access to his funds, even temporarily.
Someone please,… start the Countrywide bank run…
Temporary? …might turn out to be a Verrrrrrrry long time…like more than 180 days
Excuses, excuses.
Some spokesman for the Warren Group, did an brief exchange with a commentator for a local radio station concerning the BeanTown
market.
Usually, these dudes are usually pretty hard-core with their analysis’s passed on to the news rags.
After some crying by the commentator, the guy hemmed and hawed and said there “might” be a break in 3rd or 4th quarter of ‘08.
Lyin’ weenie.
Nobody by nobody wants to create a panic-call a spade a spade and say expect 50% price declines from ‘05 levels and a potential recovery of market normalcy in about a decade.
We are Wal-Mart Nation.
I’m over in Attleboro. Did you get a chance to get out on the HD? Spent the last two afternoons on a mid 90s Magna. Always wanted one - reliving younger days I suppose. Starting to see what appears to be housing price declines in my area. I’ll be looking at a few next week to understand if the declines are actual or just houses in need of rehab. Which area of the state are you in?
I am so dang jumpy from all this R word talk.
I was wide awake at 4am watching the Wall St. froth on tv.
Im so skittish I skimmed this last article Ben Jones put together.
I did like the part about false mortgage info.
Maybe the housing market is down because the illegals are leaving in droves.
“Stay, don’t come.”
Stick a fork in CFC, they’re done. Heck Mozillo looks a little overdone….
As someone mentioned in an earlier topic, Mozilo is unusually quiet. My guess? He’s probably rubbing shoulders with his corporage buds to scope out his next job. After all, that’s what a lot of them do….the company folds, J6P is out of a job and has to hit the sidewalk and the unemployment office…CEOs just move into the next opening (somewhere) created by one of his cronies. All will be well in his world. Not so in the world of J6P.
BayQT~
But, I thought CEOs were paid so much because of all the **risk** they were taking???
/sarcasm
Really gets to me that people just suck up all the excuses for obnoxiously high executive pay. They are not 100000X more qualified than everybody else.
“‘It is extremely rare to uncover fraud…and you certainly don’t get it through bank examinations.”
Dr. Greenspent: “I have my hand up your as$…but I can’t detect anything wrong with your tonsils.”
From Galbreath’s book about the ‘29 Crash:
“One of the uses of depression is the exposure of what auditors fail to find.”
Great book, I loved it. Major point seemed to be that the 29 stock crash caused the depression rather than “anticipating” the depression. Similary, the housing bubble and ensuing crash are about to CAUSE a deep recession/depr. These dimwits who say housing can’t crash because we’re not in recession are just not acknowledging how housing replaced the mfg economy.
She said although they are hard-working, good citizens, she thinks they are in this country illegally. I don’t want to start another anti-immigration diatrabe here, but isn’t this woman a little confused? They don’t appear to be U.S. citizens, and I think that the question of the quality of their citizenship in their native lands has been rendered rather indeterminate by their immigration to the U.S.
Is it possible this person calling to help her neighbor is only trying to save her own property value? Illegal immigrants get deported and foreclosed on can’t help the things. No matter how nice they smile and say bueno dias……
This nation is so dumbed down that the woman quoted probably doesn’t understand the distinction between citizen and resident.
I don’t want to start another anti-immigration diatrabe here, but…
A little clarification here - it’s not “anti-immigration”, it’s anti-illegal immigration. Peoples’ objections aren’t with those who played by the rules, but those who didn’t play by the rules.
I’m sure you know the typical symptoms, like border-jumping, visa-overstays, phony SS numbers/identity theft, anchor babies, things of that nature…
But the rules themselves are designed to hold down the level of immigration. Calling for strict enforcement IS, to some extant anti immigration. But because we, as a society can’t come to an agreement as to the level of immigration that we want, we pass laws and then fail to enforce them.
But the rules themselves are designed to hold down the level of immigration.
Well of course they are, and for good reason - this country, as large as it is, does NOT have unlimited resources with which to absorb a sustained influx of large numbers of people. Now if smaller numbers are allowed in the door in an orderly fashion over time, that makes things easier. And it still isn’t “anti-immigration”. Someone being anti-immigration would mean that they don’t want ANY kind of immigration at all, period, and I don’t recall seeing anyone advocating that here.
…we pass laws and then fail to enforce them.
That failure to enforce rests on the shoulders of the politicians and the special interest groups that buy them off. According to a report I saw online someplace, 70% of Americans want illegal immigration reduced and controlled. Other percentages in that range have been mentioned from time to time in various news articles. Doesn’t sound like much disagreement to me where illegal immigration is concerned.
Ok, I have to ask, what is an anchor-baby?
There is a widespread belief, largely untested in the U.S. Supreme Court, that any baby born here is automatically a U.S. citizen. Illegals come here to have babies, thus ensuring the kids will have access to free medicine and education, and because the kids are here, the parents believe they can stay. The kids are their “anchors.” This is incredibly unethical, but the norm among illegals.
The Constitution says that any person born here and SUBJECT TO U.S. JURISDICTION is a citizen, but illegals are technically citizens of their parents’ countries, not ours, subject to the jurisdiction of their parents’ countries. However, the Supreme Court did rule, years ago, that states must provide tax-payer funded services to the children of illegals, and that’s where we are now. Until the Court decides to follow the Constitution, and not the political biases of its justices, nothing will be done.
Foreign citizens in the U.S. legally or otherwise ARE “subject to U.S. Juristiction,” unless they’re diplomats coverd by diplomatic immunity. Of course we could deport the parents and since they have custody of the children the kids go with them. When they reach adulthood, of course they would be free to enter the country with a U.S. passport.
http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/02-04-2003/0001885208&EDATE=
Posted earlier, good read….
From link:
Mozilo spoke of the importance of homeownership to families, communities
and the nation. “In addition to increasing personal wealth and adding to our
national economy, creating more homeownership opportunities and narrowing the
homeownership gap increases social capital. In other words, it ties families,
neighborhoods and communities together,” he explained.
Citing several studies, he noted that children living in owned homes have
higher math and reading achievement levels, and homeowners are more likely
than renters to belong to civic groups, such as parent-teacher organizations.
I get sick of this chicken/egg argument.
Homeownership does NOT make people more responsible. In the past, only responsible people were able to become homeowners.
Totally falacious argument.
fallacious
Housing bulls are being castrated. Check this out:
http://money.cnn.com/2008/01/09/real_estate/real_estate_bulls_bears/index.htm?postversion=2008011012
Another word for the wise from the article: “Next will come depression and finally acceptance. That is when you should start to buy again.”
“The housing turndown, according to Roubini, was the initial trigger for a broad economic decline. “We’re in an economy-wide recession already, one that will be much more severe than those of 1991 or 2001,” he said.”
Do I hear 1983? 1974?
I believe you hear 1929
the “bottom” was a few years later
ya right
Color me unsurprised.
“‘We’re watching Denver, Phoenix, Austin and Tucson, but South Florida is our principal focus,’ said Arsenault. ‘If you’re a vulture, Florida has more carrion. This stuff is lying on the ground. It’s lost life. Some of the stuff in Phoenix is still breathing. Perhaps not for long.’”
LOL. Arsenault is one smart vulture. Prospective buyers should emulate his fine disposition.
“Some of the stuff in Phoenix is still breathing. Perhaps not for long.”
No kidding, we might find a few, a really small # of snowbirds willing to spend their hard earned $$$ down here, and maybe a few from SoCal, but the housing industry in PHX has too much inventory.
Question: How long can the banks keep holding all of the foreclosed properties? Where are those FB going to come from?
Interesting - he is looking for 40 cents on the dollar. Is that new housing and condo developments - or lived in housing. Is it really top-end stuff, or decent stuff
Be nice to know what the vultures are looking at - and i appreciate how honest he is in describing himself.
Bank of America in ‘advanced talks to take over Countrywide’. WSJ
CNBC
That makes sense. Have the big banks take over companies like Countrywide before they file for BK. whats paying a few dollars a share vs a drawn out BK?
Then the FED can “loan” a $100 Billion to BA keep the process orderly
BofA throwing good money after bad.
My humble advice: Just admit you made a terrible decision to invest in a fundamentally insolvent company and write off the $2billion. But then again, I’m not one of those brilliant wall street wizards paid $ millions/year to make smart investment decisions.
Holy crap, look at that price go.
Seems like a good short entry point for both CFC *and* BAC.
Perhaps. I thought BAC would take a bigger hit than $.13.
I knew I bought those CFC calls for a reason the other day, he said, smiling.
In hindsight, twas not a cash infusion, but rather a dowry.
I haven’t seen Leigh out here for a couple of days. Has anyone heard from her?
If anyone hears from Leigh let me know also - I owe her a case of brewski’s.
Ben’s Blog is at least a 2 hour a day addiction.
It’s like turning off the tv.
Her computor is probaby turned off for three weeks while she catches up.
I know, I’ve had to do it too. In fact, I should be running out the door right now….
Amen!
As I do house work I run over to the computer catch up on a few posts then clean 6 dishes, run back over, read a couple of post, scrub bath tub, run back over……
I’m so tired.
ot sorry
anyone pick up e trade it is up 20% today
Are you NYCboy? I’ve been wondering where he is..
he was here a couple of days ago, at some strange hour
no different guy sorry he is around
bank of america in talks to buy cfc
az renter you struck gold today !!! over $8
Blano, I’ll bet you are glad today you did not short CFC. It is never a good idea to pile onto a stock already down 90%
WHY is this news causing an across the market ralley? It makes no sense.
And, why are 10 year and 30 year treasury rates jumping?
If it was all based on belief there will be a .75 cut this month and next as was being speculated when the “substantive action” first crossed, I’d understand… but that petered out quickly.
Then the Countrywide news lit it up.
Is there some behind the scenes deal that the Fed will make mass laons to BoA to get them to buy CFC? So, Wall Street is glad that market turmoil isn’t going to get much worse.
What I wonder is why BoA would buy CFC with worries of forging documents and such coming out. Liability could be massive.
What you missed was Countrywide reported assets of $118B w/ writedowns of $7B and still solvent. Last year Countrywide was $84B in assets w/ no writedowns. All reported yesterday. You were a victim of white noise and time sponges. Oversold for the actual value of the news.
Got $4 off half the Ciena too and am still long all indices from yesterday afternoon. Life is good.
But why across the board ralley?
It’s like these big boys have a prearranged agreement of when they’re going to trigger the short squeeze… Ready, ready, ready…
Oh, crap. Ben leaked info and blew our timing…. crap… kill the ralley, kill the ralley… okay… wait for it, wait for it. Go! Release rumor of BoA buying CFC, and buy, buy, buy….
Queue Jim Crammer to go on and talk about how this is proof that the bottom is in. This type of acquisition is exactly what happens in a bottom. Next will be a WaMu deal…. Blah, blah, yadda, yadda.
The markets have to move irrationally. If they did not, it would be impossible for the sharks to eat the rational little fish. Since the purpose of the market is to allow the sharks to eat the fish, the markets must move irrationally.
Not irrational at all. Very predictable.
Kabuki dancing…
http://www.amphi.com/~psteffen/fmf/kabuki3.html
“Not irrational at all. Very predictable”
Predictbility does not mean rational.
Rational would be based on logic and data.
The market is based on manipulation and fraud.
Predictable manipulation maybe, but that doesn’t mean rational.
“manipulation and fraud”
Highly choreographed, no less…
Well, if you know about it, why not follow it and make a few bucks?
Ban TxChick - very Drollish. lol
My thought process for buying CFC yesterday and adding to it today:
First I read the news feed. I did not scan it, I wanted to know what it meant.
PB et al commented on the reduction in subprime loans by CFC as if it was shock and awe. My post was “It is meaningless. Countrwide said in August they would not do any more subprime and the only loans FHLC buys are prime full doc. That they did $6B is amazing. Who bought these MBS securities?” Reading white noise and not looking at facts.
Then everybody was posting on BACs taking a loss on the $2B investment in CFC convertible bonds. Posted by Tx et al. to which I posted. “CFC has some nice assets. In the event of a CFC bankruptcy, BAC has dibs on purchasing the assets from the BK court. This assumes that BAC has any moneys. Once again shareholders get nothing. BAC is not a shareholder.” and then subposted under it
“Countrywide total employment December 31, 2006 = 54,655
(From 2006 Annual Report)
from article December 31, 2007 = 50,600
A net loss of 4,000 jobs. Do not bury Caesar yet. Just a note of caution.”
Once again many were buried by white noise. Volume was huge, but everytime there was a large block offered somebody paid up. I pulled the trigger and bought; I have seen this many times. Massive accumulation.
This morning CFC started to go down but it was higher lows and looking to acquire million plus share blocks under $5 was not easy, if even possible. I bought more and posted it.
I sold half at $8.06 and kept the other half.
If you are short a stock or long a stock it is advisable to keep annual reports as well as quarterly reports on hand.
Do the homework and there are few surprises.
I know TxChick advised many to get out of the short positions.
There was no manipulation or fraud, just a company grossly oversold for the real news, which was incredibly positive!
Off to the infamous Dew Drop Inn for the first night in the New Year of the Snooker league.
that’s kind of like Dr. J’s heat seeker. Man, you can make money seeing that kind of stuff.
Hoz,
thanks for writing up the thought process.
This is the reason why this blog rocks.
Hoz,
If this means what I think it means:
This morning CFC started to go down but it was higher lows and looking to acquire million plus share blocks under $5 was not easy, if even possible. I bought more and posted it.
…big-time congratulations!!!
“And, why are 10 year and 30 year treasury rates jumping?”
To make long term mortgage rates jump.
It’s official! Turnaround about to happen in Tucson!
http://www.azstarnet.com/sn/biz-topheadlines/219839.php
Yun is going from market to market telling each and every one of them “It is different here”. How can they ALL be different?
If anyone thinks gas is getting cheaper, just think about how many people in India are about to buy these….
http://www.crunchgear.com/2008/01/10/tata-nano-the-worlds-least-expensive-car/
It’s only $2,500.00 new! I don’t care if it uses a lawnmower engine - I would buy one here to get around town. Besides, if / when this recession / depression gets going - these cars will likely be sought out in the US as well.
$2,500 for the stripped version in India.
If the same vehicle was sold in NA it would need to comply with safety and emissions. Prolly at least a $7,500 vehicle in NA, and maybe at least two feet longer and ½ foot taller.
The CEO drove this vehicle to the stage at the introduction in India and reports have it that his head was touching the top. (He is not a very big guy.)
Nobody from the press was allowed to sit in the vehicle, much less drive it. I figure they must have done this for a very good reason.
If it was me buying for scooting around city streets I would rather spend the same money on a good used sub-compact.
amen. me thinking my life is worth more than 2500.00 …grin..
“Will Subprime Spark an Arson Boom?”
http://tinyurl.com/2lbu3w
Yeah…turnaround ? Is India building a Nano midget car plant there for our financially crippled Snowbirds ?
You bet! Turnaround is imminent! Just check this story about our biggest local (bankrupt) mortgage lender!
http://www.tucsoncitizen.com/daily/local/73761.php
For economic news on India try
Ajay Shah’s blog
http://ajayshahblog.blogspot.com/
Probably the best source for India I know
Interesting you mention that. I bought REDF and SIFY yesterday too.
I am not as involved in India this year as last year. Korea and Vietnam this year. Better risk/reward ratios.
“On Wednesday, some customers at Countrywide Bank’s Glendale branch said they were…trying to determine whether the favorable terms offered were worth the risk. Fred Campi of Silver Lake decided it wasn’t. He was at the bank to withdraw four certificates of deposit, cashing out a total of $60,000.”
“Campi, an administrative aide at Los Angeles City College, said he didn’t want to risk losing access to his funds, even temporarily. ‘I don’t know if it’s worth the crapshoot,’ Campi said.”
People are so hoodwinked, they think taking their very own money out of the bank, is tantamount to gambling?
I think what he meant was that leaving the money IN that bank would’ve been gambling (risking loss of access to his funds).
People are so hoodwinked, they think taking their very own money out of the bank, is tantamount to gambling?
The impression I got was that he viewed the crapshoot as leaving his money in Countrywide’s hands.
Blano, see what I mean about CFC. Had you gone short CFC you would have been handed you bal*s in a plastic zip baggie today. Has this rally come out of the blue? No because it appears Bank of America has been negotiating to buy CountryWide for some time. Who knew? I’ll tell you who knew. The family and friends of those at the top who own shares and the Financial Gangsters of Wall Street and their analysts and you can 100% certain they tipped off their big money clients.
Look, we are human beings. Most have familiy and close friends. Let us suppose you own or are in the know about the dealings of a big corporation. You are involved in some kind of deal which is going to make a big difference to the stock price. Either up or down. Some of your family and close friends own your company stock. Whatta ‘ya gonna do? Keep quiet and see them lose (or gain) big money? I don’t think so.
There are no morals or integrity on Wall Street. Zip, nada, none. That’s why they can hand out multi-million $ bonus payments. That money doesn’t come out of thin air.
Many years ago (in my naive flag waving days) I invested big bucks and bought a stock which looked like a winner. The company built and managed retirement homes. Everyone retires, right? How safe can it be, especially when the company owns the property. Shares were around $25. I bought a lot. The stock moved up a little, then 3 days later, I woke up, checked my charts and the stock had dropped $11. It seems the analyst had downgraded the stock. I then discovered the analyst had actually visted the CEO of the company just a few days before. Wanna guess what conversations took place?
That CEO is probably living in Bermuda today, basking in the sun on the deck of his $3 million yacht, bought with the money he skimmed through stock manipulation.
The US stock market and probably the UK stock market or any stock market, are so steeped in corruption you can smell the foul odor if you trade long enough. And don’t rely on the SEC to protect the little guy. They are part of the problem. When all the fraud was taking place with sub-prime and the big brokers wheeling and dealing - do you remember hearing anything from the SEC - the guardians of our financial system? (lol) They are in business to protect “THEIR” financial system. Not “OUR’ financial system.
Mike, that is BS. The street is not lily white, but it is not as corrupt as you attempt to make it appear.
Instead of blaming the analyst that panned your purchase, you should have tried to learn what you did wrong. Did you read the quarterly reports, annual reports and news items? I bought a stock on December 19, 2007 that I have been following for a year! I wanted to know everything about the company before I invested a dime. I bought when I knew my risk.
As Warren Buffett said, “Index funds are for people to lazy to do their homework.”
Keep waving the flag.
Something went amiss with my reply. To continue: I didn’t follow the analyst and maybe you should read the post again. I mentioned NOTHING about following the analyst. I discovered that fact concerning the analyst after the stock dropped. I NEVER follow analysts. I did all my research following the rules set out by an old investor (now dead) which worked very well and still works if I wanted to trade individual stocks. I could relate a true story concerning a friend of mine (a very well known actor) who married someone, in the 60’s, who’s father was a big shot in the stock market. At that time, he was a struggling actor with a very uncertain income which meant his daughter wouldn’t be living the life she was used to. Thus, the father didn’t want his daughter to marry my friend but she did anyway. To cut a long story short, the father took my friend to one side after the marriage and gave him buy and sell advice all the time which was passed onto him via insiders. Let me put it this way - he didn’t become a known actor until the mid-1970’s but he lived very well on the father’s advice. As for Warren Buffet? Frankly, I don’t care what he says or any of them say because I trade very short term but there are plenty of investors who say ETF’s are the safest way to go. 3 days for me is about the average time in a trade.
In the ’60s and ’70s, the opportunities were available for crooked actions. With the advent of computers, every trade can be scrutinized. I am 100% confident that Yesterdays and Todays actions in CFC will be gone over with a fine tooth comb. As Martha Stewart went to jail for a small trade involving $50K, nobody thinks they are risk free. Is there insider transactions? Possibly. Yet, it is not worth the risk.
I did like the “keep waving the flag”.
Not all McDonald’s staff spit on hamburgers before they serve them to you. The hard part is knowing which hamburger hasn’t been spit upon.
I pass that guy over. Daytrader wannabe.
Comment by jetson_boy
2008-01-08 16:10:01
Where in the heck are you looking? My whole family lives in TN. You can still get a pretty nice place for under 150k. I’ve seen some -even historic homes- in TN for under 100k. Here’s the thing: there’s only about 4.5 million people in the whole state. The major cities: Nashville, Memphis, Knoxville, and Chattanooga are spread apart far enough to make them non-commutable from one city to the next. Drive 15 minutes or less outside of any of those cities and it turns into rural farmland and sometimes simply nothing but undeveloped land.
I recall seriously buying a 32 acre farm 20 miles outside Nashville last year. The place had a large farm house, barn, pond, a wooded area, creek, and fields. All for 160k.
The expensive parts of TN are the places that seem to somehow get touted as “the place” to live for out of staters. Places like Franklin in TN, or Farragut in Knoxville where the wealthy of the city lives. Sure- homes there are anywhere from 250-400k. But elsewhere homes are a fraction of that.
My Wife is from PA, and there’s no way in hell that PA is cheaper than TN. That and it gets cold there, so you’d better count on paying for heat. I would do some serious research first before you decide on PA because I lived in one, and have visited the other. Needless to say, TN has my vote hands-down.
My answer:
Mostly in Bristol, TN as it’s the best and safest part. Under $150k? LOL I can get a pretty nice place for around $150k in some parts of Florida including Port Saint Lucie and Cape Coral. But $150k is way too much, my income does not support this price level. Most people in fact can NOT afford $150k as most people do NOT make $60k a year.
Oil city has decent houses as cheap as $15k. Huge selection for around $50k. My research shows that Pennsylvania is more than twice as cheap(please find some nice houses in TN for under $50k and ill compare them with PA) also please find some low crime towns in TN. Bristol has twice the crime of Oil City/Franklin. I will agree the weather, at least in the winter is better in TN. That’s about the only major advantage I can see from my research. Oh and the taxes are a little lower unless you have alot of cash in assets as the state charges 6% income tax on dividens and interest.
I have yet to find a good, safe, affordable location further south than NW Pennsylvania. Other locations do not meet all three factors. For instance, I can get a decent house for $50k in south Georgia but it’s very unsafe. North Georgia is good and safe but very unaffordable(need like $200k+ for a decent house)
My own house cleaner is an illegal from Bolivia and owns 4 houses in Falls Church Virginia. They were are all purchased with a false social security number. The houses in question have been packed with other illegals who rent individual rooms. I know all of this because her sister-in-law was our full time nanny as well until recently. The last house she purchased was at the peak of the bubble for almost $500,000. Our nanny and her husband agreed to be responsible for the mortgage on that one with the idea that the equity would accrue to them. Problem was that even after combining their incomes and renting out the spare rooms our nanny and her husband were barely able to keep their heads above water. I asked why they put such a stress on themselves by mortgaging themselves to the hilt. She basically said they had wanted to ride the Real Estate riches gravy train since here Sister-in-law had done well with it. Of course, by this time they regretted it because they market had turned and there were literally working night and day to survive. The only reason they didn’t walk was out of not wanting to hose his brother and her sister-in-law who were actually on the hook for the mortgage. In the end that is what happened anyway because he got in serious trouble with the law, jumped bail, and they fled the country leaving his brother and her sister-in-law holding the bag. Now our house cleaner is in big trouble because she is letting that house go to foreclosure, and 2 of the other 3 now have negative equity. I wonder if the fraud will be discovered with a post-foreclosure audit. it boggles my mind that this went on. I always hold this out to my wife as a perfect example of the nuttiness that went on. I believe this was more widespread than commonly believed and as a result things will be much worse than most can imagine.
“‘There is a growing body of thinking in central banking that one should not let these bubbles run and allow them to burst,’ he said. ‘They should lean against them.’”
Sounds like driving while looking through the rear view mirror with one’s eyes wide shut is going out of fashion.
“‘There is a growing body of thinking in central banking that one should not let these bubbles run and allow them to burst,’ he said. ‘They should lean against them.’”
translation:
There isn’t a chance in hell of us getting the cow that was the housing bubble, back in the barn.
“Freddie Mac, the U.S. mortgage-finance company that lost a record $2 billion in the third quarter, may be downgraded by Moody’s Investors Service because damage from loan defaults could be worse than the ratings company expected.”
How many more worse than expected results lie ahead before this bubble is done deflating?
1) why the HE LL is Fast Money doing a segment “What is the trade if consumer, housing and economy is okay” segment?
70% of retailers missed lowered targets. Countrywide needs a buyout. Fed talking about slowing economy and willingness to cut rates while White House talks stimulus.
What is the next segment? What is the trade if green men from Mars invade?
WHY would BoA buy Countrywide? Law suits from investors. Law suits about forged… I mean, recreated documents. Originated loans continuing to default at exploding rate. REO list growing like bad weeds.
I don’t get it.
I’m guessing that this BofA thing is really about pride. When CW fails, BofA has to admit they made a really dumb move this past summer. Rather than own up to a $2billion “oops”, the CEO is going to buy CW and pretend this will pay off in the long run.
In the long run this is a fiasco, and the CEO is booted with a $150 million dollar reward comp pac.