The Housing Bubble

–
$3-4Tr. Of Americans’ Phony Wealth Evaporated In the First Three Months of the Recession

First a definitive piece of “news” – the recession in the US began in November of 2007. I have multiple confirmations on this and it will be confirmed by NBER in due course.

The phony wealth in question is due to Asset Inflation, from inflation of the Scam Market and the housing prices. The drop in the Scam Market value during Nov’07-Jan’08 is slightly north of $2Tr and drop in home values is north of $1Tr. as per my best estimate.

This drop of phony wealth during the 3-month period represents more than 20% of the annual GDP, or more like drop of 90% of the GDP annual rate. This has not happened since the Great Depression.

Jas

Here is what a troll tried to post yesterday:

‘“Chatham said that investors are also buying blocks of homes and renting them out temporarily before ‘a turnaround’ and higher property values.”

‘I know these investors. They are my people. Being auto mechanics was kind of hardwork and boring, so we got into real estate in 2002. This is just a small blip. Prices will start soaring again in April, and we will all be rich. We learned everything we needed about real estate from an internet college. We didn’t need to waste our time and money going to college. You people will be fixing our cars soon, and we will laugh at you while counting our huge stacks of cash. ‘

BTW, Jimmy was posting from Colorado, so I kind of doubt ‘his people’ are buying bulk new houses in California. And if I work on his car, it won’t run anymore.

Don’t quit the lube shop job Jimmy!

Ah, a specimen who enrolled in a get stupid quick scheme.

He is going to be awarded a free honorary degree from the University of life”: MA in “Poverty studies”

–
Trends for Downsizing the US: The Bright Side of the Panic of ‘08

by Christopher Ketcham

Futurist and trends forecaster Gerald Celente, director of the Trends Research Institute in Rhinebeck, NY, predicted the 1987 stock market crash, the collapse of the Soviet Union in 1989, the Asian economic implosion of ‘97, the decline of the dollar beginning in 2005, the meteoric rise in gold prices in an age of currency volatility, and the turn of events that may be the blessing of our era, the subprime mortgage crisis. Because of this habit of prescience, Celente has appeared regularly on CNN and Fox and MSNBC, his “Trends Reports” widely quoted in newsprint, on Oprah Winfrey, on Good Morning America.

Now in his Report for 2008, issued in mid-December, he carried the news every thinking American already knows. “The United States of America,” Celente pronounced, “has gone from first class to third rate.” It’s a “nation on the skids and heading down.” Celente projects economic and political crisis in the coming year. “In 2008, Americans will wake up to the worst economic times that anyone alive has ever seen,” he wrote on December 17. “Just as they didn’t see 9/11 coming and were frozen in shock when terror struck, [Americans] will be frozen in shock when terror strikes again.” He predicts “failing banks, busted brokerages, toppled corporate giants, bankrupt cities, states in default, foreign creditors cashing out of US securities…the stage is set, the big one is on its way.”
…

http://www.atlanticfreepress.com/content/view/3311/81/

from a link in Winter’s blog re Countrywide;

“The mortgage lender also recorded an impairment charge of $831 million during the quarter tied to securities backed by prime home equity lines of credit typically reserved for borrowers with excellent credit histories.”

http://ap.google.com/article/ALeqM5h7ceutg-wJBodBAWBkQ1j4dDlCMwD8UFKG680

The snowball has officially picked up prime HELOCs. Maybe not news here, but news to me.

sorry if this is a duplicate post

check out michelle malkin of the ny post on subrpime whiners
sounds like she is a regular here. she has all the catch phrases down

this blog is so far ahead of the msm it is ridculous
ben keep up the good work

http://www.nypost.com/seven/02022008/postopinion/opedcolumnists/the_subprime_whiners_953585.htm

“But Achuthan still holds out hope that a stimulus package from Washington could save the day.”

So, now his forecast for a recession is based on what politicians do and not on economic data?

Jas
-x-x-x-x-x-x-x-x-x-x-x-
http://www.businesscycle.com/news/press/1428/

Recession Watcher’s Rx: Stimulus Now!

U.S. News & World Report

1-February-2008

(U.S. News & World Report) - Lakshman Achuthan, who predicts recessions over at the Economic Cycle Research Institute, is gearing up for his latest call.

His weekly gauge of future U.S. economic growth sank, and the ECRI’s annualized growth rate forecast plummeted back to a six-year low last seen in early January. In short, economic growth that managed to continue through the end of 2007 may be experiencing its last gasps.

“The window of opportunity to avert a U.S. recession is about to slam shut. This isn’t good,” he says.

Achuthan’s opinion is worth a listen, as it comes with one of the better track records around. His group successfully predicted the last two U.S. recessions and managed to avoid a good chunk of false starts over the past couple of years, which is why his heightened concerns are another bit of bad news in a week when a host of reports showed weakness on everything from jobs to consumer spending.

But Achuthan still holds out hope that a stimulus package from Washington could save the day.

He reminds us that recessions rarely happen without the factory sector throwing in the towel. Today’s report from the Institute of Supply Management showed some surprising resilience in the sector that could continue if—and only if—consumer demand doesn’t fall off a cliff. The only way that will happen, he says, is if they get that extra infusion of government cash in the form of the $150 billion stimulus package making its way through Congress. And they need it now.

“That may give us this moment to sneak something in before the window slams shut,” he says. “You could do something later this year, and it’ll have nothing to do with averting a recession. You have to be doing something today. Or yesterday.”

Massachusetts Accuses Merrill of Fraud
http://tinyurl.com/333eos

The case underscores how subprime investments keep turning up in unexpected places and raises new questions about Wall Street’s sales practices and its role in the mortgage crisis. In recent years, as home prices soared and mortgage lending boomed, investment banks packaged hundreds of billions of dollars of home loans into securities for sale to investors around the world. Now, record defaults are resulting in huge losses for municipalities, states, banks, insurance companies and nonprofit organizations.

It looks like many states are seeing the economic carnage that’s coming from poor investing practices and the resultant slashing of services and large tax increases that are likely to follow.

“We must stop housing market deflation”

http://www.signonsandiego.com/uniontrib/20080201/news_lz1e1gross.html

With his Californian orange perma-tan and gleaming teeth, the homeloans tycoon Angelo Mozilo is fast becoming America’s most loathed character in the cast of grinning financiers behind the sub-prime mortgage crisis.

Mozilo’s company, Countrywide Financial, has written more sub-prime homeloans than any of its rivals.

It has a portfolio of 9m mortgages - and it has had to set aside a catastrophic $1.9bn to cope with soaring defaults.

The 68-year-old butcher’s son from the Bronx co-founded the business in 1969 and until recently, he was one of America’s best paid bosses - he trousered a hefty $142m in 2006.

http://www.guardian.co.uk/business/2008/feb/01/subprimecrisis.useconomy

The Subprime Cleanup Intensifies
By Kara Scannell, Anita Raghavan and Amir Efrati
Word Count: 723 | Companies Featured in This Article: UBS, Merrill Lynch

Federal criminal prosecutors in New York are investigating whether UBS AG misled investors by booking inflated prices of mortgage bonds it held despite knowledge that the valuations had dropped, according to people familiar with the matter.

The investigation, by the U.S. attorney in New York’s Eastern District in Brooklyn, is preliminary. The U.S. attorney’s office frequently works closely with the Securities and Exchange Commission to coordinate efforts to gather information. The New York prosecutors haven’t issued subpoenas, according to people familiar with the matter.

http://online.wsj.com/article/SB120191503643937097.html?mod=hpp_us_whats_news

“Our houses are such unwieldy property that we are often imprisoned rather than housed by them.”

Henry David Thoreau

A comment on consumer williness to buy toys. My BIL manages a bikes shop in South Orange County where the lowest cost bike is $800. Well, sales are way off for the 1st 30 days of the year, but people coming in for bike tune-ups has increased. They are hoping sales will pick-up with income tax refunds and tax rebates, otherwise the owner will be reducing the stores by half this summer, and half the employees will be gone. This has the work force worried, because much like realtors bike guys were living off the fat of the land. Gone are the days of selling 3-6 bikes at 2-6K a day to homeowners flushed with cash.

Enjoy

big homes, big problem

Down the block from my home, workmen are finishing a new house. It replaces a bungalow that had measured about 1,500 square feet. The new home has a covered front porch, two fireplaces and a finished basement. It comes in at just under 5,700 square feet. What is it with Americans and their homes?

http://www.newsweek.com/id/82709?from=rss

“It’s a gusher!”

http://www.signonsandiego.com/uniontrib/20080202/news_1b2oil.html

From a flier with my Saturday SD Union-Tribune:

EDGEWATER
NOW SELLING!
From the mid $1 millions
Approx. 3.516 to 5.147 sq. ft.
3 to 5 brs
3 and 4 bay garages
(Approx $291 to $426 per sq. ft.)

CLAYBOURNE
NOW SELLING!
From the mid $1 millions
2 story homes
Approx. 4.610 to 5.628 sq. ft.
(Approx $267 to $325 per sq. ft.)
4 and 5 bedrooms
3 and 4 bay garages

Understated Elegance.
Overriding Prestige.

LiveTheLakes.com

(My question about these “Overridingly Prestigious” homes: Will the marketing effort involve the use of giant red balloons festooned with bold capital lettering that screams “NEW HOMES SELLING NOW“?)

Fed’s rate cuts may kill US dollar soon

By cutting interest rates the US Fed expects to stimulate consumption, crucially lower mortgage payments, and in the process trigger a recovery in the US economy. Be that as it may, top economists — including Noble Laureate Joseph Stiglitz — point out to the futility of this exercise saying that this cut in interest rates will have little impact on the overall scenario

According to them, it is a case of too little and too late — akin to applying pain balm when chemotherapy was the need of the hour.

http://english.pravda.ru/business/finance/01-02-2008/103800-kill_us_dollar-0

URL: http://www.frontlinethoughts.com/printarticle.asp?id=mwo020108

What Does a Recession Look Like?
Feburary 1, 2008
By John Mauldin

What Does a Recession Look Like?
The Starbucks Index
Consumer Spending Slows Down
Rising Unemployment Starts to Show Up
It is All About Valuations

The NBER definition of recession has changed. By this definition(below) we have been in recession since 2000 since real income and total employment are not as high as they were then. That explains why if not for Iraq, the economy would have always been the primary issue the last 7 years.
–
The NBER does not define a recession in terms of two consecutive quarters of decline in real GDP. Rather, a recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. For more information, see the latest announcement on how the NBER’s Business Cycle Dating Committee chooses turning points in the Economy and its latest memo, dated 07/17/03.

http://www.nber.org/cycles/recessions.html
http://www.nber.org/cycles.html

http://www.larouchepub.com/pr/2008/080130hsg_depression.html

Housing Collapse Figures Approaching Great Depression Levels

http://www.larouchepub.com/other/2008/3504constitution_or_fascism.html

As “casino economy” collapses, the US faces a stark choice: The Constitution, or fascism.

http://www.larouchepub.com/lar/2008/3505hyperinflation_breakdown.html

Hyperinflation is here!

boom was a bust:

I don’t mean to trivialize our economic difficulties or the need for effective government intervention, but we have to face a disconcerting fact: For years now, that strange stimulus-crazed beast, the economy, has been going its own way, increasingly disconnected from the toils and troubles of ordinary Americans.

http://www.washingtonpost.com/wp-dyn/content/article/2008/02/01/AR2008020102828.html

aggressive activism:

On January 30th America’s central bank cut its policy rate by half a percentage point to 3%, little more than a week after slashing that rate by 0.75 percentage points in an unscheduled meeting. Official short-term rates have now fallen by 2.25 percentage points since the credit turmoil stemming from American mortgages began last August. With underlying inflation running at well over 2%, real rates are now barely positive. In a matter of days, American monetary policy has gone from broadly neutral to clearly loose. Gone is the incremental approach to altering interest rates. Instead there is a new Bernanke boldness.

http://www.economist.com/finance/displaystory.cfm?story_id=10609305

“The wars waged by Louis XIV left the country completely wasted, both economically and financially. And the resultant shortage of precious metals led to a shortage of coins in circulation, which in turn limited the production of new coins. It was in this context that the regent, Philippe d’Orléans, appointed John Law, as Controller General of Finances.”

Substitute Louis XIV and John Law, for ’ssshrubery & Ben Bernanke, and update things about 300 years into the future and history repeats itself nicely…

http://en.wikipedia.org/wiki/John_Law_(economist)

Hey Bush, Stimulate My Interest Rate
http://www.alternet.org/story/75765/

The solution is not to hand out several hundred bucks a head and urge the public to “buy American” to prop up the corporate economy. It’s to regulate exorbitant rates and unrestrained, nontransparent lending and trading practices. It’s to work toward increasing average incomes and decreasing the costs of corporate commandeered health care, energy and education.

Economic common sense will only get you so far. If this kind of thought were to permeate the masses, where would we get out next bubble and our next get rich quick scheme?

Just a summary report from FLORIDA.
Last week I was in St. Augustine and was staying with friends in JAX Beach. Four years ago I told them the prices were insane, I would not buy, this market will tank and there’s no way this former ghetto and crack town will keep the valuations we were seeing.
That was then, this is now. This market is schizophrenic.
I see it in transition, but not approaching reality as any sane person would see it. Like all coastal communities (i’ll be back in Clearwater Beach tomorrow), everyone thinks they are going to retire on their “Investments”, but can’t quite seem to get their price, or even have any idea what the price should be. Overall, prices are still high, some ridiculous, but their are sales and rental signs EVERYWHERE.
Here are some samples:
(and remember, alot of these are not NEW places, some are, but most are stucco’d over former apartments built in the 60’s and 70’s.) Most Condo’s were along 1st st., some on the water side, but none, unless mentioned are Oceanfront.

Condo 1/1 715 sf………..was $329K, now $289k. get real!
Condo 3/2.5…1530 sf………was $450, now $425k. how luxurious could a 3 bdr. 1500 sf living area be??
Condo 1/1 sf unknown….Oceanfront pool. ….$279,000.
Condo 2/2..S/S appliances…2nd flr…….sf unknown. $349k.
Townhouse (1st.st.) 3/3.5 2000 sf….the usually “luxury upgrades…………….$589,000 !!!

Vacant lots sold for about $20k to 30k before the boom starting in 2000-2001. Houses off the beach, closer to the intercoastal went from $85k to $125k.
When I looked 2 years ago………..lots were going from $80-$100k, if you could find a buyer.
Saw a pair of lots (typically 50 x 100 or 115) asking: 195K each, or the pair for $365k. You can buy nearby houses for less.
Another one on Seabreeze avenue (not near the sea) is asking $150k for 50×115 lot. They will add a 1900 sf house if you will bring $435k to the closing table.
An entire subdivision of remaining vacant land is near the JTB (202) intersection with A1A, south side of Jax Beach.
Not a single house has been built. None. We stopped by the sales office on Monday morning to find out about pricing. No one was in the office. The place was deserted.

Flippers still working the market. We saw a number of rehabs in process. Some for sale “as is”.
Sample asking prices:

Fairway Ln. 2140 sf. lot 100×150 on golf course..$475k.
Atlantic Beach..2nd st. 2410sf 4 bdr, 2 blocks to water……….reduced 50k to $699.9k Lot is 50 x 140.
The best part, if you buy this house, the agents will through in 2 beach bikes, so you can ride from your house to the beach.
Everyone thinks that prices will hold because this area is special. Everyone wants to live there. The folks with money from Jax want to move there….blah, blah, blah.

I did find one tear-down lot. House built in the 40’s, a wood frame, termite treat with 7′ ceilings. Total trash. Previously asking $80k, but had a reduced sign on it. The free-standing 2 car block garage was worth more than the house.

A good 35%- 40% reduction in everything would make this all seem reasonable, unless some more Califoricators come by with their easy house-lottery money, saying that these properties are “undervalued”.
When will this all end?? Please crash, California!!

No bubble here, move along

http://portland.craigslist.org/grg/rfs/558333524.html

What a POS

I think my lengthy post about Jax Beach gotten trashed.
Has anyone seen it? It took 20 minutes to type up.

http://tinyurl.com/28nedf

“This is a big week in the television rental business. Fliers were slipped under the doors at the Astoria Houses in Queens that urged people to hurry to the Rent-A-Center on Steinway Street so they could have a big new TV for the football game. Among the offers was a 40-inch Bravia, with payments of $47.51 a week. In 117 weeks, the customer would own the set outright, for $5,558.

If this were set up as a loan, the interest rate would be 71 percent and illegal under the usury laws. But this deal is called “rent to own.” In all other particulars it is much like a subprime mortgage for pull-out sofas and television sets.”

I think one of things that contributed to this mania was a general ignorance of basic financial concepts. For a business like Rent-A-Center this type of ignorance seems to be central to their business plan.

This came in my emailbox, interesting:

The United States Government is planning to send out rebate
checks in the hope that American citizens will immediately
spend the money to stimulate the economy, thus avoiding a
recession.

At best, we believe this is a band-aid solution for a broken
system that will not solve the larger economic problems
faced by our country. We believe a short-term fix will not
repair larger, long-term problems. In fact, the short-term
solution may only exacerbate the larger problems.

As such, we have started the “Don’t Buy It!” campaign in an
effort to begin a far-reaching conversation that encourages
people everywhere to “Wake Up & Smell The Rebate.”

Please visit our web site at http://www.simpleliving.net/rebate and
find out how you can participate by using your rebate in
ways that the government does not expect — ways that might
actually make more impact than, as the government hopes,
spending the money to purchase more stuff and junk.

Visit http://www.simpleliving.net/rebate today and learn how you
can print and post flyers about the rebate bribe, start your
own discussion, let others know about the “Don’t Buy It!”
campaign, and more.

Together we can change this stupid economy!

Sincerely,

Dave Wampler
Founder
The Simple Living Network

Starbucks is next- Fresh Market having big layoffs in Florida. Free range employees.

Maricopa County (Phoenix Metro) Notice of Trustee’s Sales
Jan 06 726
Feb 06 687
Mar 06 790
Apr 06 638
May 06 764
Jun 06 797
Jul 06 851
Aug 06 1019
Sep 06 1114
Oct 06 1238
Nov 06 1493
Dec 06 1407
Jan 07 1624
Feb 07 1577
Mar 07 1720
Apr 07 1709
May 07 2007
Jun 07 2325
Jul 07 2501
Aug 07 3248
Sep 07 2834
Oct 07 3458
Nov 07 3544
Dec 07 3875
Jan 08 5334

My company badly missed our 4th qtr numbers. We had 10 big deals just… stop.

CTOs had done RFPs, had done studies and proof of concepts… had all the paperwork done… then, funds cut off.

As our CEO put it, it seems that in December, everyone in our pipeline had a collective “OH Sh__” moment.

Oh course, this triggered an “Oh Sh__” moment for our company too. Every year we do a company all-hands meeting, getting everyone from our Chicago, Austin, Phoenix, and global sales and support offices all together in one place. It was well into the ploanning phase, with location selected, hotel booked, speakers set… then poof… cancelled.

Then, instead of managers having approval for expenses upto $1000, poof, VP apprioval needed for anythinhg over $250.

Instead of planning to add 150 more employees, pooof… freeze on new hiring.

Our major development efforts had been focused on adding major new functionality… poof… now we’re focused on cleaning up some of the small things to allow us to sell more, smaller contracts instead of few, big dollar customers.

That is what a recession smells like!

–
I am sick and tired of people making accusation of “phantom numbers” in an attempt to discredit. I juts downloaded fresh data on Wilshire 5000 (Total Mkt Cap). Here are numbers:

Date Close Index Mkt Cap $B

10/31/2007 15,673.4 $19,037.9
1/31/2008 13,896.7 $16,879.8

Change 3M -1,776.7 -$2,158.1

The Mkt Cap loss for the US Scam Market for 3 months ending Jan’08 was 2.1581 TRILLION. Anyone who has better data can post his, or her, data. The RRE data is not yet available and will take 8 more weeks (Case-Shiller for Jan’08).

Jas

“Exxon-Mobil reported Friday that it beat its own record for the highest profits ever recorded by any company, with net income rising 3 percent, to $40.6 billion, thanks to surging oil prices. The company’s sales, more than $404 billion, exceeded the gross domestic product of 120 countries.” We’ll keep our children fighting and dying over there, you keep piling on the obscene profits, while keeping your kids out of harms way in the best American colleges.

Sorry this one’s not about housing. This is about Ron Paul and the clout of him and his supporters. I’m not knowledgeable about the delegate system in party politics. Is it true that the third place finisher can get concessions from one of the two front runners to support his positions if he gives them the delegates? It appears Romney and McCain are very close in their support. I like the idea of Ron Paul getting promises from one of them to veto all new spending and coax Congress to make the 2001 and 2003 tax cuts permanent and makes further tax cuts. I’m in Phoenix for the weekend (yawn, not interested in the superbowl though. I dislike both teams). Weather is great here! Baltimore was lousy on Friday though.

Anyone remember the huge S&L crises that happened in the late 80’s? Do you remember how much money it cost to bail out the S&Ls? On estimate I’ve seen is $125B in 1985-1995 dollars. Back then, it seemed like a HUGE amount of taxpayer money to my young mind. That amount would be equal to anywhere between $162B and $232B in todays dollars, depending on how you calculate the inflation between 1985 and 1995.

Today, you have the president, congress, and the senate proposing $146B to $156B (and possibly more) for a ’stimulus package’ to get us out of the current mess. The eventual package seems like it will *already* be in the same ballpark as the S&L bailout.

And now you have Chris Dodd, chairman of the Senate Banking Committee, “floating the idea” of creating a new “Home Ownership Preservation Corp.” to buy troubled mortgages and place the borrowers in less costly, refinanced loans and that this proposal should get “serious consideration”.

Wow. It’s funny how much the S&L crisis cost us when put in context.

“I am convinced that if the Great Depression had never happened these turkeys would be comparing today with the Dark Ages! Its amazing how some people just cannot get off the depression angle! Things will be tough, but they are never as good and never as bad. Dollar cost average into the market, and you will end up way ahead 10 to 20 years from now.”
Well, Blackbox, let me share a little historical perspective with you. Did you know that economies, societies, nations, and civilizations are at first new, then grow old and weak, and then die, just like flowers, insects, puppy dogs, and your relatives? Did you know that democracies and systems of fiat currency are among the most unstable of human creations? Did you know that an economic depression is just four quarters of negative economic growth?
Did you know that the United States has severe structural imbalances economically? Do you deny that this country is built upon a mountain of debt? Do you deny the balance of payments and trade deficits which have persisted for decades? Do you think they matter? Do you think the fact that the United States has an Air Force, Army, Navy, Marines, and military-industrial complex that can annihilate its opponents, has over the last fifty years influenced the rest of the world in helping us enjoy our rather high standard of living? Do you even allow for the possibility this might end one day? I believe it is a human fantasy to think that everything we enjoy is due to us because we are so clever, hardworking, intelligent, educated, etc, etc. However, terrible periods of adjustment, decay, and despair mark all of human history. Don’t think that this time it’s different because now YOU are on the scene with your own agenda and aspirations. That’s just folly.

UK Guardian
Banks too slow on mortgage relief-US regulator
http://www.guardian.co.uk/feedarticle?id=7272219

“Federal Deposit Insurance Corp Chairman Sheila Bair said lenders must show “real progress soon” in modifying troubled mortgages.
Otherwise, lenders are inviting a potentially major regulatory and legislative crackdown, she told a Senate Banking Committee on mounting home foreclosures.
Bair’s remarks came as Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, again urged forming a Depression-style federal Home Ownership Preservation Corp to help borrowers keep their homes and refinance into more affordable mortgages.
…
Bair told the Senate committee that foreclosures remain too high and urged the lending industry to modify more loans on a broad, systematic basis, instead of case-by-case.
She also warned that a new wave of loan problems involving prime — not subprime — borrowers looms in 2009. About $600 billion was lent to prime borrowers for nontraditional mortgages in recent years, Bair said.
Unlike subprime loans that go to borrowers with risky credit, prime loans go to borrowers with good credit.
“Large volumes of these loans will undergo payment reset and require amortization beginning in 2009, in market conditions that may not be much better than we see today,” said Bair, adding that many of these nontraditional mortgages include interest-only and payment-option loans that lacked proper documentation and underwriting…”

I saw an ad by McCain on Faux News Channel this morning. He described himself as a social conservative. Said nothing about his fiscal stance. Saying nothing says a lot. Of course, I know for a fact he hates cutting taxes. I have a letter from his Washington office to me in 2001 documenting his opposition to the 2001 tax cuts. He’s a democrat really. I see no difference between him and Hillary Clinton.

At the moment I’m sitting at Tempe Honda while my trusty Civic is getting an oil change. There are placards all over the place in the showroom with current car loan rates based on various lengths and FICO scores. NOT ONE PLACARD has any rates listed for less than a 60 month loan. Doesn’t anybody pay a car off in 36 months anymore?

http://www.larouchepub.com/other/2008/3503monkey_trap.html

Excerpt: “The irony is that the oligarchs are using the fools to help them finish the destruction of the nation. An analogy to this is the Malaysian monkey trap, a narrow-necked container into which the hunter puts a nut prized by monkeys. When the monkey reaches into the container and grabs the nut, his hand with the nut in his grasp is too big to be withdrawn from the narrow neck. All the monkey has to do to escape is release his grip and withdraw his empty hand, but he does not, preferring to hang on to his prize even when the hunter returns to collect him. The real trap is not the container, but the inability of the monkey to recognize the nature of his situation. The same can be said of the money fools who refuse to let go of their fictitious assets.”

Ben, are you removing certain comments?

I saw it. I don’t know about California crashing around this part o’ Cali.
Bay Area prices are still high, not many houses for sale, and when they do go on the market they sell quick. (East Bay-Berkeley,Albany,El Cerrito). just my observation.

Chris Dodd (D-Conn) proposing direct bailout: http://money.cnn.com/2008/01/31/real_estate/subprime_bailout_proposal/?postversion=2008013117

“Senator Chris Dodd, the committee chair, said he is working to create a Home Ownership Preservation Corporation, which would purchase mortgage securities that are backed by at-risk, subprime loans from lenders and investors…

This corporation would give these lenders and investors a better price for the securities than they would get if the properties backing them were put through foreclosure…

Borrowers could see their monthly costs drop dramatically.”

15-20 billion is a start. But, it’s the camel’s nose in the tent. If it starts, if the HOPC is created and starts taking bad loans off of lenders’ hands, you can bet that it will spiral.

And the lenders won’t learn. They will continue to make bad investments. And borrowers won’t learn either.

Forget about whether this bailout will “work” or not - it rewards the bad investments of lenders and borrowers and will badly undermine the efficiency of the markets.

Do a Google search on “Home Ownership Preservation Corporation” - interesting results follow.

Richard Shelby (R-Alabama) had a good response to the possible creation of the Home Ownership Preservation Corporation:

“It’s not the responsibility, I believe of the American taxpayer to bail out those who for whatever reason have found themselves unable to meet their financial obligations. ”

http://www.pbs.org/nbr/site/onair/transcripts/080131b/