Bits Bucket And Craigslist Finds For February 29, 2008
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Ah, the builders, those choice examples of why it was a good idea to evolve opposable thumbs: so they could hold hammers and make so many beautiful giant subdivisions in the freakin’wetlands and/or remote pristine deserts, or even in Texas.
For those HBBers who reside in Washington state, how about you call up the legislative hotline number at 1-800-562-6000 –and give firm opposable thumbs up for SB (senate bill) 6385. Here, I’ll condense the bill: ‘…any construction professional involved in the construction of improvements upon real property intended for residential use, which may not be waived, must exercise reasonable care in the construction of the improvement.’ Allows for damages to be recovered. Declares that the act does not apply to condominiums subject to chapter 64.34 RCW.
What? Huh? Make sure the building you build isn’t defective? That’s crazy talk! Nevertheless, let’s give it a try. The builders, developers shot it down last session, and are sure trying for that again, but it turns out that leaking roofs and exploding toilets often anger people who get leaked or exploded upon, and that works in SB 6385’s favor. Now, Hbbers, let’s call quickly, because things go fast. Just take your coffee and stagger to the phone and make the call now, okay? Okay!
(and I don’t know why condos are exempt. Possibly because they’re already so craptastic hereabouts? It’s a mystery.)
“must exercise reasonable care”
What does that mean? I’m not sure lawsuits are the answer.
A better idea is for both consumers and suppliers of services to use a website that gives insights into the reputation of a company and references, like a linkedin for construction companies.
Many states have statutes that require home construction to be done in a proper, workmanlike manner (or some such language). These are statutory warranties. Every builder contract has the buyer waive such warranties and limits all redress to the home warranty policy provided by the builder. Needless to say, when I bought a new home in a down market I had that proviso stricken from the contract. I also had the parent corporation, not the limited liability entity that actually built the home, warrant that the home would be built in a proper, workmanlike manner.
Olygal,
All of the states have statutes regarding construction defects in residential housing and I’m not familiar with WA’s, but it seems to me that passing a poorly worded bill, “must exercise reasonable care”, is only going to encourage litigation regarding what reasonable care means.
So my question to you would be, will this protect the consumer or will it be a bill to promote litigation for the plaintiff lawyers?
Protecting the consumers is an honorable thing, but I suspect this bill would do more to promote litigation.
It’s the beauty of trying to weaken legislation. It has the perverse incentive of increasing the number of frivolous lawsuits.
Fun, fun.
Yeah, why should you be able to sue someone who you pay to fix or improve your house that does not use reasonable care in repairing your house. This is just a CRAZY idea.
Will, the insurance companies has been avoiding contruction companies for years because they’ve been loosing so much money to construction defect claims. If you think adding to the mix additional claims is going to fix the problem, you’re wrong. What I’m “suggesting” is that sometimes laws are taylored for the lawyers, which is not necessarily good for the common folks. dweeb.
“…in Texas.” “exploding toilets” Haha.
One of the nice things about living in the Dallas area is that this is one of the places where the county can explosively back up your sewer flooding your house with raw sewage and get away with a “Sorry!”.
Why would they do so? (or in what situation, perhaps?)
The situation: whenever what flows into a sewage system overwhelms the ability of the system to accept and discharge. This could be (1) if the outflow gets clogged or (2) if too much is flowing into the system, the commonest reason is excessive rainfall getting into the sewers, a very widespread design flaw in municipal sewage systems. Rainfall should be kept from draining into sewers by whatever means necessary, but this was seldom done in years past (to save $).
Sewage backflows may look explosive, but almost never are due to real explosions. In my high school days, flushing a chunk of sodium metal from the chemistry lab down a toilet was a neat way of blowing out a sewer line a floor or two down, but that is not what happens in a sewage backflow situation.
My town got 12″ of rain in 24 hours in 2003, and thousands of homes experienced sewage backflows for the first time in the town’s history, uncovering the construction shortcuts & omissions of the last century or so, and revealing the complete ignorance of the town’s sewer personnel and the area’s construction companies & plumbers on this topic. Areas of the country where flooding is more common (e.g. Grand Forks, ND) tend to be far more knowledgeable on this subject.
This incident occurred back in 1993 (and was still wending its way through the courts in 2002), so I’m not sure it is the one I remember. The one I recall left me aghast that the utility could get away with any such incident with zero liability. (Sorry! Act of God! or some such.)
http://goliath.ecnext.com/coms2/summary_0199-1526911_ITM
“On the morning of December 27, 1993, a crew sent by the city’s wastewater collection division unstopped a grease-clogged sanitary sewer main. The grease and sewage rushed down the pipe and caused a second blockage. This caused the sewage to back up the sewage main and flood the interior of the Jennings’ home. The flooding of the Jennings’ home was a one-time event.”
================
No regional sewage story is funnier or more far reaching architecturally than Seattle. IIRC, in order to keep people from being blown off of privy seats during high tide in the late 1800s, they built them on poles up in the air. When that didn’t work, they raised the entire downtown business area up by one floor. When too many people died falling into the sidewalks (down one level from the raised streets), they finally paved over the top of the sidewalks and the lower level storefronts then fell into disuse.
Take the tour
Don’t you guys have sewer backflow valves? If not, look into it . . . relatively cheap insurance against a backup.
Mr. Drysdale, many parts of the country have no idea what you are talking about. I live in one of them. The better quality backflow prevention valves are best installed in new construction or when sewer laterals are replaced, otherwise they are very $ to install. They are prone to clogging in an open position and failing just when needed.
If there is only one basement floor drain connecting to the sewer, an open standpipe is the easiest preventative measure to install, costs about $10. The plumbers in my area know nothing about this measure.
Actually sewage backflow is a construction issue for the homeowner, not a governmental issue. Workmanlike construction would mean some type of sewage backflow would have been installed when the house & sewer laterals were constructed, which is not a governmental responsibility.
“sewage backflow prevention measure”, not “sewage backflow,” that is what happens later if nothing prevents.
The legal/design responsibility of the authority maintaining the areawide sewer system is to ensure it doesn’t get clogged, and that it doesn’t accept fluid inflows (e.g. rainwater) that can overwhelm the design of the system.
Reasonable care is a negligence standard. It is already is a basis for civil liability. Also, isn’t there a permit process in Washington?
Yes, what about building inspectors that let this defective building get buy . Somebody posted a couple of years ago that the inspectors were letting the builder do the inspection themselves .
Jim Rogers… U.S. Out Of Control…
As always some will agree, some will disagree, but one thing is certain this fellow has been calling future moves correctly for a long, long time.
http://business.timesonline.co.uk/tol/business/economics/article3451136.ece
“And he also warned that it “made sense” if global competition for resources ended in armed conflict.”
Absolutely. Now is the time for our nation to become self sufficient in the basics. Perhaps this is why the PTBs are pushing hard (behind the scenes, of course) for a North American Union. I could definitely see a “Fortress North America” being self sufficient. Of course Americans will have to change their ways. If we remain stuck in the “hyper-consumer” mentality, then there is no way we can achieve self sufficiency.
‘If we remain stuck in the “hyper-consumer” mentality, then there is no way we can achieve self sufficiency’.
You are correct. Old habits are hard to break, this go round we may be forced into it.
The time for our nation to become self-sufficient was 1973, the first oil embargo. That horse left the barn long ago. The US still hasn’t filled its strategic petroleum reserve.
I think the war in Iraq is evidence of armed conflict for resources already taking place. If Iraq were not surrounded by oil-rich countries & if it did not have potentially huge unexplored resources, it would have been handled quite differently, more like Serbia was handled during the Kosovo intervention. US hyper-consumers tend to avoid making this connection.
Well the SPR is capital, not income. It does nothing for energy self sufficiency. The difficulty is that there is a tendency to worry about it only when supplies are low, so it tends to be a “buy high, sell low” program as far as the governmet is concerned.
The time for our nation to become self-sufficient was 1973,
WE WOULD HAVE BEEN, but thanks to the Sierra club and other true huggers, the Alaskan pipeline was delayed so long and it allowed OPEC to gain power…it would have replaced the 2 million barrels a day that was cut off…..
http://www.pbs.org/wgbh/amex/pipeline/timeline/index.html
I’m not sure if you’re implying we NEED a North American Union to be self-sufficient? If you are, I’m here to tell you you’re full of it.
Rogers is right on.
and that is why he moved to Asia last year …
Bush and Bernanke say we’re not headed for recession. LMAO! Didn’t Bernanke adopt the whole “subprime is contained” mantra?
Things are getting curiouser and curiouser…the rhetoric shift this week is most intriguing. What’s their plan - to talk their way out?
John, That kinda the scary part…only weapon left is rhetoric. They have fiddled while Paris burned,and while sure they have a few tricks up their sleave, they are saving those for the worst part?
“They have fiddled while Paris burned” Is that before or after the Germans bombed Pearl Harbor?
Don’t stop him. He’s on a roll.
Whenever this administration gets into a jam (economic or otherwise), their default mechanism seems to be “If We Keep Lying About This Issue, The Truth Will Cease To Matter.” The recession is treated the same way as hundreds of other unsightly problems, both large and small.
Bah.
Unfortunately they’ve only now discoverd that they’re not lead jammer and can’t just “call off the jam.”
I think the strategy isn’t so much lying as it is holding the dam until January 20, 2009. Things seem to be changing exponentially these days so it’ll be close…the 30 percenters still think all is well.
There are so many things about ’ssshrubery’s administration that bring back memories of bad dictators from the Ancient Roman Empire, the dictator Commodus, being his role model.
S.P.Q.A.
I think it’s more like the Mad Hatter’s Tea Party…There is no plan.
It’ll be a cold day in hell when any head of government and head of a central bank forecast a recession for their country.
ABSOLUTELY!! Always look at the self interest that one has in their opinion or forecast!!
Not only did Bernanke adopt the “subprime is contained” mantra, but prior to that he was touting the “there is no housing bubble” mantra.
Wells Fargo tightens mortgage guidelines
“Wells’ new guidelines adjust the list of markets it considers soft, distressed or severely distressed. It has ratcheted down the maximum amount of loans it will make in relation to the value of a property, which means home buyers will need to put more money down. In markets considered severely distressed, for example, it will not make a loan for more than 75 percent of the value of the home.
Twenty counties in California, including Los Angeles County and Orange County, are on the severely distressed markets list. At-risk markets around the country include 33 in Florida, 15 each in Michigan and Virginia, and 13 each in Maryland and Ohio. Many other states, including Arizona, Colorado, Connecticut, Louisiana, Massachusetts, Minnesota, New York, Nevada, New Jersey, Washington and Wisconsin had markets on the list.”
http://biz.yahoo.com/bizj/080228/1597695.html?.v=1
It is amazing to me that people don’t notice out of control prices until they can’t get a loan for the full amount.
Lending tightening seems to be happening geographically. That is, the lenders suddenly say “oopsie” and start cracking down in markets that are tumbling catastrophically.
So here’s my question: Will the so-called low-risk areas experience one last gasp of mad appreciation/speculation while you can still get easy money there? Or will the lack of out-of-state HELOC money just make them all wither away?
According to OFHEO, the last states with 7% appreciation are Utah, Wyoming, North Dakota, and Montana. Yeehaw, everyone stock up on houses in the West while you can!
(Take a look at that link for a nice cliff-like graph of national housing prices).
“According to OFHEO, the last states with 7% appreciation are Utah, Wyoming, North Dakota, and Montana.”
Perhaps some people in the know are quietly moving to a place that will be safe from rising sea levels and urban riots for food and gasoline.
Yeah, but when the big magma plume under Yellowstone blows, those places are goners [been watching way too much History channel].
“In markets considered severely distressed, for example, it will not make a loan for more than 75 percent of the value of the home.”
Is this a SHTF moment for SoCal home prices (or perhaps straw breaking camel’s back moment)? SoCal prices obviously are already on a downward trend, but I can’t believe too many people will have anything close to 25% to put down. This will kill the market.
Well there are probably still a few who have enough equity from their old place to do this. But far too many have been in HELOC/ReFi mode for too long.
Is this a SHTF moment for SoCal home prices (or perhaps straw breaking camel’s back moment)?
Let’s hope so. I know you have to in for the long haul watching this bubble unfold, but I’m getting impatient (no, don’t worry, I won’t buy).
We’re getting pretty close I think. I’d say this will kill the market when all the other lenders follow suit. We’re not there yet.
“In markets considered severely distressed, for example, it will not make a loan for more than 75 percent of the value of the home.”
That’s still too high.
DOC
This was first mentioned here yesterday at 20%.its actually 25%.I doubt very much there are many people out there that have 25% to put down on a home to “live in”.Of the ones that do how many will be willing to part with that kind of cash at this point in time?$150,000 down on a $600,000 house.Not gonna happen.
I just wonder how many lenders will follow this trend?
This will no doubt send prices into the gutter…….
Blog eater gobbled my post. Perhaps it will appear later. It had links to insurance cos. and Canadian banks circling the drain.
ugh:
Canadian banks circling the drain.
I am looking for it. ugh is in though and daughter.
I wonder, when the say “year-over-year sales fell 40%”, who is still buying, and more importantly - with what money? Are zero-down liar’s loans still available? I would expect the number for sales to go very close to zero at this point in time.
Supposedly, recent buyers in the higher-end areas of San Diego County are flush with cash.
Not sure I believe it — they (used house salespersons) tend to cherry-pick.
Definitely some knife-catchers out, though.
“Definitely some knife-catchers out, though.”
Oh yeah. I am amazingly still hearing stories around my workplace of knifecatchers entering the market, including a new one just today!
The buyers that are out there are the over 50 Boomers. They are the only ones, for the most part,that still have decent jobs. They also have down payment cash either from the sale of houses they previously owned, or the death of their well insured parents.
I know what you mean. Here at mega-corp no one is getting any raises, in spite of record profits. So all the entry level people, who in years past would have received large pay raises during their first 3-5 years, are still working for entry level pay, which is as little as 50% of what some old timers are getting.
Euro reached close to 1.525$ today (and at the same time it is dropping significantly compared to the yen!).
The uproar from the kleptocrats in the Euro Parliarment is getting deafening, most of all the noise coming from French politicians. Big corporations are threatening to cut jobs or move outside the Euro zone of the euro stays above 1.50$, although economic numbers show that the supposedly severe problems caused by high euro exchange rate have failed to materialise. At the same time inflation pressures (including demands for higher wages and surging money supply) keep building.
Something will have to give … I just hope they choose to keep credibility, stop the credit madness, fight inflation and let the EU housing bubble go poof - but I’m not very hopeful regarding that outcome. Most likely there will be more hawkish words and more dovish actions from the ECB
BRUSSELS (Reuters) - Euro zone economic sentiment deteriorated much more than expected in February but inflation expectations were stable, even though data confirmed that food and energy costs fuelled a record surge in inflation in January.
http://biz.yahoo.com/rb/080229/eurozone_economy.html?.v=1
although economic numbers show that the supposedly severe problems caused by high euro exchange rate have failed to materialise.
I think that’s where a lot of our worldwide market problems go wrong.
It is like when the Fed lowered the interest rates after 2001 - people said it was a bad thing - but after a while they think the “coast is clear” and they got away with it. In other words - the negative impact doesn’t happen RIGHT AWAY, so we don’t see it. Short attention span.
of course there could be effects later on, but I don’t buy the argument that a strong euro is bad for Euroland. The EU is doing most of its trade within the EU borders - the situation is very different from the US.
Most of the crying about the strong euro comes from big corporations like Airbus en the big German car companies; they are extremely influential in the EU parliament but definitely not representative for EU business in general. For employment the smaller companies are more important than these giants who depend on exports to the US or dollar-denominated sales. I think smaller companies might get hurt more from inflation than from a stronger euro.
wow! I will have to do more virtual meetings with our European Customers unless they subsidize on me going over there. Europe is in a deep of hurt since american dollars are not funneling into Europe. I recall being in Paris and american tourism (the biggest spenders) there is non-existant. Cab driver was elated that I came into town for business. He says business is so slow.
I guess the American tourists will be replaced by Chinese visitors. In my country the number of Chinese tourists is growing exponentially; numbers are not huge yet, but if this continues for some years they are the number one tourist
One of the funnest things about New Zealand, is that it’s neutral ground for the world to meet and get to know one another.
We are @ Lake Wanaka in the South Island and it’s been raining all day, and i’ve had conversations with people from G.B., Ireland, Netherlands, Germany and Canada. I know the Chinese are turning into travelers, but I don’t see many of them here. The Japanese still travel in packs of 15-20, as they always have.
The Japanese still travel in packs of 15-20, as they always have.
Only 15 o3 20? Well, that’s progress. I remember being in Venice in the late 80’s, blissfully looking at the Ca D’Oro, almost alone, when all of a sudden this stream of Japanese people started pouring in led by a guide holding an umbrella. I ended up trying to peek above a see of heads at the far end of the room… there were at least 70 of them.
aladinsane, now that you are in Wanaka: is it still nice and friendly there, or is the building mob taking possession of the area? I noticed some early signs of that three years ago (like some luxury condo’s near the lake), just wondering if it managed to escape … I would hate to see it go the way of Queenstown.
Wanaka is still a wonderful town… we talked to an Aussie that’s building a house here, and he complained about having to jump through hoops, with the local government. I was happy to hear this.
Queenstown went from being a sleepy burg in the early 1980’s, to being like South Lake Tahoe.
Planning was not an option.
FASB to Reexamine Treatment of Off Balance Sheet Vehicles.
Maybe the end of mark to myth.
Accounting-rule makers plan to re-examine how banks treat off-balance-sheet vehicles that have played a big role in the credit crunch.
These vehicles contributed to the more than $150 billion in losses that have hit financial institutions, but often came as a surprise to investors because banks didn’t put them on their books.
It is time to “look under the hood” of rules related to the treatment of these off-balance-sheet vehicles, Robert Herz, chairman of the Financial Accounting Standards Board, said in an interview. He said the board still is gathering information about these vehicles and whether problems were due to …
http://online.wsj.com/article/SB120424784526601699.html?mod=hpp_us_whats_news
It is time to “look under the hood” of rules related to the treatment of these off-balance-sheet vehicles.
How about “off-balance-sheet” anything? Accounting “oversight” is a joke. Is now, was yesterday and will be tomorrow.
FASB has as much credibility as the rating agencies.
liquidation:
Feb. 28 (Bloomberg) — Peloton Partners LLP, the London- based hedge-fund firm run by former Goldman Sachs Group Inc. partners, is liquidating its ABS Fund after “severe” losses on mortgage-backed debt and demands from banks to repay loans.
http://tinyurl.com/yq2c8m
Rebel investors seize Bear hedge funds
By James Mackintosh in London
Published: February 29 2008 02:00 | Last updated: February 29 2008 02:00
Rebel investors have seized two failed Bear Stearns hedge funds in a move their lawyers hope will give them a platform to sue the US bank for compensation.
A Cayman Islands court ejected liquidators appointed at the behest of Bear to run offshore feeder versions of Bear Stearns High-Grade Structured Credit and Enhanced Leverage funds, replacing them with investor-supported liquidators.
The move prepares the ground for the investors to try to win back some of the $1.6bn lost in the collapse of onshore and offshore Bear funds last July, the first high-profile victims of the subprime crisis….”
FT
Not looking good for Bear - Cayne should be in jail, not for what he did or did not do at BSC but because he cheats at bridge.
Today is free money day! Yeah
Peloton’s failure is the
AAA 07-2 series
Look at the graph of AAA rated mortgages.
Markit
http://tinyurl.com/yt9s6u
Late last summer there was a poster here that commented he was long MBS and had instructed in his will that under no circumstances would they be able to sell it. Our gentle host, Ben said something like “that is why banks are marked to market”. I commented something like “you are joking, right?”
These are trading where subprime was trading in August. And they are defaulting. AAA the new subprime
Sorry we just lost your $2B in our fund.
28 February 2008
Dear investor
Peloton Multi-Strategy Fund (the “Fund”)
We are writing to you as founders and co-managing partners of Peloton Partners and at the request of the Directors of the Fund.
As you are aware the Fund has a very large position in the Peloton ABS Fund. We are writing to inform you that we have today had to take steps to attempt to realise the Peloton ABS Master Fund’s portfolio.
As you may also be aware, the Peloton ABS Fund, which has delivered excellent performance since inception, has recently experienced difficulties in the challenging credit markets. Although there has not been any material deterioration in the credit quality of the Peloton ABS Fund’s assets, given the current liquidity situation in the asset backed securities market the Peloton ABS Fund has experienced severe NAV declines. In addition, because of their own well-publicized issues, credit providers have been severely tightening terms without regard to the creditworthiness or track record of individual firms which has compounded our difficulties and made it impossible to meet margin calls.
We have been working night and day exploring every feasible option to alleviate the situation. In the end the best solution has been to seek buyers and we have been actively pursing this option and many others in an effort to stabilise the situation.
The problems for the Peloton ABS Fund have had a serious negative impact on the Multi-Strategy Fund and we are currently assessing our options.In order to protect the interests of stakeholders, the Directors have determined to suspend the calculation of Net Asset Value, subscriptions and redemptions with immediate effect and until further notice.
You will understand that in the circumstances we are limited in what further we can say at this time. However, we will keep you informed to the extent we are able. We deeply regret recent events and appreciate your patience and understanding in these difficult times.
Yours Sincerely
Ron Beller
Geoffrey Grant
Many people will recall the French word “peloton” which refers to a lined-up field or group, most-often heard in association with bike racing.
Another more appropriate definition here, used in Spanish “peloton”: firing squad.
My goodness, Hoz!
Can you imagine being one of those investors? Hopefully, we (HBB’ers) can avoid much of the financial turbulence. Too many ways to lose right now.
600 billion:
Feb. 29 (Bloomberg) — Financial firms are likely to face at least $600 billion of losses as the crisis triggered by the collapse of subprime mortgages batters banks, brokers and insurers, UBS AG analysts said in a report today.
http://tinyurl.com/ysrz8l
Gettin’ closer to that magic $1 Trillion all the time.
joke of the day from Mr. Containment:
Paulson Says He Favors ‘Strong’ U.S. Dollar, as Currency Slides
Feb. 29 (Bloomberg) — Treasury Secretary Henry Paulson said he favors a “strong” U.S. dollar that reflects the competitiveness of the world’s largest economy in the long term.
“In my heart and soul, I just know and believe that a strong dollar is in our nation’s interest,” Paulson said yesterday in response to questions after a speech in Chicago
http://tinyurl.com/yoqjp8
words are cheap, shut down the fed and raise interest rates if you believe that!
and strong it is, it is winning the race to the bottom!
There will be a time to buy the dollar. Not sure when it will recover, but if the dollar goes south so does the Euro and all of the individual European countries currencies with the exception of Norway.
It will recover when the fed stops cutting rates and the gubmint reigns in it’s cc spending ways.
Alas, it is not that simple.
The Federal Reserve is only part of the problem, the government is part of the problem, but the biggest part of the problem is the ability of banks and Basel II regulated companies to create moneys.
“The Federal Reserve is only part of the problem, the government is part of the problem, but the biggest part of the problem is the ability of banks and Basel II regulated companies to create moneys. ”
The Federal Reserve creating money is no different than the banks creating money in my book.
Ok, so all currencies fall. If all currencies are falling in real terms there is no reason to buy the dollar. Nhz is correct; the dollar will win the race to the bottom.
The Russians have no reason to let their currency follow the USD to the bottom. They don’t export anything to the West except commodities (oil, etc) so they have no competitiveness issues. They import manufactured goods (consumer stuff, cars, etc) so they have an interest in keeping their own currency strong. They are not interested in tourists.
BTW every Russian is aware that the USD has been dropping against the ruble as the rate is displayed at the money changers which are everywhere. This is a huge propaganda victory for the Putin regime.
Krushchev got it wrong when he said “We will bury you”. He should have said, “You will bury yourselves”.
and to top it off, the Russians and the Chinese are accumulating gold while the Americans (and old Europe) are selling…
Always dangerous words: “in my heart and soul…”
Don’t we prefer our leaders to use their brains?
Remeber when GW looked into Putins soul, and said everything was A OK.
I’m glad I am unable to look into Putin’s soul, seeing what’s there would probably kill me.
Nah. The “gut” is just fine for me. Don’t want any of those unpopular “eggheads” making smart decisions.
“In my heart and soul, I just know and believe that a strong dollar is in our nation’s interest,’’ Paulson said yesterday.
See, now–there’s his lil’ ol’ problem. I use my BRAIN to reason through and solve my problems, and my ‘heart and soul’ can go play canasta meanwhile.
Besides, I’m not sure this pandering toad even has a soul.
Pandering toad - that certainly does catch his essence, doesn’t it? Thanks for that, OG.
Want to freak yourself out?
Watch any of Paulson’s speeches and concentrate on his eyebrows.
They move up and down about 1 to 2 inches…
It’s his “tell”.
Waging the fight for homeowners
http://tinyurl.com/273zw9
“There’s just not enough lawyers to go around for the … tidal wave of foreclosures,” said Holland, of the Holland Law Firm in Annapolis, who’s working with Civil Justice on a case in Prince George’s County. “You’re overwhelmed, and it’s often an uphill battle.”
A study released by the Mortgage Bankers Association in January suggests that loan servicers who began foreclosure proceedings for 6,300 Maryland homes last summer also struck deals with 5,800 local borrowers for repayment plans and loan modifications to avoid foreclosure.
At least there’s some legit help for the honest FB.
Sorry, but Ms. Fisher’s story and facts ust seem too “Fishy” to me (sorry, I just could not help it) plus I do not think I will be retaining her for financial planning services.
That’s what it took for Hampden resident Daphne Fisher. After more than a year of fighting the foreclosure of the cozy home she bought in 1997 and rehabbed herself, she learned last month that her house is hers again, thanks to negotiations between Robinson and her lender. She lost in Circuit Court last summer and had been waiting for an appeal date.
“Oh, God, do I feel relieved,” said Fisher, 60, a financial planner who fell behind on her payments after illness prevented her from working. “Civil Justice has really brought balance - more balance - to the process.”
* * * * *
Now, having overcome the odds, Fisher is elated and grateful. But her success is not without cost: about $90,000, by her calculation. Civil Justice charged her nothing for the legal help, but everything else added up. Fees tacked on as part of the foreclosure process. The bill from the private attorney who handled her first court case. The price tag to sell the rental she’d intended on keeping.
“That’s a lot of money for a $3,000 debt - I could have paid my house off with what I’ve had to pay,” she said. “At least I’ve got my house.”
Hmmm, you’d think a financial planner would know about the importance of disability insurance?
Interesting new form of crime: This appeared in my inbox from our neighborhood watch.
————————————–
Two men came to my door, announcing that the bank holding the mortgage was foreclosing on the property and their orders were to change the locks on the door and remove everything from the property. I know the owners, and I know that they have no mortgage. They showed me the paperwork and I pointed out that the name on their paperwork was not the name of the owner. They told me to contact the bank. They assured me they would report that the premises were occupied, so the next step would be the sheriff coming by at some point to evict me. I wrote down the name of the bank, the account number, and the name on the account. They didn’t want me to write down the name of the company they worked for (although I noted that it was “Maryland Real Estate”), since they just take orders from the bank. I did not allow them in, and they left without taking anything. At that point, I assumed that there was a clerical error, and they simply had the wrong condo.
When I contacted the owner’s daughter, she assured me that there was
no mortgage on the property and that her parents owned it outright. We also looked up the real estate company and the bank name (370 Indy Mac), but neither of them exist. Their intent seemed to be to simply
steal everything.
————————————–
What do you call this - grey collar crime?
Anyone who appeared at my door unannounced and/or uninvited was met by no answer to the bell. Nobody’s home if I don’t know you, pal. What I liked about living in the city was that you could attach those little mirrors to your second floor exterior to check out who was on your doorstep.
I have four dogs. They are more than welcome to come in. They never do.
? Attempted larceny by deception. IANAL. Agree with not answering your door to someone you don’t know or aren’t expecting.
Yea, even in the suburbs I pretty much follow the same policy. I have better things to do.
Here in Norfolk, VA they new thing is “undesireables” come into the better neighborhoods, say give me your wallet, then send the person the the hospital after they get the wallet.
First thing if they tried to come in is that they will be greeted with the barrels of my shotgun.
Unfortunately, someone with no spine will be taken.
or to distract you while someone else entered through the back door…
i let my large dog answer my door- it deters these types of situations
Release the hounds Smithers!
Answer the door holding a loaded 45. They leave quickly.
Why answer the door at all?
Hmmm….time to sell my Realses?
http://money.cnn.com/2008/02/29/news/international/buffett_dollar.fortune/index.htm?postversion=2008022916
I have no idea why this showed up here?
good point, Spook.
ahh, what a great land we inhabit…
More gas from Gasparino:
The bailout of troubled bond insurer Ambac has hit a significant snag, after rating agencies demanded more capital from the consortium of banks involved in the bailout effort, CNBC has learned.
http://www.cnbc.com/id/23405541
This is impossible! We were saved! What excuse can the rating agencies give for not downgrading this piece of cow flop? With margin calls coming in i wouldn’t be surprised to see a cascade effect in the siv’s.
Yeah, well maybe CNBC will learn to shut their traps and not broadcast idle rumors like they did last Friday.
If it takes a depression to rid this world of CNBC - it will have been worth it.
I never understood how can an insured bail out the insurance. I thought it was supposed to be the other way around.
Like a house of cards, they know they will all fall together.
Well the WSJ is subscriber only, but reading it is like going to a horror movie these days. You could do a whole “daily doom” post just from today’s articles.
One takeaway is that stocks have never really returned to full value from the 1990s bubble. Executives still feel free to vote each other a large share of the company’s future profits (quite often more than 100 percent), and dividends are still not paid despite a tax break intended to encourage them.
at some point it’ll be cheaper for T (or some other telecom) to just make a play for Sprint, the price wars are under way, but by all means do not buy the stock, Im way too short for anyone to believe its a good purchase. Covered call seller.
Didnt they write off the entire value of the Nextel Goodwill yesterday?
this post was poorly placed, more coffee.
was destined for kid clu below.
apologies.
What would happen if everyone wanted to borrow more and more, and no one wanted to save and lend?
http://www.bloomberg.com/apps/news?pid=20601109&sid=aY_vg_qlAGy0&refer=home
“Trying to spur lending and avert a recession, the Fed has chopped 2.25 percentage points off its benchmark rate since September. Wariness among lenders and fears of inflation are keeping mortgage and auto loan rates close to or above levels before the central bank began easing while credit-card issuers are tightening their standards. The slippage between the Fed’s rate cuts and consumers’ ability to borrow or reduce loan costs is weakening the central bank’s ability to stimulate the biggest part of the economy, consumer spending. It accounts for more than two-thirds of goods and services output and rose 0.2 percent in December, the slowest pace in six months.”
check out the creditboardscom mortgage forum
i scan it once a month or so, just for giggles
last few years the resident subprime mortgage brokers there were giving away free money and people who posted about getting a loan came away with money. now everyone is posting about how to best foreclose because they can’t afford the loan reset, can’t refi or whatever
Will Sprint/Nextel be the next “victim” of the housing bubble burst? I have seen a lot of info blaming its falling stock prices on admittedly bad Sprint customer service & high debt. However, most of Nextel’s customer base was the construction industry. Unemployed construction workers don’t exactly need to have push-to-talk phones anymore.
Funny you should mention that (maybe you saw these articles):
http://tinyurl.com/27tn82
Sprint Nextel bleeds US$29.5 billion, cuts dividend
…
“Sprint Nextel took a battering Thursday, reporting a US$29.5 billion loss for its fourth fiscal quarter, caused by a write-down from its 2005 acquisition of Nextel and a shrinking number of mobile subscribers.”
…
and
http://tinyurl.com/yr2q87
Struggling Sprint Reports Huge Loss
“Sprint Nextel yesterday reported a $29.45 billion fourth-quarter loss and said legions of subscribers continue to abandon its service, many because they can’t pay their bills.”
The nation’s third-largest wireless carrier last year courted people with poor credit to boost its number of subscribers. Now the company is feeling the pain disproportionately as the economy weakens and consumers default on their debts.”
There you have it. Mobile service isn’t tied to housing - right? It’s all contained - right?
(Sorry - couldn’t resist the urge to beat that dead horse some more)
I had not seen these articles–Thanks for the links !!!
Beat it! Beat that horse! Smack it ’till it can’t recognize it’s own mama. We on this blog have EARNED that right! Knock yourself out….
No. Sprint is still the third largest carrier, and while they are having tough times, they will get through it as Dan Hesse is a great manager who has already made some good moves. Cutting stores and positions is good, and moving headquarters back into the hundred million dollar campus Sprint built in 1999 is smart.
Buying Nextel was a mistake, but it kept Sprint from being bought out by Cingular/Verizon. Now they are too big to be purchased.
The ‘push-to-talk’ feature was always a blue collar feature. I used to frequent a BBQ place for lunch and have to listen to that annoying BEEP and the conversation of 20 different people during lunch.
I’ve been a Sprint subscriber for 8 years. Their service is no worse than anyone else, and substantially better than my 2 year experience with Cingular/AT&T. Sprint customer service is horrible but I try to avoid them whenever possible.
Sprint’s needs to go after corporate customers again. I think they let anyone with a pulse get a phone and it cost them. I’ll continue to support the company though.
I have some friends that worked for Motorola in the group that built and supported all of the Nextel infrastructure. The push-to-talk feature was designed into the system from the start, and it was incredibly efficient for short-duration communications. The competitors from the other phone companies never took off because none of them could build a system that made the connections as quickly, nor accommodate the resources needed for the feature.
Anyway, when Sprint bought them, they signed a contract agreeing to maintain the Nextel service, which they have. But within months of the purchase, they stopped buying as much service or equipment from Motorola. Equipment failures happen infrequently, but if you’ve got a nationwide network something is going to fail every week. Either a backup piece rotates into service or resources are re provisioned from somewhere else. Anyway, Sprint/Nextel stopped being responsive to the problems. And a few months after that, the Nextel customers started moving on. Sprint has barely been able to sign new customers up to replace the Nextel losses for years now.
“For every 5 basis points cut by the Fed, only 1 basis point is reaching Main Street,” said Rosenberg. “The Fed is cutting rates, which is wonderful for the government yield curve, but most interest rates are not following suit.”
Bloomberg reports
How is it that anyone in the financial media can’t understand what a Fed rate cut is? The Fed does not SET interest rates, it TARGETS them with recommendations. The number the Fed spews means nothing to you or I, because we can not borrow from the Fed. It means nothing to organizations that can’t borrow from the Fed. It is merely an interest rate that member banks (and only member banks) pay to the Fed to take advantage of Fed liquidity.
If the Fed drops rates to 0.25%, the bank STILL needs to guarantee their loan with money. Even if the bank borrows from the Fed at 0.25%, it isn’t a 30-year loan, but a short term loan. The bank has to pay the Fed back, usually quickly. In order to cover its reserves “lost” to paying the Fed back, the bank needs depositors (savers), who are few and far between. Plus, the bank needs depositors who will deposit at a lower interest rate than the loan they’ve generated.
You can see the problem. When the interest rates were very low, depositors were scarce, but investors gobbled up the loans so the bank didn’t own them anymore. Now, investors are gone, baby, gone, so the bank needs their own reserves to bank the loan, reserves from deposits from savers.
Also, the bank needs to feel comfortable that they’ll get their money back. Many loan-reserves are demand deposits, meaning the bank owes the depositor their money back regardless of how the loan gets paid back. If the borrower defaults, the bank still owes the depositor their money.
Do you now see why a saver strike is such a key activity for those of us with money, any money, as long as we have a positive net value of assets. The banks need us. The Chinese ain’t loaning the banks jack, the investors ain’t buying jack, and the Fed wants their money back quick, so the banks need capital. Refuse them capital by hoarding, and the banks WILL fail and the dollar WILL get stronger.
AB, since Oct I have been lucky enough to save 15k hard cash.
I try to save 2k a month. With my new shopping diet I am able to pay rent, pay bills and save.
Next month should suck. I have 5’s 10’s and 20’s and a freezer full of crumpets.
Go Ahead, make me puke.
The number the Fed spews means nothing to you or me.
Well, maybe not directly, but in terms of how fast and hard this whole housing debacle unwinds, it’s of paramount importance. Therefore, indirectly, it may mean a great deal to you or I.
But your point is well taken - it’s not like you or I can borrow directly from the Fed. Why is that anyway?
Because you don’t have suitable collateral in reasonably large sizes.
The loans are not arbitrary. The banks have to put up collateral, and there’s a schedule of what’s allowed, and how much the Fed will loan against it.
Unsuitable collateral gets rejected regularly (sometimes for fairly mundane boring reasons.)
If you want more info:
http://www.frbdiscountwindow.org/frscollateralguide.cfm?hdrID=21&dtlID=81
OK, this is the geekiest thing I’ve ever posted. What can I say? I’m getting a little tired of the conspiracy theories. LOL
Hey, thanks for posting that - that’s cool. I wasn’t trying to be conspiratorial - more of an honest question. I always kind of wondered how one would go about opening their own bank…
Adam, this is actually the first time I’ve heard this suggestion… to hoard. Interesting. Any detailed tips you want to throw out there?
ECONOMIC REPORT
Consumer spending flat in January
Inflation eats away almost all income gains
By Rex Nutting, MarketWatch
Last update: 9:19 a.m. EST Feb. 29, 2008
(This updates a previous version, which gave the incorrect date for the highest yearly inflation.)
WASHINGTON (MarketWatch) — U.S. real consumer spending was unchanged in January for the third time in the past four months as the economic slump deepened.
Inflation jumped in January, eating away almost all the increase in personal incomes, the Commerce Department reported Friday.
“It is a weak picture of the consumer,” said Robert Brusca, chief economist for FAO Economics. “Income growth, the raw material for spending, is fading.”
http://www.marketwatch.com/news/story/economic-report-consumer-spending-flat/story.aspx?guid=%7BDB15D4F4%2D306D%2D442B%2DB744%2D863C9051B59B%7D&dist=hplatest
This is the first time I’ve seen an MSM report where consumer spending was adjusted for general price increases (the result of course is an estimate of unit sales). This is something I’ve always done on a rough basis. I guess it’s because when I was in college the accounting profession pondered whether to require CPI adjusted, supplemental financial statements. After the price runups of the 1970s ended the issue became moot.
Today’s New York Times: “Facing Default, Some Walk Out on New Homes” By John Leland
Snippet:
“Mr. Zulueta said he felt he had let down the lender, himself, and his family.”
“But you got to move on,” he said. “I know in a few years my credit’s going to be fine. If I want to get another house, it’s going to be there. I’m not the only one who went through this. I know I’m working the system, but you got to do what you got to do. There’s always loopholes.”
Check out the picture of the Zulueta’s. They would have been good models for a Botero painting.
..like one said in the article, “if you’ve got no skin in the game, why not walk away?”
IMNSHO, this is precisely what is needed to fix the lending problem.
A few JT thrusts later, the lenders (or their financiers) will learn.
Of course, it will have all vanished by the next cycle as new breed of MBA’s learns about debt anew.
Sometimes, I wonder if this same crowd will all congregate on whatever passes for online blogging in the next cycle. Hah! I bet you half the crowd here was on f*ckedcompany.com. I know I was.
Maybe i’m missing something, AGO has 500M in cash (347M in debt) and they re’d 29B of Ambak. Why doesn’t Ross buy AGO bonds instead of stock? Wouldn’t that be a better deal if Ambak implodes? Munis won’t be immune from the contagion forever.
http://biz.yahoo.com/ap/080229/assured_guaranty_wilbur_ross.html?.v=6
So I’m waiting in the lobby of my kid’s dance school and what do I hear a couple of the other parents talking about? Buying foreclosed properties in Florida. This on the same day that I saw The Donald’s image in a full-spread ad for a class on how to buy foreclosed properties.
This is what the U.S. economy has become? It’s this strange form of cannibalism, a dog-eat-dog mentality where people would prefer to prey on others than go out and get a freakin’ job or do something that actually contributes something to the world. This is the new American ingenuity: find new ways to make money without working.
Day traders (sorry txchick), RE flippers, online poker players, casino players, it’s all the same nonsense that contributes nothing to the economy, and, indeed, is literally selling the country out to foreigners.
Here in PA the taxes from casinos are going to be used to offset property taxes. You betcha! Just wait! Any day now!
This is the new American ingenuity: find new ways to make money without working.
What’s the alternative for most? $9/hr at WalMart? And if you do have a decent job you are still losing ground with skyrocketing heathcare premiums and wages that are falling way behind inflation.
I guesss what I am saying is that people will gravitate towards wherever the money making opportunites are, regardless if they are economically sound.
That’s just it
Work has been devalued in America via outsourcing and inflation. Even the people who do work are constantly looking over their shoulder and keeping an eye out for other jobs.
I see no reason that people shouldn’t behave in their own interest. When corporations are so inherently badly run, I am not terribly suprised that most people are looking out for themselves.
Out in Silly Valley, many of the engineers spend their day “insider trading” their competitor’s stocks. After all, they knew best where things are going. I want to see the SEC even attempt to prosecute that.
If you study austrian economics you will see that all inflationary currencies result in speculation because speculation becomes the only means to beat inflation. With 12% inflation, how many jobs keep up? The stock market doesn’t even keep up! You have to gamble and speculate because real work does not pay off!
I agree. These clowns need to spend a little time in educating themselves first, or the market will give them a nasty dose of this medication. I just read about a couple from PA buying Miami condos for 30% off to retire in ‘4-5 years’. By then they will be foreclosed and selling for about 30% of their money.
The boomers will not retire in Florida and buying a downtown condo in Miami is not retirement. It’s a freaking joke.
I’m curious about your opinions on the falling dollar. It seems to me that the consensus is that it is all bad and I’m suprised there hasn’t been more people talking about the positive impacts of it.
I’ve got a decent amount of money saved up and some of it is in cash. I admit it’s pretty frustrating to see the value of it decline. However, I still have quite a few years of work left in me and I work in the tech industry. At this point in my life, my job stability is still more important than my savings. I’ve long complained about the outsourcing and how it is simply a function of exchange rates. From my experience the average college educated Indian worker isn’t more highly skilled than the average American worker nor are they poorer. (True, they can’t buy imported goods as easily as I can but I also can’t pay for a personal driver or full time maid that many in India have.) I can’t compete with a person making $15,000 a year who also lives a quite good lifestyle on it.
Many here have complained that we’ve lost our hard working productive lifestyle. If we can become competitive again I believe we will see a reverse of that. That’s why I don’t believe in the whole demise of America thing. These things cycle and as we face the pain of a falling dollar we will also become more self sufficient and productive.
I’m afraid that some of this comes down to those who have already made their money vs those who are just starting out. If I were 60 and had a huge retirement savings and a fixed income, of course I would push for a strong dollar.
My policy is to get rid of dollars as quickly as possible. I keep only enough to pay my daily expenses. This has been a phonomenally successful investment strategy, far outpacing stock markets, etc. and I do not plan to change it.
Get rid of it like how? Like the typical American who spends and doesn’t safe?
JJ: I’m a bit older than you (34), and I have no fear about outsourcing or my retirement. My annual income has waxed and waned from low 5 figures to low 6 figures, but I’ve always persevered by staying ahead of the game in my markets.
I travel to India yearly, and the #1 reason I find companies outsourcing is because of the available labor that is not cheap always, but very well educated. Most Americans think “phone center” when we think of outsourcing, but the engineers in India are VERY well versed on engineering (and I have a hard time finding an engineer in America, many of the ones I’ve looked at want $250k+ annually!).
There are many reasons why I’ve succeeded where my friends have failed. I am not tied down to one town (ready and willing to move at a moment’s notice). I am not a W2 employee (1099 and loving it). I am not unwilling to work above and beyond the 40 hours the law caps my labor at, and I am willing to work at no charge if I go above and beyond what I quoted and estimated.
All fiat currencies die over time, so the timing of your future wealth will correlate to what part of the cycle your preferred currency is. For a few years, I was buying Euros along with dollars and gold and silver, but I was also working at not living on debt or beyond my means. My home is 1X my annual income (I live in what some consider the ghetto but I consider a great neighborhood). My car is a 2000 Subaru, a 2001 Land Rover and a 1998 Maxima, even though I could afford new versions of all.
Set your sites on SAVING, not on “investing” or “speculating” and especially not on living beyond your means. Live more like a pauper than a prince, and hide your true wealth from everyone (even girlfriends or boyfriends) and you’ll do fine. Work on buying your assets FAST (pay that new house off in 5 years, not 30, pay that car off in 1 year, not 5), so you aren’t burdened by debt, which robs more from you than inflation does.
Engineering salaries where I work hover between 90-110K.
That’s for senior engineers. Fresh out of college engineers are going for 60k, give or take. If you know of a place that pays 250k for an experienced engineer, let me know, I’ll them my resume.
Agreed. And the entry level guys wages are stagnant as well. Of course they have the option of switching employers once they are experienced enough.
Typical PhD non-mgt sci/eng where I work with 20+ years of experience ~120-130k. All on the flat part of the curve after 20 years. New PhD ~90k.
I take a few online grad eng courses and occasionally the camera pans the audience. Doesn’t look or sound like a single American student in the class in some of the courses.
That’s my point though. The Americans you do have tend to be pretty bright. Now that the dot-com era is long gone, engineering is no longer fashionable and it is truly the interested and gifted who go into it (obviously with exceptions).
Actually, I am a peak boomer. I would not recommend engineering or science as an occupation at this time. IMO, maybe get an undergrad degree in it if you are so inclined and then go to law, medical or even business school. Would be an OK backup if you don’t get in - better than Walmart. Again, imho, PhD a waste in a non-academic setting and competition for academic jobs is some of the fiercest I’ve heard about.
Like in Co said, the overall level of benefits is decreasing for the engineering occupation. Also, severe salary compression for engineers who are not mgrs.
The line of H1Bs is huge. Like Bill in MD and I exchanged one time, even the ability to get a clearance (US Citizen)is only going to buy so many more years.
In Co, Bill in MD, and others who are engineers, will likely be amused by this. Read the comments.
http://cosmiclog.msnbc.msn.com/archive/2007/05/07/184576.aspx?
I guess I’m a just a bit older test engineer who tests RF electrial devices. Best designers are at start-ups and the worst are at big well known tech companies. I guess I would still recommend Engineering to any young folks who are very good at math but have Aspergers Syndrom or some other reason why they want to work 60 hours plus a week and eat pizza and drink coffee all day long.
OK Thats a joke Engineering is fine. I recomend the start-up or small company after you get some experience. And have you noticed older Engineers often get real werid?
I work with a guy now who beleives the bad economy is a plot to get the world ready for an invasion of aliens. OK
I call BS on this!
Where do you think you will be if you lose your JOB! Can you eat “IT”. You will lose your job just like everyone else, because directly or indirectly, your job depends on the base of this pyramid, the US consumer.
Flexibility is the name in this game, called USA-2008.
I wish you the best in your plan, however, please do not think that any job is guaranteed.
I do not anticipate that any job is guaranteed. I suspect that know job is guaranteed including govt. jobs. We will all be scrambling for new sources of income, whether “butcher, baker or candle stick maker”
“I do not anticipate that any job is guaranteed. I suspect that know job is guaranteed including govt. jobs. We will all be scrambling for new sources of income, whether “butcher, baker or candle stick maker”
Good point, but your quote says it all. Know job = no job. Simple typo, but multiply it by the millions of people in this country that think education is a waste and following others is the name of the game, and one begins to see the true problem with American society.
I disagree about the talent of Indian engineers. I can only speak from the ones I’ve dealt with here not in India. I’ve seen really good ones and really bad ones. However, one thing I’ve noticed is that the American engineer typically grew up interested in engineering, math, and science. Some (stress the word “some”) of the Indians I went to grad school with (school near work so this wasn’t MIT or anything) clearly only became engineers due to social pressures and showed no real inherent ability or love for the sciences. I’m sure their educational system is better than ours but with so much social pressures towards engineering and such a high rate of engineers, I think you end up with people who aren’t inherently designed to be an engineer.
BTW, I am actually 2 years older than you but I still feel like I have a lot of work left in me.
I have found that the turnover rate in India is 50%. Generally, I have found that they leave as soon as I have them trained up and they are approaching productivity(generally 6 months). If anything, they have learned well from our corporate CEO’s and have no loyalty to any company and will immediately leave for an increase in pay at the drop of a hat.
“I don’t think that house is going to recover in value any time soon. I’d just be throwing the money away.”
Crappy papers think alike, WSJ and NYT identical line of article, same firm mentioned You Walk Away located in San Diego
LOL. Like renting, paying the mortgage is just throwing money away.
Paying for 30 years on a clearly overpriced house is definitely throwing money away.
They are behaving rationally.
Freddie Mac CEO: Price declines are only 1/3 of what’s to come
Secondary mortgage market bohemoth Freddie Mac held its 4th quarter 2007 earnings conference call yesterday. During the call, Freddie’s CEO, Dick Syron, shared his views on where we are in the correction:
http://seekingalpha.com/article/66573-freddie-mac-q4-2007-earnings-call-transcript?source=homepage_transcripts_sidebar&page=-1
“Syron: No one knows how long the housing downturn will be, we’ve been pretty cautious on our expectations but clearly our sector is in a rough period that for anyone that’s likely on this call is totally unprecedented in our lifetimes.”
“Syron: We think we’re dealing with this situation in a prudent and responsible way. We’re not at all claiming that the housing downturn is mostly done. On the contrary, we’re assuming that house prices have fallen about one-third as far as they’re going to go peak to trough.”
Any guesses as to whether he is underestimating or overestimating?
Sounds about right to me if you are talking nominal dollars and Case-Shiller.
http://tinyurl.com/2otbra
New spin on stealth property assessement increases.
Fairfax County Va assessor’s office is dropping the assessment on the “structure” of the home while jacking up the assessment on the land to create an overall increase in the assessment. They now determine land price purely based upon the sale of local vacant lots and stuctures based upon lots sold w/ structures. I cannot believe they can say this with a straight face. Hello, the lot w/ a sturcture also has land under it!!!
The logic is based upon the dynamic of here of developers who buy land w/ structures, but who tear them down to slap up McMansions.
Outside of bald faced greed to keep the faux inflated property tax revenue stream up to the level the county now views as baseline I have no idea as to why they are doing this.
We were all hoping home prices would come way down.
Instead BB is saving the problem banks and scuttles the consumer’s economy.
Why can’t these house sellers just save us the pain and lower prices or pay their mortgages ontime.
Let my people go.
Pathetic.
http://news.bbc.co.uk/2/hi/americas/7270607.stm
US jail numbers at all-time high
RATES OF INCARCERATION
USA: 750 prisoners per 100,000 people
South Africa: 341 per 100,000
Iran: 222 per 100,000
China: 119 per 100,000
That’s a lot of free housing!
And going higher.
http://www.suburbanchicagonews.com/heraldnews/news/818806,4_1_JO29_BANK_S1.article
It’s a growth industry!
Just wait a few years, until people can’t afford to retire. Prisons will become the new elder care, when old folks who have no pension &can’t afford food or health care rob 7-11s so they can get thrown in jail.
Got a Boston Legal flash there.
It’s not just free housing, but also free food and medical care. All paid for by YOU.
Why is it that Americans get all bent out of shape about people on welfare getting these things for free, but are all gung-ho about putting more people in prison at the taxpayers’ expense ?
Oh one more thing: everyone is always complaining about all the illegals in prison. Well why not just deport them and let their countries of origin deal with them? Because the prison industry would make a lot less money, paid for by YOU, that’s why.
My philosophy:
Make everything legal except intentionally physically hurting another person or damaging their property. If you do either of the two illegal acts, your hanged at sun up. No need for prisons.
Another, and more unfortunate, reason for not just deporting criminal illegals is that in the absence of any meaningful border security, it’s far too easy for ‘em to come back. Many times they’ve already been deported numerous times - at least that what it says in the newspapers. Probably not appropriate in any case where a citizen wouldn’t be entitled to probation, IMO.
Send them all to sheriff Arpaio in Maricopa County Ariz. Tents and $0.20 a day for food.
High volume in the mar 1200’s again.
http://www.cboe.com/delayedQuote/SimpleQuote.aspx?ticker=SZP+OT-E
Im in bidu at 250. Green in a red sea.
The buying started 2 days ago around .30, not bad for 2 days.
I know. I trade that one nearly every day.
Nordstroms is up. When did retail become a safe haven?
On Minyanville, Dwyer makes the case for large upside in the US equity market beginning “soon.” I can’t repost it here but if you have their intraday product, take a look.
Holding Vanguard’s CA LT Mutual fund and been taking a bath of late. Hold or dump?
Dump, dump, dump.
You’d have to be borderline retarded to fund long-term munis at these spreads. Not when there’s a sh*t-storm coming down the poop-chute.
Also, you might want to note that there’s a Supreme Court decision in the pipeline that can change the rules of the game: Kentucky v. Davis.
Even the short-term MM have seen almost a 90 bps move in yield in less than three weeks. That’s a clear sign of distress.
Thanks. Will do. Have done really well except for this bad idea. Thought that since Bernake was lowering interest rates, the fund would go up. It did for a while.
You’re welcome.
My sister lives in CA. I’ve done some homework on her behalf.
“US jail numbers at all-time high
RATES OF INCARCERATION
USA: 750 prisoners per 100,000 people”
There are a s__ load more who should be off the streets. My community alone has eighteen convicted child molesters residing here. OK, so most of them served their time and are out, but show me a rehabilitated child molester and I’ll show you an honest politician.
I think the numbers are skewed due to the criminalization of soft drugs and poor treatment programs. Our drug policies are ass-backwards.
Pedos need ongoing treatment after serving time. Pedos are not quite right in the head.
Isn’t that the same person? Only not honest or rehabilitated?
Whoops…..
http://biz.yahoo.com/cnbc/080229/23405541.html
that’s why I have this straddle. When that situation resolves, will kick off half of it.
The problems are multipyling faster than the solutions. By the time they resolve this it will be too late.
People close to the deal are confident that it will still happen, because the banks and the rating agencies are aware that, if it collapse, there will be a huge decline in the stock market.
If I were an investment bank, I would short the bejesus out of the market and then refuse to pony up money for ambac.
Come to think of it, the prisoner’s dilemma might apply. Net result is all of them should quietly take the above strategy.
I thought investment banks weren’t allowed to short anything.
Weird spikes 10-year treasury note. Chart read “0.36″ for a few minutes. (Says “Day’s Range: 0.36 - 3.62″) Thoughts?
5-day
Somebody blew a decimal point in the record or graph. Probably 3.6
“Thoughts”
The is either at the data-provider level or the market level, as the marketwatch.com site is showing similar weirdness…
http://tinyurl.com/ywlno2
I am hoping this does not mean that BB’s printing press has thrown a rod…
read that pdf I posted above
Using Wells’ new guidelines for “severely distressed” Los Angeles and Orange County (CA), your Wells Fargo down payment on a “median sales price house” purchase would be:
Los Angeles : $71,250
Orange County : $87,450
I wonder if other lenders will adopt similar guidelines…and I wonder how many buyers have those kind of down payments…
Oops, my mistake, the new guidelines are being reported as 25% down…not the 15% down the figures above represent.
So, the required down payment for a median LA County house would be around $118,000.
Sorry to start up a Chicago thread yesterday but I was sick with a cold and working from home, so I didn’t have much time to post and I missed a lot of the thread…Anyway:
4014 N. Western. I saw an ad on Craigslist for a new construction 3 bedroom apartment for $2,500 a month. I typed the address in Yahoo and the first result showed that unit was listed for sale for $545,000. The second result was an older Yahoo classifed ad showing the same unit for rent for $2,800 a month.
Some developer made a huge mistake. He can’t sell nor can he rent his ‘luxury’ triple stacked brick double wides. In my opinion, in a balanced and realistic market this unit would probably sell for $190,000 to $200,000 based upon comparable rents in the area of $1,600 to $1,800. Granted, it’s a nice looking place and the location isn’t *that bad* but … no one would ever put a McMansion in the parking lot of a strip mall, so, why did this guy think it was ok to build a luxury three flat in between a continuous strip of car dealerships and auto body shops?
Leveraged Losses: Lessons from the Mortgage Meltdown
http://www.brandeis.edu/global/rosenberg_institute/usmpf_2008.pdf
That is a keeper — saved it alongside of Google’s Subprime Primer in my personal bubble article archive…
BTW, what does “Embargoed until 11am February 29, 2008″ mean?
public couldn’t read it until then
1) Who embargoed it?
2) Don’t markets function better with a free flow of information? What good does it do to hide bad news?
Embargoed is a journalism term. Typically this is used to control information for product launches or reviews. That is to say, they will let you watch the movie, or review the product early, so you have time to write the story so it comes out at the same time, as long as you don’t publish before a certain date. For certain very newsworthy items, media will break embargo and publish anyway. Typically it is not worth the trouble, as the type of information being embargoed isn’t critical, and media can get blacklisted for breaking embargoes.
Is the T-bond market broken, or is this weird graph just an artifact of a glitch in the marketwatch.com web site?
http://tinyurl.com/ywlno2
I’ve been thinking of getting into that inverse T-bond yield mutual fund Hoz mentioned a few weeks ago. Is now the time, or can yields possibly go lower from here?
You should see what’s going on in the muni market today.
Poopy time!!!
The vomitorium is open for business.
What market? There were no bids!
The three stages of any speculative bubble:
[1] It’s a great investment.
[2] It’s a long-term investment.
[3] Somebody, anybody, please give me a bid.
“What market? There were no bids!”
Evidently there was a market failure — time for the govt to fix it…
D’oh…
REALTY Q&A
Breakeven point
Don’t count on rentals to recoup all second-home costs
By Lew Sichelman
Last update: 7:31 p.m. EST Feb. 28, 2008
http://tinyurl.com/2dookk
“Negative gearing” shows its magic again!
A market update from the Central Coast of Cali (CCC)…
Here in AG (Arroyo Grande, not Alan Greenspan), I’m seeing a LOT of houses listed for $300K - $399K. This is a first. Most of the “junk” SFHs have been in the 4’s, and even the 5’s (at the peak).
“Not bad” houses are now in the 4’s and 5’s, whereas they were in the 5’s and 6’s (and even 7’s) at the peak (about 1 1/2 years ago).
And are they ever going to sell those houses up at “Spyglass Pointe” (with an “E” at the end), up past Pismo Beach? Maybe the market for $2.1 tract houses isn’t what they thought.
That’s good to hear, arroyogrande. In San Luis, prices have come down more than the official numbers would indicate, but they are still quite high (only the occasional SFH under 500K, and most condos in the 300-399K range). Inventory is lower here, too, and many seem to be using this to argue that San Luis is “special” and that prices won’t drop. But with prices dropping in north and south county, how can prices here hold? They really can’t - it will just take longer. Sigh.
SFRs are listed under $100K for the first time in San Diego since we moved here (near the bubble peak…)
What If?
http://www.minyanville.com/articles/HD-CFC-GE-C-MBI-whr/index/a/16102
SFV People - Vitellos off due to lack of interest - only 2 people were interested! :((((
It’s a good thing we know that mortgage default problems are contained to sub-prime loans. Otherwise, news like this might be somewhat troubling:
http://tinyurl.com/34q4mc
Incidentally, here’s the headline:
S&P may downgrade 1,887 classes of Alt-A mortgage securities
Is there any real question about whether downgrades are warranted?
If not, then what (or who) stands in the way?
Next up: Prime ARM downgrades (the kind made to help people with good credit histories buy homes they could not afford…)
To funny, Homeowner blues in Florida:
http://www.palmbeachpost.com/news/content/home_garden/index.html
Just coming up for air for a moment as the market hits -300 for the day.
A MAJOR call out to Hoz, Tx, the insane punster, and vox for your insights– and to Ben for the forum. (The check is in the mail.) I thank you.
My kid’s bursar thanks you.
Now, back to the fray….
careful speculatin on commentation.
Dumping the put side of my straddle. Probably nuts but big beta is saying something.
“Not only did Bernanke adopt the “subprime is contained” mantra, but prior to that he was touting the “there is no housing bubble” mantra.”
Exactly. I read early on the Bernanke and Greenspan opinions that there was no housing bubble. How soon most of us forget the days not so long ago that Republican and Democratic leaders were falling all over themselves with praise for Greenspan as if he alone had engineered an economic miracle. I do look forward to the days in the future when things improve and this country isn’t awash in the extreme pessimism that’s everywhere now. At least the young people are not worn-out from lifetimes of seeing the evil that men do. It’s nice to be young.
Seeing much of that evil over the last eight years has aged me quite a bit, in some ways…
Another month like this and a nasty rumor may start that a bear market may be upon us, along with lowered earnings estimates, writedowns across the spectrum, and no bottom in housing…
phew, thanks be to Jeebus we are not in a recession.
For what it’s worth…
I’ve never had a more profitable vacation than this one.
Maybe I ought to get away, more often?
maybe you should be humble and not gloat before you’ve taken the “windfall.” Karma has a way of evening that out.
Is this a good time to buy the dip?
Stocks Dive on New Signs of Economic Chill
By MICHAEL M. GRYNBAUM
Published: February 29, 2008
In a painful year for Wall Street, even the shortest month couldn’t end soon enough.
Stock markets sank on Friday — Leap Day — after a new round of credit woes and a painful dose of weak economic reports reignited fears that a recession may be imminent.
http://www.nytimes.com/2008/02/29/business/29cnd-stox.html?em&ex=1204434000&en=fcd46a4365574732&ei=5087%0A