Buyers Seem To Be Hiding
Some housing bubble news from Wall Street and Washington. Associated Press, “Toll Brothers Inc. said Wednesday that home building revenue fell by 22 percent in the first quarter, its seventh consecutive quarterly decline, and warned that it’s ‘not yet seeing much light at the end of the tunnel.’ CEO Robert Toll, who months ago thought the housing market could be dancing along the bottom, said that despite historically low mortgage rates and falling home prices, a slowing economy could be spooking buyers.’
“‘Buyers seem to be hiding,’ he said in a statement. ‘The market’s problem is a lack of confidence, not just regarding the direction of home prices, but … the overall economy.’”
“Net signed contracts, a sign of future activity, were cut in half to $375.3 million. In the quarter, 257 contracts valued at $198 million were cancelled. The cancellation rate came to 28.4 percent in the quarter, compared with 29.8 percent last year during the same period.”
“In contracts, the Western states of California, Nevada, Arizona and Colorado plunged by 76 percent to $30.7 million. The North followed with 57 percent, the Mid-Atlantic at 37 percent and the South bled the least, down 26 percent.”
“In contracts signed before cancellations, the average price per home fell 13 percent to $634,000. After taking account cancelled contracts, the average price fell to $580,000 as buyers backed out of higher-priced homes.”
Dow Jones Newswire. “As the housing slump drags on, some builders have a deal for potential buyers: Sign a contract, and if the price of comparable homes drops before closing, you get the lower price.”
“It is a strategy shift for the ailing industry, which initially resisted price cuts as the market softened. Builders first offered freebies like granite countertops. Then, in September, Hovnanian Enterprises Inc. held a national ‘Deal of the Century’ bonanza offering discounts into the six figures, a move other builders quickly copied, even though it can drag down a neighborhood’s value and incense earlier buyers.”
“Dramatic price reductions, however, haven’t been enough.”
“There is also risk for builders and no assurances this will work: Last year, behemoth Lennar Corp. tested it in Florida, one of the states hardest hit by the downturn, but stopped.”
“Even after trimmed price tags, buyers could still decide to walk away, keeping cancellation rates elevated. And if prices decline during construction, companies could see gross margins, which hit 25% during the boom and have plummeted to razor-thin levels, further stressed.”
“Jeff Gibbs feels ‘peace of mind’ about the value of his $245,000 home being built, replete with crown molding and hardwood floors, that he contracted to buy near Phoenix. ‘If the market keeps on going down before I buy, I’m going to get the lower price and that means a lot,’ said the 28-year-old sales and marketing rep. ‘It’s almost like they’re thanking me for buying when I did.’”
The Daily Herald. “Sirva Inc., the moving company doing business as Allied Van Lines Inc. and North American Van Lines Inc., filed a pre-negotiated bankruptcy for itself and 58 affiliates, citing the slowing housing market.”
“‘Customers are simply not moving as much,’ Douglas Gathany, senior VP, said in court documents. He added consumers are delaying moves because they can’t sell their homes.”
“As part of its services to corporate clients, Sirva helps manage employee relocation programs, including helping the customer’s employees sell their houses, move and buy new homes, often buying the home for later sale. Under some of the contracts which work on a fixed fee, Sirva agrees to buy the home if it isn’t sold within a pre-determined period. It also assumes costs and losses on a resale of the home.”
“Their ‘home inventory is growing,’ Gathany said. ‘The homes stay in inventory longer, and many homes must be sold for a loss.’”
“Barry Diller’s IAC/InterActiveCorp reported Wednesday that it lost $369.9 million in its fourth quarter. Revenue at online mortgage referral unit LendingTree fell by 55 percent to $52.1 million as it dealt with a falling housing market. That unit swung to an operating loss of $508.1 million.”
The Budapest Business Journal. “South Korean local banks lost $563 million as of the end of December after investing in US subprime mortgage-related instruments, said the Financial Supervisory Service.”
“Seven local banks, including Woori Bank, the country’s No. 2 lender, invested $682.5 million in US collateralized debt obligations (CDOs) derived from subprime mortgages and lost 83% of their total CDO investments, the financial watchdog said.”
From Bloomberg. “U.S. Central Federal Credit Union, the non-profit company that invests on behalf of 8,400 local lenders, lost its AAA rating from Standard & Poor’s after reporting a $760 million drop in the value of subprime-infected securities.”
“The ratings service may downgrade U.S. Central again if the investments deteriorate further, analyst Robert Hoban said in the statement.”
“‘With the housing market weakening to levels not seen since the early 1990s down-cycle, we expect U.S. Central’s large portfolio of mortgage-related securities to further decline in value,’ Hoban said. ‘Earnings and capital measures already are under pressure.’”
“The amount represented almost 2 percent of the Lenexa, Kansas-based firm’s total assets. The $18 billion writedown Citigroup Inc. reported last month amounted to less than 1 percent of the largest U.S. lender’s assets.”
“‘I’ve never seen a market disruption or interruption like this’ during more than two decades working at credit unions and commercial banks, Executive VP Dave Dickens said. ‘Fixed-income markets are in a state of disarray.’”
“The fourth-quarter writedown reduced U.S. Central’s ‘net economic value’ by about half, according to financial statements released last week. Of U.S. Central’s $45.1 billion of assets, about 45 percent are ‘non-agency’ mortgage-backed securities, meaning they don’t carry a guarantee from a federal-government-sponsored entity such as Fannie Mae or Freddie Mac.”
“Less than 2 percent of total assets are in securities backed by subprime mortgages, Dickens said.”
From Reuters. “The CEO of accounting firm PricewaterhouseCoopers expects more non-financial U.S. companies to report write-downs linked to the credit crisis, showing the problem has the potential to infect a wide swath of corporate America.”
“‘It’s not just in banks,’ CEO Samuel DiPiazza told reporters late on Tuesday. ‘These securities sit in cash equivalent accounts of industrials; they sit in investment portfolios of pensions.’”
“‘We are having to deal with this with thousands of companies, not just a handful of big banks,’ he said, and added that a ‘first wave’ of write-downs was likely in the current audit cycle this quarter.”
“Last month Bristol-Myers Squibb Co became among the first companies outside the financial sector to disclose its exposure to the world-wide credit crisis. Over the last few months, other non-financial companies such as networking-equipment maker Ciena Corp and software company Lawson Software Inc have also reported write-downs related to the credit crunch and the housing sector meltdown.”
“DiPiazza declined to comment on how big he thought such write-downs would be, saying it varies with companies.”
“‘I will not underestimate the challenge we have working through a lot of complex securities and getting them valued,’ he said. ‘We have to ask the question, what’s under the surface.’”
“The U.S. Securities and Exchange Commission’s review of the credit rating agencies is in process and agency staff may make some recommendations on how to improve disclosure and conflicts of interest as early as June or July, a senior SEC official said on Tuesday.”
“Last year, the investor protection agency gained oversight of the credit rating agencies such as Moody’s Corp, Standard & Poor’s and Fitch, which have been blasted for not responding quickly enough to the deteriorating conditions in the subprime mortgage market.”
“Rating firms have been accused of conducting weak analyses and granting higher ratings because they are paid by the companies or issuers whose securities they rate. Critics also blame them for failing to highlight risks secured by pools of mortgages, including subprime mortgages for U.S. borrowers with tainted credit.”
“FDIC Chairman Sheila Bair, who spoke at the summit earlier in the day, said said the industry needs greater transparency about the quality of the assets ultimately underlying the products they’re rating.”
“‘They don’t even look at the underlying quality of the assets,’ Bair said at the Reuters Summit.”
“A global forum of financial watchdogs will call for greater disclosure on securitised products when Group of Seven finance officials meet on Saturday in Tokyo, Japan’s Nikkei daily reported.”
“The Financial Stability Forum, a group of central bankers and regulators from 12 industrialised nations, will present the G7 officials with an interim report on the causes of the global market turmoil and ways to prevent such problems in future.”
“To prevent further turmoil, the forum’s report calls for rating agencies to provide investors with more information to make their rating methods more transparent, the Nikkei daily said. It will also recommend that these institutions build up enough convertible assets to prepare for liquidity risks and that authorities tighten controls on risk assets, the Nikkei said.”
“Subprime mortgages were the driving force behind a boom in structured finance as banks bundled risky U.S. mortgage assets into complex instruments and sold them to investors worldwide.”
“It also asks authorities to examine whether current practises that rely greatly on rating agencies is weakening market discipline, the Nikkei said.”
From MarketWatch. “Goldman Sachs Chief Financial Officer David Viniar said Wednesday that the firm wants to be a buyer of distressed mortgage debt. ‘We will be a buyer if there is a seller, at a reasonable price,’ he said.”
“He added that among subprime mortgage securities, he reckons they are likely near fair value, because, ‘you can’t go below zero.’”
“U.S. credit markets are trading as if the economy is in a recession because investors’ ‘fear has overwhelmed greed,’ Goldman Sachs CFO David Viniar said today. ‘Credit markets are trading like we’re in the middle of the worst recession we’ve seen in a very, very long time,’ Viniar said at an investor conference.”
“Gregory Fleming, Merrill Lynch & Co.’s chief operating officer, said at the same conference that while ‘there’s a lot of liquidity,’ the climate for deals had deteriorated, and many investors are waiting to make sure the worst is over.”
“‘There clearly is a lot of nervousness and indeed even fear out there,’ Fleming said.”
“Viniar also said he expects to see a plan devised that will help the monoline bond insurers, which are facing potential rating downgrades. Insurers including MBIA Inc., Ambac Financial Group Inc. and Financial Guaranty Insurance Co. are at risk of losing their AAA ratings because mortgage-backed securities they’ve insured have declined in value.”
“New York State Insurance Superintendent Eric Dinallo told a meeting of Wall Street banks and brokerages that they ‘created this mess,’ making necessary a plan to rescue bond insurers, the Wall Street Journal reported today, citing people familiar with the matter.”
“‘It is likely that you will see some solutions to what’s going on with the monolines,’ Viniar said.”
“The senior Republican on the Senate Finance Committee called on Tuesday for more public disclosure and transparency in the mortgage market.”
“Sen. Charles Grassley said more transparency, such as the disclosures mandated by the Securities and Exchange Commission, is needed in the troubled market for mortgage- backed securities.”
“‘Included in transparency is some sort of reporting so that somebody in government knows what’s going on. It’s kind of along the lines of what the SEC’s supposed to be doing,’ Grassley said at the Reuters Regulation Summit in Washington.”
“‘If there’s criminal activity — and the FBI’s investigating it — heads ought to roll or it’s going to be repeated,’ Grassley said.”
“In addition to more transparency and disclosure, Grassley called for more accountability along the debt securitization chain, starting with originators of mortgages.”
“‘People that originate this stuff ought to have skin in the game. They don’t have any skin in it. You negotiate it and you get your money and you can run for the woods,’ he said.”
“‘And then the financial institution. I think the best way to make sure this doesn’t happen again, when you pass these on to somebody else, you ought to have some little bit of risk — one percent, five percent, I don’t know what the magic percent is … You just can’t dump your problems on somebody else,’ he added.”
“There ought to be some relationship between that financial institution and these people that are negotiating these things,’ Grassley said, adding that originators need to pay more attention to the income and ability to repay of borrowers.”
“‘We’ve got evidence that they gave loans to people who didn’t have jobs or even bothered to look to see if they did,’ he said.”
‘On a recent Monday evening in suburban Philadelphia, two dozen sober-suited executives huddle around a giant conference table for the weekly “ops” meeting inside the nerve center of Toll Brothers, the hottest homebuilder in America.’
‘After digesting the data, Toll himself makes the final decision on whether to raise home costs. On this night he’s so confident that people will keep buying that he lifts the prices on projects in Florida, Las Vegas, and other markets by 1%. That amounts to about $10,000 for each house over the list price from the previous week. It’s nothing new; he’s been hiking prices Monday after Monday. At Toll’s Frenchman’s Reserve community in Palm Beach Gardens, the price of a Florida rococo confection called the Signature has jumped $200,000 just since January, to $1.4 million. That’s an average increase of $15,000 a week.’
‘People just keep buying anyway,’ Toll marvels. ‘I’ve never seen anything like this in almost 40 years in the business.’
‘For Toll, what looks to many people like pure craziness is perfectly normal, a reflection of a new supply-and-demand equation that will last a long time. He’s an outspoken believer that, yes, the world really has changed this time. That the traditional boom-to-bust housing cycle is now a smooth upward climb. That housing prices will keep rocking practically, well, forever.’
‘We’ll reach the point Europe reached 20 years ago, where families pay 45% of their income on housing and married couples have to live with their parents for years before they can afford houses,’ he says. ‘Prices will keep going up in double digits for years.’
‘Look at what happened in San Francisco in 2001 and 2002, when the area lost 100,000 jobs,’ says Toll. ‘Prices fell, yet 12 months later, they hit new record highs. Today a down cycle means that only two people want to buy your house instead of ten.’
‘Toll argues that even with increased construction in some markets, the flow of new houses won’t keep up with the ferocious demand that is a natural outgrowth of demographics. He points to the 80 million baby-boomers who are reaching the prime age for moving up to fancier homes and securing their havens for retirement.’
‘Look at what happened in San Francisco in 2001 and 2002, when the area lost 100,000 jobs,’ says Toll. ‘Prices fell, yet 12 months later, they hit new record highs. Today a down cycle means that only two people want to buy your house instead of ten.’
__________________________________________
The fake recession of 2001 will now begin in the areas that avoided it because of the massive helipcopter drop by Easy Al.
‘We’ll reach the point Europe reached 20 years ago, where families pay 45% of their income on housing and married couples have to live with their parents for years before they can afford houses,’ he says. ‘Prices will keep going up in double digits for years.’
Why do I have the sinking feeling that he regards such a development as progress?
Clearly he did think it was progress or he wouldn’t have said it. And it shows just what kind of greed is in the mind of your average CEO.
Indeed - power is all that matters. The concept of the commoners have freedom is anathema to them. It is not enough for them to be richer than the kings of old - you must be poor and miserable as well.
maybe cause taxes as percentage of gpd have tripled since the 40’s
that’s the progress the “progressives” love
You can always count on flat to wheel out a boogeyman. Cya tomorrow.
Meanwhile, he was selling his stock. He was pimping, nothing more.
Huggy Bear was a much classier pimp.
“He’s an outspoken believer that, yes, the world really has changed this time. That the traditional boom-to-bust housing cycle is now a smooth upward climb. That housing prices will keep rocking practically, well, forever.”
———————
Man, that is just beautiful!
Which newspaper did this come from? It would be nice to get an original copy and mail it right to Toll HQ, or maybe fax them a copy every hour for a few months.
If nothing else, if you EVER see these kinds of sentiments in print ever again, you know it will be time to short the heck out of all homebuilders, lenders, etc. Maybe about 15 or 20 years from now?
Ben’s link was an archived article from Fortune Magazine (2005).
Man, I thought for a moment they were trying some reverse psychology — we’ve hit bottom; buy now before prices go back up! And the worst part is, some suckas would fall for it.
Actually wasn’t it from The New York Times Sunday Magazine? Cover story if I remember it. Of course the kids living with their parents until their 40’s is most memorable.
Once again, it’s time for Slim to weigh in with the tale about the family friend who once worked for Toll. His firsthand experience with their shoddy construction prompted him to create the following slogan:
Toll Brothers Homes: Guaranteed for five years. Then they fall apart.
Indeed. Toll builds crap and tries to cover it up with shiny fixtures. I think their other slogan is that “there’s no mistake that some caulking can’t fix.” I would love to see them go under, but I think they are fairly well capitalized and will likely survive. Bob Toll = A$$ Hat.
Total blast from the past…
That’s the way the Toll house cookie crumbled.
THE NEW KING OF THE REAL ESTATE BOOM
With housing sales soaring, homebuilders are the toast of this year’s FORTUNE 500–and none is riding higher than luxury specialist Toll Brothers. But what happens when there’s a slowdown?
By SHAWN TULLY
April 18, 2005
(FORTUNE Magazine) – No. 477
On a recent Monday evening in suburban Philadelphia,
Ah…..April 18, 2005……..
Sounds like a scene from Scarface — all the narcotrafficantes gathering around while they decide who gets what and what to charge.
‘For Toll, what looks to many people like pure craziness is perfectly normal, a reflection of a new supply-and-demand equation that will last a long time. He’s an outspoken believer that, yes, the world really has changed this time.
BWHAHAHAHAHAHAHA!
Thanks for posting, Ben. That was rich.
Outstanding look back Ben….
Who can blame a buyer for sitting on the sidelines with nothing but the sky is falling which it is everyday and night. I wish these news agencies would have run stories on how easy it is to get a mortage and the fall out from that, it may have averted this disaster.
In the mean time, the public is scared to death the house they may offer on falls even further, confidence is huge in this business until people are comfortable with their purchase we will continue to see look and wait no matter how low the fed goes or interest rates.
Animals wait for the weak of the heard to fall behind then they strike no difference in the housing crisis, people want to see the best house on the block with no offers and then go for the lowest price, if the seller or builder is really serious they will sell and move on?
I note with pleasure that you are starting to use those ‘period’ thingies. One day soon perhaps I will witness a few more commas here and there in your work, hopefully in the right places, and on that glorious day I might be able to decipher what you are saying.
no, no i love the stream of consciousness style
Some would call it “laziness.” Not me, mind you, but some….
Lemme guess….Faulkner fan?
not that, it’s just that I like shadow7’s style especially the way s/he always ends with a question mark?
Try reading it through again, but with Christopher Walken’s voice in your head.
I always thought it was English as 2nd language coming from a Blackberry while driving?
I enj
Comment by laughing boy
2008-02-06 15:19:03
Try reading it through again, but with Christopher Walken’s voice in your head.
Ahahahaha! Oh, golly! Fabulous! Everything is so much better now.
“Animals wait for the weak of the heard to fall behind then they strike no difference in the housing crisis,” -
Definitely Christopher Walken material.
Dang ol’ cataract of consciousness.
i too love the stream of consciousness style. william faulkner was great, but used so many big words. i try to avoid big words when i can, just like i avoid capitals and paragraphs because, you know, they take up so much of ben’s bandwidth. its not laziness because i’m saving the environment - i’m betting on the patriots to win that superbowl game - whose with me???
I never met a syllable I didn’t like.
I saw the best minds of my generation destroyed by
madness, starving hysterical naked,
dragging themselves through the negro streets at
dawn looking for an angry fix,
angelheaded hipsters burning for the ancient
heavenly connection to the starry dynamo in the
machinery of night
The English language does not borrow from other languages. It follows them down dark alleys, knocks them over the head and goes through their pockets for loose grammar.
“I saw the best minds…”
Howlingly good.
On the road trip===================
Confidence is significant, but is only the primary factor if buying is a sound economic decision.
Once prices started to fall, aside from debt being less available, people started to look at whether buying made economic sense. In most places, it does not. Prices are way to high relative to rents.
It’s that simple. To buy the house I rent, I figure my monthly cost would go up by 3-4x. That on its face means that it makes no sense for me to buy, which, given those economics, means that prices will have to come down, which means my down payment will be wiped out. Why in the world would I risk that?
Reversion to the mean is a powerful force. Why fight it?
He added that among subprime mortgage securities, he reckons they are likely near fair value, because, ‘you can’t go below zero.’”
I’m not sure about that. If the value of the underlying security (house) keeps dropping can’t these mortgages actually have a negative value?
Actually, if you assume possession of a house riddled with leins, these “assets” could be extreme liabilities. Some time ago, someone posted information about $1 houses in Cleveland–of course, these houses probably have past-due taxes, leins, and demo costs associated with them.
You don’t own the house, you own the security. I will buy any mortgage security, no matter how bad it is for $1.
Now, if there are laws passed that say you become the defacto owner of the house if the borrower stops making payments, perhaps you can have a value of less than zero. If you foreclose, you might have a negative value.
So, buy the securities for $1, and never foreclose. Keep your place in line if someone ever wants to own the property.
But if you don’t foreclose, people (the previous ‘owner’/FB will just live there rent free.
It’s just a “COUPON”, and a coupon can go to ZERO.
“Jeff Gibbs feels ‘peace of mind’ about the value of his $245,000 home being built, replete with crown molding and hardwood floors, that he contracted to buy near Phoenix. ‘If the market keeps on going down before I buy, I’m going to get the lower price and that means a lot,’ said the 28-year-old sales and marketing rep. ‘It’s almost like they’re thanking me for buying when I did.’”
You get a lower price and a knife set. Is this being done to maintain the LTV ratio needed for financing to to through?
Thank goodness Toll brothers now thanks people, in the hot market this company didn’t care if you had a heart attack in the sales office they just stepped over you and said, next?
“said the 28-year-old sales and marketing rep.”
This dude was college hammer-head during the Dot-Com bust, and a acne-ridden monkey-spanker during the last housing bust…..but I’m sure he’s an “expert”.
Axepert, as in Axe Catcher
Ex-pert = Former drip, under pressure.
LOL. I’m five years older than that 28 y.o. buffoon and I’d have to agree with Ex-nnv: generations X and Y are going to learn about down cycles the hard way. Growing up in the age of computers and video games, we have no concept of reality. My wife and I are saving our $ in preparation for the carnage.
Ditto.
6 years older and yeah, none of us have seen a significant downturn. We bought in 97 (rent now), a year after college and it (obviously) went to the sky since then.
I AM 28!! And I remember both the .bomb and the ensuing recession (which latter hurt me personally). I also have vivid memories of the recession in 1990. Also watched my parents buy and sell homes at a loss as we moved for my father’s career.
I guess I was lucky to have a mother with a keen interest in economics. She never finished college, but she still taught me to pay attention to the macro-economic picture.
And to anyone my age or older who learned nothing from the dot com disaster, no sympathy!
Monkey-spanker. LOL
My vocabulary expands daily on this blog.
LOL. Sadly, you can’t use most of your newfound words in polite company.
You wanna bet on that one?
Hey Ex, Here are some housing stats from the Reno area for you! Enjoy.
http://www.financialsense.com/fsu/editorials/2008/0206.html
Hey hey, there are some people in that age bracket who see things the way they are. Not necessarily saying I’m one of them.
and a knife set.
A set of Falling knives, I presume.
“Jeff Gibbs feels ‘peace of mind’ about the value of his $245,000 home being built, replete with crown molding and hardwood floors, that he contracted to buy near Phoenix.
The small furry woodland creature sunning himself on a rock is in a tranquil state of mind as it dozes in the warm Colorado sun, heedless of the cold dark shadow passing overhead - a Raptor Hawk spying an easy meal. Similarly, another clueless cretin suddenly registers on Sammy the Housing Vulture’s Future FB Carrion-Detection Sensor, blissfully ignorant as he marches lemming-like to his date with destiny.
“In contracts signed before cancellations, the average price per home fell 13 percent to $634,000. After taking account cancelled contracts, the average price fell to $580,000 as buyers backed out of higher-priced homes.”
What was the average price of a Toll Bros home at the bubble peak? I am guessing $580,000 is at least 30 pct off, but perhaps my guess is biased by what I know of California prices, and the fact that Toll built lots of homes in California.
I think I remember reading in one of their quarterlies that it was 680,000 and another time (the peak?) it was 730,000. Don’t forget they built in many markets less expensive than California as well.
How could so many economists, ceo’s, financial managers, politicians and tthe likes been so completely off on all of this. I am getting real tired of reading the posts and all you here is “NOW is a good time to buy” I now skip right to the comments as they are a better read. So how many times can these people spew this garbage until they are called out on it?
Dang, here I thought I was the only one who skipped right to the HBB comments!
That’s OK. I skip your posts too…
LOL!
LOL - SLAM! Hey Arizona Slim, you need some oinment for that burn?!
Nope, I’m still laughing.
You gotta read the stories and then hit the links in some of them. Great comedy on an almost daily basis.
I usually gets a couple really good yucks as I walk around the mall reading HBB. I’m sure more than one person has wondered if I’m sane.
and the post are getting longer with more unbelievable stories everyday
i am sure ben has to pick and choose as to which links will make it to the daily ws thread
like tx-chick i enjoy the comedy daily
And over time, you can observe the NAR meme-building attempts as they develop. Reading this blog has made me a much more intelligent (and skeptical) consumer of everything I read. For example, click around on the web and note how people are spinning today’s productivity numbers in at least two completely different directions.
I’m convinced that economists, ceo’s, financial managers, politicians only talk to each other. “Best time to buy” just gets passed around that circle time and time again…
Actually I think there is a Diagram much like the Home Land Security Threat Level meter.
(Red) Buy before you are priced out forever,
(Orange) Healthy Gains in real estate
(Yellow) Buyers have never had it so good, Now’s a good time to buy
(Blue) We are near the bottom, now’s a GREAT time to buy.
(Green) We are giving them away, get yours now before they are all gone.
Very clever, and, unfortunately, true.
I said it before and I’ll say it again. Don’t you guys feel guilty for saying all those bad things about Britney Spears?
Why? I have no interest in Ms. Spears, but from what I just googled; Ms. Spears seems to be an out of control alcohol/drug abusing young lady.
She has little respect for herself or for her family.
And this is different from the FB’s how exactly?
Hoz:
No, you missed it! Her manager has been grinding up drugs and putting them in her food. Her mom went over there with her dad and her sister, and they discovered the whole thing. Now there’s a restraining order against the manager (Osama Lutfi). That’s the real reason why they put her in the psych ward and gave control of her estate to her dad. It’s to get her off the psychoactive drugs and take control away from Osama.
I am very skeptical of this. I hope it is true for the young ladies sake, but my natural inclination is either a legal maneuver or a publicity stunt.
And as FP,Sell Sell (wonderful name btw) so aptly stated and I concur, I am tired of reading “Its a Wonderful Life” stories from every FB.
Where the @@@@ is personal responsibility?
Merci.
And I sympathize with you about the responsibility angle. It’s an uphill battle. Sigh.
Preach on, Brother Hoz!
umm… the drugs he was giving her were two prescribed medications from a psychiatrist she has been going to… and both medications were meds used commonly to treat bi-polar and/or schizophrenia.
sounds like her manager was doing his job and trying at least to get the sick fork to take her meds.
…and, personally I am sick of hearing about her craziness. She should take her meds and stay out of the news. criminy. :-/ she should probably be locked away from her parents for her own protection. poster parents for why stupid people should not breed.
Athena:
According to the restraining order, he was not giver her the meds according to her prescription. Rather, he was grinding them up and putting them in her food in order to control her mood/behavior. He also claims that the psychiatrist was working for him. This wouldn’t be the first case of a shrink who was willing to prescribe improper medication to a generous client (or, in this case, perhaps the client’s “manager”).
How much you want to bet Kevin Federline put Osama up to this? He’s the one really cashing in on all this.
For all of you skeptics out there, “Osama” has a history of restraining orders and obsessive, controlling behavior:
http://www.msnbc.msn.com/id/23017882/
ditto, athena. Britney had what, one hit record? And now she’s a celebrity on par with Monica Lewinsky? So we’re now subjected to a daily dose of Britney’s tribulations.
Please just keep pumping me with reruns of “Survivor” or “American Idol” and drop the Britney frenzy…
die, thread, die
“Buyers seem to be hiding”
We are right here in plain view. You just have to look and lower your prices another 40%.
60% brother.
Wifey and I are invisible to the realtors.
This summer, we drove our 8 year old honda civic to about 30 open houses in ritzy towns (aka very solid school systems). I can’t tell you the amount of times we were told about more affordable homes in less expensive towns (aka schools fighting for accreditation) before we even got through the doorway. I’m glad to hear about options, but these realtors didn’t even let us see the house first, then while taking the tour, they continued to spout off about the more affordable towns.
It was embarrassing for the realtors, they should have been in the driveway kissing that Honda…Wife still gets ticked about it….
Exact same thing happening in Denver. I drive up to million dollar open houses in my 10 yr old Honda Accord and nondesigner clothing, and they ignore me, or tell me that I might want to look at other open houses (pointing out ones in more affordable communties although they never ask my price range) focusing much more on the flashy couple in the new Range Rover. They just can grasp the concept that the other guy is probably in debt up to his ears, and I can pay 50% down in cash, very likely have a higher salary, and have no debt. It no longer bothers me. I make a game out of it. I ask them what they think think about burst of the housing bubble. Once they start the its a great time to buy nonsense I let them have it. Two actually told me they didnt know what to think, and asked we what I did. Once I told them and gave them my card, they knew I was legit and asked me about the effects of rate cuts, the Bush plan and the recession. I took their cards and actually may call them when I feel prices are bottoming. See I’m not a total monster.
It’s funny. I’ve never had that reaction. We drive up in my 7-year old car, or walk to the open house. I think because we live in the Bay Area, the realtors never know whether we have Google money oozing out of our bank account, even though we look like we eat out of cans.
I do think it would be different in San Fran, Silicon Valley, Boston, etc.
True story….
Back when the Dodge Viper first came out, a guy I know (who is a die-hard Dodge guy) who owns a very successful independent auto repair/transmission shop went out to buy one.
Went to the only dealer that had one on the showroom floor (in his work uniform, naturally)…..sales guy basically said “We don’t let guys like you sit in the car, much less test drive it…..” This kinda p.o.’d my buddy.
He went to the bank, got a $70-80K cashier’s check, went back to the dealer, went direct to the Sales Manager with the check, and asked him if they were planning to sell the S.O.B, or not?
And, by the way, keep the salesman he had previously talked to OUT of the transaction.
I would have said I’ll buy the car right now, and here is my check, contingent on me watching you fire him on the spot. Im sort of mean. It’s the bitter renter in me.
Realtors who act like that are just plain stupid, and their stupidity will result in lost sales. Some of the richest people I know drive old cars and dress straight out of the L.L. Bean catalog, when they aren’t wearing their grandparents hand-me-downs. Why offend people when you can be nice to them instead? Sheesh.
Well, actually, they’re being wise. You can’t sell a huge, tyvek-covered pile of cardboard for 400% more than it should cost to somebody who has a lot of money because they know how to handle money, you got to court the guy in the silk suit who’s leasing a flash car and has 25 credit cards.
Good point.
I thought the LL Bean catalog was for rich people?!
So 80’s.
My husband and I used to get that reaction all the time. Lately we have not been shopping for much in person and I find I get very good treatment from businesses especially the second time around after they know that my checks don’t bounce(or after they run our credit rating) but it has been four years since I bought what I would consider a big ticket item.
We’re waiting to the return of days when Realtors drove Buick Centurys, not Mercedes. When a credit score meant something. When sellers were glad to get an offer and willing to negotiate. When you didn’t have fake bidding wars. When an appraisal was honest. When having a downpayment means something. When not any drooling moron had the right to buy a house and bid prices up. When fake price increases of $10K an month don’t exist. I’ll come out then, maybe.
I’ll come out if clay aiken or barry manilow come out also. and that other guy that raided barry’s wardrobe. him too. matter of fact I ain’t coming out any time soon cause he’s crackin’ skulls . . .
lets call the whole thing off.
“A woman walks into a bar with a poodle under one arm and a 2 foot salami under the other. She walks up to the bartertender, sets the poodle on the bar and says..CRASH!!”
I always wanted to here the end of that joke, darnit.
Me too
I happen to think the fake bidding wars could be good for us on the sidelines. When the used home salesperson tells us that someone else is going to make an offer on the house, we can tell the used home salesperson to let them have it and move on to the next one.
I doubt that they will get in tune with the problem. The only homes I have considered the past couple of years are ones that the selling agent has told me that they are open to any offer.
The absolute best solution to fake bidding that I
have ever read about is to write a clause in your
offer that *reduces* your bid by 1% for each
and every bid above your own.
Thus, if a legit buyer makes a bid above yours, he
better get ready to sign on the dotted line. If a
fake bid comes along, the selling agent will
have some explaining to do. (I would love to
be a fly on the wall during *that* conversation)
We’re waiting to the return of days …when men were men, and women were women, and you could get a decent cup of coffee for a nickel.
If I could remember those days, I’d be right there with you. *grin*
and transexuals were transexuals? *gg*
>>We’re waiting…
Great post Mo Money! Really says it all … I’m saving it…
Look up in that tree - see my roost? And that’s me, Sammy the Vulture, waiting patiently - note the implacable glint in my eye. I’ve got all the time in the world. Sadly, you, Mr. Seller, don’t.
“‘Buyers seem to be hiding,’ he said in a statement. ‘The market’s problem is a lack of confidence, not just regarding the direction of home prices, but … the overall economy.’”
So what is this jackass really saying? Anyone care to take a shot? He’s implying there are buyers and at the same time they don’t exist because he can’t see them? Is he playing the blame game with folks who decided not to buy(us) because his junk is overpriced by 200-400%? Or is he making excuses to shareholders because he has no excuse?
He is saying “Invest in Asia”. The market in China never goes down.
“As the housing slump drags on, some builders have a deal for potential buyers: Sign a contract, and if the price of comparable homes drops before closing, you get the lower price.”
Ah, yes. But that all depends upon what definition of “comparable home” the builders use. Better read the very fine print…
“As the housing slump drags on, some builders have a deal for potential buyers: Sign a contract, and if the price of comparable homes drops before closing, you get the lower price.”
You also have to rely heavily on the builder still being in business!
“Rating firms have been accused of conducting weak analyses and granting higher ratings because they are paid by the companies or issuers whose securities they rate. Critics also blame them for failing to highlight risks secured by pools of mortgages, including subprime mortgages for U.S. borrowers with tainted credit.”
I continue to blame the government. They set the rules, they provide the oversight. The ultimate blame is on our elected officials.
“The ultimate blame is on our elected officials.”
Bingo. But an admission of guilt isn’t enough. These creeps need to do some time.
I don’t know that the SEC had oversight of the raters until recently.
You want to rely on these guys?
‘There ought to be some relationship between that financial institution and these people that are negotiating these things,’ Grassley said, adding that originators need to pay more attention to the income and ability to repay of borrowers. ‘We’ve got evidence that they gave loans to people who didn’t have jobs or even bothered to look to see if they did.’
An explanation I got of rating agencies is that they take information about a set of loans and then rate them. They don’t investigate the truth of the information they are given - that’s not even their job. Thus, if a bank says “we got all these great loans, see?”, the rating agency can say “looks good!” and that’s that. The whole thing depends on a lot of willful denial. The banks didn’t want to know anything that would make a loan look bad, because they would have to tell the agency and then the loan is downgraded.
“Sirva Inc., the moving company doing business as Allied Van Lines Inc. and North American Van Lines Inc., filed a pre-negotiated bankruptcy for itself and 58 affiliates, citing the slowing housing market.”
Serves them right. My new company goes through Sirva for relocation. Through Sirva, I received two moving bids, one from Allied and one from North American . . . both were outrageous with one bid being over $12,000 for a 2,300 SF house and 600 mile move. I ended up ditching both and hired a local reputable mover for about $5,500. Used the savings for other moving costs. Buyer beware with these clowns.
Wow, another local hit this week! First Wickes Furniture and now Sirva. I worked right down the block from their big building in Westmont, IL on Oakmont.
I had the same thought. Those guys aren’t in bankruptcy because of people not moving, they’re in bankruptcy because they run their business badly. They got used to quotes that were 2x too high, because the HR depts of the world couldn’t negotiate worth a damn.
No i think it’s worse than that. If you read the article it says that they were offering a package that included buying the employee’s home and then handling the resale, and absorbing any resulting losses.
So i bet what actually happened is that some greedy s.o.b said “Oh, house prices never go down” we can make money off both ends of this. Besides the (now) obvious, it would also have provided an easy fraud opportunity for any company employee that thinks things through.
When you move they give you an option: 1) sell the house on your own,(2) pick two appraisers from their list and they will average the appraisal for a buy out price (60 day offer, after 60 days you are on your own) with money delivered to your bank account in 24 hours. From my experience (self and friends) appraisals are on the low side, but you don’t have to do any repairs, etc, just move out and in a down market at least you can get an immediate buyer for your property. When they buy your property you have no RE fees, and all prepayment fees (loan) are paid by them too (adds up to a tidy sum).
yeah, you’re right- fraud opportunities galore!
Reading further, they funded four consecutive years of operating losses with a line of credit and their interest costs killed them.
It’s a big-a$$ FB, funding losses with a HELOC that just ran dry . . .
I was debating whether to post this but I guess I have to…
I interviewed with Sirva about a year and a half ago. I like the people I met. They were bright and motivated. During one of the final interviews, a four on one, I asked point blank how they thought the coming downturn in the housing market would affect their business.
It was a very important question because it seemed to me that they were completely exposed to any downturn in the housing market. After I asked the question the interviewers became very uncomfortable. It was as if I’d spoken the name of “him we do not speak of”.
Everyone fidgeted, some looked down at the table and one answered. Her answer was suprisingly honest in some respects, considering the level of rah-rah that was still going on at that time. She said they did see a slowndown coming and that they thought it would affect the business to some extent but that they didn’t think it would be too severe.
Didn’t take the job.
“Jeff Gibbs feels ‘peace of mind’ about the value of his $245,000 home being built, replete with crown molding and hardwood floors, that he contracted to buy near Phoenix. ‘If the market keeps on going down before I buy, I’m going to get the lower price and that means a lot,’ said the 28-year-old sales and marketing rep. ‘It’s almost like they’re thanking me for buying when I did.’
Ok, so good idea in theory to lower the final price if the market goes down. howver, do YOU trust the builders/real estate industry to willingly accept any markdowns? and just who detrermines how much the house should go down in price? I’d bet the sales crew just glosses over the details & rushes the buyers into a contract. I can see this marketing gimmick as chocked full of loopholes to benefit, who else of course, but the builders.
I want to actually see/hear/read about this happening . . .
without a major hassle by the buyer to make it happen . . .
without a lawsuit to force the builders to abide by their agreement.
very skeptical about this proposed “deal”. good luck joe homebuyer.
Jeff Gibbs is a dumb ass for taking the bait because that is exactly what this price matching gaurantee is…. bait. And Jeff is just another sucker that got reeled in. How is it any different that a “free” car or jumbotron TeeVee? It’s interesting how these sellers and builders run from the very medicine that will cure their ailment.
This time last year I was hot to trot to buy something. This year, could care less and not even looking.
That’s funny, I’m your mirror image in that respect.
You represent a very scary reality for the REIC then, because if even qualified, real buyers like yourself are sitting out, then the bottom is much, MUCH, further down than anyone thought.
I too have decided to stop “looking” at $500k houses that should be priced at $320 but are still sitting at $497. The refusal to “get real” on the builder/realtor/seller side has made me lose interest in moving up at all, and now I’m putting some new trees in my yard and refurbishing my pool. Maybe in 5 or 6 years if they’re lucky I’ll casually look at some listings again.
My wife and I are spending money and effort to make our rental more livable for a potential second child (a couple of years off). New bedroom furniture to make room for a desk, clearing out unneeded clutter, re-wiring the house to more some equipment into out of the way places, etc.
I think this downward slide will be long and drawn out.
We’ll look at a house, but mainly from the outside as we walk past it on our way to coffee, noting that yes, it’s still on the market.
What’s the rush?
“What’s the rush?”
Somewhere a brassy real estate agent is in need of her Botox injection. Where’s your sense of compassion man?!
Careful, Rental Watch. You don’t want to spark another coffee war on the blog!
I’m just throwing out offers @ sq’ that I’m willing to pay for that area. No takers yet, but eventualy I will get an 2001yr price in a nice area. I have three arease I’m looking @. One I will pay $110 per sq’ one @ 105 per sq’ and one if nice $75 per sq’. These are all below what they are currently asking. Just keep trying! They will eventualy meet your price.
BTW. I have been reading this blog 3+ years and have never responded to this or any ather blog for that mater. Ohh! And It might be different here. Every home owner is getting solicitations to lease gass under their home lots. Highest offer $17,000 per acare.
“This time last year I was hot to trot to buy something. This year, could care less and not even looking.”
I went on four househunting trips last spring/summer. Then I found Ben’s blog and quit looking. The agent we were working with stopped calling in September. We’re moving into a great new rental next month.
Thank you, Ben!
There have to be loopholes. Someone posted the other day about how the fine print might say the gimmick applies only to prices on “identical” house models.
mission aCOMPlished
“It is a strategy shift for the ailing industry, which initially resisted price cuts as the market softened. Builders first offered freebies like granite countertops. Then, in September, Hovnanian Enterprises Inc. held a national ‘Deal of the Century’ bonanza offering discounts into the six figures, a move other builders quickly copied, even though it can drag down a neighborhood’s value and incense earlier buyers.”
Hey,
This is taking non-profit a little too seriously!
“U.S. Central Federal Credit Union, the non-profit company that invests on behalf of 8,400 local lenders, lost its AAA rating from Standard & Poor’s after reporting a $760 million drop in the value of subprime-infected securities.”
Bloomberg interviewed U.S. Central on February 5th in advance of the S&P news. The resulting article contained several inaccuracies including comments that U.S. Central had a $760 million fourth-quarter write-down resulting in a nearly 2% loss of its total assets.
In fact, the amounts referred to are part of the increases in unrealized losses that all financial institutions face. These losses are considered temporary and have not been recognized through their income statement.
Generally Accepted Accounting Principles require securities available for sale to be reflected on the balance sheet at fair value, or “marked-to-market.” The difference between the original purchase price and the current market value is shown on the balance sheet as Accumulated other comprehensive income (loss). These are often referred to as unrealized losses.
When markets are bullish, financial institutions often show an unrealized gain. When markets are dislocated, as they are today, they often show an unrealized loss. This is a normal part of the accounting for the securities held for sale classification.
“DiPiazza declined to comment on how big he thought such write-downs would be, saying it varies with companies.”
“‘I will not underestimate the challenge we have working through a lot of complex securities and getting them valued,’ he said. ‘We have to ask the question, what’s under the surface.’”
From where I sit, it appears to be a gaggle of Black Swans…
I posted this on an earlier thread (sorry…), but keep ‘ol Robert Toll in the back of your mind when you read this article from today’s IHT.com
“Researchers have shown in careful studies that people tend to be poor judges of their own performance and often to overrate their abilities. Their opinions about how well they’ve done on a test, or at a job, or in a class are often way off others’ evaluations. They’re confident that they can detect liars (they can’t) and forecast grades (not so well).
This native confidence is likely to be functional: in a world of profound uncertainty, self-serving delusion probably helps people to get out of bed and chase their pet projects.
But it can be poison when the job calls for expertise and accountability, and the expertise is wanting.”
http://iht.com/articles/2008/02/05/healthscience/05mind.php
“Researchers have shown in careful studies that people tend to be poor judges of their own performance and often to overrate their abilities. Their opinions about how well they’ve done on a test, or at a job, or in a class are often way off others’ evaluations. They’re confident that they can detect liars (they can’t) and forecast grades (not so well)
That’s the truth! I am still always surprised when a student calls months after the finals asking me why he didn’t make an A in the class… after a string of 80’s and skipped extra credit assignments.
And an hour later:
‘Upscale Builder Toll Says Buyers Are ‘Hiding’
Ah…. a game of Hide N’ Seek.
More like this “Hide N’ Seek” I suspect.
http://imdb.com/title/tt0382077/
That was a dictation mistake. What he really said is thay buyers are “high tailing”. Easy to get confused.
Regarding- Buyers Seem To Be Hiding…
“When prices stopped rising-when the supply of people who were buying for an increase was exhausted-then ownership on margin would become meaningless and everyone would want to sell. The market wouldn’t level out; it would fall precipitously.”
John Kenneth Galbraith- “The Great Crash 1929″
THANK YOU! The buyers aren’t “hiding;” they already bought. The funky loans used up 5 years of future demand.
The media thinks that the housing bubble popped last August, but they are about 12 months too late. That 12-month Mexican standoff in 2006 or so when “nobody was buying” was really the point when the Ponzi scheme hit the bottom level and we ran out of pyramid. So, Housing prices stopped going up, just in time for the big wave of subprimes resets to NOT get refinanced. Then, and only then, did the securities market take its nose out of their caviar and realize they’d been fooled by Tan Man Mozilo, deferred interest, and Moody’s & Co.
“‘Buyers seem to be hiding,’ he said in a statement. ”
Despite Bobbie Troll’s reports to the contrary, I’m NOT HIDING!!!
I am just keeping a very low profile and a very careful watch upon MY little pile of hard earned money
I’m hiding my money from ridiculous home prices!
From the USNews link Ben provided above:
“Toll said in a statement that suggested that even price declines averaging 13 percent weren’t helping the company move inventory.”
I wonder if that’s a true (ie weighted) average of 13% or more like a median/average price discount…?
I’ve been reading “The Great Crash 1929″ and if we aren’t on the verge of Great Depression # 2, we must be awfully close…
Every 5th page, there’s a striking simularity to today’s monkey business.
Pay particular attention to the chapters that talk about the value of cash.
Back then folding money and Gold were same-same.
Big difference now.
Wrong. Today you can exchange your folding money for gold. Back then you couldn’t.
Americans could own any Gold Coins dated before 1933, quite legally in any fashion until 1975, when it was decreed that you could own Gold in any which way you’d like.
You’d have to pay on the basis of $35 per Troy Ounce after 1933, not $20, as it had been for well over a century, though.
Ooops..He ALMOST saw me ..stay LOW when you pass the popcorn Neil
LOL
“We have to ask the question; What’s under the surface?”
Which is why I would be running from ANY kind of investment, and converting it to cash and/or PMs. Much like the alien life-form in “The Thing” (the 1980 version), things look normal, until it is waaaay too late to do anything about it.
I thought that the Wall Street guys that you paid the big bucks to were being paid to identify these issues, and steer people clear of them.
When the general public figures out that an E-Trade account and a dart board works just as well, Wall Street will be toast.
“I thought that the Wall Street guys that you paid the big bucks to were being paid to identify these issues…”
No kidding! They best get their paid shills in the MSM to keep telling Ma and Pa Kettle not to pull what’s left of their retirement savings.
“Whatever you…don’t sell that cow!”
I think this “loss of trust” is going to be one of the biggest casualties of this whole thing.
In my business, I am paid to to do my job, so that the pilot and/or owner of the airplane doesn’ have to worry about it breaking on them 1000 miles out over the Atlantic. If I screw up, people could die, and I will lose everything I own due to certificate revocation, lawsuits, etc.
I used to think other so-called “professionals” felt the same obligation to the people they worked for. Some still do, although it seems that weasel-like behavior is rewarded more than it is punished in this country.
Call me a Neanderthal, but what this country needs most right now is a little less “sympathy”, and a few more “firing squads” (either literal or figurative). I’m not betting on that happening……
I like your anger.
I’m an old guy……when my kids screw up, it’s kinda funny, because some things you just have to learn on your own.
It’s the stupidity of people that are older, educated and should know better that makes me want to have a personal “Chernobyl”.
I used to think the people that came on Jerry Springer and Maury Povich were fakes……..then I got a job as a department manager for 10 years.
My Dad puts a whole lot of stock into “experts”. As in, I should find a doctor whom “I trust”. Or that I probably shouldn’t homeschool after early grammar school because “I’m not a teacher”. (My Dad is good guy in general and relatively gently and infrequently expresses his concerns about my admittedly unconventional choices.)
Problem is, though, that the best economic, personal, and health advise I ever gotten has been scouring the ‘Net for blogs and information sources like this. When I’ve screwed up in my life, it’s for 2 general reasons: because I haven’t paid enough attention and/or thought things through, OR when I took mainstream/expert advise even though I knew it didn’t make any sense.
The later has happened enough to convince me that my judgment isn’t 100% perfect but it’s functioning better than everyone else’s opinions that pertain to my life. At this point, I’m just trying not to screw up big time.
Wow, I need to not post when I’m this tired.
Why not? It was a good post!
Sometime ago I wrote down this quote from Andy Grove (of INTEL):
“Drive deep into the data, then trust your gut.”
I find this to be good advice; when both your intellect and your “feelngs” agree you are probably making the right decision.
FWIW.
• The NY Giants won their first Super Bowl in 1987; the Great US Stock Market Crash appeared later.
• The NY Giants won their second Super Bowl in 1991; the last US full-blown recession appeared; money center banks barely avoided the abyss.
• Before yesterday, the last NYC ticker-tape parade was 2000 (Yankees); the Great US Stock Bubble burst.
• The NY Giants won their third Super Bowl in 2008 and received a ticker-tape parade; head to the caves!
Bill King
So if only the Packers had won, we would not be in this problem. lol
What if the Patriots had won?
The we would have to listen to Mr. Tom Brady doing commercials for a year. ugh
Tom Brady has only done a few commercials unlike Ely’s older brother. You can’t watch a game without listening to Peyton during every single break. UGH!!
I’m not hiding–I’m just bored with $500k tear-downs “reduced” to $495k because the “seller is motivated!” Anytime they want to get serious, I’ll be right here waiting.
c’mon! you can’t just expect the sellers to just “give it away”, even if they are motivated! sheesh!
“257 contracts values at $198 million….”
Should be “257 contracts at $100 million or less…..”
Surprised I am the first to comment……..you guys are slipping……..:)
Here is some Realtor BS from Fort Collins, CO. “The Group” is the largest brokerage in Fort Collins. Back during the late 90’s they were so dominant that they could get away with charging 7% commission.
http://www.coloradoan.com/apps/pbcs.dll/article?AID=/20080205/BUSINESS/802050317/1046/CUSTOMERSERVICE02
I love how “The Group” says in the article that this year will be an improvement over 2007, but estimates that total number of sales will be lower than last year….
Jack GuttenTag writes on Yahoo advocating disclosure of mortgage broker kickbacks.
Check out the squealing from the mortgage brokers in the comments to the article.
The comments ranged from: Don’t pick on the little guy; Banks are worse than Mortgage Brokers; The fees are needed to give customers the best service (rolling eyes); It’s govt/Wall street’s fault.
Good read-thanks.
Leigh
“‘We’ve got evidence that they gave loans to people who didn’t have jobs or even bothered to look to see if they did,’ he said.”
Someone here hasn’t been paying attention . . . 1) buy a home with stated income and get enough cash back at closing for living expenses and mortgage payments, 2) buy another property with cash to you at closing, 3) extract equity every year as values go up . . . who needs a job when RE pays like this?
So, Seattle is not different after all. It’s just lagging.
http://seattletimes.nwsource.com/html/businesstechnology/2004168019_webhomesales06.html
Home Less Protection Program
“‘Buyers seem to be hiding,’ he said in a statement. ‘The market’s problem is a lack of confidence, not just regarding the direction of home prices, but … the overall economy.’”
Islamic banks shielded from subprime
Mon Feb 4, 2008 4:03am EST
By Mohammed Abbas
MANAMA (Reuters) - Islamic banks have been largely shielded from the U.S. mortgage crisis, which may even open doors for expansion beyond traditional strongholds in Arab and Asian markets, Bahrain’s central bank governor said….
http://tinyurl.com/3acdu7
Okay - this to me falls into the category of “news of the weird”.
Because they can’t charge interest, don’t Islamic banks have to even weirder math than your average CDO to figure things out? Along with an ownership interest in the money you are not “borrowing” that causes most Islamic banks to (almost) require you to pledge your first born?
I also was under the impression that the sharia laws under which these banks run are somewhat and/or totally incompatible with the assumptions of the English court law system? (Open to being wrong, too lazy to research…)
I suppose, though, if you are the only bank lending money you can require what you want. However, I don’t see Islamic banks lending to even a fraction of the people that got loans in this last boom.
“I don’t see Islamic banks lending to even a fraction of the people that got loans in this last boom”
I don’t know it either, however, I suspect you are correct. I know of few “Islamic banks” were active in pushing their loans during the boom in SF bay area.. e.g.
http://www.guidancefinancial.com
don’t know if they were successful.
“U.S. credit markets are trading as if the economy is in a recession because investors’ ‘fear has overwhelmed greed,’ Goldman Sachs CFO David Viniar said today. ‘Credit markets are trading like we’re in the middle of the worst recession we’ve seen in a very, very long time,’ Viniar said at an investor conference.”
Hey Viniar, do ya think???! What the hell was you first clue? Gotta lov that phrase ‘fear has overwhelmed greed’. Let me tell ya Viniar, I have no fear but you and your greedy a$$ buddies are swimming in it.
“Even after trimmed price tags, buyers could still decide to walk away, keeping cancellation rates elevated. And if prices decline during construction, companies could see gross margins, which hit 25% during the boom and have plummeted to razor-thin levels, further stressed.”
______________________________________________________________
Kurtz: I watched a snail crawl along the edge of a straight razor. That’s my dream. That’s my nightmare. Crawling, slithering, along the edge of a straight… razor… and surviving.
Quote: “As the housing slump drags on, some builders have a deal for potential buyers: Sign a contract, and if the price of comparable homes drops before closing, you get the lower price.”
And this will be the first time in history that builders actually get the job done by the date they promised. Just so they don’t have to give a lower price.
“CEO Robert Toll,..said that despite historically low mortgage rates and falling home prices, a slowing economy could be spooking buyers.”
Okay, I’ve had it with being described as “spooked,” as if I’m a large, dumb, easily-frightened grazing animal.
Where was Grassley, when he could have made a difference?
“‘If there’s criminal activity — and the FBI’s investigating it — heads ought to roll or it’s going to be repeated,’ Grassley said.”
The cow slipped out the barn door and was slaughtered, years ago…
“CEO Robert Toll,..said that despite historically low mortgage rates and falling home prices, a slowing economy could be spooking buyers.”
*cough*
foreclosure animals in S. Fla
vid on top left. that’ s one prediction I made 3 years ago that I wish were not coming true
http://news.yahoo.com/s/ap/20080206/ap_on_bi_ge/toxic_pet_food
“Goldman Sachs Chief Financial Officer David Viniar said Wednesday that the firm wants to be a buyer of distressed mortgage debt. ‘We will be a buyer if there is a seller, at a reasonable price,’ he said.”
“He added that among subprime mortgage securities, he reckons they are likely near fair value, because, ‘you can’t go below zero.’”
Look @ Goldman Sachs and their agents of zoom, trying to breathe respectability into a moribund market, by offering next to nothing, proudly.
“In contracts signed before cancellations, the average price per home fell 13 percent to $634,000. After taking account cancelled contracts, the average price fell to $580,000 as buyers backed out of higher-priced homes.”
This is just ridiculous…$580K for the average home price for KHov homes? Who do they think will afford these homes?
You know, the more I see this, the more I believe as a non-homeowner, we are so screwed. Alot of you believe the prices will come down or whatever…and some places have seen that I’m sure…but frankly, in places such as LA, SF, etc….these price corrections are not enough.
We see that our only way to get into the housing market will be to buy a bank owned home. Banks say they will negotiate, so I’m wondering how low they will go?
They’re going to have to give in at some point, for prices are just too high for the average income. How much further might prices fall in Riverside, CA?
Don’t hold your breath waiting for a bank to respond to market conditions. Have been monitoring a few REOs, and the banks have let them sit for years. They appear no less delusional than individual sellers.