A Lousy End To A Lousy Year
Some housing bubble news from Wall Street and Washington. Associated Press, “Sales of new homes plunged by a record amount in 2007 while prices posted the weakest showing in 16 years. The Commerce Department reported Monday that sales of new homes dropped by 26.4 percent last year to 774,000. That marked the worst sales year on record, surpassing the old mark of a 23.1 percent plunge in 1980.”
“The median price of homes sold in December was $219,200. That was down 10.4 percent from a year ago, the biggest 12-month price drop in 37 years. It would take 9.6 months to eliminate the backlog of unsold new homes at the December sales pace, the longest stretch of time since the month’s supply stood at 10.3 months in October 1981.”
From CNN Money. “This decline probably doesn’t accurately capture the weakness in prices for new homes, as about three out of four builders have reported having to pay buyers’ closing costs or offer other incentives in order to maintain sales.”
“Prices have been driven down by the glut of new homes on the market. The report showed a record 195,000 completed new homes available at the end of the period.”
“The weakness in prices made buyers reluctant to jump into the market, even if the availability of financing was not an issue. The number of new homes bought with cash fell nearly 24 percent, while mortgages guaranteed by federal agencies such as the Federal Housing Administration or the Veterans Administration fell 16 percent.”
From MarketWatch. “Inventories don’t include homes thrown back on the market due to canceled sales. The inventory of completed homes now represent nearly 40% of the homes on the market, the biggest percentage ever, up from 21% during the heart of the boom two years ago.”
“November’s sales pace was revised to 634,000, down from the 647,000 reported earlier. Large downward revisions to the data have become common.”
“In December, sales of homes costing more than $400,000 fell fully 50% compared with a year earlier — likely a reflection of how difficult it has become to qualify for a jumbo mortgage.”
“‘A lousy end to a lousy year,’ summarized Richard Moody, chief economist for Mission Residential.”
“The average sales price fell a record 11.5% to $267,300 compared with December 2006.”
The Philadelphia Inquirer. “The average new-home price, which peaked at $329,000 in March, had slipped to $293,000 by November, according to Census Bureau data.”
“Ryland Group reported a 10 percent drop in its average sale prices, and a 30 percent drop in sales, in its 2007 earnings report Friday. ‘Ryland is in a position to weather this storm,’ CEO R. Chad Dreier told investors in a conference call. Dreier offered a ’silver lining’: It’s getting cheaper to buy vacant lots.”
“Will new-home prices keep dropping? For lower-priced homes, ‘demand is probably being affected by affordability,’ said Fred Cooper Sr., spokesman for Toll Bros.”
The New York Times. “A company that analyzed the quality of thousands of home loans for investment banks has agreed to provide evidence to New York state prosecutors that the banks had detailed information about the risks posed by ill-fated subprime mortgages.”
“Clayton Holdings, a company that vetted home loans for many investment banks, has agreed to provide important documents and the testimony of its officials to the New York attorney general, Andrew M. Cuomo, in exchange for immunity from civil and criminal prosecution in the state.”
“The investment banks pooled the mortgages into securities, often by blending loans from different lenders. Information on those mixed pools was then delivered to the rating agencies, which assigned the securities a score. Pension funds and other big investors bought them because they had triple-A ratings.”
“But investment banks did not give the rating agencies their due diligence reports, and it appears that the agencies did not demand them, people familiar with Mr. Cuomo’s investigation said.”
“In January 2007, Clayton briefed at least one credit rating agency about the exception reports it was producing, the person involved in the agreement said, but the credit firm did not ask to see the reports.”
“Last week, the CEO of Moody’s Investors Service pointed the finger at investment banks. The executive, Raymond W. McDaniel Jr., said in reference to the information the company received, ‘Both the completeness and veracity was deteriorating.’”
“Chris Atkins, a spokesman for Standard & Poor’s, said the firm was not responsible for verifying information provided to it by the issuers of securities.”
“In November, Fitch Ratings published a detailed review of 45 loans in an effort to identify what went wrong as mortgages were turned into securities. It found extensive inaccuracies and fraud. The firm noted that many of the problems would have been easy to identify by looking at loan applications, appraisals and credit reports — but it appears that such review was either never done or ignored.”
The San Francisco Chronicle. “At least two GOP senators have expressed opposition to the proposed yearlong increase in conforming loans limits, arguing that the government should first establish a new regulator with the power to reduce the $1.5 trillion mortgage holdings of Fannie Mae and Freddie Mac.”
“Complicating the debate are the substantial financial losses that both Fannie and Freddie have racked up during the mortgage meltdown. In light of such problems, Sen. Richard Shelby, the senior Republican on the Senate Committee on Banking, Housing and Urban Affairs, said it’s imperative to increase control over Fannie and Freddie before allowing the companies to take on additional risk.”
“‘Doing so in the absence of such a process enables thinly capitalized entities with recent accounting problems to provide a high-risk benefit to the wealthiest Americans without any real consideration of the need to do so or of the risks it presents to the taxpayer,’ Shelby spokesman Jonathan Graffeo said in an e-mail.”
The Arkansas Democrat Gazette. “While Arturo Reyes Jr. sits in jail on charges of harboring illegal aliens, his wife and co-defendant, Silvia Reyes, is under federal detention at their home — a brick house with a soaring foyer and a soccer goal in the yard.”
“There’s also a hole dug for a backyard pool. That’s a project that may have to wait.”
“The Reyeses’ plans were upended last month when immigration agents raided the family business, Acambaro Mexican restaurants. Prosecutors are not only mounting a criminal case but also moving to seize the Reyes home and other properties that they call the fruits of the illegal labor the Reyeses allegedly used in their restaurants.”
“Largely overshadowed: The bank that holds the mortgages. Arvest Bank, based in Bentonville, is one of few the banks in Northwest Arkansas where an illegal alien can hope to get a home loan.”
“Arvest lent the Reyes family more than $ 2 million for houses and restaurant properties that government prosecutors are now moving to seize, mortgages on file at the Benton County courthouse show.”
“In each case, the bank made the loans to Arturo Jr. and Silvia Reyes, who prosecutors have identified as illegal aliens, the documents show.”
“Arvest Bank Group Inc. spokesman Jason Kincy…said mortgages extended to borrowers without Social Security numbers make up a ‘very small’ portion of Arvest’s mortgage portfolio and that the bank complies with all federal rules on mortgages.”
“‘We’re well within the regulations to make those loans,’ Kincy said.”
“Arvest, owned by the Walton family of Bentonville, is only following a path that federal banking laws and regulations plainly set out, Kincy said. He said the bank’s policy is also in keeping with its efforts not to discriminate.”
“‘We don’t have an aggressive push to go after those loans,’ he said. ‘But as customers come to us, that’s an option we can provide.’”
From CBS News. “It sounds complicated, but it’s really fairly simple. Banks lent hundreds of billions of dollars to homebuyers who can’t pay them back. Wall Street took the risky debt, dressed it up as fancy securities, and sold it around the world as safe investments.”
“It sounds like a shell game or Ponzi scheme; in some ways, it was a house of cards rife with corruption, greed, and negligence.”
“Developers started turning asparagus fields into subdivisions, and lenders handed out free money to anyone who wanted to buy. ‘What do you mean by free money?’ correspondent Steve Kroft asks Jim Grant, one the country’s foremost experts on credit markets.”
“‘I mean free money. I mean you had to apply not to get a loan, almost. Sometimes you have to apply to get a loan, you almost had to apply not to get one,’ Grant says.”
“‘When you opened your mailbox in 2004, 2005, you could barely — people were pressing on you, if you were not institutionalized, all matters of schemes in which to expand your personal debt and mortgage debt. You could, and people did, borrow more than 100 percent of the price of a house with the most fragile of financial bonafides,’ Grant explains.”
“Jerry Abbott, who runs the Coldwell Banker office in Stockton, California, says it didn’t concern the borrowers, many of whom were getting mortgages for more than their houses were actually worth. ‘They were getting loans in excess of 100 percent of the value of the property,’ Abbott says. ‘That type of thing. So, most of ‘em were actually putting a little bit of money in their pocket at close of escrow.’”
“‘So, they were getting paid to buy a house?’ Kroft asks. ‘They were getting paid to buy a house. Yes. Yeah,’ Abbott says.”
“And strangely enough, it didn’t seem to bother the lenders either, who were collecting huge fees just for landing the loans. ‘Whatever they wanted to state for their income. The bank accepted that at face value and made the loan based on that income,’ Abbott says.”
“‘Bonds marked triple-A are now quoted at 50 cents to the dollar, 40 cents on the dollar. Some of them, much less,’ Grant says. ‘Some of them are worth nothing on the dollar. Nothing on the dollar. This is the worst thing that has happened to Wall Street in a long time,’ Grant says.”
“The day Kroft went along, there were two busloads checking out houses that are now 70 percent cheaper than they were when the crisis began. The consensus seemed to be prices are going to drop still further. Not particularly encouraging news for the past two chairmen of the Federal Reserve Board.”
“‘Alan Greenspan and his successor, Ben Bernanke, would say over and over that it’s contained. The problem’s contained. It turns out, it is contained only on planet Earth,’ Grant says, laughing. ‘That’s it.’”
“The central bank’s dramatic three-quarter of a percentage point rate cut last Tuesday was the equivalent of shoving a pacifier in a crying baby’s mouth. And that only stopped the whining for a little bit.”
“Dallas Federal Reserve president Richard Fisher, speaking in Philadelphia on the same day that Bernanke was giving his blessing to an economic stimulus package during testimony on Capitol Hill, made some interesting remarks that the market pretty much ignored.”
“He warned that the Fed still has only two mandates, fostering price stability and supporting economic growth. Keeping the markets happy is not a new third mandate.”
“‘Our job is not to bail out imprudent decisionmakers or errant bankers, nor is it to directly support the stock market or to somehow make whole those money managers, financial engineers and real estate speculators who got it wrong. And it most definitely is not to err on the side of Wall Street at the expense of Main Street,’ he said.”
“Most importantly, he stressed how crucial it is for the Fed to not go overboard in response to current doom and gloom headlines. ‘We must be mindful that short-term fixes often lead to long-term problems,’ Fisher said.”
From USA Today. “The current housing recession is the worst his company has seen since 1974, Toll Brothers CEO Bob Toll says.”
“Toll describes a builder’s survival strategy: ‘You concentrate on what’s necessary to hold your business steady and prepare yourself to ride out the storm and take advantage of opportunities that must come. Then, as fast as you can, you go to concentrating on liquidity … (because) when you’re out of money, you’re out of Schlitz, you’re out of beer, you’re done. You must recognize that very fast,’ says Toll.”
“Toll didn’t see it coming. Just before the market peaked in 2005, Toll predicted that boom-and-bust real estate cycles were over and that housing would continue a smooth upward climb. ‘Prices will keep going up in double digits for years,’ he told Fortune magazine.”
“In hindsight, he says, ‘We miscalculated the extent of the speculation that was taking place in the market.’”
“Toll and other builders tried to protect themselves from house-flipping investors. They made buyers sign contracts, promising they’d live in the home and not resell it for a year or two. But industrywide, these contracts were handled by a mortgage sales force paid largely on commission. Salespeople thus had a financial incentive to overlook suspect buyers.”
“Toll also wrongly predicted at the end of 2006 that the industry’s excess number of newly built homes sitting on the market would all be bought up in the spring selling season of 2007.”
“‘I said that?’ he asks. ‘So foolish.’”
“Sales of new homes plunged by a record amount in 2007 while prices posted the weakest showing in 16 years. The Commerce Department reported Monday that sales of new homes dropped by 26.4 percent last year to 774,000. That marked the worst sales year on record, surpassing the old mark of a 23.1 percent plunge in 1980.”
Wow — it’s just like 1980! BTW, how did gold fare as an investment over the next several years following 1980?
Was your gold question a rhetorical one? For those who don’t know, gold collapsed spectacularly over the next couple years from its manic peak and continued a decline for the 80s and 90s.
All in good time wheatie. All in good time.
I haven’t figured out your gender but I can tell this: you got no cajones. Try shutting the fk up and shorting gold. You
were squawking last week when gold was down a whopping
2%, did you short then? You seem too retarded and bitter to understand what the deal is with gold.
If you want your savings and your currency respected - buy gold.
If you want inflation in check - buy gold.
If you want government spending controlled - buy gold.
If you want an end to ponzi schemes pretending to be invesments - buy gold.
If none of those things appeal to you, then continue to
bitch and whine like Prof Bear and other tools.
You sound like my brother harping on about the solid San Diego housing market - just after he bought in 2004. I have no skin in the game with gold, but it sure sounds like YOU do.
Some people just get hostile when the truth gets between them and their fantasy wallet.
The only reason I can possibly think of for buying gold or making other investments is to show the world what big cajones I have.
Gold Cajones reminds me of a 200 lb+ football player in my high school class who threatened to physically thrash me after I wiped his @ss all over the tennis court. He said I should try taking some punishment on the football field for a change. I kept my mouth respectfully shut during his lecture, but have enjoyed many a laugh after the event.
I expect a manic peak in gold sometime after 2010. To be followed by a spectacular crash.
Sorry but this is not the 80’s Vastly different can’t compare gold then to today. Well you can but you’d be wrong.
I was just ribbing Aladinsane a bit here — he said in the bits bucket that it is 1972 again. I honestly cannot say it looks much like 1972 or 1980 to me…
Apples(1972) & Oranges(1980)
Both are fruit, but that’s where the similarity ends.
How do you come to your 2010 prediction?
Gold already peaked. Theres nothing left but the crying for gold bugs.
I have a tiny short on it still. If it really breaks down, I’d add.
“Gold already peaked. Theres nothing left but the crying for gold bugs”.
If you don’t like Gold then don’t buy it. No reason to knock something you don’t understand though.
My crystal ball says, “Gold will peak at 15 this year, will go up to 2000 over next 3 years.”
At least tx puts her money where her mouth is.
“If you don’t like Gold then don’t buy it. No reason to knock something you don’t understand though. ”
Eerily reminiscent of housing bulls (R.I.P.): “If you don’t want to own a house then don’t buy it. No reason to knock… etc.”
When Gold touched down @ $257, you could sell as much as you’d like, no problem.
How’s liquidity doing, as far as houses go, now?
“Eerily reminiscent of housing bulls” (R.I.P.)
Comparing the housing market to the Gold market is a 180 degrees out, completely different reasons for the rise in home prices and the rise in Gold prices.
“When Gold touched down @ $257, you could sell as much as you’d like, no problem.
How’s liquidity doing, as far as houses go, now?”
Now you are comparing liquids (PMs) to solids (houses)…
Nasdrovia!
Peter Schiff claims that gold could hit $5K to $10K an ounce before he thinks it’s deemed expensive.
However, if hyperinflation takes place, since gov’t would prohibit its use as currency, on the black market it would fetch $100K to over a million an ounce E-Z.
Gold is money, whether the government likes it or not.
In the late 70s before gold peaked, ten year notes were yielding above 8%. Now ten year notes are yielding about 3.6%. The low yields of Treasuries mean that the majority of safety conscious investors are thinking the treasuries are safe investments, and they are staying away from precious metals. The reverse was the case in the 70s. This is why I think gold, silver, platinum, and the other precious metals are well below their peaks. Jim Rogers says commodities booms last 20 years. This is the 7th year of precious metals booms. My other point is that gold needs to be at $2000 per ounce to equal its peak $800 price in 1980, adjusted to inflation.
Peter Schiff claims that gold could hit $5K to $10K an ounce before he thinks it’s deemed expensive.
However, if hyperinflation takes place, since gov’t would prohibit its use as currency, on the black market it would fetch $100K to over a million an ounce E-Z.
Gold is money, whether the government likes it or not.
Respect to Peter for speaking out about the housing bubble… but you rentire post has me only wondering about context.
I can see Gold doing lots of things… but $10,000.00 an ounce would have me real curious if this would be just the USD in major decline or a worldwide paper currency crisis.
To me it is impossible to not see how much money has changed. Even gold and stocks. It is all just numbers on computers, most people who trade Gold don’t have it in any vault within 1,000 miles or more. In that sense, the price is based on lots of paper trades / bit trading.
I think if gold were to go from $930 to $10,000 there would have to be huge changes in lots of other things too.
My point is: it wouldn’t be about Gold. It would be symptom of some other radical thing.
Gold will be at 5-10K and achieve parity with the Dow, just like it did before.
Peter also predicted the dot bomb bubble and is successfully predicting the general credit crisis as it pertains to auto loans and credit card debt. He mentions that at 5-10K, gold will be considered “expensive” and similar to the 1980 highs.
Hyperinflation would likely yield gold illegal to own and really make it shoot through the moon to the point that it’s practically infinite in value versus the dollar. Of course, you’d have to watch your back when exchanging gold for goods and make sure the Stasi isn’t watching you.
“rhetorical” absolutely
Since you brought it up, you have been negative on gold on this blog since $600.
Again, a parallel situation.
Many of us were down on housing bubblers in 2004, 2005 and 2006. We were ridiculed for negativity, year after year. So it will be with gold. Every mania will end in a bad way.
As I’ve said before, gold IS money, and government has no say in that fact, although they’ll try to the best of their ability to have some sort of say.
Gold doesn’t pay dividends, doesn’t pay interest, it is merely a guarantee that you possess REAL money that cannot be debased.
2008 is most emphatically *not* just like 1980, except in that 1980 was a bad year for real estate. But for different reasons… take a look at where the Fed funds rate was in 1980…
You mean Bernanke isn’t going to raise rates to 18%? Guess I will hold onto my gold then.
Absolutely.
While part of the uptrend in gold is a flight to commodities around the world. A big part of the rise here in the US is the fall of the dollar and inflation brought on by the weak dollar.
It could be a better investment here in America than Europe or Asia.
As the dollar plummets due to the Fed’s low rates, gold is a mighty good hedge.
Tell me when you see the dollar getting strong and I’ll sell my gold.
Amen.
‘In light of such problems, Sen. Richard Shelby, the senior Republican on the Senate Committee on Banking, Housing and Urban Affairs, said it’s imperative to increase control over Fannie and Freddie before allowing the companies to take on additional risk.’
In case anyone thinks Shelby is trying to protect the taxpayer; in 2005, when presented with a petition asking that the so-called ‘implied’ guarantee, that the negligent ratings firms have bestowed on Freddie and Fannie, be officially renounced by congress. He single-handedly shot it down.
I told you I have a long memory at the time, Shelby.
OK, so his history is spotted. However, I like his position now, any idea what is motivating it?
Another desperate power grab AKA re-election.
It’s the same old thing. Two partys fighting over the GSE cookie jar, IMO. Each positioning as on the side of right, taking turns to put cronies on the boards and rake in more campaign dough, etc.
Like I said, he was giving the same lip service when he shot down the easy way to get the taxpayers away from this disaster in 2005. A simple resolution would still do it Shelby.
Ignoring Senator Shelby’s relative worthlessness, give him credit for a succinct explanation of why the change in conforming limits is B.S.
The blatant pandering to the financial thugs of the banks and the Wall Street toll takers is breathtaking and completely devoid of all subtlety. Citizens, pay no attention to the a..holes behind the curtain. Ahhh, look over there Dorothy—we’re going allow you to elect a new wizard. Oh!Oh! We’ll be saved for sure. I’d like to stuff ruby slippers up all of their collective backsides. Did I say that out loud? Sorry. Rant off.
“He warned that the Fed still has only two mandates, fostering price stability and supporting economic growth. Keeping the markets happy is not a new third mandate.”
Keep on talking, but just remember: Actions speak louder than words. And monetary policy actions tend to shout when they take the appearance of panic reactions to short-term market fluctuations.
PB - I was going to say the exact same thing - talk is cheap!
Part of their modus operandi is to have speakers fan out across the land and give talks representing different positions on the same issue, in order to not tip their hand. At the end of the day, it is only the Fed’s actions which reveal their policy preferences.
Actually… “fostering price stability” is NOT in the Fed’s manadate, and never has been. Actually, “Soundness” and “stability” of the monetary and financial system, not propping up inflated asset prices is supposed to be the Fed’s core mandate. For those interested, here it is:
“Congress created the Federal Reserve System in 1913 to serve as the central bank of the United States and to provide the nation with a safer, more flexible and more stable monetary and financial system. Over the years, the Fed’s role in banking and the economy has expanded, but its focus has remained the same. Today, the Fed’s three functions are:
1. to conduct the nation’s monetary policy,
2. to provide and maintain an effective and efficient payments system, and
3. to supervise and regulate banking operations.”
Source: Dallas Fed
http://www.dallasfed.org/fed/understand.cfm
Okay, let’s grade the Fed.
#1. Around a “C”.
#2. Around an “A”
#3. Around an “F”
So, in my book, the Fed gets a failing grade. However, much of the blame goes in Mr. Magoo’s court as Fed Chairman. He had plenty of cheerleaders over the years. Bob Brinker was so impressed by Mr. Magoo who he never stopped calling, The Maestro, that he was on track to propose marriage. Book stores however, had plenty of subject matter concerning Mr. Magoo’s incompetence and downright gambling attitude to the economy. Still, it’s pointless to keep on about this stuff. Mr. Magoo, like the CEO’s on Wall Street scores of CEO’s of corporations which they robbed at every turn (to many to list) simply pick up their winnings and make a run for it. A few get caught but only the tip of the iceberg. With the SEC and the Fed and the Financial Gangsters of Wall Street in charge of our and our childrens financial future, the terrorists are the last thing we need to worry about.
Actually, I’d give ‘em an “F” on #1 too (from the perspective of a wage-earning saver/renter/non-crook). But, if I were a bankster or specuvestor, I’d probably give ‘em an “A”. The Fed is very responsive to the cheap-money junkies.
“He warned that the Fed still has only two mandates, fostering price stability and supporting economic growth. Keeping the markets happy is not a new third mandate.”
I have to ask them why the “emergency” 75 basis point cut, instead of waiting until January 30?
Agree - these guys are so full of $hit!
“Price stability” is not –and has never been– part of the Fed’s stated mandate. See my 12:54 post above.
I think by “price stability” they mean controlling inflation. I don’t think they’re implying propping up asset prices. Now, if they did try to exert price stability on housing, I would have to ask, “Where were you 5 years ago?”
I also watched the 60 minutes expisode . How many of the loans were done through the advise of agents in MR. Abbotts’ Coldwell Banker office. How much were the commissions earned during that period to CB? Abbott sat there as if they were not responsible for the finacial fiasco that they caused.
what about getting all the involved parties into a perp walk?
the thing that really got me pissed was the couple who said i am not paying for my mortgage because the value has gone down.
but if it went up, well totally new ballgame
i was yelling very nasty words at my tv
the sense of entitlement of these people is mind boggling
let them all rot
“what about getting all the involved parties into a perp walk? ”
We dont have enough prisons.
Do we have enough rope?
Bullets?
Rope is more enviromentally friendly and reuseable!
And it even used to be made from hemp!
“…i am not paying for my mortgage because the value has gone down.”
Hope they don’t have any car loans!
Or purchased a meal with a credit card!
As long as they understand the credit consequences of walking away, I have no problem with them doing so. Lending standards were obliterated because lending companies thought people would stay tied to a sinking anchor. Why should they? Businesses cut their losses every day and there is no moral opprobrium attached.
Amen.
They’re playing by “the rules”, which say that if you can’t pay the mortgage you get foreclosed on. Walking away by choice is just another variation on the same outcome. Sure it’s dirty pool, but just like every other financial rule used and abused by Wall street, this one is totally legit and legal.
Of course their credit is shot and maybe they feel a little shame, but oh well. Now maybe the banks will be a little more careful next time?
But that’s the thing, I didn’t see a heck of a lot of shame from those people. They were just upset the roulette wheel didn’t stop on their number!
It’s the modern America. The businesses feel no shame in dumping it’s workers for foreign labor. Businesses will pollute the environment and risk fines if the fines are cheaper than compliance. If anything, I think it’s an example of the American business ethic being thrown back at the corporations.
Exactly, the gamble didn’t work out so now they bolt. That’s the new attitude about debt these days. I say bring back debtor’s prisons. I bet you would never have people walk then…
“Of course their credit is shot and maybe they feel a little shame, but oh well. Now maybe the banks will be a little more careful next time?”
Shame? What is this strange concept you speak of?
In the year 2008, there is no such thing as shame. That’s been gone for a long time. If such a concept existed, there would be no such thing as Girls Gone Wild videos. These girls would be worried about shaming themselves and their families, but apparently that’s no big deal anymore.
We are a shameless world in every way now, because the concept of shame involves someone being made to feel accountable for their actions. But that accountability often involves someone else making that judgement, and as well all know, there is no greater sin in these days of phony self-esteem than to be “judgemental” of someone else.
– Judge Smales
“You’ll get nothing and like it”
If banks don’t want people to walk, they should start asking for down payments or at least PMI (real money, not 80-20). That will stop the walking in a hurry.
If states don’t want people to walk, they should legislate the state to be recourse. That will also stop the walking in a hurry.
If people don’t want to walk, they should ask the bank to put those “oh you can always refinance later” platitudes in writing. That will shut banks up fast.
But you can’t blame the people for walking.
I don’t think PMI is an acceptable solution either, because of the counter party risk. They’ll need true 20% down. Like it used to be.
The only question is whether they’ll need 30% or more, given the prognosis for future price declines.
Whether PMI is adequate or not is for the lender to decide. It’s the lender’s problem not the borrower’s.
I say let ‘em walk. There’ll be 2x the number of places on the market in *no time*!
“I say let ‘em walk. There’ll be 2x the number of places on the market in *no time*! ”
You’re right, but you better bring your own copper pipe, AC unit, wiring and, you know, drywall. I think I’ll pass.
– Judge Smales
“You’ll get nothing and like it”
These FB’s are saying that they want to steal from the banks and not pay if their equity goes down ,but if their equity goes up it’s their God given right to have it .What ever easy money scheme or panic buying these borrowers bought into ,it wasn’t based on sound real estate investment . Why was it that the Realtors got away with saying that these borrowers could just rent the house out if something happened ,or just refinance because” real estate always goes up ?’
The loan/real estate industry betrayed these greedy borrowers because they told them that there would be a never ending supply of “new money ” on property values that were based on a speculation frenzy. Any agent that has been in the business for any length of time would of know that the promises made to FB’s were BS.
We all know you can’t trust salespeople ,but people tend to trust real estate and lender agents (I don’t know why they do ). To bad the MSM didn’t challenge the promises that were made to people during the boom and in large part this is why people have this entitlement problem and a feeling of being conned (no excuse however ).
Toll is full of it when he said in essence that he tried to discourage investors by making sure they agreed to live in the property for 2 years .First, he was curbing re-sales for himself to insure he didn’t have sales competition from speculators ,and everybody knows that most speculators were on a two year plan of the no capital gains tax requirement 2 year holding period anyways .
For a long time now I have thought that the secondary market could not of been checking these loan packages . It will be interesting to see if the Courts think that these Investment firms or Rating agencies had some “duty’ to exercise some quality control ,or is liability going to fall on the originator and borrower of the loans that did not prevent fraud ,or will they all be liable ,or will they all avoid liability?
1946 Germany: “Nope, didn’t know any Nazis, how ’bout you Col- er, Klaus?”
“the thing that really got me pissed was the couple who said i am not paying for my mortgage because the value has gone down”
Glad that I wasn’t the only one. I paused it and said to my wife that if I was interviewing the couple my response would have been: ‘So under your logic if the house appreciated since you bought it then you’d have no problem with the bank taking it back at the orginal sale price and reselling it for their own profit?’ These people are amazing with what they can rationalize - imagine the lessons their kids are learning too.
Welcome to the result of situational ethics education. If one person does it and the majority protest it, it is a crime. If the majority does it and only a few protest, it is OK. No absolute truth, then no absolute false.
Dovetails nicely with group responsibility. If everyone is responsible, nobody is held accountable. Perp walk? Lets start with NAR’s top brass, Cendant CEO(century21), CrapwellSkankerCEO, Director of Comptroller of Currency as well as a few other take the money and run politicians.
“dramatic three-quarter of a percentage point rate cut last Tuesday was the equivalent of shoving a pacifier in a crying baby’s mouth. And that only stopped the whining for a little bit.”
My first thought was about the pioneer days when women giving birth had to chew on leather to stop from screaming.
“If everyone jumped off a bridge…”
That’d be awesome.
“Welcome to the result of situational ethics education. If one person does it and the majority protest it, it is a crime. If the majority does it and only a few protest, it is OK. No absolute truth, then no absolute false.”
I wish more people would protest pornography and recreational mating
I wish more people would engage in pornography and recreational mating.
me too.
Disease is fighting the second.
If you are sincere, thank you for the comment.
Hey Abbott, wasn’t he the panzer commander of grupe bubble?
3 out of four builders must pay closing cost or give incentives to sell homes, my heart goes out to them??? Of course when they told solid buyers not flippers to stand in line and fill out a financial form and then we may talk to you all the while raising the price of the home ten fold minute by minute i guess all that is forgotten, buyers must still bail these people out for the good of the economy.
I suggest you as builders stop the closing cost and granite counters nonsense and lower your homes with proper legimate loans and deliver a home to be proud of then you will see a recovery, don’t do what the US auto industry did offer 0% and still sell a poor product with poor service it hasn’t worked and won’t, Americans are forgiving people when there is something to be forgivin for, ripping off the public and showing them total desrepect was not the way to win their hearts you just drove a wedge thru it, now do the right thing to save your business and reputation what’s left of it?
Amen. Just wait until all these bubble homes start falling apart in 10 years.
A co-worker just had the roof of her 1961 house replaced. The roofer told her that most (80%?) of their business was new construction.
Problem is, most of these builders will be gone anyway by the time their crap product falls apart. (unlike the Big 3)
There’s been a lot of speculation here on the blog about condos ending up in a bad way when owners stop paying their condo fees. Surprise, surprise, it’s on in earnest:
http://www.wftv.com/news/15152030/detail.html
I think that the older condos on the coast should be pretty safe, at least in areas where a lot of retirees own them, because the flipper percentage is smaller. But many of the large ones built since 2002 or so could be in major trouble. How do you price a condo unit when there is no air conditioning in the public areas and a sizable percentage of the total number of units is in foreclosure?
A condo is only as safe as its fire abatement. I expect to find out that most condos were made with spontaneously combusting materials with strange pools of gasoline and crumpled newspapers found in the oddest places.
“The core people that care are paying for those that don’t and it’s not fair,” said Ian Stewart, a condo owner.
I am wondering how fast some of these buildings will deteriorate with limited or irregular maintenance. I watched “After People” on the History Channel last week and it was remarkable how quickly things broke down and nature reasserted itself.
Off-topic, but your link also has an interesting piece on how local carjackers shot the victim in the face because they were frustrated over their inability to operate his stick-shift car. One of the reasons I drive a manual transmission is because almost no one in this country knows how to drive one, but I hadn’t considered this type of outcome.
“I am wondering how fast some of these buildings will deteriorate with limited or irregular maintenance.”
That would seem to tie into a comment on the blog yesterday or the day before, speculating that some properties could end up with negative value. I suppose some representative of Leviathan will come up with a proposal to Section 8 the places, to the near-ruin of legitimate owners.
I could see that happen here in Long island City some of the Queens West high rises in Long island city were cheap $50-65K for a studio, but the maintenance fees were $1500-$2000 a month, because they borrowed 95% of the money.
———————————-
That would seem to tie into a comment on the blog yesterday or the day before, speculating that some properties could end up with negative value.
Personally, I think driving a silky smooth shifter is one of life’s greatest pleasures
Just out of curiosity, have you ever shifted a Honda product? If you have then what is your assessment of Honda shifters?
I have a 2000 Civic with a 5 speed. Smooth, tight as a rifle bolt, and never had a problem with it (160K miles and still on the original clutch).
From the original post:
“Toll didn’t see it coming. Just before the market peaked in 2005, Toll predicted that boom-and-bust real estate cycles were over and that housing would continue a smooth upward climb. ‘Prices will keep going up in double digits for years,’ he told Fortune magazine.”
Here’s another thing that Toll probably didn’t see, and that’s how poorly constructed his company’s houses are. So much so, that a family friend coined a slogan that was inspired by his own experience as a Toll employee:
Toll Brothers Homes: Guarantee for Five Years. Then They Fall Apart.
Career tip to all of the legal eagles out there: Construction defect law. It’s gonna be huge.
But, but, buttheaded Mr. Toll…It seems your vision was clear enough concerning your personal finances to sell a boat load of options. Funny how the positve comments ended about the time of your last option dump.
May he be the first major test case of SarBox.
Career tip to all of the legal eagles out there: Construction defect law. It’s gonna be huge.
Ever see the movie “The Rainmaker” Sue em large enough and they just run off, then what?
All these lawsuits will get settled, but where exactly is the settlement money gonna come from?
“Toll didn’t see it coming.
Lies, Lies and more Lies! Toll knew damn well what was happening in the housing market, but ignored the facts and I know that for a fact.
How did cashing out millions from his company stock shares in late summer of 2005 constitute “ignoring the fact”?
Excellent point! Toll is trying to play the role of the victim while he has been the culprit during the boom. Smart move on his part, play both sides of the fence.
Construction defect, it’s already HUGE!!!
“Toll also wrongly predicted at the end of 2006 that the industry’s excess number of newly built homes sitting on the market would all be bought up in the spring selling season of 2007.”
“‘I said that?’ he asks. ‘So foolish.’”
_________________________________________________________
How much of those HUNDREDS of MILLIONS of stock options and bonuses are you going to give me back Mr. Troll?
stock options? He long ago exercised and sold the majority of them, of course this was because he didn’t see the end coming. At home builder Toll Brothers, top insiders unloaded 14 million shares for $612 million, before revealing slowing demand and a decline in orders that caused that stock to plummet from $56 to $33, costing shareholders $3.5 billion. Talk is cheaper than insider transactions.
Didn’t see it coming, but sure did a good job of protecting his profits.
PS. J Grant writes one of the best financial news letters out there
all the masters of the universe and ceo’s are shocked at the severity of the situation in the housing and credit markets but it was known exactly what was coming on this blog for well over 2 years already
this is the biggest bunch of crap thrown on the public
‘We don’t have an aggressive push to go after those loans,’ he said. ‘But as customers come to us, that’s an option we can provide.’
Replace “loans” with “a lil’ nookie” and this cat could be talking about a brothel.
And notice, CONGRESS, that here we have the poor old Walton family making money by giving out $400k loans to illegal-immigrant criminals.
Walmart gave lots of political donations so they could destroy this country!
Awww… but, Ben, without a steady stream of compliant, exploitable new
slaves“guest workers”, how would the economy survive?If the guy owning the restaurant is in jail for harboring illegals, and he is an illegal himself, why aren’t the Waltons in jail for harboring him?
“Replace “loans” with “a lil’ nookie” and this cat could be talking about a brothel.”
Very true. And their defense is that the Walton’s bankers were not strolling the streets, sans underwear, in sequined ho-wear. Nope, they were lounging around the Walton bank, winking and blowing kisses, happy to accomodate identity theft, mortgage fraud, contract fraud, and any other ‘lil thing they could do to make their criminal clients rich and happy. The Walton Family Ho-Bank.
Glad this report his “60 Minutes.”
Yet more ‘mainstream’ viewers will get swatted over the head with the reality that the bubble is long over.
More pain and misery coming.
“In November, Fitch Ratings published a detailed review of 45 loans in an effort to identify what went wrong as mortgages were turned into securities. It found extensive inaccuracies and fraud. The firm noted that many of the problems would have been easy to identify by looking at loan applications, appraisals and credit reports — but it appears that such review was either never done or ignored.”
I do not believe foreign banks will wait very long before the lawsuits are filed. A thought question: Will the US eventually end up guaranteeing all the CDOs and MBS that foreign banks purchased and that subsequently defaulted?
Will the US eventually end up guaranteeing all the CDOs and MBS that foreign banks purchased and that subsequently defaulted?
I may be wrong, but my guess is no, not in a million years. The investors are stuck with the radioactive junk. Lawyers will make a lot of money, though.
Cass
In the words of Wen Jiabao “People like to say that when all the leaves grow, when the tree becomes green all over, this crisis will be over. And they also said that they would all rather be the green leaves themselves, and they asked me, Premier, in this big tree, which part of the tree are you? I immediately replied, “I’m also one of the leaves like you.”
Paraphrased: If you wish me to buy your US Treasuries, you must make good our banks losses on previous purchases of US debt.
Bubblefucious say:
Man who roll radioactive dice should not be surprised at loss of hair.
Yuk.Yuk. Good one landlord.
And NOW they’re all singing a NEW TUNE…
Prop IT Up..Prop IT Up
The Re Agents, the Banks. the FB’s
Prop IT Up…
The Lenders, Wall St and Congress..
Singing Prop IT Up..
Title Companies, Tax Men and the States are
all singing Prop IT Up..Prop IT Up
Builders, Flippers and the Greed People …all singing…
Prop IT Up..Prop IT Up..
For MY Retirement for God’d Sake …PLEASE PROP the Damned HOUSES UP
“‘I mean free money. I mean you had to apply not to get a loan, almost. Sometimes you have to apply to get a loan, you almost had to apply not to get one,’ Grant says.”
I must really be out of it, but I have never heard of this program where one needs to apply in order to not get a loan. Is anyone who reads here familiar with this process?
Are you familiar with Sarcasm ?
I believe it. First I stopped getting my mail out of the box for weeks at a time. The mailman would eventually take it back to the post office and leave a notice in my box. Then I went to the Post office to see if there was a way to stop the mail service to my house. There is, but it didn’t work. So I finally guessed that the only way to get the constant barrage of useless 1% mortgage and 0% credit card offers to stop from slime ball crooks would be to call everyone of them as they came in and APPLY to not get the loans.
Can you say do not call list. Yes you have to apply for that too.
And the lowest slimeballs of them all,
Credit Card checks, you have to apply to your credit card company to get them to stop sending them with your bill.
A friend had his mail stolen and some payday loan place actually cashed the credit card checks for the thief.
I’ve had the same three credit cards for maybe 30 years. They long ago stopped sending me teasers for loans. The only teaser that comes to the house is from Sallie Mae, of all places, pushing their credit card. I had no idea that it was part of Sallie Mae’s charter to issue credit cards to the public. The only business we ever did with them was relative to a student loan for one of our kids, long ago.
Only way to stop mail is to remove the mail box itself.. works very well.
A neighbor says that this service has greatly reduced her junque mail load:
http://greendimes.com/
I have a CITI VISA and I too have been receiving CC cash advance checks in the mail. I have been calling CITI (for over a year now) to explain to them my concern about these checks getting in the wrong hands, but they keep sending them to me.
The last time I received CC CACs in the mail from CITI I complained about it in writing.
So yes, in my case I do have to apply not to get a loan but this application process can take more than a year’s worth of follow up applications not to get a loan.
This banking thread is so bizarre, it is like “1984.” (Black is white and yes is no.)
As a side note, I read in the news that CITI is planning on closing some of their neighborhood credit offices. I cain’t hardly wait until they close down the one in my home town; they have been soliciting me by mail as well.
Goodbye and good riddance CITI!
Citi is easily one of the worst card solicitors I’ve ever encountered. They make Discover and Capital One look like prudes. They don’t even let me check my balance via phone w/o sending me through a rep to push balance transfers, credit limit raises, etc. I do admit that it’s often amusing to speak to someone whose first language is obviously not English when the conversation is:
Rep: “We have balance tranfers at 0% with no fees and we’ll pay you $25!
Me: I don’t have any balances to transfer over if I wanted to.
Rep: Uh, um, uh 0%!
Seriously, I don’t think that their ‘playbook’ even has a scenario regarding a customer with no card balances to transfer - pretty sad when you think about it.
PB if English is your second language then that is the only way to apply in order to not get a loan.
Today they are saying:
There is a subprime aparthied against certain Americans in Ohio.
What is the term for illegal alien apartheid?
“He warned that the Fed still has only two mandates, fostering price stability and supporting economic growth. Keeping the markets happy is not a new third mandate.”
From the Federal Reserve’s Dallas website
“..Today, the Fed’s three functions are:
1. to conduct the nation’s monetary policy,
2. to provide and maintain an effective and efficient payments system, and
3. to supervise and regulate banking operations.
…Member banks receive a fixed, 6 percent dividend annually on their stock, and they do not control the Fed as a result of owning this stock. They do, however, elect six of the nine members of Reserve Banks’ boards of directors….”
As I recall 6 out of nine is a majority, but they do not control? LOL
and as to fed actions I pick door #3 - preserve the banks
Also notice how not one of those “mandates” is so-called “price stability”, a.k.a., propping up bubble-inflated asset prices.
Stability would also apply to keeping the price from rising in the first place.
Amen to that, James.
No, no, no. You’ve got it all wrong.
Price stability only matters on the way down. If prices are going up, it’s “To the moon!”
/sarcasm
– Judge Smales
“You’ll get nothing and like it”
I ran a chart of the new home sales number for the entire history Bloomberg has for it. Turns out data goes all the way back to 1963 (always using annualized data seasonally adjusted, of course).
The chart is very revealing. EVERY trough in new home sales was right around 400,000, and over the last 45 years we have had five or six of these troughs. They never overshoot 400,000 by much, and the only time the number has spent more than a couple months down there was during the 1981-82 recession. So with annualized sales at 600K we still have a ways to go.
Once we hit the 400k number, it takes another year or so to hit the bottom of the recession — declining home sales are a LEADING indicator, and it takes a good deal of time before the effects are felt throughout the economy and prices pick back up.
Give me a few more minutes and i’ll post a chart.
Awesome post… reminds one of how the serial bottom callers never bother to bring data to support their claims.
Looking foward to the chart.
Thanks, bubbly
Hope this works; this is supposed to be the chart:
http://i44.photobucket.com/albums/f19/frequentfreak/hbb/newhomesales.gif
I think you are missing something from your analysis.
While all the troughs are 400,000 new houses a year, then peaks were only 800,000. The peak of the this bubble was 1,400,000.
Population is up 25% since 1980. If you add 25% to the top, then it should have been 1 million.. not 1.4 million. This bubble was anything in the data. If you take the 400,000 peak and adjust up for inflation, you could “justify” belief that 500,000 will be the new bottom…. and I do think we are near the bottom on the number of transactions.
Take the mean of 600,000 and adjust for population to 750,000.
It is going to take a lot of years at 200,000 below trend to make up for many years running running 250,000, 450,000, 650,000 above trend.
If bottom is 400K-500K, then we should expect to be below 750,000 for 10+ years while we work off the excess houses.
I’m aware of the effects of population growth. Population was growing in the 60s-70s-80s, too, and we still went right to that 400k figure every time.
My bigger points are: (1) we still have a ways to fall in home sales, but not too much, (2) the bottom in new home sales means overall economic recovery is not for another year or so (3) home prices can stay depressed much longer after new sales have bottomed, as happened after the late 1990 bottom.
Interesting chart and thanks for posting it.
Do you know if the data is normalized for increasing population? If not, that set of 400K bottoms is getting nastier with each cycle.
It should not account for population growth. However, it is seasonally adjusted and annualized.
I don’t have a lot of knowledge of the 1965 and 1970 recessions, although I am well aware how severe the mid-70s and early-80s recessions were. So I think there is a connection to be made in the bottoms getting nastier over time. The 1990-92 resession was not deep, but was rather long (otherwise Bush 41 would have been re-elected); most people didn’t feel like we came out of it until 1995-96.
I’d have thought that with the 1.4M peak, so much excess inventory was generated that the trough could easily move below 400K this time.
How low was the trough in ‘32?
Very interesting chart, thanks passthebubbly
Great chart, PTB! Thanks.
“‘I mean free money. I mean you had to apply not to get a loan, almost. Sometimes you have to apply to get a loan, you almost had to apply not to get one,’ Grant says.”
This is news to me. Did anyone who reads here actually go through this process of applying in order to not get a loan?
Hyperbole.
We once got approved for a loan we did not ask for and had to write a letter to tell them to take a long walk off a short pier.
Does that count.
When I was looking at rental apatments in 2003-04, I got a lot of offers from landlords wanting me to buy the place instead. So you can think of asking for a lease as applying not to get a mortgage, I guess.
“The weakness in prices made buyers reluctant to jump into the market, even if the availability of financing was not an issue.”
As I’ve been saying for the last couple of weeks, all the loan limit talk is the biggest “whatever” so far. I’ve already gone over the qualification factor as being it’s undoing, but the quote above drives it another important point home. Remember, during the boom appreciation was already going up and everyone was seeing their friends making money in RE before the easy-money cookie jar was opened up. By that time, everyone was willing to dive in. So the point, as made above, is that even if more folks could qualify under the revised loan limits doesn’t mean they would pull the trigger. Everyone is afraid to go in the water now. And as was pointed out on this blog Friday, the amont of saved FB’s from the proposed limit change will be a drop in the bucket in the big picture.
By the way, instead of one of those little smiley faces you guys tend to use at the end of your comments, can someone create me a little monkey humpin’ a football that I can use for that purpose? I have a feeling I’m going to be arguing the impotence of these govt bailouts for some time here and it would be a perfect way to complete a comment like the one above.
LMAO! I am glad you are on this board. Someone needs to keep me staright.
*straight
Who’s lending the money to the Cali fools who are buying the house across the street and dumping the current ones? NNMB I thought you couldn’t get money these days.
That ain’t happening. There’s more to that story that we need to know.
I dont see how they can do it either. Only way is through fraud.
It might get some of the underwater loans already made, and stuck on bank’s books, offloaded.
Save the banks.
Hello All -
Here is a video link to the 60 Minutes story - it’s about 15 minutes long: http://www.cbsnews.com/stories/2008/01/25/60minutes/main3752515.shtml
RE: 60 Minutes…
MSM is really getin’ up to speed on this recession in the making disaster
The Beantown Glob is now running at least three or four articles a day relative to the housing valuation disaster or financial market meltdowns-with one usually making the frontpage.
And you can definitely count on the snowball gettin’ bigger as it rolls downhill with all the attendant human mayhem and wreckage which will evolve over the coming 2 years.
fears of a return to ‘flaming’ ’90s
http://tinyurl.com/3a9grz
Excellent work, but most analysis seem to miss the point. The business tax incentives and tax payer rebate checks are a diversion.
Lets mail the working stiff a one time $300 check, while we give $150K and a hall pass to the buyers and banks that got us into the mess.
Where’s the beef? The pea is under the pod called the GSE loan limit increase from $417K to $729K.
The more stringent FNMA, FHLMC limits are raised for one year, while the less stringent FHA limits are raised, permanently.
According to California Sen. Barbara Boxer’s office:
On the average $650,000 jumbo loan balance, a 30-year fixed rate mortgage, the lower rate (-1%) on the “conforming” GSE jumbo would result in an average $417 per month savings, every month for 30 years!
Thats a $150K subsidy which amounts to white collar welfare for rich homeowners and speculators. Many of these “homeowners” who are under water, will walk away from their mortgages as prices decline further.
U.S. homeowners with no or negative equity 2006 3.5 million (7% of the 51 million households with mortgages). With the 10% decline in housing prices at the end of 2007, 5.6 million or 11%.
If prices decline an additional 10% in 2008, the number of homeowners with no equity will rise to 10.7 million or 20.9%.
In effect tax payers will be subsidizing the banks and borrowers with non conforming jumbo loans in these areas: California 35%, New York 19.5%, New Jersey 13,5% & DC 21.5%
Millions of 1, 2, 3 & 5 year interest only & teaser jumbos will be reset this year. Conserative calculations estimate if only 1 million default after a FHA refi, this will result in a $260 billion cost to the taxpayer within 2 years.
There is nothing preventing Countrywide and other lenders from refinancing their delinquent and defaulting “liar loans” with the GSE’s under this program.
This stimulus package is despicable, digusting, a disaster and a disgrace. Should it pass and be signed into law as currently drafted, its constitutional legality needs to be tested.
At a minimum, it is a violation of the GSE charters infringing into the “primary” mortgage markets. I urge you to contact your House & Senate reps to have the loan limit increase provision stricken from the bill.
http://naybob.blogspot.com/2008/01/barney-frank-hr-1852-sb-2338-economic.html
This stimulus package is despicable, digusting, a disaster and a disgrace. Should it pass and be signed into law as currently drafted, its constitutional legality needs to be tested.
What would someone need to do to get this before a Federal judge?
There’s another aspect of this mess I’d love to see legally tested: increased property taxes based on valuations calculated from comparable sales, where the comparable sale was a fraudulent loan application (misstated income). It seems to me that millions of people deserve property tax refunds.
This stimulus package is despicable, digusting, a disaster and a disgrace.
Exactly. Which is why I fully expect it will be passed and signed into law without delay. Another fine example of “bipartisan” legislation and 2-party “cooperation”, like the BK bill, Patriot Act, Iraq, etc.
Here’s to perma-gridlock.
Time for Bernanke to ‘man up’
The Fed needs to show Wall Street that it - and not the markets - is calling the shots.
http://money.cnn.com/2008/01/28/markets/morningbuzz/index.htm?postversion=2008012814
“Alan Greenspan and his successor Ben Bernanke would said over and over that it’s contained. The problem’s contained. It turns out it is contained only on planet earth”
Yeah, just like a boxer felled by a stiff upper cut telling the ref, who wants to stop the fight: “The problem is contained in my head”
“you’re out of Schlitz”
Man, when you’re out of Schlitz…
Geez, what decade is that guy living in? Those ads were popular in what, the 60s?
Lol - my wife still refers to “the cat’s pajamas.”
“You’re out of beer!”
“It sounds like a shell game or Ponzi scheme; in some ways, it was a house of cards rife with corruption, greed, and negligence.”
Was this writer competing in a metaphor contest?
Guys, am I missing something or is this just an old post OI stumbled across? It’s dated 1/27/08.
I just didn’t think any of these people were still around.
http://florida.tienpow.net/2008/01/27/south-florida-real-estate-bubble-fact-or-fiction/
Read through the “old” Nov 07 archive — looks like the blogger is either in the RE business or an investor.
“It would be unreasonable to think the South Florida real estate market can maintain the rate of appreciation it has seen over the last two years. A more realistic view is that instead of seeing 25% to 30% in appreciation per year, it will be more in the range of 10% to 12% per year, which is still very good.”
Oh my. Talk about head in the sand!
Amazing how the volume of bad news is feeding this positive market, even given the already-anticipated .5% rate cut this week.
http://tinyurl.com/ypr67h
Bad news = Good news
How 1984′ish.
(shakes head)
http://tinyurl.com/2fadfs
Price plunge lifts homebuilder stocks, due to anticipation of higher sales due to lower prices.
Wow - methinks someone’s missing the whole concept of “cause and effect” relationship here.
“It sounds like a shell game or Ponzi scheme; in some ways, it was a house of cards rife with corruption, greed, and negligence.”
———————————————————————————-
Where was 60 Minutes 2-3 years ago when it would have made a difference to shine the spotlight on this whole speculative housing cluster? As much as I enjoyed the 60 Minutes episode, I couldn’t help but wonder what’s happened to our media.
Ask Mozillo. He’s plea bargaining right now, in the media, ahead of any indictment even.
60 Minutes says it is now OK to:
Just walk away Renee
You won’t see me follow you back home
The empty sidewalks on my block are not the same
You’re not to blame
From deep inside the tears I’m forced to cry
From deep inside the pain I chose to hide
Just walk away Renee
You won’t see me follow you back home
Now as the rain beats down upon my weary eyes
For me it cries
Your name and mine inside a heart upon a wall
Still finds a way to haunt me though they’re so small
Just walk away Renee
You won’t see me follow you back home
Now as the rain beats down upon my weary eyes
For me it cries
Just walk away Renee
You won’t see me follow you back home
The empty sidewalks on my block are not the same
You’re not to blame
Lord Humongous: Road Warrior?
I aways liked that song, and other done by the Left Banke, “Pretty Ballerina.” They still play them in the grocery store I frequent.
http://en.wikipedia.org/wiki/Left_Banke
Don’t cha love it when your favorite teenager music is now musak? Ouch.
Big ouch.
How about your favorite music now considered classic rock? Talk about ouch. Makes me think how old I am.
Most of my favorites are from the ’90s, but there are few older ones I like–such as those mentioned above–and I guess they are now considered classics. Getting older sucks. It’s part of that same expansion/contraction, yin/yang cycle that the government is now trying to stop with its stimulous package. Might as well pass legislation requiring tides to stay high. Odd we live in a binary world, but 99% of the population still thinks it can be all this or all that, with no regard for the opposite side of the coin, without which neither side could exist.
The only mail I got on my 50th birthday was an invitation to join the AARP
Did you have to stop yourself from putting your head in the oven?
Toll Troll
“Toll also wrongly predicted at the end of 2006 that the industry’s excess number of newly built homes sitting on the market would all be bought up in the spring selling season of 2007.”
“‘I said that?’ he asks. ‘So foolish.’”
Oh Wow! Donald Trump is coming to Tampa this week to teach everyone the fast-track to foreclosure investing, and how to many thousands of dollars in profits INSTANTLY. I just saw an ad. This should keep house prices here propped up for another year, with all the gullible would-be-Trumps buying falling knives at pseudobargain prices. I wonder what he’ll say about the non-existent Trump Tower he was marketing a few years back, probably to many of the same suckers.
” He said the bank’s policy is also in keeping with its efforts not to discriminate.”
REALLY … the fact is, I’m being discriminated against because I have to supply my social security number for a loan an a illegal alien does not.