A Tainted System From A To Z
Some housing bubble news from Wall Street and Washington. Bloomberg, “Ambac Financial Group Inc., the first bond insurer to be stripped of its AAA credit rating, reported its biggest-ever loss after writing down the value of guarantees on subprime debt by $5.21 billion, according to a statement by the company today. Ambac’s loss reported today followed the company’s first- ever loss in the third quarter. Before 2007, Ambac had reported profit increases every year for the past decade.”
“Prices for credit-default swaps that pay investors if Ambac can’t meet its debt obligations imply a 72 percent chance it will default in the next five years, according to a JPMorgan Chase & Co.”
“‘In retrospect, insurers wish they’d never heard the term structured finance, much less written the business,’ said Donald Light, an insurance analyst.”
The Associated Press. “Fitch said it cut Ambac’s ratings because the company does not have enough capital reserves to cover the higher potential defaults. MBIA raised $1 billion in capital last week to boost its reserves, but Ambac balked at such a move, saying the market conditions were not optimal.”
“Business slowed sharply in the quarter, with net premiums written dropping 78 percent to $49.3 million.”
“Bank of America Corp., the second- largest U.S. bank, said earnings dropped 95 percent after $5.28 billion of mortgage-related writedowns and higher provisions for future loan losses.”
“The writedown was 76 percent more than the $3 billion that Chief Financial Officer Joe Price estimated on Nov. 13.”
“Wachovia Corp., the fourth-largest U.S. bank, said profit fell 98 percent to its lowest since 2001 after writedowns for bad loans and mortgage-backed securities.”
“The provision for credit losses rose to $1.5 billion. Holdings backed by commercial real estate mortgages were written down by $600 million.”
“Wachovia has dropped almost 45 percent in New York trading since CEO Kennedy Thompson acquired Golden West Financial Corp. for $24.6 billion in October 2006 just before the housing market peaked. Since then, U.S. home sales have slumped 21 percent, prompting Thompson to call industry conditions the ‘toughest’ in his 32 years of banking.”
“‘They’ve got a tiger by the tail in Golden West and I don’t think they know what to do,’ said Nancy Bush, an independent bank analyst.”
From CNN Money. “National City Corp. swung to a fourth-quarter net loss as the mortgage company was badly hurt by the subprime-mortgage crisis. Revenue dropped 40% to $1.7 billion.”
“The latest quarter’s results include $181 million, in mortgage-related charges and a loan-loss provision of $691 million resulting from higher credit losses on liquidating portfolios of nonconforming mortgage and out-of-footprint home equity loans, as well as other mortgage loans.”
“Nonperforming assets were $1.5 billion at Dec. 31, or 1.31% of loans, more than double $732 million a year ago, primarily due to a larger number of delinquent residential real estate loans.”
“National City, among the nation’s biggest mortgage firms, has traditionally been known for its conservatism and ‘Midwestern common sense.’ Its weak results are a sign that the credit crisis is spreading deeper among traditional banks.”
“The company had hoped that subprime loans and a larger geographic base would help it overcome slow growth closer to home, but the company now concedes that it made mistakes.”
The Indy Star. “Property appraisers helped exaggerate U.S. home values by as much as 10 percent in 2006, contributing to a record number of foreclosures because borrowers ended up owing more than their homes were worth.”
“The dollar equivalent of that 10 percent? $135 billion. Those figures come from Susan Wachter, a real estate professor at the University of Pennsylvania’s Wharton School.”
“Lenders and mortgage brokers routinely pressured appraisers to boost values, said Jonathan Miller, a New York property appraiser for two decades.”
“And appraisers accepted those pressures, said Brett Martin, who owns Indianapolis Appraisal Associates. ‘There’s a saying that a good appraiser can make $50,000 a year, and a bad one can make $200,000,’ he said.”
“Debbie Huber of Las Vegas says a third of the lenders who want to hire her are looking for a guaranteed value before she appraises the property. ‘We get calls like that every hour of every day,’ said Huber, past president of the Nevada Appraisal Commission, the state agency that oversees appraisers.”
The Boston Herald. “Local activists vow to begin this week physically blocking eviction of Bostonians who lose homes to foreclosures - even if protesters wind up in jail.”
“‘We feel stopping evictions is important enough that if arrests are necessary, some people will be arrested,’ said Steve Meacham of City Life, a Jamaica Plain group that plans to launch a civil-disobedience campaign tomorrow.”
“City Life wants lenders to either rent seized properties back to former owners or sell homes to nonprofits for use as affordable housing.”
“‘That would be a way out of this crisis that we think would be better for everyone,’ Meacham said. ‘Yes, banks are going to lose some money, but they’re going to lose money anyway, because these properties are no longer worth as much as the mortgages on them.’”
The New York Times. “Marty Ummel feels she paid too much for her house. So do millions of other people who bought at the peak of the housing boom. What makes Ms. Ummel different is that she is suing her agent, saying it was all his fault.”
“Ms. Ummel claims that the agent hid the information that similar homes in the neighborhood were selling for less because he feared she would back out and he would lose his $30,000 commission.”
“For decades, residential transactions almost always involved brokers who, whatever assistance they gave the buyer, legally represented only the seller. The long boom that began in the late 1990s put an end to that one-sided world. As prices spiked, buyer’s agents and brokers became popular as sounding boards, advisers and negotiators.”
“That makes this the first housing collapse in which large numbers of buyers had a real estate professional explicitly looking after their interests.”
“The Ummel case poses the question: In a relationship built on trust, where promises are rarely written down and where — as in this case — there is no signed contract, what are the exact obligations of these representatives in guiding their clients through a sizzling market?”
“The defendant in the Ummel case is Mike Little, a veteran agent. Little said that contrary to Ms. Ummel’s claims, the suit was motivated mainly by the declining market. ‘When people see their home values and assets declining, they always feel there’s someone to blame,’ he said. ‘This is a dangerous time for all of us in the industry.’”
“A wave of lawsuits is beginning to wash over the troubled mortgage market and the rest of the financial world. Homeowners are suing mortgage lenders. Mortgage lenders are suing Wall Street banks. Wall Street banks are suing loan specialists. And investors are suing everyone.”
“Everyone wants to know who is to blame for the losses paining Wall Street and homeowners. The answer, it seems, is someone else.”
“‘It will be a multiring circus,’ said Joseph A. Grundfest, a professor of law and business and co-director of the Rock Center for Corporate Governance at Stanford. ‘This particular species of litigation will be manifest in many different types of lawsuits in many different jurisdictions.’”
“Two questions lie at the heart of many of the cases. The first is whether lenders and investment banks alerted borrowers and investors to the risks posed by subprime loans or securities backed by them. The second is how much they were legally obliged to disclose.”
“‘What strikes me here is that this a tainted system from A to Z,’ said Tamar Frankel, a law professor at Boston University. ‘Everybody blames everybody else. If you look at what is being said, there isn’t one who doesn’t blame another and there is half-truth in everything.’”
The Plain Dealer. “For almost a century, politicians from the White House to City Hall have pushed and prodded us to own a home. The result: Nearly seven in 10 families own rather than rent.”
“But now, as foreclosures throw tens of thousands of people in Greater Cleveland out of their homes, the question arises: Did government go too far?”
“Here are some of the ways government has promoted homeownership: The Federal Reserve Bank, which influences credit by setting the interest rate that banks charge each other, let mortgage rates remain at historic lows this decade, even as analysts warned that housing prices would flatten.”
“When the prices did flatten, many borrowers were left unable to sell because their houses were worth less than what they owed.”
“‘It was a bubble that had to burst,’ says Stuart Feldstein, head of SMR Research, a company that studies mortgages and other lending. ‘Nobody was paying attention.’”
“The federal government gives homeowners $150 billion a year in income-tax deductions and other tax breaks, says George McCarthy, who analyzes homeownership campaigns for the Ford Foundation.”
“That’s 4½ times the annual budget of the Department of Housing and Urban Development, the main government sponsor of low-income rental housing.”
“The income-tax deduction for mortgage interest gained luster in 1986, when Congress scrapped deductions for credit card and other consumer debt. Homeowners also were allowed to continue claiming credit for property taxes.”
“Mortgage guarantees, through the Federal Housing Administration and the Department of Veterans Affairs, let borrowers get by with little or no down payment.”
“The VA’s guarantee of zero-down loans for World War II veterans began the mortgage industry’s long slide into looser standards, says Tom Bier, a housing researcher at Cleveland State University.”
“Fannie Mae and Freddie Mac, federally chartered corporations, buy mortgages. That gives lenders cash to make more home loans.”
“Researchers say the pair served as models for the Wall Street-led secondary market that emerged in the 1990s and crashed a decade later under the weight of high-interest loans made to people with bad credit.”
“The federal Community Reinvestment Act requires banks to lend money in neighborhoods where they have branches.”
“Under pressure from regulators, banks grudgingly lent money in low-income and minority neighborhoods in the 1990s, and discovered an untapped market. In Cleveland, unregulated mortgage companies joined in and became dominant in neighborhoods where foreclosures now rage.”
The Desmoines Register. “Jim Anderson set a Decatur County record after paying $4,000 an acre for a 75-acre farm.”
“‘It’s pretty good ground,’ Anderson said Friday after he outbid about 20 other people, including bidders from California, Illinois and northern Iowa. Decatur County typically has the lowest-priced farmland in Iowa, with an average price last year of $1,828 an acre.”
“The record-breaking bidding underscored the fact that these are high times down on the farm, where high prices for crops and farmland are sending U.S. agriculture to altitudes never seen before.”
“In Iowa and the three other states covered by Farm Credit Services of America, a leading agricultural lender, farmland prices have risen 20 percent or more in the past year, said Kirk Manker, chief appraiser of the bank.”
“Iowa State University Extension economist Michael Duffy, who conducts an annual survey of Iowa farmland prices, said he thinks Iowa’s farmland market will be strong for at least five years. ‘We have seen a fundamental shift in demand for corn due to ethanol production,’ Duffy said. ‘I don’t think this demand will diminish in the near future.’”
“Iowa farmland set a record in 2007 for the fifth year in a row, Duffy’s survey showed, rising to an average of $3,908 an acre, 22 percent more than a year ago. It was the largest one-year increase since 1976.”
“Murray Wise of a leading Midwestern farm real estate brokerage based in Champaign, Ill., said the Iowa farmland market ‘is hotter than most, but Illinois, Indiana and Ohio follow close behind.’”
“‘This is a demand-driven market,’ Wise said. ‘It’s only the second one in history.’”
“The first demand market occurred in the early 1970s, when the Soviet Union purchased large quantities of U.S. grains, Wise said. That demand market only lasted about a year. ‘It’s a different world out there,’ Wise said. ‘The good times are here for an extended period of time.’”
“One spillover from the housing market downturn, Wise said, is a shift of capital from mortgages to agriculture. ‘East Coast lenders are saying they want to go into agriculture,’ he said. ‘Capital wants a home in U.S. ag.’”
MBIA up 40%. In Germany, the financials, such as Hypo Real Estate are up, too, while utilities, such as RWE and EON are down.
This suggests that the mess is spreading into the “real” economy, while the fallout in the financial industries is priced in.
More like people saw an oppertunity to run a short-squeeze on the financials.
Look at what was up today. Financials, retailers, home builders…. All heavily shorted.
This was not a fundamental lead rally(from 500 points dow to only 100 points down). It was, in my opinion, a short-squeeze.
Once the short-squeeze has run its course, these industries will be right back down. No way anyone beleives that consumer will consume, builders will sell or the monoline bond insurers losing AAA rating won’t cause another big round of losses for the financials.
Febuary should be safe to start buying puts again ?
Aren’t people fed up with hacks like Ben Stein. His latest column on Yahoo blames BB, because Ben Stein obviously made a wrong call last fall that “subprime was contained”. Why Americans put up with these hacks?
In defense of BB, imagine where we would be today if he had spent all year warning “subprime is uncontained — duck and run for cover.” His job requires him to shine the best possible light on the status quo.
Can’t you then, by extension, also defend Lawrence Yun?
No. Yun (and his predecessor) make comments that are too out of touch with present market reality to be defensible.
How about lying Larry Kudlow and his charade?
I think if there is anyone out of touch in his comments it is Ben Bernanke; right from when he took office.
At least with Fun Yun people with an IQ above 60 (no idea how many subprime customers that includes) should understand how biased he is, while J6P probably still believes Ben Bernanke is doing the best he can for him
But what pisses me is off that an ACTOR Ben Stein gives a financial advice, and a very poor one. Who let him open his mouth?
Not to be a Ben Stein defender, but he was a law professor at UC Santa Cruz and Pepperdine for a while — he taught securities law. He’s at least as well qualified as many of our other yammering media “experts.”
Not to be disrespectful to Ben Stein, and although I admire his academic achievements, he is certainly an elitist and part of the problem, not part of the solution (if there was one).
He was interviewed on New Years eve on KNX News Radio, and mentioned the “Champagne Glasses” index (story). He told the story of how he went out to buy some in this high end store and things in that store were fine. Him and the Mrs. were going to pop the cork on some fine Champagne to celebrate New Years Eve. Therefore, the economy wasn’t that bad.
Oh Ben, can you explain to the rest of us how that’s an economic indicator?
I do give him credit for apologizing to Peter Schiff in the media, but Stein is no Economist. Now, Peter Schiff is someone I listen to.
Qualifications are meaningless these days when you are willing to sell your opinions to the highest bidder.
I agree 100% on selling your soul to the highest bidder. Regarding Ben’s father Herb Stein, BFD. He raised a pos elitist for a son. There is Wall St. and Main St. Main St. is hurting.
In the end, when you are laid to rest, you will not be judged on the size of your portfolio.
Anyone who has an opinion worth listening to is selling their opinions to the highest bidder…
The people that read his column.
UC Santa Cruz doesn’t have a law school, so he couldn’t have been a law professor there.
Damn, I thought he looked familiar.
Ben Stein’s father was Herb Stein.
About a year ago Kudlow made the mistake of calling “Ben” “Herb” two or three times in one show.
Yes, I actually sat through an entire hour of Kudlow.
Everything in RE today is “Contaminated” and not contained…
You have fraud after fraud and no one knows where it begins and ends…
Forged Loans with inaccurate incomes
Forged Apprasials pumbed by REA and LO
Fake multiple offers to drive bids higher
the contamination is pretty thick!
RE: the contamination is pretty thick!
That’s why all the gangster’s derivative formula’s are BS.
ben stien was pitching xlf at $30
whoops
also wants airlines re-regulated
Isn’t the whole stock market thing a bit too Fed-centric these days?
I watch CNBC Europe because the quality is so much better. Reading anything from these idiot “salesmen” is a waste of time. Wall Street is also quick to point the finger but the fact is THEY screwed this up. The Fed helped, but the Wall Street Gangsters caused most of what we see today. If they want someone to blame look in the mirror.
Wall Street is slime.
Marc Faber has been saying for years to buy farmland.
LMAO… yeah… Buy farmland? Thats a winner. /sarcasm off
Ben —
You amaze me with your ability to keep up with a tsunami tide of financial market news. Meanwhile, some folks are in severe denial about what is underway…
The Short View: Global plunge
By John Authers, Investment Editor
Published: January 21 2008 19:49 | Last updated: January 21 2008 22:55
On days like Monday, there is little to do but wait for the casualty count at the end. Even with the US on holiday, the sell-off was the worst single day for global equity markets since the terrorist attacks of September 11 2001.
…
All of this on little bad news.
http://www.ft.com/cms/s/0/24a3c35c-c853-11dc-94a6-0000779fd2ac.html
I’ve just been happy to have a place to spew my animosity toward this housing crap for the past several years on a daily basis and have a like minded audience in attendance.
My husband, in frustration, asked me why I was always on this blog and I explained that it was the one place that doesn’t think I’m crazy to think the world has gone mad and that things will return to normal.
We’ve had so many financial hard knocks in our 13 years of marriage (some self inflicted, many not) that my hubbie still is in doubt that the housing market will turn around just because if it did, god forbid, it might benefit us.
the HBB is my sanity. It keeps me on track with my goals and gives me hope….
I know, I know, sappy. But true.
This blog has been a fabulous education. Not to mention support group and source of some of the best humor on the Internet.
Thats odd danni. You described us right down the to years. Although the downside of the financial end hasn’t been all that bad, I missed out (messed up or sell inflicted as you call it) on a multi year multi million contract that would have changed things for us dramatically. I’m over the regret of that one but the bubble wouldn’t have made a difference to us had I gone through with the contract. I’d have been able to afford whatever and where ever.
Ok, here comes Mary Poppins. “just a spoon full of sugar, helps the medicine go …. ” .
This blog is a fine education, indeed, and a theatre of the living!
When I get canned, I know someone will take us in…right?
‘that the housing market will turn around ‘
With prices going down or up?
What about the education? And the community?
Even though I only recently started posting, I have been reading from very long (mid 2004-ish). Work constraints prevented from posting. Those have been terminated with extreme prejudice.
We may be angry, rave and rant, and invoke the sacred oath of the JT but as my sister put it, “Very few have worked so hard to prepare themselves for what is coming.”
She may have needed my advice on the finance part but she is right about the life-cycle/psychology part.
Cheers!
Tx..
and we’ve loved listening to your spew (and learned alot at the same time).
This morning, at about 9:25 on CNBC, they were cutting back and forth between the different hosts, all of whom were on the trading floor.
There was an interesting comment by Jim Cramer. He may have given out a little more information than he intended, (probably due to his excitement in the heat of the moment - an impending 500 point drop).
Anyway, his statement was in response to one of the other hosts questions about their reporting, and went something like this:
“Look, we try to be as honest as we can be, without scaring people about what is really going on. For example, behind the scenes, we have talked amongst ourselves about how the banks look worse on paper than they did before the 80’s S&L crisis”
That is not an exact quote, but it paraphrases the conversation. Maybe he meant to say it, I don’t know, but it was obvious that his statement made it clear that the business reporters are intentionally cheerleading against the negative market data.
Not that this is news to anyone, but it is the first time I have seen it acknowledged openly by the business press.
I have also seen a CNBC anchor tell a guest that “we’re here to calm people’s fears”.
That’s funny, I thought they were providing objective analysis.
Tried calling mortgage contacts - the phone wont stop ringing. The housing bubble is dead - time to reinflate.
No regulation in place and this mess will just happen again.
You may have touched on the reason global stock markets are sh!tt!ng bricks at the moment. The system is clearly broken, and the main policy response is somewhat akin to applying a bandage designed for a skinned knee to a gunshot wound.
I see it more like bringing more body parts in from the morque and applying the lightning: Trying to reanimate what is left of Frankensten’s Monster after the peasants have trashed it.
“The name on the jar was Abby-something”
Normal…
Don’t sweat it too much Crispy. I’ve been getting calls from my former clients too. But here’s the deal, it’s all refi, and not one of the clients I talked to can refi with where their values are. So what’s going to happen over the next few weeks is a lot of mortgage folks wil be spending money they don’t have trying to qualify people that won’t qualify. Ain’t it beautiful.
Bottom line is the Fed can lower to zero and it isn’t going to do a damn thing. And, they can’t make the lenders loosen up the money. This time the money will be out on the table and no one will be able to get to it.
exactly…
“The Boston Herald. “Local activists vow to begin this week physically blocking eviction of Bostonians who lose homes to foreclosures - even if protesters wind up in jail.”
It seems to me that these ‘activists’ are confused and going after the wrong side.
activist=communist
What???? The ability to protest, right or wrong, is certainly not communist.
I seem to recall that the Eastern Bloc communist countries didn’t allow such things. And see where protest will get you in China. Or in Cuba.
Slim, communists only like protesting until they protest themselves into power. After that, protesting makes you an Enemy of the People.
“physically blocking eviction”
That’s not a protest. They’re looking for jail time if they start shoving sheriffs around.
No, but they are.
My last involvement in Boston area protest that got me arrested was a pro-rent-control demonstration at a police station in 1969 or 1970. The organizers were definitely communists, self-identified. Members of the Progressive Labor Party, opposed to CPUSA because they thought it “reactionary.” OK, the present protesters are probably not self-conscious communists, but probably committed socialists at best; at worst, just nincompoops who haven’t thought about how their actions, if successful, would put an ending to mortgage lending in Massachusetts. (Just as rent control when implemented caused various distortions.)
maybe each activist could make a mortgage payment….that’d keep them in the house
Hmmm, maybe the “protesters” are just FBs who now need a place to live? Roof, bed, three meals, no mortgage….
As sad as it is, betcha some folks are gonna pick jail as an alternative before this is over.
“One spillover from the housing market downturn, Wise said, is a shift of capital from mortgages to agriculture. ‘East Coast lenders are saying they want to go into agriculture,’ he said. ‘Capital wants a home in U.S. ag.’”
Govt subsidies are a very lucrative crop to cultivate.
‘Capital wants a home in U.S. ag.’
An excellent way to lose money. Farm land is priced by the money it can generate via the crops the land produces. Crop prices are now high thus buyers are eagar to pay top dollar for farm land.
The trouble is, today’s high crop prices leads to extensive planting which leads to tomorrow’s abundant yield which leads to tomorrow’s crop price decline.
It’s just not crop price declines that one has to worry about. The weather is the ‘BIG UNKNOWN’. One bad year could wipe out the small independent real quick.
How much was farmland in the 1930s during the dustbowl?
EXACTLY !!!….I don’t know if anyone on the norad listens to Ed Shultz on the radio but his show is broadcast out of S. Dakota or thereabouts….Anyway, he said Iowa and surrounding Farming states are in BOOM TIMES right now…I assume due to the Ethenol and other farm subsidies….What a scam…
My post was directed to P. Bear…
The next uber-bubble? With housing a dead issue, there is still massive equity in farmland just begging to be liberated. Besides, the current ethanol subsides effect a broad range of farm investments: diversions to corn are affecting all grain commodities, as well as the long-term decisions of when and what to plant. Ag products may be one of the few things this country can continue to export at competitive prices for the medium term future.
I was watching CBS Sunday Morning a couple of months ago, and they featured a documentary called “King Corn”. It looked pretty interesting - it criticized the US agriculture business for producing lower and lower quality product. I haven’t seen it, but I was kind of curious. I’m from Iowa, and my extended family has farmed mostly corn and soybeans on the same land for the last 140 years. (I’m a city girl myself). But having seen it firsthand my entire life, I know that it’s an extremely difficult business. My grandparents and aunts and uncles work 24/7 364 days a year, and they save money in the boom years to cover the inevitable years of low yield from droughts or floods, or high yield and low prices.
I laugh at the folks who think they’re gonna trade their house in New Jersey for the farm life. There is far more to it than sitting on one’s can and raking in the gov’t subsidies.
One of the best pieces of business advice I got came from a farmer: Spend slightly less than what you take in. Yes, he was quoting (or paraphrasing) Will Rogers, but the advice was still good.
The very best farming advice I ever got was from a farmer. His advice: “Don’t ever be a farmer.”
Meet the King of California…
Jim Boswell is his name.
http://www.amazon.com/King-California-Boswell-Making-American/dp/1586480286
I thought it was Emperor Norton.
The Emperor told me he wanted all of his constituents to have a little walkin’ around money…
Can’t compete with ’ssshrubery’s $800, but here’s enough for a Dime bag.
http://en.wikipedia.org/wiki/Image:Nort10d.jpg
Similar background here tampaesq. I hear so many eurotrash driving, latte drinking, sneaker wearing fools from metro areas say “I want to live in farm country”. When I asked them if they’ve ever jerked cows or bailed hay for a living, they give me that stupid look that only native metro dwellers give. These morons wouldn’t last 3 hours on a farm.
My uncle is a dairy farmer. He also works 24/7.Up at 4:00AM, quits at 8:00PM. Goes to bed,gets up, does it all over again. He told me once that if he were to start all over, he wouldn’t be able to afford it since a new combine is easily 150-200k alone. His is 30 years old. The land has been in the family 130 years. This is near Fayetteville, AL. The suburbs are creeping in slowly on all fronts around them. It’ll be interesting to see what happens in the next 10 years with he and his famiy’s farm.
just for amusement: the most popular TV series by far in the Netherlands at the moment is ‘farmer looking for a wife’. Gets nearly two times more viewers than the closest competitor (the evening news). Lots of wannabe-farmers-wife town girls get their chance in a lifetime to date a REAL farmer and the farmer can choose from them, all of course spun out through many episodes. Farmer is the new sexy thing in the Netherlands, people are writing books, colums etc. about the phenomenon already … Lots of interesting psychology behind it, you can probably imagine the details.
Farmer is the new sexy thing in the Netherlands, people are writing books, colums etc. about the phenomenon already … Lots of interesting psychology behind it, you can probably imagine the details.
OK now I’m curious…is it because they think those “earthy” guys make better lovers?
Farmers know how to work a hoe.
ROFLMAO!!!
Good one, FutureVulture!
psychologists are writing books about it, so I won’t dare to explain it all here. Suffice to say that apparently many Dutch women now consider farmers to be the ‘real men’, instead of pathetic loosers like 20 years ago or so. Probably it helps that every farmer is a multi-millionaire over here when he sells his farm(land).
“I laugh at the folks who think they’re gonna trade their house in New Jersey for the farm life. There is far more to it than sitting on one’s can and raking in the gov’t subsidies.”
Coming from a farm family, I’m sure you know there are plenty of farms in NJ, right? Or is NJ just your short-hand for “the big, bad city”?
I don’t think they really intend to be farmers, they just assume they’re going to trade their suburban house for a farm and then work at their office job via the internet. That, or if they do actually do some farming, it’s of the variety where they make 15 gallons of jam a year and charge $200/ounce for their ’special’ jam that you can’t get anywhere else (even though 15 other bubble Martha Stewarts in the area are trying to do the same thing on the side), or, that they’ll run a puppy mill and wifey gets $1,500 a pup for a questionable purebreed and the rest get sent to the AWA, but only after they claim the ‘livestock’ for tax purposes to keep the ‘farm’ subsidies.
Isn’t that the truth. I grew up in a small town in Ala. Lots of hard times in those days. The schools would let out early a couple of days a week at certain times so kids could help out with planting, harvests (maybe they still do, I don’t know but many were looking for a different way of life). Not an easy ay to live. Not one for me.
I have a cousin who is a farmer in western Kentucky. Good-sized operation. Has about 1500 acres last I knew, probably more now, soybeans and corn. It’s big numbers, highly mechanized, highly capital-intensive. Corn used to be 150 bushels an acre; now I hear you can do 300 with the hybrid seeds, big kernels, tall-growing, closer planting. That’s $1500 X 1500 right there in a good year, and that’s your lowest cash crop (you rotate). He also grows an allotment of tobacco and keeps animals - all very good bucks. Farmers may scrape a little in tough years, but they make big bucks in the good years, hundreds of thousands. They haven’t needed to use the gubmint safety net for awhile most places. This is why the top seed companies are so profitable and their stocks are so meteoric.
The small town I grew up in in Virginia used to have a lot of wealthy engineers, inventors, chemists, etc., what with the local industries. Now the rich people are the farmers from the county. In a way it’s more a farm town than it was 50 years ago.
Farming is just like any other profession - you can do very well with it if you are willing to devote your life to it to the exclusion of everything else, which you kind of have to with serious farming. Always being a “roadie,” that never worked for me.
There was a PBS show about the seed companies suing farmers for hybrid seeded plants, at no fault of the farmers. Turns out, the seeds would blow out of trucks full of crops, or the wind would carry the seeds to neighboring farms. It bankrupted a lot of family farms. The interview with the corp thugs made you see red, and the poor farm families made you so sad. Big $ is mighty powerful, regardless of right or wrong.
The seed compamies knew what was going on, but wanted the land. It was an amazing show.
Another scary repercussion of genetic crop engineering is that many of these seed varieties being pushed by corporations are not even fertile. They don’t reseed themselves readily, so you are forced to buy new seed from the company. It’s not nice to fool with Mother Nature. Read about it in “Harvest of Hope” written by Ms. Jane Goodall, everyone’s favorite primatologist.
I’m happy when farmers are doing well. And why shouldn’t they make bank? Any way you slice it, it’s hard, demanding work.
And better American farmers producing our food than imported garbage fertilized with human sewage and treated with pesticides banned in this country for 30 years as carcinogenic.
I’m happy with anybody getting rich, including farmers. But a lot of us aging boomers grew up with the notion that farming was subsistence life or middle class at best - rich was what got in Florida from orange groves or having a mega-spread in California. It’s not very well understood by the general public that the income from general farming has changed drastically in the last 5 years - now that a bushel of corn don’t sell for a $2 dollar bill.
Well avoid HSBC at all costs. Have an old credit card that I use for cell phone bill. HSBC’s newest trick is to mail the bill late, and shorten the grace period unofficially. I think they have it down to 4-5 days. Started pulling this stuff in September. I’m closing the account and to hell with FICO. I don’t owe a dime, and I don’t trust the folks at HSBC for spit.
Citibank (Citicard) also does that. I called them up and they admitted to shortening the grace period if you paid your balances off all the time.
Got to the point that I had to mail it out within one week of getting the bill.
Now, they let you choose a due date (or billing date…don’t remember) online. Also, you can call and get the grace period extended again, but you’ll have to keep doing this as “the computers” will continue to shorten the period when you pay off your bills.
Nice, huh?
Why are the U.S. headline indexes holding up so well when the rest of the planet is enveloped in gloom? Do U.S. stock market investors know something that overseas investors do not?
Panic sparks plunge in global markets
By Joanna Chung and Robert Orr in London and Andrew Wood in Hong Kong
Published: January 21 2008 19:12 | Last updated: January 22 2008 04:54
Global equities plunged on Monday as investor concerns over the economic outlook and financial market turbulence snowballed into a sweeping sell-off.
…
“September 11 aside, I can’t remember a day like this. It was carnage,” said Jimmy Yates, a dealer at CMC Markets in London. “It’s been a really good four or five years but it looks like the end of the bull run.”
http://www.ft.com/cms/s/0/604d71dc-c853-11dc-94a6-0000779fd2ac.html
GS,
Good thing the stock market only goes up!!!
/sarcasm
Anyone else as pi$$ed as I am about the rate cut? Is it the Fed’s job to prop up the stock market?
Nice for the savers & fixed-income oldsters…we’re back to totally negative interest rates, and in order to just keep up with inflation, we’re supposed to take on a ton of risk in an already risky world.
Guess we’ll just be life-long renters, as I absolutely refuse to buy anything as long as morons with “free money” are bidding prices up.
its just Ben Bernankes way to say “f*** you” to the few savers that are left on the planet, at least in the anglosaxon world (I doubt Asian savers will be converted by his rpeated punishments).
http://flickr.com/photos/tppllc/2212977810/
The “War On Savings” wasn’t working, so they initiated a SURGE!
Excellent, reuven!
Let’s make one up (including the whole picture) and send it off to him!
Anyone else as pi$$ed as I am about the rate cut? Is it the Fed’s job to prop up the stock market?
I’m Pissed! It’s punishing the few responsible people in the US who have savings accounts to prop up Specuvestors and Wall Street.
“Do U.S. stock market investors know something that overseas investors do not?”
US investors have all read “The Secret” and know that their positive thinking will keep the boom alive. Them and Tom Cruise will save the world.
“Help me Jesus! Help me Jewish God! Help me Allah! AAAAAHHH! Help me Tom Cruise!”
– Ricky Bobby, on fire
Tom Cruise, Scientologist — for those who haven’t seen it. It’s a trip.
http://www.youtube.com/watch?v=UFBZ_uAbxS0&feature=related
I am not a fan, but he has helped out people in car accidents, and he helped his driver pay for private schoolingfor his kid, when he was in a ruff spot financially.
So, he is a man of his word, and he does help people. PR or not, he did make a difference a few times that I know of.
Point taken. There are plenty of a-holes out there to criticize, so I probably shouldn’t take shots at people who are actually trying to help. I’m anti-Scientology, but it’s probably a discussion for a different board.
“‘This is a demand-driven market,’ Wise said. ‘It’s only the second one in history.’”
Bull. All markets are demand driven, if only negatively. Don’t think so? Go down to flea market and try to sell a Yoko Ono album.
Point taken — but lots of Yoko albums are highly salable.
I make decent money during the summer (for more records) buying LPs at flea markets and reselling them to collector-oriented stores or on the ol’ eBay. ‘Course, the magic finds aren’t what they used to be given the ubiquity of eBay.
-47 bps move on the three-mo T-bill, and -20 bps move on the two-year T-note (scroll down to see the yield curve shift). If the bond market were a land mass, I would say that a major earthquake just struck.
http://www.bloomberg.com/markets/rates/index.html
I’m currently re-building an old house. Sheetrock to wiring, siding to roof - I have yet to find the bottom, that point where deconstruction ends and rebuilding begins.
Like that wonderfully passe phrase, the USA is now a tear-down.
I like the analogy. Shoulda thrown something in about the backed up sewer though….
I would say that a major earthquake just struck.
I would say we are headed for more trouble, including high inflation. People are going to suffer even more now that they dropped the rates to appease Wallstreet.
From the original post:
“‘They’ve got a tiger by the tail in Golden West and I don’t think they know what to do,’ said Nancy Bush, an independent bank analyst.”
I can’t help thinking that Bank of America will experience the same problem with Countrywide.
And, a rhetorical question: I can recall from college days that there was quite an aura around finance courses. They were among the most difficult in our business school.
So, why, pray tell, has there been so much stupidity in the financial world? Didn’t these people have enough brains to get through Finance 201? Or are brains not the issue here?
Where did you go to college? Where I went, the “Business Majors” that populated the financing classes are either too lazy or too dumb to cut it in a real major. We engineering majors KILLED them on tests w/o even studying.
I once showed up 25 min. late for a 1.5-hour Investment Management class final, and left after 30 minutes. Got a 97 on it.
And yet you are but a mere renter!!
You’d be crazy to buy in NYC/Jersey area now! I did my math thank you very much.
I went to the University of Michigan. And, yes, I’ll agree with you to a point. I also met quite a few business majors who were very sharp cookies. Ditto for the engineers — some of the brightest people I’ve ever met.
But, at Michigan, the dummy colleges were education and certain departments in liberal arts. (The communication department comes to mind.)
Dr. Hibbert: “Well, you can always fall back on your degree in - Communications! Good Lord!”
Anton Lubchenko: “Lubchenko knows! Is fake major!”
Kinesiology seems especially popular among football players at UM hence probably not terribly demanding.
I was in the American Culture department…
But, at Michigan, the dummy colleges were education and certain departments in liberal arts. (The communication department comes to mind.)
At my university, those who couldn’t make the grade to get into the Business faculty went into Economics instead. Really.
Too many quants looking at historical data, never lifting their heads to look around.
That tends to be a problem with quantitative types. Too busy thinking to look both ways before crossing the street.
In my college, those who could not cut it in the engineering department transfered into the BA department, and would generally ace the classes…
Try Quantum mechanics, or some other physics class, and any finance class is just for beginners.!
Preach it, Pinch! Slim will take physics over finance any day.
Plug and chug, as my engineering student son says. Enviously.
“Quantum mechanics”
Brings back great memories of a carefree time in college. That along with theoretical chemistry and physics was great but it didn’t pay the bills.
“That along with theoretical chemistry and physics was great but it didn’t pay the bills.”
Yep, for that you need a history degree.
who can not appreciate Sp2p orbitals
The two jock majors at my school were Comm and Econ. The best program for me was essentially financial engineering (focus on optimization/systems analysis,etc.).
You have to look 3 steps ahead, not 50 years in the past…
I always loved history and literature. However, I was also very good in math and that is what I finally wound up in. Although I was a jock in college (football scholarship) I knew I’d have to WORK for a living and liberal arts just wasn’t for me as I needed a job. Also took a few advanced physics courses and even quantum mechanics. And found them relatively easy after advanced calc, real and complex variables, etc. But only relatively, still studied lot of hours to get thru them.
“A wave of lawsuits is beginning to wash over the troubled mortgage market and the rest of the financial world. Homeowners are suing mortgage lenders. Mortgage lenders are suing Wall Street banks. Wall Street banks are suing loan specialists. And investors are suing everyone.”
Well here is what they all to look forward to…many years down the road:
Nothing…like in: “I can’t get no sat-is-faction”
For example:
Supreme Court won’t hear Enron case
The court declined to hear an appeal out of the U.S. Court of Appeals for the Fifth Circuit, which had barred the lawsuit against the banks, which included Merrill Lynch, Barclays and Credit Suisse.
http://weblogs.baltimoresun.com/news/politics/blog/2008/01/supreme_court_wont_hear_enron.html
Yep money won’t buy you love but it will buy you a loving congress and president who will appoint a loving supreme court. The giant boot of a corporate run government will squash middle and upper middle class America.
“Bank of America Corp., the second- largest U.S. bank, said earnings dropped 95 percent…Wachovia Corp., the fourth-largest U.S. bank, said profit fell 98 percent.”
It could just be a coincidence. But does anyone else think that perhaps “mark to market” losses are so large financial institutions would be insolvent, thus they are setting market value declines at 100% of other profits?
Assuming they don’t have a cash crunch and continue to make money elsewhere, they may be in “break even” mode for years.
Those profits do seem suspicious. Perhaps those banks wrote down their bad loans just enought to leave a profit that reassures those that want to be reassured.
Who knows? After a few years as an accounting major in college, I became disillusioned with the smoke and mirrors of GAAP accounting. It seemed too easy to move numbers around to either hide negative information or put more lipstick on a pig.
As a practicing one, I’ll tell you that it’s getting tougher.
This is exaclty what Jim Crammer put forward as the way out this morning.
1) Get rates down to increase bank profits. Let them borrow at 3% and loan at 5% intead of borrowing at 4.5% and loaning at 5%.
2) Get rates down so homeowners and card holders can refi to stay afloat and hold the line on default rate.
3) Use the profits from 1) to slowly write down the losses from 2).
The guest at the time was highly skeptical. She saw a huge round of corperate defaults coming pushing up risk spreads on bonds that would eat up and gains from lower interest rates on fed funds. Corproate losses would become bankruptcies and unemployment and push default rates up more than the refi’s would reduce.
2) Get rates down so homeowners and card holders can refi to stay afloat and hold the line on default rate.
Who can refi? Most of the people in severe trouble can’t refi because their credit is shot or they are upside down due to declining values.
Well, more can refi now than will be able to refi a year from now….
Trust me on this one, the people that NEED to refi can’t - no way, no how. Like I posted above, they’re stuck on the outside looking in. There will be folks that benifit from this and refi, but they’re not the FB’s that need to be saved.
After the rate drops again, I plan to be one of those!
“There will be folks that benifit from this and refi…”
And for the 50th time I ask:
Refi into WHAT? The loan they were in was already the lowest of the low. They can’t refi any lower, and they can’t afford anything higher. Checkmate.
This cracks me up too. Were these people smoking crack right before sitting down to sign the paperwork and the mortgage originator assured them they could always refinance later? Rates were as low as they were going to go, that was the time to bag a low rate FIXED loan, not an ARM. What morons.
Not too sure about this - rates have come down quite a bit recently. Approx 5.25/ 30 yr fixed w/ no points is available (non-Jumbo). I have a few friends who are going to refi this week. They have approx 6 3/8 - 6 5/8s rates and the 20% equity to get the current rates. Pretty substantial savings. I think that 5% 30 yr no points is on the horizon.
But does anyone else think that perhaps “mark to market” losses are so large financial institutions would be insolvent, thus they are setting market value declines at 100% of other profits?
Based on what I have seen first hand at some large banks, you would be correct. It is far worse than you could even imagine and will probally get much worse in the next few months.
Read somewhere last year that some banks make 47% of their profits on various types of service charges…
If this is true, America..bend over and get READY to be SERVICED to Death
“The world’s richest model has reportedly reacted in her own way to the sliding value of the US dollar - by refusing to be paid in the currency.
Gisele Bündchen is said to be keen to avoid the US currency because of uncertainty over its strength.”
According to US Weekly, Ms. Bundchen has denied making that statement, and condemns it as a vicious lie. (Ha-ha).
Ms. Bundchen has denied making that statement
Lie and deny, the norm of the unethical bunch in corporate America.
Ms. Bundchen has denied making that statement
No surprise here - pretty models are a dime a dozen. I bet she gets a significant portion of her contracts with American companies. Could be sticky if they hear about this and decide that they might be better off with some other, less controversial, model.
“The VA’s guarantee of zero-down loans for World War II veterans began the mortgage industry’s long slide into looser standards, says Tom Bier, a housing researcher at Cleveland State University.”
“Fannie Mae and Freddie Mac, federally chartered corporations, buy mortgages. That gives lenders cash to make more home loans.”
“Researchers say the pair served as models for the Wall Street-led secondary market that emerged in the 1990s and crashed a decade later under the weight of high-interest loans made to people with bad credit.”
Thank heavens for academic researchers who are willing to shine the bright light of discourse on questionable housing policy.
Wall Street following the lead begun by Government chartered programs.
Now THAT’s scary!
The head housing honcho OH??? said that the two Freddie/Fanny deals that are being considered on conforming limits are; #1 allow the conforming to adjust to the Median house price for any given area OR #2. Do a flat 50% increase in the $417k conforming limit…CNBC this morning…
conforming to adjust to the Median house price..
Now there’s a positive feedback loop just begging to happen.
snooz. Call me when Fannie/Freddie conform to three times the median INCOME.
Amen, oxide!
RE: “The VA’s guarantee of zero-down loans for World War II veterans began the mortgage industry’s long slide into looser standards,
I’d never begrudge the ball turrent gunner on a B-17 Flying Fortress a 0% down mortgage loan.
It’s the state housing authority first time homebuyer subsidized rate programs which always put me over the edge.
Now there’s the group you can point finger’s at for an escalation of supply/demand imbalances and subsequent market price inflation.
I’d be interested in any substantiation you can point to for that. Seriously, I could use it..
Ben Stein is an annuity salesman. He is not a financial adviser. Last summer he predicted that the subprime issue “is contained”.
I was just at my little Wachovia Branch bank over the noon hour, usually they have the big plasma TV one over head as you wait in line on some financial station.
Today the plasma was off…..gee wonder why, some bad news out there….or maybe they are saving on electric
LOL
I have two CDs at World Savings which is being taken over by Wachovia. Guess I should be nervous.
My nephew works for Wachovia and he thinks housing has already hit the bottom. I told him I hated to burst his bubble but that’s still a year or two out on the horizon.
I think Wachovia posted 90+% profit decline today…Probably something you don’t want to advertize as you are making a deposit…
Since I wasn’t a business major, I need to ask a dumb question. Do you think this means anything for account holders? I mean, are deposits safe?
Not if they’re FDIC insured.
“Ms. Ummel claims that the agent hid the information that similar homes in the neighborhood were selling for less because he feared she would back out and he would lose his $30,000 commission.”
Bag holder sues 6-percenter, that could get interesting. Maybe a first step to dismantle the National Association of 6-percenters.
Doesn’t the Department of Justice also have something going against them? As in, an antitrust sort of something?
Yes, they do
I think it’s scheduled to go to trial this year.
Yes they do.
The realtors have tried to blackball the low-cost, innovative brokers by not including the discount brokers’ listings on their websites and, I believe, by keeping the high-priced brokerages’ listings from the discounters (check this).
The DOJ has been battling the NAR for at least a couple of years regarding this, IIRC.
The realtors have tried to blackball the low-cost, innovative brokers by not including the discount brokers’ listings on their websites
The case is heading for a jury trial later this year. The real issue stems from the NAR not allowing the discounters, websites, etc. from putting their listings in MLS, thus forcing them out of business. It is an anti-competitive type suit which is also bringing in the question of the not for profit status of the NAR. The NAR has much to lose and it does not look good right now for the NAR and it’s members.
That’s just BS. How did the agent “hide” the information. All the FB had to do was request a list of recent sales from the MLS and she could have seen for herself. I wouldn’t be the least big sympathetic to this claim as a trier of fact.
Tx: Agent’s rep made argument that buyer should do own research and is responsible for due diligence. If that’s the case then why should the agent get any commission? What exactly is he doing to earn it. I think there’s a bit of a valid argument here - buyer uses agent and expects a level of expertise and also expects that a buyer’s agent is there to represent them, then when the buyer finds out the agent skewed stats and told them value was more than it is and withheld appraisal, agent says tough patooty - you shouldn’t have trusted me. I’m just not loving that idea.
Agree with you, ATC.
In most states, don’t the agents get paid by the seller? That’s the case in AR. It is possible to get a “buyers” agent, but that’s not the norm by any stretch.
If the buyer paid for an agent that didn’t do her job thats one thing, but if was the more normal relationship, I don’t see the realtor having the responsibility of making sure the buyer is making a good financial decision.
Exactly. I’d pour this whining bitch out and make her pay the defendant’s attorneys fees as well.
Doesn’t matter who pays the broker. Without a broker fee, a different price could be negotiated.
We see this all the time–a buyer of commercial or residential property comes with an offer without a broker involved and part of the negotiation is “how much are you willing to reduce your price since I don’t come with a broker?”. We can do the math.
We shave the price accordingly, and on a net basis are exactly the same as if there were a broker (which is more common).
It matters in terms of the agency/principal relationship. A person is not likely to be your agent unless you are compensating them. (at least, that’s my assumption and what I’m trying to get to the bottom of with my limited knowledge of contract and agency law)
Enough of this “buyer’s agents” and other RE agent and NAR/REIC BS.
One WAY or ANOTHER, the BUYER of the HOUSE PAYS for EVERYTHING directly or INDIRECTLY with the COSTS listed BOTH on and OFF the HUD-1 Form despite the shell games, incentives and crapola.
NOBODY is really WORKING for him with this REIC MOB and/or in HIS best interests from RE agents to Title companies UNLESS he pays for HIS OWN RE lawyer.
It’s ALL GAMED to the into Sales, Profits and Closings AT the BUYER’S EXPENSE
Exactly, Mikey!
IMHO, if anyone is making a profit (the seller is not bringing all the money to the table), then the BUYER is paying the costs.
I’ve bought and sold a few homes in my time, and was never under the impression that I (seller) was paying the costs on a sale. It was always the buyer, in reality.
If that’s the case then why should the agent get any commission?
They don’t get a commission from the buyer. The get it from the seller. Anyone being paid a commission on a sale price is working in the interests of the seller.
Calling someone a “buyer’s agent” does not make him one. What matters is how he is paid.
They don’t get a commission from the buyer. The get it from the seller. Anyone being paid a commission on a sale price is working in the interests of the seller.
Calling someone a “buyer’s agent” does not make him one. What matters is how he is paid.
Exactly–that’s why no one out there should be calling themselves a “buyer’s agent,” when they know such a creature doesn’t exist.
Well, technically you CAN higher an agent as a buyer who would then be working in your best interest. Even in that case however, I imagine there would still be some question as to their role. Would this person be responsible for gauranteeing appreciation? I doubt it.
Depends on the state in which the buyer’s agent contract was written between the buyer and agent. There are explicit clauses in some states specifically requiring allegance to the buyer in matters of discolosure and so forth. For example passing on to the seller explicit info about how much a seller might be willing to pay and so forth would be barred, and so would keeping important info from the buyer. The comission paid to the buyer’s agent by the seller is a separate matter. Virginia is such a state, I sold a house there in 05 and saw both sides of these. Virginia also has exclusive seller’s agent contracts, meaning they work exclusively for the seller and cannot represent the buyer under any circumstances. That means they can’t get double comissions (the buyer’s agent comissions). I signed such a contract with my agent, I found a buyer without an agent, my agent attempted to get the full 6% out of me, all it took was a threat to go to the board of realtors on ethics violation and comission quickly went down to 3%. Sweet.
There are also “transaction brokers” in some states, in addition to buyer’s and seller’s agents, Colorado is one. Their allegance is to the “transaction”. There are also rules of conduct for state licensing, in no state that I know of is it kosher to not disclose information that would seriously affect a buyer determining fair market price. Of course they are all liars anyway but there may be a valid means to sue them for misconduct if they were signing buyer’s agent contracts with clients and then screwing them over.
“The comission paid to the buyer’s agent by the seller is a separate matter.”
The comission is ALWAYS without exception paid by the buyer. No buyer, no sale. The buyer is the one who brings the $$ to the table, hence all agents are paid for by the buyer. End of story.
Txchick… BS or not, if the suit serves the purpose of taking down NAR then I’m all for it.
Any time now the fed rate will be 1 to 2% all will be solved? You can go back to getting in more debt by refi of your aleady cash poor home, and for you retired people just think you now get 2.5% on your hard earned money and still have to pay income taxes on it, what a joy.
This is suppose to make you love your gov’t even more, spend money you don’t have, go vote for these people in Nov. and proclaim all is well. Why not bring the fed rate to 0% so we all can have a nation wide street party while the rest of the world takes us over?
Didn’t the Japanese try this 0% interest rate idea already? I seem to recall that it didn’t work very well. Anyone here from Japan who’d care to comment?
Not Japanese but they did go to a .25% rate, which basically resulted in the “Yen carry trade”, of people borrowing Yen for nothing and then buying up dollars at 5%. It was a license to print money for a decade.
As a side note - with the housing and securities (both equities and debt) prices collapsing, we’ll see plenty of the negative “wealth effect”.
I beleive the rough estimate is 3% of consumer expenditure per $1 of wealth. A 25% shave of all real estate value is ~ $10T, which would make for a ~ $300B drop in consumer spending.
A bigger drop and things will get worse.
And worse. And worse.
Besides my vintage kimono collection this is the first time I feel Japanese.
I don’t want to spend my savings.
I guess retail is going to have to tank afterall.
“I guess retail is going to have to tank afterall.”
I was at Copley Plaza in Boston today and it was as empty as I’ve ever seen it, even emptier than the week after 9/11. It was Last Call at Neiman’s and nobody but me was in the fitting rooms. Big sale at Barney’s, too. Nobody there.
For all of you living behind the Orange Curtain in the O.C.:
“There’s no business, like no business, like no business, I know”
As reported by the LA TImes…
O.C. Register to drop daily business section
http://www.latimes.com/business/la-fi-register22jan22,1,7371133.story?coll=la-headlines-business&ctrack=1&cset=true
Wonder if they’ll eliminate the sports section?
Gotta keep the sheeple happy.
I wonder if they will also drop their real estate section.
Fearless prediction:
With the exception of perhaps 1/2 a dozen newspapers…
They are all dead and gone, within a year’s time.
They got no reason to live.
“They are all dead and gone, within a year’s time.”
I’m not sure I can agree with you on this. It depends on the paper - those with a good local slant will survive (and thrive).
A newspaper is at least a good advertisement for a web site.
85% of the content of most local newspapers tends to be a/p stories, based upon my reading a bunch of them over the past few years.
That hardly qualifies as “local” reporting…
All newspapers history?
Then we can have those super-smart engineers and even biz types (not to mention bug-eyed broadcast bimbos and himbos) telling you what’s going on in the world?
What happened, alad … neighbor or your neighbor’s dog grab your paper this morning? Er … semi-full disclosure: I toil on a large daily and hope to keep doing so for a decade or even two, if humanly possible! Fortunately, it’s in the top half-dozen on numbers, so maybe we somehow survive the aladinsane pulp armageddon.
Horse, buggy & whip, circa 1908 = Newspapers, movies & tv, circa 2008
Man, the talkies just killed the acting profession. But they’re a fad! Eh, we’ll see …
The internet wasn’t breathing down Garbo’s throat, was it?
A wave of lawsuits is beginning to wash over the troubled mortgage market and the rest of the financial world. Homeowners are suing mortgage lenders. Mortgage lenders are suing Wall Street banks. Wall Street banks are suing loan specialists. And investors are suing everyone.”
So guys, the new career that’s going to be short of workers is law.
Gosh, maybe someone will give me a shot then.
11 acres total, 7 tillable, $200,00 well and power, barn and shed, build a house where the old one burned down? The property cannot be subdivided, there seems to be alot of that- zoning restrictions on ag land.
http://www.qcfsbo.com/listings/2007-Vol11/LOT27GM.html
Very similar to that property near Iowa City last year. Close to industry. On a windy hilltop, nice on a day like today - for snowmobiles and cross-sountry skiing - and all with no bugs!
The State DNR advises sensitive people to stay inside on foggy days due to the nitrates, et al.
That price sounds very high. I would expect it to come with a modest ranch house for that price. You should be able to get a lot more land, a lot less isolated, for less: http://www.landwatch.com/Iowa-Linn-County-Ranch-for-sale/PID/94198
A very high price, because you can build on it. My guess is, it is near impossible to get more land for less AND less isolated.
If the world is going to buy the USA, why didnt the same thing happen when Japan went to zero for 15yrs?
Just thinking, farmland, it all still seems very expensive. Those high priced bubble leftovers are everywhere here and help prop up other properties. A local board zones property around a State park as ag land to help support the values of the condos and townhouses built down the road. Even the farmers who own the land cannot build a house on it.
Bubble resistant farmland?
If corn prices skyrocket with ethanol, is this the makings of a farm crisis all over again? Farmers and speculators bid up the land and equipment- when ethanol falls out, the leveraged go bust. Aint that the way it went the last time?
in Netherlands farmers are complaining that prices of farm land are going up because of biofuel (same problem as in US: higher profits because of government subsidies so everbody wants to buy extra land to grow corn; it’s easy money apparently). So they want even more government subsidies to compensate for the increase prices … In a few years the price in my region went from 2.5 to nearly 4 euros per m2. In the same region, land that is zoned for building homes sells for around 300 euros per m2. Go figure …
RE: “And appraisers accepted those pressures, said Brett Martin, who owns Indianapolis Appraisal Associates. ‘There’s a saying that a good appraiser can make $50,000 a year, and a bad one can make $200,000,’ he said.”
The ultimate professional perversion.
Tell the truth and do your job…go out of business.
Lie, distort, mislead and establish the rep as a number hitter-the lenders will all scramble all over themselves to make sure you get their deal.
I remember the time right before I got out when brokers use to call to find out the status of VA related appraisal requests.
I wouldn’t even have the assignment on my fax and they’d call wanting to know when the appraisal was going to be done.
Tell them anything beyond 24 hours and they’d go ballistic.
However-for their deals outside of FHA/VA…many would wait for as long as it took for the local, NAR-endorsed, number hitter to show, so they’d know their deal was sure to thru with no snags.
And make no mistake…the appraisal fraudsters are still doin’ their thing, ’cause the underwriting relevant to a declining market won’t work, unless they’re checking the “stable” boxes on the FNMA 1004.
The “fix” remains in.
I will be findng out in few days. I’m refi-ing my house to 4.75%. I think it is worth $230K, but need it to come in at $240K to get the loan I want with the LTV required.
It will be interesting to see what they hit.
Check out HGTV.
You should probably paint your kitchen and plant a flower out front. That should add about 30k to the value of your home.
Good luck.
Well, since I moved in 2 years ago (my now-wife owned for years before that) we have painted and laid a couple thousand worth of laminant floor. (and replastered the pool, replaced the water heater, repaired the solar water heater, fixed drainage, regraveled, etc.)
We’re looking for a number about $110K above what she paid 4 years ago. ($30K off peak of year and a half ago).
You’ve don REAL improvements.
My comment was sarcastic, I should have noted that.
Yeah, I knew it was sarcastic… and no way should my $10K in improvements account for $110K increase in value. I was playing along.
RE: I think it is worth $230K, but need it to come in at $240K to get the loan I want with
I always got antsy with an appraisal for anybody who “NEEDED” a specific number…
I use to see deals blow-up because the appraisal number was off $500.00.
WTF?
Got any info or data to help your cause?
The appraiser won’t turn it down, all long as it’s credible
How far we’ve fallen. Less than a scant 3 years ago Ben started this website and there was a lot of discussion about housing prices being too high. I don’t think anyone foresaw companies failing and banks taking huge earnings hit.
Fastforward to today and the Fed has cut 75 bps because he was basically forced to due to bad mortgage debt and its side effects.
The big question is, what lies ahead of us. Anyone taking the CNBC talking heads at face value today would tend to think things are pretty rosy. I love how they are calling today a 300 point rally, from -450 to -150 !
I can’t help but think that this is the tip of the iceberg. Irregardless of the Fed’s actions, housing inventory is still massive, home owners are still underwater and being foreclosed on, the economy is still in trouble and there is still a liquidity crunch.
I can’t wait to hear what the Fed has to say on Friday.
Erin Burnette just asked if the banks were done writing down their subprime holdings ! :laughs: Remember when CNBC told us the subprime problem was “contained” ?
This was the same chick that had a town hall meeting with Trump and Kiyosaki and all agreed that it wasn’t yet the best time to buy a home. Trump kept bragging about how NYC was still appreciating. Erin Burnett need a painful whipping.
She wasn’t hired for her brains.
Bill Gross, who has been pimping for lower rates, today is calling for fiscal stimulus to be 2-3x as big as current proposal…. $250B-$450B.
Pretty soon we’ll get them calling for the full $600 billion that won’t be entering the economy from MEW this year. And next… and next.
All we need to keep the U.S. economy healthy is for people to continue to spend 10% more than they make…. No problem.
With $450b…
You could buy 2m homes for $225k.
You could give 120m households $3,700.
Time to cut the crud and go with my proposal. $2 trillion handed to consumers on a basis of their annual income (people comitting fraud in the bubble, or making huge profts from it (realtors, brokers, etc) get nothing. Reduce your payout by $.10-.25 for each $1 in income above the median. If you have debt, the money goes to pay down the debt. If no debt, then hand you a check. Combine with usuary laws greatly restricting ability of lenders to loan that money back to the debtors.
Pays down debt, gets inflation fired up, everyone gets a check regardles if they made bad decisions or not. If you are way overextended, you’re still bankrupt. If you have assets, you are partially compensated for the loss in purchasing power by the check from government.
Why do the CNBC guests keep telling investors to get out of Treasuries?
Do they want us to buy stocks?
They don’t make comissions on treasuries.
If CNBC is telling people to get out of Treasuries then that tells me I’s better stay in >; )
SoBs… They just got a .75% cut, and fed funds futures already as a .25% priced in for next week, with 80% chance of .50% next week.
You have got to be kidding me.
That’s not surprising, I personally figired .75 was a given with a strong chance of 1.00. I didn’t expect an emergency cut like this though, I thought they woudl wait the additional week and do a full point.
So with the early cut, I’m expecting BB to come back with .25 next week. I’m actually a little skeptical it will be .5 (unless the stock market tanks in the next week, in which case it could be another .75), but then nothing really surprises me here.
I think the big banks have figured out it’s profitable to manipulate fed funds futures, so the Fed can’t NOT lower rates without causing a market selloff. In fact that’s been the real trick of Wall Street for decades now: using the rest of us as human shields.
My family advisor called to see how I’m doing.
He got livid when I said I’ll take a pass on pimco.
He told me to stop reading HBB and stop watching CNBC.
Are they getting lectured at the brokerages?
I’d rather be Japanese.
He wants you to buy some financial assets so he can make his commish. (unless he is a fixed-fee advisor)
“Bank of America Corp., the second- largest U.S. bank, said earnings dropped 95 percent after $5.28 billion of mortgage-related writedowns and higher provisions for future loan losses.”
“The writedown was 76 percent more than the $3 billion that Chief Financial Officer Joe Price estimated on Nov. 13.”
Full Price, now.
From current CNBC guest: former president of Dallas federal reserve: “if you think you aren’t going to get paid back, then the interest rate which you aren’t going to get paid back isn’t really all that important.”
Nice quote.
Want to talk about China, the 97% Shanghai stock market gain in 2007, and a billion workers angry at their communist government?
We may see -30% on our S7P index this year, but if that happens China will see -70%. How big of a clampdown will they need to make things look “prosperous” for the Olympics?
If nothing else a collapse of Asian markets will support the price of gold.
http://online.wsj.com/article/SB120102173724506961.html?mod=googlenews_wsj
a shift of capital from mortgages to agriculture. ‘East Coast lenders are saying they want to go into agriculture,’ he said. ‘Capital wants a home in U.S. ag.’”
SWF buying binge of unwanted farmland?
Headline the other day saying there is a shortage of dirt? Funniest thing ever.
There are no large foreign multinational corps operating the rice fields of Japan, to my knowledge. The Russians or the Arabs never bought out the malls of Tokyo or producers like Suzuki. Why would the world buy much of the USA now?
Farming is no guarantee of ANY return on investment.
Any.
No profits due to bad phophesizing…
“Wachovia Corp., the fourth-largest U.S. bank, said profit fell 98 percent to its lowest since 2001 after writedowns for bad loans and mortgage-backed securities.”
“Wachovia has dropped almost 45 percent in New York trading since CEO Kennedy Thompson acquired Golden West Financial Corp. for $24.6 billion in October 2006 just before the housing market peaked. Since then, U.S. home sales have slumped 21 percent, prompting Thompson to call industry conditions the ‘toughest’ in his 32 years of banking.”
It’s getting damn close to Margarita Time at this PC terminal. BB, Congressmen, WS’er’s and the rest just don’t get it. Come on guys read my lips “YOU PEOPLE HAVE ALREADY MORTGAGED ALL FUTURE SALES”. It was called the ‘How much’a a month it’a a’gonn’a cost me plan’. Future car sales, home building products, electronics, furniture, etc all future sales,mortgaged. Remember those 7 yr auto loans, no down. Those buy now no payment for a year plans. Those 10 credit cards you assigned to anyone who could fog a mirror regardless of debt or ability to repay. Do you really think any stimulus package will buy your way out of this? As for BB, he needs to go to capital hill and blame Congress before they completely castrate him.
The best thing J6P can do now is stay out of the stores and go to the library. Maybe then will he become aware of the shameful manner in which he is depicted by the MSM and the pols - a mere consuming organism.
Whatsa matter J6P? Only have $35k in the ol’ 401k and ya want to retire in five to build an eco-friendly dream house and sail the globe?
No problem ol’ Joe - just send that $35k to the boyz and they’ll send you back a check for to pay for it all by 2013.
Past performance does not…
“Marty Ummel feels she paid too much for her house. So do millions of other people who bought at the peak of the housing boom. What makes Ms. Ummel different is that she is suing her agent, saying it was all his fault.”
Ms. Ummel would you be just as upset had your purchase been assessed at a higher value today. Can’t the MSM interview her friends and coworkers and tell us what she was bragging about a year ago? How many people did she talk into buying because of her RE prowess? What was she doing before she bought, renting?????
Ya know, I can see why people are mad at the Federal Reserve for basically blowing this double bubble and now embarking on an extreme inflationary rampage, but I can not sit idly by while people blame “the government” for the stupid decisions of free individuals. I’m sorry, but anyone who bought a house in 2004 or later was taking a huge gamble and they knew it. How many people had plans to “just send the keys back to the bank” if anything went wrong? How many people reasoned that housing was a fool-proof investment because “the government can’t let housing tank”? When were we told that the US government was going to suddenly start taking responsibility for everyone’s mortgage payment? Never, as I recall. This is CAPITLISM, people. CAPITALISM!
“Presidents financial advisory council on financial literacy”??????????
A presidential advisory group to figure out how to educate people on financials? Who is their first student? Alan Greenspan?
Bush on tv addressing the sub-prime meltdown, saying he is asking various entities to try and help the financially unaware understand finances. What a joke! Standing to his left right and behind him, are several of the Financial Gangsters Of Wall Street Godfather’s!
Um, note to Bush: “George, the guys on your left and right and behind you created the lions share of the cause of the sub-prime mess.”
The Axis of see no evil, until it’s too late.
Thanks! Gonna have to steal that for a headline, while there’s still time!
Make hay while the sun shines…
Apple misses Q2 bu $.16. Off 15%.
Tomorrow should be an up day… not!
Tomorrow won’t be an up day for AAPL, but almost certainly will be for the market. Every single person I heard today was saying, “Now is still not the time.” Not a single unequivocal bull on the Street, even for a couple days’ rally. And after down 10% in 6 trading days and Asia explodes to the upside tonight? AAPL is just helping to mop up the last of the short money. My bet: Rest of the week will be net up.
Here is a nice article on the effects of the presidents finaincial advisory group recommendations, and what future presidents have to look forward too.
http://www.vanityfair.com/politics/features/2007/12/bush200712
I just got a letter from Bank of America. They are increasing the interest rate on my credit card from 10.7% to 12.74%. It isn’t an index move, it is a move of the amount above the rate. Therefore, I can reject the change, locking my rate to the current level until I actually use the card.
Fortunately I have only $4K balance and can pay it off withint a couple months. I will reject the change, and as soon as it is paid off, I will close the account.
Don’t close the account! Just cut up the card and leave the account open; check it twice a year to be sure it’s not being used by someone else. My husband and I did this last year after BofA took over our largest card balance. We previously vowed to never pay BofA any amount of money if we could help it. We accepted the offer to freeze our rate (by letter) and haven’t looked back.
But no matter what, don’t close the account. The older your accounts help your FICO.
Why are you paying credit card interest? That’s just “cash in the trash!”
Job loss, divorce, alimony, child-support, marriage, divorce again, job loss again, marriage again…..all in the last 6 years. Debt to my eyeballs. Any questions?
Yeah, did you hear that in life marriage is optional?
We need a Defense of Marriage amendment to protect people like Darrell_in_PHX. Obviously he wouldn’t have divorced three times if we protected the Institution of Marriage better!
I was slumming over at ticker-forum.org, and someone there said they and their sibling had B of A jack up their rates, too. Great credit, no real reason. A rep told her they were raising rates “across the board”.
Haven’t looked at my account yet; maybe it’ll be time to move to Wells Fargo or someone non-bankrupt.
I had to go to Bof A today to do a wire transfer today. Hate the place. The woman that helped me had all her top front teeth rotted out, was nice but not at all detail oriented (wrote a crucial number down wrong), and had the handwriting of a 3rd grader. Took 15 minutes to do something that I could do online in 5 if it was allowed. Non-trivial fee. Very frustrating how unprofessional all aspects of American life have become, especially in the South. (One of the pleasures of NYC - every occupation is considered a profession.)
I don’t think it’s just the south, because that sounds like the same lady I’ve had do wire transfers for me in the west. Maybe she got transferred.
Isn’t it ironic how bad the service is everywhere you go in this “service economy”?
Ha! I went to BofA today to take out some cash. What amazed me is she had a HUGE PILE of 20s that she was counting about a foot away from me, right behind the counter. You’d think they’d try to protect themselves a little better against someone grabbing and running.
What I don’t like about BofA is they always try to sell me product, like CDs or something. I use BofA simply as a place where my incoming checks go, and for my checking account, and to hold cash I need for the next quarter’s tax payment, etc.
It’s scary that the kid behind the counter tries to use his 1 or 2 years experience in the banking world to try to offer me financial products. Just give me my cash and shut up!
Funny thing happened at Chase Bank a few months ago, with a young man in an office- I have no idea what he was supposed to be, but this is what he told me. I have a small personal stash of cash I wanted to invest and he suggested a Chase product. I inquired about what my investment would accrue in 10 years and he gave me a number. Well, either he did not know what he was doing or flunked basic math- because when I did the numbers by hand (old-school here) I could have done better stuffing it under the mattress. On top of that, the kid had the nerve to tell me his number was like that because it was adjusted for inflation! What a dufus- and the King or Queen of dufusses who let that kid have an office and pretend to give financial advice. Please start these people out at lemonade stands Chase folks.