The Predicted Soft Landing Failed To Materialize
The Mt Shasta Herald reports from California. “According to mortgage broker Jacob Barr, the Lake Shastina area has been hit to some degree with foreclosures, but the rest of Siskiyou County has largely escaped people losing their homes. Barr said the county is seeing ‘three or four homes foreclosed per month.’”
“‘They are all high balance foreclosures with no equity in the property and maximum financing,’ Barr said. ‘All have 100 percent financing.’”
“Barr said where Lake Shastina differed from the rest of the county was in the number of homes built.”
“‘There was more speculation in Lake Shastina than anywhere else in the county,’ Barr said. ‘There were more homes built in Lake Shastina in the last three years than in the whole county combined. The areas in the country where prices are now dropping are where a lot of homes were built.’”
“‘One hundred percent financing became so easy for folks who would otherwise not qualify,’ Barr said. ‘The standards were drastically lowered. The easy money drove up home prices. Barr said prices in Lake Shastina have dropped after they ‘went too far too fast.’”
The Press Democrat. “A small-town Mendocino County lumber mill and 200 of its employees have become the latest victims of the nationwide housing slump.”
“Harwood Products last week began shutting down its Branscomb mill and will be laying off all but 40 of its employees, a situation Art Harwood hopes will last no more than a month. ‘It could be extended beyond that,’ said Harwood, the third generation of his family to run the 57-year-old mill.”
“Harwood said he’s being forced to temporarily shut down the mill because the sharp drop in the demand and price of lumber has made it unprofitable to produce wood products. ‘Lumber prices are low, maybe the lowest they’ve ever been,’ when inflation is taken into consideration, Harwood said.”
“Prices have dropped from a 2004 peak near $500 per 1,000 board feet to about $200, he said. ‘That’s a 60 percent deterioration in the price. That is huge,’ Harwood said.”
The Sacramento Bee. “Mortgage giant Countrywide is reeling, its stock price falling amid concerns it could be filing soon for bankruptcy protection.”
“One thing is certain for the thousands of Sacramento-area homeowners who do business with the Calabasas-based lender: No matter what happens, you still have to make your mortgage payments.”
“‘They aren’t going to pack up and go away and say, ‘Don’t bother to send us the money,’ said Sacramento bankruptcy attorney Gary Fraley.”
“But there are other concerns. Countrywide is a big player in the capital region’s real estate market, owning and marketing a large supply of foreclosed homes. And at least one attorney said he was concerned about any disruption in helping borrowers who face foreclosure.”
“‘The problem is there would be nobody to give any permission to do modifications,’ said Sacramento bankruptcy specialist Peter Macaluso. ‘There would be a period of time until the bankruptcy court put somebody in control.’”
“Countrywide was the leading mortgage lender in El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba counties from June 2005 to June 2007, according to DataQuick. The firm did 34,300 loans in the two-year span, a 7.75 percent market share.”
Fox 6 San Diego. “Some of the nation’s leading economists say the US is already in a recession. So is San Diego also heading in the same direction? Economists are worried about our slow housing market and a rise in foreclosures. Fewer homes are being built and the county counted on the construction industry to help fuel growth in the first half of this decade.”
“‘The construction industry is a very important one in determining the direction of the economy,’ said Marney Cox, the chief economist for the San Diego Association of Governments.”
“Another problem? San Diegans who cashed in on their home equity in the first half of the decade are now overextended.”
“‘We’re expecting just about a billion dollar loss in retail sales from the reduction in home equity available for expenditure so that’s a huge turnaround,’ said Cox.”
The Union Tribune. “Lincoln Timson never thought he would be living in a downtown condominium with a view of the San Diego-Coronado Bridge. The unit is small, 500 square feet, and the downtown is National City, but that’s precisely why Timson and others like him can afford a fully furnished condo conversion with bay views.”
“The former Red Lion Hotel, built in 1990 at Eighth Street and National City Boulevard, was recently converted into 170 one-and two-bedroom condominiums.”
“The project was aimed at buyers looking for affordable housing. A banner hung outside the top level of the building for months, advertising condos as low as $185,000 to motorists driving on Interstate 5.”
“He said he paid $189,000 for his third-floor unit. The kitchen is tiny and the ceilings are low, but Timson doesn’t mind. ‘Who wants to spend time in the kitchen? I have a big-screen TV,’ he said.”
“A few doors down from Timson, Erma Militar and her husband, Edwin, had spent two years living in a National City apartment saving for a house. ‘We really wanted to have our house, but we decided to have the condominium instead,’ Militar said.”
“Their 700-square-foot condo has two bedrooms. The couple moved in Oct. 30 with their daughter, Maeden, 20. ‘It seems like I am living a luxurious life here,’ Erma Militar said.”
“Pacifica had other plans in National City, but those are on hold. The firm owns the Holiday Inn across the street from Bayview and proposed building a 19-story condo tower next to the hotel. The firm postponed the project because of the slumping real estate market.”
The Daily Bulletin. “When Gov. Arnold Schwarzenegger said Tuesday that the housing slump was one of the chief reasons for California’s $14billion budget deficit, few could disagree. Builders, in fact, commended the governor and suggested there were actions the state could take to start the money flowing into state coffers again.”
“‘We’re encouraged that (Schwarzenegger) mentioned the importance the homebuilding industry plays in California’s economy and in the state’s budget and his commitment to infrastructure improvement,’ Robert Rivinius, president of the California Building Industry Association, said in a news release. ‘Ignoring the impact of the homebuilding industry will only make things worse.’”
“Todd Tatum, a Victorville builder who is president of the association’s Rancho Cucamonga-based Baldy View chapter, said developers had done what they could.”
“‘We’ve lowered prices and we’ve asked our suppliers to lower their costs,’ he said. ‘But impact fees need to be lowered too. That’s the third leg of the stool. If we can do all three things together, we can get moving again.’”
“Inland Empire housing starts are down 50 percent since 2004; new permits are down by 50 percent as well. Just three years ago, new home construction was responsible for 74,000 jobs in San Bernardino County alone.”
The Press Enterprise. “Tricia Powe lost her job and her house in Corona and then found new employment, all because of the bashed housing market.”
“Having been laid off as a mortgage consultant in March, Powe and her husband no longer could afford to pay their own mortgage. Their house was foreclosed on and they started the new year packing up the family’s belongings so they and their two children could move to a rental in Riverside.”
“The irony for Powe is her new job is as a foreclosure-prevention counselor for a consumer assistance group in Riverside.”
“Also hitting the streets are high-paid home building executives and hundreds of engineers, architects, appraisers, underwriters, escrow workers, loan processors and real estate brokers and agents.”
“‘I cannot think of any company that has not let go a portion of their workforce over the past 18 months and are not thinking of laying off more,’ said Borre Winkle, executive director of the Riverside chapter of the Building Industry Association.”
“‘I would say the industry is 60 percent smaller than it was two years ago,’ said Steve Johnson, director with a Riverside real estate consulting firm. The cuts started in 2006 and have accelerated as the predicted ’soft landing’ for home builders failed to materialize. ‘It is getting worse every day,’ Johnson said.”
“Greg Berkemer, executive VP of the California Desert Association of Realtors, said he expects that organization will lose 30 percent of its membership from non-renewals in the next two years. He predicted many of the agents ‘will go back to something they did before they sold real estate.’”
“Brian Weide, branch manager of SunStar Mortgage Services in Ontario, said many loan officers paid on commission have not formally quit but no longer show up for work. ‘Most of them are leaving because they can no longer make a living in the business,’ he said.”
“John Munoz, a loan officer at SunStar, has seen his business dwindle by more than half.”
“‘I got my insurance license so I could start doing financial planning seminars,’ Munoz said. The Upland resident, with more than 20 years in the mortgage industry, is also selling jewelry over the Internet and has learned to repair eyeglass frames for optometrists.”
“Despite all these endeavors, which he said keep him busy at least 12 hours a day, Munoz said he and his wife have seen their monthly income drop from about $12,000 to $5,000. They cancelled a European vacation and a full-time maid, and cut back on dining out.”
“Scott Chappell, a longtime Riverside real estate broker, said that since 2004 his business has shrunk by two-thirds. Chappell said he is trying to bolster his earnings through property management and hoped to land much-coveted contracts with lenders to sell foreclosure properties. But to get by, he said, he is selling real estate he bought during the flush times.”
“‘I work every day and make absolutely no money. It is just a living hell this year,’ Chappell said last month. ‘I have been through three real estate down cycles and this one is absolutely the worst.’”
What does a “full-time maid” do when she’s not cleaning, I wonder?
My great aunt had a full-time maid. She’d come in the morning and work throughout the day, then head home in the evening. IIRC, Josephine’s workday was 10-12 hours long.
Many of my customers have maid / nanny’s. If the customer has children, the maid is usually getting them ready for school etc in the mornings. Otherwise, I usually see them just puttering and cleaning.
I am suppling custom cabinets for a large home in Malibu and the customer actually built the extra large laundry for their very short maid! The counter tops are only 33′ high.The Laundry is about 8′ x 14′.
12k which means 140k per year and they have a full time maid, idiots is all I can say.
LOL…you’ve never visited L.A.? I know someone who has a maid that makes far less than that and I’d be surprised if the house is more than 1700 sqft. Oh, and age is not an issue.
I’m not sure what constitutes a maid anymore. We had someone come in twice a month to do the basic cleaning. Then again, when I was growing up most everyone I knew had live in maids and none of the moms worked outside the home.
Cheap illegal labor… I say she was paid $2 an hour under the table. The irony is they probably claimed her as a dependent based on a fake SSN. Hope the feds will catch such basta**** or else I will call my local Mineutman chapter.
I don’t see how someone making $144K a year could possibly afford a full-time maid in California, unless the “maid” was actually a “slave”. In Santa Barbara, our housecleaner got $20/hour.
Jeez,
That’s cheap!
In OC, house cleaners are pretty much guaranteed $50/hr for once-a-month cleaning.
Chuck Ponzi
I make nearly their $12k/month and wouldn’t consider hiring even a monthly cleaning service, let alone a full-time maid!
$189k for a 500 square foot condo? Yee-ouch, that’s pricey!
San Diego is the new NYC… it’s all more cramped than Manhattan in the golden triangle. Those canyons are a bigger barrier than the Hudson river cause they are full of rattle snakes and coyotes.
“American Express to Take Charge As Card-Spending Trends Weaken” yet still the market goes up……….so everyone tunes into Bernanke and ignores everything else?
RE: American Express link.
http://www.bloomberg.com/apps/news?pid=20601087&sid=atutQQocOMnA&refer=worldwide
Capital 1 in deep doo-doo to.
All contained.
“…so everyone tunes into Bernanke and ignores everything else?”
How do you know the Fed doesn’t juice the market little when a big liquidity reflation announcement is made, just to get the party rolling? I can’t imagine why they would not do this, if the goal is to kill the shorts on the stock market…
San Diegans took the money and spent it like drunken sailors on shore leave.
“Another problem? San Diegans who cashed in on their home equity in the first half of the decade are now overextended.”
“‘We’re expecting just about a billion dollar loss in retail sales from the reduction in home equity available for expenditure so that’s a huge turnaround,’ said Cox.”
“said many loan officers paid on commission have not formally quit but no longer show up for work.”
How many REAL professions can do this??
At least they’re not all in Panera talking like future millionaires. Matter of fact, Panera has been a lot slower lately. Maybe it’s because of the lack of real-estate deals.
How professional can one be if he’s not getting paid?
Did y’all know I’m a professional gigolo?
Spam alert!
“Scott Chappell, a longtime Riverside real estate broker, said that since 2004 his business has shrunk by two-thirds. Chappell said he is trying to bolster his earnings through property management and hoped to land much-coveted contracts with lenders to sell foreclosure properties. But to get by, he said, he is selling real estate he bought during the flush times.”
“‘I work every day and make absolutely no money. It is just a living hell this year,’ Chappell said last month. ‘I have been through three real estate down cycles and this one is absolutely the worst.’”
Wow, just 3 years ago a lot of RE agents were hardly doing any work all day and making a lot of money. Everything goes in cycles. In a cyclical industry, one should save some cash during good times to ride out bad times.
His savings plan was built on the premise that RE always goes up.
That was the savings plan for millions of people. Retirement plan too.
Real Estate is the new Enron ™
‘I have been through three real estate down cycles and this one is absolutely the worst.’”
HA!!, you think ‘07 was bad?….wait ’til you meet his big, bad brother. That’s right, Mr ‘08. You’re gonna think ‘07 was gravy when you see the a$$-kickin’ that dude is going to give you.
“…said that since 2004 his business has shrunk by two-thirds…”
Key phrase…
He should’ve gotten out of the pool sooner. That cold water does no service to men in general…
“I was in the pool!! I was in the pool!!”
I’m thinking there won’t be any relief until 2010.
I’m thinking 2009 will be the year people scream. 2008 will be ugly… but 2009 will rock the REIC.
So sit back and relax.
As to relief… Volume? 2010, sure! prices… munch, munch, munch. I’m going to take a bit to pondere that one.
Got popcorn?
Neil
The double header locomotives on the Gravy Train Special have just begun to DERAIL.
This is a long, heavy Freight train and it will take some time in this slow motion wreck to flip out the excess RE baggage and REIC dead weight in the cars before it piles up and burns.
Sheesh..and they never saw the “Slow Down” warning lights on the hairpin curve overlooking the Debt River Canyon.
Who’d have EVER expected this tragedy?
“‘I got my insurance license so I could start doing financial planning seminars,’ Munoz said. The Upland resident, with more than 20 years in the mortgage industry, is also selling jewelry over the Internet and has learned to repair eyeglass frames for optometrists.”
“Despite all these endeavors, which he said keep him busy at least 12 hours a day, Munoz said he and his wife have seen their monthly income drop from about $12,000 to $5,000. They cancelled a European vacation and a full-time maid, and cut back on dining out.”
______________________________________
Wake up clown, the $12.5k was not a once in a lifetime opportunity for you…
Multiply this by thousands of 30k millionaires, I dont care how far BB (Bubble Ben) cuts, it wont matter.
That eyeglass repair thing sounds like a real cash cow.
don’t know why I did not think of that…sounds like a true winner
whats wrong with this - although we would like to make more $s, $60K per month is respectable and you can live well on that.
Nothing. The $12.5 was never real - that is what I am pointing out. Deduct his wages from our economy and see what happens
I don’t understand your comment Crispy, how was it not real…?
Not sustainable is a better way to say it. ‘I made $13,000 this month, never mind that $9500 of it was a student loan deposit’ kind of math is common among the RE industry. If I take a cash advance from a credit card, is that income???
Not if you want a fulltime maid and European vacations. He’s probably selling that jewelry for half what he paid for it, too.
But I see your point, Bob. Letting go of their materialism will do them a lot of good, hopefully.
I’m expecting to see very few mericuns in Spain this spring.
Here is a little nugget of information I thought I should pass on….
Per Peter Schiff, for the first time in about 100 years, the per capita income of an American is less than the per capita of an average person in Great Britain.
http://www.europac.net/Schiff-FBN-1-08-08_lg.asp
(Watch the end of the video)
anyone care to comment on this? why?
This got a lot of play in the media, but it’s largely garbage, IMHO. The calculation is based on GDP calculated by official exchange rates, not purchasing power parity (PPP). Exchange-rate calculations adjust foreign incomes at spot exchange rates. In other words, foreign incomes are adjusted to domestic price levels. Apples to oranges.
PPP, on the other hand, calculates domestic incomes adjusted for domestic price level, versus foreign incomes adjusted for foreign price levels. Apples to apples.
Residents of the United Kingdom have not seen a dramatic increase in their well-being over the last few years, unless they are a small minority who have household costs denominated in dollars, and revenues in euros or British pounds. Have British citizens seen a 30% increase in their consumption, incomes and well-being, just because the pound has appreciated 30% versus the dollar? Not even close.
According to the CIA World Factbook (a good resource, although you can check-out the OECD website for the exact same information, if the thought of using the CIA Factbook gives you some kind of paranoia), the PPP income of the United Kingdom in 2006 was $31,723 per capita. The PPP income of the United States was $43,369, *far* surpassing all other countries but the small minority of European offshore banking centers (like Luxembourg). The EU-27 average was $27,399 per capita on a PPP-basis, about as low as Mississippi (the rural parts).
Here’s what Great Britain should be compared with, for a more interesting point: Ireland. Not that long ago, Ireland was the basket case of Europe. Now, its PPP-adjusted income is $44,024, surpassing even Hong Kong. Now it’s a huge growth center for pharmaceuticals, offshore banking, and tech.
So, rather than compare the UK with the US, maybe they should compare themselves with their more immediate neighbor ….
Lets give ourselves back to the British.
They cannot afford to support us.
Got popcorn?
Neil
Moooooooommmm! I skinned my knee.
Reading all of the crap hitting the fan in CA makes me glad we got out of there. I am thinking of changing handle to ‘escaped from CA 2 NM’. Or should I leave it the same?
How about “We made it”?
It has a double meaning as well, through an obscure reference:
http://en.wikipedia.org/wiki/We_Made_It
how ’bout “Escaped Newer Mexico”?
LOL. We are all about to become ‘Crashlanders’
Nah, change it to Cut and Run.
“Harwood said he’s being forced to temporarily shut down the mill because the sharp drop in the demand and price of lumber has made it unprofitable to produce wood products. ‘Lumber prices are low, maybe the lowest they’ve ever been,’ when inflation is taken into consideration, Harwood said.”
I was kind of hoping that with all this bad news that prices on things for home improvements would start to come down. But I’m wondering: If all these smaller and medium places/chains go out of business, leaving us with only the biggest of the big who can weather the storm, will we start seeing monopolies of sorts and prices going through the roof as there will be no real competition?
Man, I just want to finish my basement!!
You can finish your basement by filling it with nonperishable food items, water, guns and ammo. Building materials be damned!
Again?!! I did that for Y2K and then again for the bird flu pandemic last year.
On a serious note I pulled the max I could from my 401k using a loan (to myself) and brought all the gold I could get during the last 3 months…
Yeah retirement plan is truly an oxymoron in the age of the big shrinking economy (say.. for the next 20-30 years).
Yeah, thats pretty much what I’m doing as well. I’m going to corner the dried bean and canned goods market.
Monopolies are generally only possible when items are necessities. It’s really hard to have a monopoly on a luxury item because people do not have to purchase it. Building supplies is a perfect example. Right now we are seeing the other end of the spectrum. Recall that in 2004/2005 Home Depot was a second home for many specuvestors, and 2008/2009 spending more than the absolute necessity at HD is like a scarlet letter. Even if they were the only game in town, they have no customers so they can’t raise prices.
Regardless, this is a free-market economy and it’s very unlikely that the situation you describe would happen.
free-market… I had to laugh out loud. No this market is completely captive to the federal reserve, the income tax, and managed trade agreements. Everything from the media, to doctors, to food, to housing to retirement, and banking is licensed,permitted, or otherwise regulated.
It’s the specuvestor’s rule — when housing prices are going up, they’re geniuses and it’s “the miracle of the free market”.
When house prices are collapsing, it’s all because of the evil manipulations of the government sullying their pure free market.
Privatize gains and socialize losses… people forget capitalism is all about a *tiny* minority reaping huge profits, sometimes at the expenses of “suckers” and “idiots” ™
If you don’t like this move to Cuba or North Korea, or China (the non special economic zones).
It will resemble the retail clothing trade, either the really cheap stuff made in China, or the really expensive stuff made in China.
EVERYTHING in the industry became completely oversized, the prices, # of homes built, associated jobs, state budgest, etc. ALL of these numbers need and will go back to their historical norms.
NOTHING, and I mean NOTHING that people can do will bring that type of insane market back.
If a person spent $100K of their equity, however they spent it, how can you persuade them to keep spending money THEY DIDN’T HAVE IN THE FIRST PLACE???
The faster we get to the bottom, the better for long-term health.
(Couple purchasing home in 2005)
WIFE: “But honey, the bank said we can afford a $600,000 house”
HUSBAND: “Monthly payment is $3500 but I only bring home $2750 a month”
LOAN OFFICER: “Not a problem, just take out equity to tide you over for this year and next year your house will be worth $200,000 more”
WIFE: “Can I get a new Tahoe as well”
LOAN OFFICER: “Sure, we can do that”
Most people were clueless and are finally starting to wake up, well after it’s too late.
The gender is interchangeable, right? Though it is the tiny women who drive the honkin’ trucks and SUVs.
And the scourge of motorcyclists like me. Gas at $6 a gal is good for us as it means less lethal cages on the road, and the collapse of the sprawl economy is also good for the environment.
We’re a country of dieters, this should be the next new craze. We could call it:
Wallet Slimmer
Debt Fasting
Equity Slim
Dr. Bernanke’s Debt Diet
“‘I work every day and make absolutely no money.”
______________________________________________
What you are and were doing was/is not work. You, along with thousands of other HALF-WITS, were in the right place at the right time. Time to pay the piper for your wasteful ways. Did you really think it was going to last? See you in the drive-through…
When I took a break from my professional field (big time burn out), I worked for a Latino in loans, who hated to read. As it turned out, he was a produce manager in his former ‘career’. This guy was making some serious dough, no doubt back in produce by now. His wife was the Broker, he could only be an Agent (6th grade cognitive skills).
As America does not produce what it consumes, a lot of us are in the business of trying to acquire other people’s money in some offbeat way. Me. txchick. Probably some of the rest of you. Didn’t someone post a couple of days ago about having recently gotten a RE license? (!?!?!) Persons who are not making anything Real do have to be flexible in their thinking. Some are driven to prostitution (Lawrence Yun). Etc…
Gary Watts was fired while bagging burgers at Burger King.
He told customers “Six whoppers are in the bag”, but none were found.
LMAO
az_lender: I plead guilty to getting a real estate license two weeks ago. But don’t worry, I intend to keep living off people as a surgeon for a few more years. My interest in real estate is as a hobby, and I have no intention of being a realtwhore.
When I was a young pup, I enrolled in the UT Galveston nursing school. Enjoyed the work until the first surgical rotation. Watched someone open a chest, put in those spreader things and passed out cold on the floor. That was the end of my nursing career.
My defining moment in nuring school….I passed out cold while watching my first baby delivery.
I passed out while watching my first surgery too, but I got used to it.
I’m in the same boat, I watched an arterial blockage in the coratid artery removed. I turned pail white and the surgeon had to tell me to sit down. I did and within in seconds, I almost past out. That was the end for me as well.
LOL what killed my medical career (wayyyyy back when the earth was still cooling and I wanted to be an OB/GYN) was vomit. I could handle everything: blood, guts, urine, feces, necrotizing wounds, etc. but clear the way if I even hear the sound of someone throwing up because I’ll be joining them.
I still watch weird medical procedures on tape. I have the biggest respect of joint replacement surgery - that’s work!
My defining moment for me was passing out when I got my first shot. I still dol pass out from a shot or giving blood. I can handle everything including vomit, it’s those da*n needles that get me.
I wanted to be a veterinarian until I spent a day on the job with a country vet while in high school. Found out the way they find out if a horse is pregnant is by putting on an elbow length rubber glove and reaching around in the horse’s ass until they feel something. Of course, I’m sure a lot of realtors and loan officers feel that way now (either the vet or the horse).
Either you failed anatomy, or that is one rough test!
LMAO - thanks for the chuckles after a long week! I think something was lost in that translation. No way you gonna find the uterus via the horses a$$
People who are in fields and pick crop work. People who design new engineering marvels or look for a cure for AIDS work. Idiots like these are gamblers who think you can get something for nothing. Las Vegas was the model of the US economy for the last 5 years and the chicken will now come to roost.
“‘I cannot think of any company that has not let go a portion of their workforce over the past 18 months and are not thinking of laying off more,’ said Borre Winkle, executive director of the Riverside chapter of the Building Industry Association.”
“‘I would say the industry is 60 percent smaller than it was two years ago,’
- The Inland Empire unemployment is probably 10 x greater than reported, they are including the illegals.
Very similar to the dot com boom where a large percentage of jobs were cut at internet and tech firms.
The dot com bust ‘created’ lots of jobs related to real estate; agent, broker, mortage, etc etc. They have like what 6/7 of good years. Now, they are bused again. I feel sorry for them because there is no other jobs they can apply.
I guess ‘would you like fries with your order’ doesn’t make it SV as the real estate is expansive over here. Those mortgage is going to kill them.
I hope you pay someone else to write the comments and documentation for your code.
This post has soo much bait. I feel like a kid in a candy store!!
Are you calling Ben a master baiter? If so, the “kid in the candy store” comment is really freakin’ me out!
Hey ex-nnvmtgbrkr,
Here’s something I think you’ll get a laugh out of……..download and listen………….enjoy
http://depositfiles.com/files/3030158
It’s going to be interesting how long it takes before the good people of California, turn on our governor?
He’s looks like a charming version of Grey Davis…
If the economy gets worse, they will turn on him.
I’ll be handing out the pitchforks and torches to the awaiting masses and happilly hold him down when the crowd gets there.
Now I remember a great Doonesbury cartoon that was published during the recall. It had a mail in coupon with Arnold’s name on it to save the people of CA some time when it was Arnold’s time to go. I wish I could find my copy of it!
Hey, that’s Maria’s job, not ours.
I disagree. Arnold seems to be moving in the direction of making some serious budget cuts, which may alleviate some of the financial distress. Davis was unwilling to cut because he was heavily indebted to the different unions.
“I disagree. Arnold seems to be moving in the direction of making some serious budget cuts, which may alleviate some of the financial distress. Davis was unwilling to cut because he was heavily indebted to the different unions. ”
Arnold will run up against the entire array of special interests ,state unions, advocates for the poor. Every group which has its hands in the state cookie jar will be screaming against cuts. The battle with the entrenched CA educational bureacracy will be the worst. They can close some parks but cut education spending? This will be a bruising fight and I predict the problem will be somehow papered over with temp borrowing of more bonds to do quick painless patches, and somehow pass this hot potato over till next fiscal year, as they alway do. The CA entrenched spending bureacracy is simply too powerful and will fight to the death against cuts within its own sphere. The CA public is too stupid or more likely many in CA are parasitic leachs themselves and will not support Arnold as Californians by and large think that everything is free or should be free in CA and think that the CA gov’t will somehow conjure up the money from thin air (more Bonds).
The vast majority of Californians are really stupid in state fiscal matters and keep voting more state indebtness each election cycle; E.G. more and more stupid bond measures.
“The CA public is too stupid or more likely many in CA are parasitic leachs themselves and will not support Arnold as Californians by and large think that everything is free or should be free in CA and think that the CA gov’t will somehow conjure up the money from thin air (more Bonds).”
Agreed.
They got what they deserved with Arnold. He’s an actor and his campaign was an monologue of wishing. He had no clue as to the reality of government and no experience. Maybe people will get off the “we want an outside” mentality. Outsiders sound great, but can’t function within the confines or government. Maybe they’ll also stop with voting for people because they seem like the kind of guy you’de want to have a beer with and recognize you need someone that really knows the system because the system is not going to change.
McClintock was the man to lead California, not Arnold. California is in worse shape than when Arnold was elected in the recall. McClintock may not have had the glitz, but he sure has the brains, economic and finance background, and knows our state government. The fools elected the wrong guy. The budget cuts should have happen a long time ago. Arnold is worthless.
Yep. It was a sad day when Arnie got elected. Most people were just glad to get rid of grey day vis, but I wish McClintock got the nod.
“It’s going to be interesting how long it takes before the good people of California, turn on our governor?”
The state of CA is like a big wallowing rhinoceros and the special interests who leach off the gov’t dole are like the little birdies who pick the ticks off the rhinos skin.
I say cut to the bone, cut handouts, let loose the immates , cut freebies to illegals, cut funding to schools, cut out half the useless pasasitic bureacrats , cut out the nanny state altogether-true laissez faire 19th century darwinian capitalisim at it’s finest.
As Thomas Hobbes’ s eloquently put it:
A society where life was ‘’solitary, poor, nasty, brutish and short”
Peter-
You must have an attic full of ammo…
LAtimes notes that the 50k prisoner release number is up from 22k a week ago…supposedly panicked Cali taxpayers should throw up their hands and beg for tax increases to keep felons in jail. A cynical ploy? Of course not. But other states, including NY with a 4.3 billion tax shortfall will be watching to see what works to get more money out of the already squeezed middle class.
CUT Higher Education……especially colleges we don’t need this many in America. Make entrance requirements hard, those that don’t get in they can work with their hands. And keep kids in school 12 months a year if they cant read write and speak English.
I don’t understand why we have so many college graduates when all the smart jobs are being outsourced. Why keep the kids in hock with debt?
Governator: I have an exit Caly strategy……run for governator in New Mexico……got idea from blogger need 2 leave ca.
That’s amusing.
Lehrer NewsHour tonight has a short segment on economy and election. Evidently NH primary dominated by economic concern. MSM perplexed. The economy is “growing,” so why are 80% R and 95% D so “worried” about the economy? Duh, maybe they are aware that the banking system is threatening to collapse.
The economy is “growing,” so why are 80% R and 95% D so “worried” about the economy? Duh, maybe they are aware that the banking system is threatening to collapse.
The truth is that the economy has been doing very well since 2002…. it is just that people have been spending way too much. Way way way too much.
Even housing is still doing very good… the 10% drops seen so far really aren’t that bad. The stock market has only corrected 10% too. None of this is serious, this is all NORMAL.
It is the fear that such MINOR downward is a problem that will lead to perhaps the major meltdowns many on this blog are expecting.
I think J6P has no clue about banking failures. And frankly, we could do without 40% of the banks… way too many branches around. Banks on every corner like gas stations.
People were snowed into thinking the economy was good because they could live the good life on credit and their HELOCs. Once those were taken away, they realized that wages have been stagnant and only those at the top were really doing well. It was all smoke and mirrors. All those people that thought having an ownership society was the cat’s meow didn’t realize now they’ll get to own their poverty as well.
“The truth is that the economy has been doing very well since 2002…. it is just that people have been spending way too much. Way way way too much.”
What?
CHILIDOGGG: Real constructive reply there.
Maybe you confuse the term good economy with healthy economy
I’d say the Housing Boom was popular with the masses… and a lot of people are indeed getting to walk away from houses with interest-only loans and their toys.
“The truth is that the economy has been doing very well since 2002…. it is just that people have been spending way too much. Way way way too much.”
Is this some fox news opinion or something?!!?
I think you mean maybe the economy was doing well until about 2000. Inflation (falling dollar) has been rampant but ignored by the MSM. Had the dollar fallen as much during the Clinton boom years as during the Bu$hco disaster, the Wall Street Journal would have had almost daily headlines about the “Clinton catastrophe.” The excesses and employment “gains” of 2001-2007 were clearly unsustainable and lulled consumers of MSM into a false sense of security. The deficits created since 2001 and finance industry bailout will cost this country more in inflation adjusted dollars than all the wars of the 20th century combined.
The truth is that the economy has been doing very well since 2002…. it is just that people have been spending way too much. Way way way too much.
Yes.
But think about what you just said. Since roughly 70% of the economy depends on consumer spending, the minute people can’t spend more the economy tanks.
I volunteered to bring a friend’s dog to the vet to be put down once because my friend couldn’t do it herself. The dog had been to the vet dozens of times and was never scared or skittish. Friggin dog was shaking like a leaf and no amount of petting/calming techniques worked to settle her down. The dog KNEW, somehow, what was going on. Same with the folks here in the US, they may not be able to verbalize what they are feeling but they know there is bad Ju-ju a comin.
“Same with the folks here in the US, they may not be able to verbalize what they are feeling but they know there is bad Ju-ju a comin.”
I’ve had this feeling for years. I’m a Civil Engineer with a comfortable living, and yet in my mind I’m under-performing, so I live a moderate lifestyle. However, the front desk girl who answers the telephone drives a new truck, has silicone implants, drinks lattes every day, and she sports a Mexican suntan in the winter. A cursory glance of our parking lot reveals the lowest paid workers driving the newest cars! “…bad Ju-ju a commin”, indeed.
Most vets will come to the house to do euthanasia. When I had to let my 15 yr old German shepherd go, her vet came to the house. My dog had no idea that anything unusual was happening and she passed away peacefully in her favorite spot in the living room.
“‘I got my insurance license so I could start doing financial planning seminars,’ Munoz said. The Upland resident, with more than 20 years in the mortgage industry, is also selling jewelry over the Internet and has learned to repair eyeglass frames for optometrists.”
“Despite all these endeavors, which he said keep him busy at least 12 hours a day, Munoz said he and his wife have seen their monthly income drop from about $12,000 to $5,000. They cancelled a European vacation and a full-time maid, and cut back on dining out.”
These residents on the outskirts of the city of angles are fairly typical of the see me-dig me flaunt it, even if you don’t got it lifestyle… there.
In gauche Upland, of all places.
It does always make me laugh when I see expensive cars going those directions on the freeways. Who would want a nice car and live in Fontana direction. yikes.
I’d change that to “He’s looks like a version of Grey Davis…”
FWIW - the Central Coast is starting to melt down.
I have an illustration of one “high-end” SLO County neighborhood down about 25% from the peak.
http://centralcoasthousingbubble.blogspot.com/2008/01/losing-money-on-mesa.html
The Coast is certainly not immune.
Thanks, SLOBear. Asking prices for small units or shacks in Morro Bay are still averaging $399/s.f. (wtf?) Never mind, the vacation rental rates are still cheap - and I mean with furniture and all utilities included. I’ll be there starting Jan 19th.
There are no wages around the Central Coast to support this housing. The owners of these monsters have to fleece people with “financal products” or “sweat labor”, and now credit has seized and labor is staying home. Game over faux rich!
Here we go again with all of the doom and gloom about California real estate….geez…I have gotten to the point where I don’t really believe this stuff anymore…I don’t even believe me anymore!
Just like they say we landed on the moon in 1969, I think all of these stories about foreclosures are all made up. Nobody is losing their homes in California because everybody in California is a movie star and makes a gazillion dollars a year.
Just because a house that was selling for $600,000 in a dump like Modesto in 2005 and is now only worth about nothing doesn’t mean there was/is a housing bubble…..uh wait a minute…maybe it does…never mind.
Seriously though, I am amazed to see the whole country being dragged down the drain because of the greed and stupidity that ran rampant when it came to houses. I think groups like NAR and the Mortgage Brokers Association should be investigated for market manipulation and fraud. I think people and companies who knowingly wrote loans people couldn’t pay back should be held to some level of financial respsonsiblity and even criminal prosecution.
I didn’t participate in the housing bubble except to warn people of its impending crash but now I’m paying for it as I watch my IRA and 401K lose money because of Countrywide and the others go under. I’m getting really pissed as I watch our idiot President and the Fed running to the rescue of the dumb people who participated in this fiasco.
Is there a global depression on the way?..I’m afraid to say…I said the housing bubble would crash so if I say we’re headed for a depression it may actually happen.
Cry baby Banks only like it when they are making Billions. Manufacturing went overseas and it was “Oh how sad” Banks lose money and its “Oh no now we are all doomed you have to save us”
“Privatize the gains, socialize the losses.”
What else is freggin’ new?
In the early years of this decade and as late as 2006, the mantra was that you will be priced out forever if you don’t buy a house and that real estate only goes up.
If you are younger than 48 (my age), I hope it can help reduce your fears by telling you I’m investing my max contributions to my 401k and IRA stock mutual funds this year and will do the same next year and the following year, buying over regular periods. I have a long term horizon before I will want that money. The thing you must worry about is remaining competetive and to increase your professionalism at work, and be a can do employee (if you are not self-employed). Reducing your debt to zero should be a high priority, as well as saving extra money (beyond retirement contributions) in conservative investments and precious metals bullion.
I read Harry Dent’s books in 2000 and did not take his advice on going full bore into stocks this decade. Nor did I do the complete opposite of his advice. I took a middle course, since my income more than doubled in 2000. I looked ahead and worried that boomers would be downsizing their homes when they start retiring. That led me to be a skeptic about the real estate bubble early on. In 2004 I was shocked and angry at the specuvestors driving up prices so that responsible low income people could not buy houses. Then I was laughing when I found a lot of low income people lied about their loans and got stuck. Now I’m laughing everytime I see about another 12% drop in values somewhere over a span of a few months.
It’s going to get much fuglier this year - fuglier for the FBs. For those renters who did not save in TIPS, series I bonds, and precious metals, you can still save a substantial amount of wealth before you really start suffering. Just takes discipline. SHTF in 2010, I think. If interest rates go lower and lower through inauguration day 2009, the recession may be staved off and given to whoever is the next president. The next president may likely be the next Hoover.
The pendium always swaying all the way to the left or all the way to the right. Yes, it will get fuglier for next couple yrs.
What gets me mad is if you walk into a casino, play roulette, you need to shell out some real $ to play. In RE we allow 0 money down game; so if I win, I’ll keep the money. I lose, I just wash my hand and walk way. This is totally BS. The FB deserves all the spanking allowed.
All of the evening news shows led off with recession and economic forecasts for recession. All of them included a talking head saying if the consumer pulls back, the economy is toast. No one mentioned that the
negative savings rate means that an unemployed person without a nickel in savings will experience a personal depression.
No worries B of A will buy everyones debt load and make everything better…
Lennar, the biggest US homebuilder in terms of revenue, is rumored to be short of cash and thus, selling 11,000 properties for 40 cents on the dollar in 8 states, according to Bloomberg news.
Interesting. We are only 2 months away from the start of Spring and a massive ad-campaign by the NAR telling us, “Now is a great time to buy.” Spring, of course, is the main property selling season. Makes you wonder why Lennar doesn’t hang on a little longer. They must be really short on cash.
Jack McCabe of Florida, a bear where property prices are concerned and certainly not a cheerleader for the NAR, figures a drastic reduction like 40 cents on the dollar might mark the bottom.
So, what to make of it? Either Lennar is just raising cash (if they bought the land over 10 years ago there is still plenty of gravy even at 40 cents on the dollar) or they sniff bad news in the air concerning the Spring selling season. Spring will be the key. Actually, a month or so after Spring. Only then will we see if the bottom has been reached (I personally doubt it) or if it’s just a dead-cat bounce, followed by a retreat which will fall through support to new lows. By Spring, we should see the recession taking effect even though Bahgdad Ben Bernanke tells us we will avoid a recession. That’s the one we have been in for several months. Somebody needs to tell him.
Lennar is definitely doing some strange things. I work in a building next to Lennar in OC and I talk to some of their employees occasionally. They originally occupied all 5 floors of the building; they are now consolidated into 2 floors. That’s quite a few people they let go.
Meanwhile, they have stopped construction on ALL of their OC projects. Even returned deposits on one of the projects. Their OC projects include the Platinum Triangle in Anaheim and a couple of projects in Irvine. They say they are waiting for the market prices to come back up to where they can make money. But the carrying costs have got to be killing them. I don’t know if they do typical construction financing, but if they do, then stopping construction would violate the loan agreements and they would need to take out new financing (or get funds from somewhere else, such as bonds) to replace the construction financing.
Oh, and they were the company that bought the former El Toro military base back in 2006. IIRC, the cost was about $2 billion. To my knowledge, they have not started any construction there. That is a huge carry cost.
I just don’t understand their thinking. Hell, on the projects that are already underway, just go ahead and finish them and sell them for whatever they can get. I just can’t imagine how it is cheaper to pay the carrying costs (plus any costs to maintain their partially-completed projects) for some unknown duration in the hopes of achieving higher sales prices than it would be to just complete the projects and get the cash.
Lennar could possibly be better off liquidating the company and returning the proceeds to shareholders. (NOTE, I have not looked at their balance sheet), but I cannot see any value in any large homebuilder. This may be the end of the national homebuilder as a couple events are confluencing to shape the future:
1. high cost of energy
2. personal responsibility
3. lack of ability to afford McMansions
We’re going to wind up like the rest of the world, living in duplexes and flats unless this stupid lending stops. At this rate, our lifestyle is not sustainable. Wanton waste and lack of personal responsibility (Moral hazard) might spell the end of it.
“Meanwhile, they have stopped construction on ALL of their OC projects. Even returned deposits on one of the projects. Their OC projects include the Platinum Triangle in Anaheim and a couple of projects in Irvine.”
That platinum is a gigantic turkey boondoogle. The way that entire area was bulldozed and leveled is parallel to Soviet/Chinese style massive urban demolition and eradication techiques. Ambience and locale so bad that I would actually prefer dwtn LA(major heresy) but at least dwtn LA has some edginess and historical old blgds, whereas Anahein Platinum is simply a deadly dull area.
Lennar project off 405 and jamboree a bit more promising and better locale but was scaled back and some construction of remaining units postphoned/ mothballed i believe.
El toro a big chuck of idle former military land sited in what should be a very promising future site(down the road) in S OC as area around it is mostly upscale modern industrial parks with plenty of hi-tech . The current recessionary trend and RE meltdown is what is holding back development of EL toro but down the road looking into the future it is still a valuable site.
Well let me add to this. Centex Homes did the same thing in the SoCal areas about 2 months ago. Got rid of most everyone and abandoned projects. I have kept quiet on who it is since I still havent read any of this in the news. But not so good if multiple big builders are stopping projects.
I call shenanigans! What was it, 1-2 months ago when Lennar was claiming they were going to mothball their new home inventory in OC so they could wait for the “market to return”? And that clever strategy won’t work in whatever 8 states they’re going to have a firesale in?
Mothball? BULLLLL-SHIITE!
From 1/1/2008 to 1/8/2008, there were 1 homes sold in ZIP code 90274 for an average price of $585,000.
1) $585,000 on Cresta Verde Dr
only one home sold in a very expensive zip
and then there is this.
16 Portuguese Bend Road, Rolling Hills, 90274
Status: ACT MLS#: S955686 $1,999,000*
List Dt: 09/29/2007 PType: SFR-D Orig Price: $2,700,000
a very nice 701, 000 price reduction
90274 being that large hill south of LAX as you fly in from East viewed out of pilot side of plane
“Status: ACT MLS#: S955686 $1,999,000*”
Notice the 1,999,999 price. I guess they think that selling a mansion in PV is like featuring the $4.99 burger- fry special at Tommies. Just make it look a bit cheaper-instead of advertising it for for 2 million just feature it at 1.999,000. Makes it sound cheaper no ? Bet some Einstein genius realtor came up with that brainstorm.
BTW: Bet all those’ supposedly rich’ folks up there in the PV hills are waiting for the spring season and the Fed helicopter drops, and all will be saved!
I could only hope for a major correction in PV. Will it happen this time? We’ll see. PV dropped 40% in the 1990’s bust, so there is a precident.
It amazes me how many J6P’s believe high end won’t crash… Yet Trump can’t sell in 90275… hmm…
I’m thinking quite a few will try to ‘cut and run’ this spring. I still recall 1994… ghad was it ugly in 90274/90275 real estate that year…
No jumbos… puts a crimp on the hill. (Most homes have mortgages.)
Got popcorn?
Neil
Bet all those’ supposedly rich’ folks up there in the PV hills are waiting for the spring season and the Fed helicopter drops
Or for the water tanker helicopter drops during the next wildfire.
The Portuguese Bend area is one of the most active earthquake fault zones in SoCal.
“The Portuguese Bend area is one of the most active earthquake fault zones in SoCal. ”
Yes there is a section of road along palos verde drive south as it goes thru the Port bend area which is warped and being constantly repaired. It is like a 2-3 mile stretch and it has weird dips and drops as if that entire coastal bluff area is collapsing/ sagging . I alway thought it was due to land subsidence as the soil in entire PV is mostly soft/crumbly conglomerates and shales. Never figured the earthquake angle.
“‘We’re expecting just about a billion dollar loss in retail sales from the reduction in home equity available for expenditure so that’s a huge turnaround,’ said Cox.”
Who could have foreseen this development? (WE DID.)
‘Who wants to spend time in the kitchen? I have a big-screen TV,’ he said.”
For that matter, who needs a kitchen, when you can pretend-eat food you watched being prepared on the cooking shows on your big-screen TV!
Just curious,
“If a desperate man dives off an empty condo highrise balcony and there is no one there to hear it, does his abrupt landing make a sound?”
“‘I got my insurance license so I could start doing financial planning seminars,’ Munoz said.
So why would anybody want to be bothered with any financial planning seminars? With get rich quick losers like Muñoz at the microphone you are far better off staying home.
Amazingly, the seminars will probably be full of former real estate persononnel looking for the next big break
“Everything you see me do, just do the opposite.”
More fantastic news from downtown San Diego. Looks like corporations didn’t want to be shut out of that sweet real estate appreciation:
Corporate Owned -
350 W Ash #809
San Diego, CA 92101
Price: $379,900
MLS#: 076085350
Sales History
Date Price Held Return Annual
06/29/2006 $650,000 9m 25% 32%
09/12/2005 $520,702 n/a - -
Oh, and back to original builder prices (2001-2003) for a premium building…
645 Front St #512
San Diego, CA 92101
Price: $449,500
MLS#: 088002589
Sales History
Date Price Held Return Annual
06/24/2003 $515,000 n/a - -
06/06/2003 $449,000 n/a - -
I get a weird feeling about tomorrow…
http://www.youtube.com/watch?v=UVQKiqCZ9No&feature=related
Your lips to God’s ears…
How about that magically moving comment?
Why Ben, why?
http://invivoanalytics.com/2008/01/10/gold-the-dreaded-yellow-metal-enters-the-enthusiasm-phase/
Six months ago I said to my wife, “we need to buy gold.” Unfortunately, at the time, she was my fiancee, so we needed all that money for the wedding. Now, I wouldn’t touch the stuff with a ten foot pole. Damn! If we’d have bought with our savings at the time, we would’ve netted about $8,000.
I wouldn’t either. I have some coins I bought late in the spring but $900? Don’t think so.
BTW, your latest blog post is very funny.
Shucks, thanks.
I’ll sell it to you for an ounce of gold!
Yea its great isn’t it ? it will run up parabolic on perception the FED has lost control. I am holding out for the big panic though. I think we are ripe for it. My Gold Holdings are rather small though so its just playing around money. NEM and PAAS, SSRI. I am watching NG also it had a big tumble awhile back, its a small one.
HMY and GFI tend to lead all the others.
Gold is going tremendously higher. Silver will also go much higher. It isnt going to happen overnight, it may take another 5 to 10 years but it was in a bear market for 20 years, it will eventually end when everyone jumps on board. How many of your neighbors are telling you to buy gold?
The fundamentals for gold have never been better. The fed is printing like mad, there is alot of uncertainty in the world. The dollar is falling. Its a perfect storm for gold, inflation adjusted for the 1980 high for gold is around 5000.00. Gold is going to highs that nobody expects. If gold is to expensive for you then buy Silver. Silver is the next moonshot. Its used in everything from disinfectants to plasma screens. Its also being used in Solar panels and superconductors.
Surprised I’m the first in fifty comments to note this, but:
No, that’s not ironic. It’s telling. She was a failure as a mortgage consultant, selling people poisoned loans that killed them, and then when she lost that job because there were no more suckers left, now she’s supposedly counseling people on how to avoid foreclosure. And she just lost her house in foreclosure.
Who could possibly be a worse foreclosure counselor?????
that is too easy…Casey Serin…and he too tried offering foreclosure avoidance advice for awhile
Those who can, do. Those who can’t, teach.
And besides, since a lot of the folks coming to her for assistance will be beyond help, she can walk them through exactly what it is like to have to pack up all of their stuff while being evicted after the lender forecloses.
Oh, was that too harsh?
Too bad she wasn’t a suicide counselor…
Me thinks the writer misunderstood — she’s actually a “foreclosure counselor”. No prevention about it. Who better to counsel than someone who just went through it?
ahh… the subtlety. Wouldn’t a true foreclosure councilor smack the idiots with a 20lb frozen trout and then rip they keys out of they’re crying hands?
Got popcorn?
Neil
She got the job cause she had ‘experience’……boy did she!
“Having been laid off as a mortgage consultant in March, Powe and her husband no longer could afford to pay their own mortgage”
My irony detector just went off the scale…
The Powes are victims!
They were obviously misled by uncrupulous lenders into getting a mortgage they couldn’t afford. Prime candidates for a bail-out!
I blame Erik Estrada.
not Ponch?!
Nikkei @ 52 wk low tonight, lowest its been in a year and a half. Looks like the CFC BAC stuff didn’t impress the Japanese so much.
I agree that Tom McClintock was the right man to be governor in that recall, and the man I voted for. I never voted for the Governator. I guess those of now in New Mexico will have to keep Billy Boy Richardson, as he has dropped out of the presidential run. Ahnold will have to try a new state - like Oregon. He got used to up there in Kindergarten Cop.
Yup,
That was who I voted for.
me too
I realized I voted the same too. Though I was hoping anyone besides Cruz would win. I didnt think very much of him for actually running against Davis.
Time.com
“How Inflation Helps–and Hurts–the Poor”
Friday, Nov. 28, 1969
Merrill Lynch to Take $15 Billion Mortgage Writedown, NYT Says
Merrill’s writedown is more than the $12 billion analysts had estimated