Everybody Knew Something Was Going To Happen
Some housing bubble news from Wall Street and Washington. Reuters, “WCI Communities Inc, which builds high-end homes, said it expected to record a pre-tax, fourth-quarter loss in the range of $410 million to $460 million partly due to the hard-hit Florida housing market. The U.S. company said the loss includes impairment charges of about $335 million to $350 million for lower value of land, unsold homes and apartments, abandoned option deposits and goodwill write downs.”
“The company also said it would recognize a $38 million reserve for Oceanside, a Florida high rise, because of a high number of buyers who walked away from deposits.”
From MarketWatch. “French bank Credit Agricole swung to a fourth-quarter loss of 857 million euros ($1.3 billion) following a $5 billion write-down. Analysts cautioned there could be more write-downs on the way as the bank still has some residual exposure to struggling bond insurers and its impairment assumptions for certain mortgage-related investments appear less conservative than those of peers.”
“Utrecht-based Rabobank, one of the largest retail banks in the Netherlands with more than 9 million clients, said it booked a loss of 284 million euros on investments in residential mortgage-backed securities (RMBS) and other investments whose risks have recently become more exposed.”
“Rabobank reiterated that it had no direct exposure to subprime mortgages that were made to risky home borrowers who were later unable to pay.”
From The Age. Rising costs of funding loans resulting from the US subprime-induced credit squeeze have forced Macquarie Bank to wind back its $23 billion domestic residential mortgage business.”
“Macquarie Securitisation makes its money by packaging the loans and selling them to investors as bonds. Macquarie had been paying significantly over the bank bill rate to stay in the business.”
From Bizjournals. “JPMorgan Chase & Co. will not extend the 30-day moratorium on foreclosures it backed last month as part of President Bush’s plan to minimize the housing downturn, CEO Jamie Dimon said. That moratorium is set to expire in the middle of March.”
“The New York financial giant has written down more than $3 billion in the past two quarters. Dimon expects more to come, as Chase still holds some $50 billion in ‘risky assets,’ he said. ‘We made some mistakes,’ he said to the more than 750 luncheon attendees.”
Dow Jones Newswires. “Robert Sheridan, president at Robert Sheridan & Partners, comments on the Dow Jones Newswires story ‘Fueling Housing Decline, Lenders Retreat From Tough Markets.’ ‘These steps by lenders may seem cynical, but they are necessary to avoid ‘catching a falling knife’ by making loans when prices are expected to drop a lot further. This is tacit confirmation of what we have been saying for months.’”
“1. There needs to be a significant price correction to bring this market into balance. 2. The worst is yet to come in housing prices. 3. Losses on existing loans will be much greater than is generally expected.”
“Lenders including BankUnited and a wholesale lending unit of Wachovia Corp. have elected not to lend to some areas or properties because of declining prices. Other lenders have tightened underwriting guidelines for slumping markets so as to make financing nearly unattainable.”
“‘We don’t call it blacklisting,’ said an official at a large bank. ‘We just don’t write the loan.”‘
“As U.S. regulators reflect on lessons learned from the subprime mortgage crisis, the Federal Reserve admitted on Tuesday it should have been more forceful with the banks it supervises.”
“‘One of the lessons learned is that we need to be more forceful,’ said Fed Vice Chairman Donald Kohn when pressed by Sen. Richard Shelby to explain why bank regulators did not spot subprime mortgage problems earlier.”
“‘We did not perform flawlessly. I absolutely agree with that,’ Kohn said, adding that the Fed was conducting an internal review of what it should have done differently. Asked by Shelby if the Fed was afraid of the banks that it supervises, Kohn responded: ‘No.’”
“‘Through public speeches and private meetings with bank representatives over years, the Fed tried to warn banks about their exposure to risky subprime mortgages before they exploded into the current crisis, Kohn said.”
“‘That might not be the most effective way to make a point.’ said Jack Reed of Rhode Island. ‘I have to ask questions about the culture of regulation at the Fed.’”
“The hearing provided a glimpse into how the Fed, which is most known for its role as the powerful U.S. central bank, communicates with individual banks it supervises. ‘A lot of people believe the Fed was asleep at the switch,’ Shelby said.”
“Kohn defended the Fed, saying it was ‘a very hard sell’ for the Fed to get banks to focus on potential risks when the U.S. economy was booming and banks enjoyed record earnings. The Fed supervises about 5,000 bank holding companies with consolidated assets of about $14.2 trillion and 870 state member banks with more than $1.5 trillion in assets.”
“‘It’s a hard sell for the banks, yes, but you’re the supervisor,’ Shelby responded impatiently. ‘You’re also the central bank, so you have not just a little bit of power, but a lot of power.’”
The Associated Press. “‘The problems in the mortgage and housing markets have been highly unusual and clearly some banking organizations have failed to manage their exposures well and have suffered losses as a result,’ said Kohn.”
“Under questioning from Sen. Richard Shelby, Kohn acknowledged that the Federal Reserve did not anticipate hefty mortgage-market losses. ‘I don’t know that we fully appreciated all these risks out there.’ Kohn said. ‘I’m not sure anybody did.’”
“As the U.S. housing meltdown forces hundreds of thousands of Americans from their homes, the extent to which fraud was a factor in the crisis is just coming to light. Many fraud schemes kept running as long as cash kept flowing from Wall Street. Once the credit crunch turned off the supply of easy money, the perpetrators simply walked away.”
“Arthur Prieston, chairman of the Prieston Group, which provides mortgage-fraud insurance and training to lenders, said that ‘at least 30 percent of the loans out there contain some form of misrepresentation.’”
“‘But because lenders often have to sell off properties quickly to cut their losses, we will never know exactly how much mortgage fraud has been committed,’ he added.”
“Prieston estimates that mortgage-fraud losses were around $4.2 billion for 2006, adding that figures for 2007 ‘will be much higher.’ Prieston said that had major lenders been proactive in checking the identities of the people who were buying properties using stated-income loans and similar products, then a lot of fraud could have been avoided.”
“‘A lot of lenders claim they were victimized by fraud but helped to constitute it by looking the other way,’ he said.”
“In a recent case in Chicago, he said the authorities prepared to file charges against a woman who had fraudulently bought five properties. ‘When we turned up to serve papers on her, we found she was 9 years old,’ he said. ‘Her uncle had stolen her identity.’”
“‘The vast majority of the cases I’m aware of involved straw buyers,’ said according to Boston-based real estate analyst John Anderson. ‘Thanks to products like stated-income loans, people walked away with a ton of free money.’”
“Anderson is among those who were warning for years that easy credit created an easy climate for fraud. ‘The banks on Wall Street had to know there would be fraud. If they didn’t they’re morons,’ he said.”
From USA Today. “As housing prices continue to fall, real estate agencies are responding with a marketing onslaught to try to entice reluctant shoppers to get off the fence and buy.”
“‘The theme now is that’s it’s a great time to buy,’ says David Rea, chief creative officer for RE/Max, who directs its advertising.”
“It’s not such a great time to be in his business, however.”
“‘We had an incredible run for the past five years,’ Rea says. ‘A lot of it had to do with lower interest rates and probably the subprime. It was one of the most productive real estate markets ever. But it can’t go on forever, and everybody knew something was going to happen.’”
The Boston Herald. “Boston Federal Reserve senior economist Alicia Sasser and Lawrence Yun, the National Association of Realtors’ chief economist, told a real estate conference in Cambridge that while Hub housing remains depressed, the market has already planted the seeds of a turnaround.”
“‘Probably the worst for the Boston housing market is over,’ Yun said. ‘It’s possible that we might see a notable rise in home-sale activity in the second half, or we might just see more of a stabilizing, no real major change up or down.’”
“Still, Sasser and Yun say burgeoning home foreclosures, a big backlog of unsold properties and other problems continue to hurt the Hub.”
“Yun thinks the biggest factor holding the market down involves buyers who hang back because they think prices might fall further. ‘Will (the market) decline further from this point?’ the economist asked. ‘Yes - if the buyer remains pessimistic. Buyer pessimism can be self-fulfilling.’”
The Leader Post. “The Regina real estate market continues to fire on all cylinders, according to a report released by the Association of Regina Realtors on Tuesday. And the market doesn’t look like it will be cooling off anytime soon, said Gord Archibald, the association’s executive officer.”
“‘Assuming the economy continues to do well (and) generates jobs (and) attracts newcomers and expatriates back to the city, we’re going to continue seeing high levels of demand,’ he said. ‘It’ll take some time for the supply side to catch up to that,’ he said.”
“The average price of all residential properties sold last month was $204,459, while the average price for single-family-detached homes was $221,717. In February 2007, those figures were $132,519 and $136,991, respectively. That represents year-to-year price gains of 54.3 per cent for all residential properties and 61.8 per cent for single-family-detached homes.”
“But just how many more dollars are changing hands is …’staggering,’ according to the association. Last month was the 13th-straight month of record-setting home sales in Regina, the report said. But homes aren’t just selling for more money these days, they’re also selling a lot faster.”
“‘The prices just keep on going up, even in the traditionally slower months,’ Archibald said.”
“Archibald also warned against first-time home buyers trying to wait out Regina’s hot real estate market. ‘Get into the market early,’ he said. ‘Prices are likely to go up and the earlier you get in, the greater the chance you’ll find a home that fits your needs.’”
‘Kohn defended the Fed, saying it was ‘a very hard sell’ for the Fed to get banks to focus on potential risks when the U.S. economy was booming and banks enjoyed record earnings.’
Having read William Fleckensteins new (unreleased ?) book, I can say that this just isn’t the case. Actually, the Fed was explicitly downplaying risk, ignoring reckless speculation and providing easy money in the runup to the stock and housing bubbles.
Ooooh! I’m going to get that book. Was it good? Funny? Witty and informative? I’ve seen it in the sidebar of his weekly column he writes for MSN money. I think Fleckenstein is super dooper. Plus, he’s cute.
Although someone on here recently informed us all that Bill has newly obtained a mullet. I’m not sure I approve of mullets, except on hockey players. I hope it doesn’t detract from his writing skills.
It’s more straightforward than his column. Lots of transcripts. etc. But he really lays it out, and it should shake things up when it hits the streets.
does it imply in any way the current obfuscation on known unknowns in the next bubble?
Collateralized Commodity Bonds? Im callin ‘em CCB’s
The old moral hazard argument. I always gripe about this as I am sick of seeing these big Wall St. Firms socializing all of their risk. The talking heads on CNBC and FBN have been saying that the big banks like Citi are “too big to fail”- is this because of their size or because the Fed will prop them up at all costs? At the risk of sounding like a conspiracy nut, there does appear to be quite the concerted effort to prob up big firms in trouble either through Fed policy decisions or highly suspect bond and credit ratings- does MBIA deserve a AAa rating?
“Too big to fail”? Or “too big to bail”? There’s trillions with a “T” in leverage that’s unwinding. I don’t think that can get fixed, even if they want to fix it. It’s just Too Darn Big.
Round 1 (circa 1998 and before): One or two “too-big-to-fail” firms get bailed out.
Round 2 (circa 2008): Myriad “too-big-to-fail” firms have sprouted up like weeds, creating a “too-big-to-bail” situation in the aggregate.
… Kohn acknowledged that the Federal Reserve did not anticipate hefty mortgage-market losses. ‘I don’t know that we fully appreciated all these risks out there.’ Kohn said. ‘I’m not sure anybody did…
Really! How about the readers/contributors to this very blog??
Please, someone tell me this guy isn’t really that stupid and/or
that big a liar. I need to boost my faith in government today…
I honestly do not believe for a minute the people running the Federal Reserve are stupid. I suspect this was a massive scam using FB’s at patsies to bring in hundreds of billions in investor money to the US, which would never be repaid. In effect a scam on the rest of the world.
You’ve obviously never worked in an organization where people in charge are perceived to be of such “genius”, that questioning them is a career death sentence.
I have and it is classic human, organizational, behavior. It happens all the time and, unfortunately, it sometimes happens in incredibly destructive ways when the “genius” ultimately fails.
It isn’t that everyone in an organization is either stupid or smart, they simply get caught up in a collective dementia around someone who attains (and often sustains) an “aura” of superiority about themselves.
Think about it; a business becomes fabulously successful. Maybe its for a lot of esoteric reasons, maybe its luck and maybe someone did have a keen insight at a key moment. As that success is realized its really hard for anyone, at the lower end of an organization, to step in and say, NOW, the Emperor has no clothes. No matter how rational their reasoning or the quality of their data and presentation.
Trust me, people don’t WANT to hear it in most instances and they certainly have little confidence in some “nobody’s” contrarian ideas, do they?
It happens because we’re human and because people, generally, aren’t rewarded for humility in major organizations. Organizations WANT messiahs. Is it any surprise they often get FALSE messiahs and messes created by the human desire to have someone provide us with “all the answers”?
I love Kohn’s self-evaluation…”we did not perform flawlessly”.
I agree with GH’s assessement…no way did the Fed not know what was happening…and yes, it was a Fed engineered scam.
Got a little out of hand, though, huh?
Greenspan had a policy that it was better to clean up after a bubble than to prevent it.
The bubbles had kept the nominal economy growing quickly, but at what cost? Debt in place of savings. Debt in place of income. Debt in place of manufacturing. Debt, debt, debt…. Debt is the bone, the muscle, the blood, the organs, the brains… Debt IS the economy.
And we’re insolvant.
only for as long as a repayment can be made
You should check out WBs book. That became Ags policy when the bubble questions go too heavy to ignore, but prior to that he insisted it was impossible and actively pushed more mortgage lending/withdrawal. He stopped talking about bubbles for periods of years in the 90’s and this decade. It’s quite a story.
WB=?
‘We did not perform flawlessly. I absolutely agree with that,’ Kohn said
This has to be the understatement of the century.
He’s practicing for how he’s going to write it on his résumé. Like most of these yahoos, he will soon be out of a job.
No way, Kohn will be around for years. He knows where the bodies are buried…a sure guarantee of continued employment.
‘Will (the market) decline further from this point?’ the economist asked. ‘Yes - if the buyer remains pessimistic. Buyer pessimism can be self-fulfilling.’”
Oh, you mean all i have to do is remain pessimistic and I’ll get a lower price? Well alrighty then!
Another one for the stupid list!
I was going to comment on this one too.
So, what he’s saying is “It’s not a good time to buy because if everyone just waits, the prices WILL come down”.
And I love how he refers to it as “pessimism” rather than future buyers just being “smart” knowing that the prices will come down.
I say he’s just planting the seed to have someone to blame later: “See, I told you if you all didn’t buy, prices would come down. Can’t blame us for that. It’s all your fault!” As if prices coming down are a bad thing.
Snicker…
I like how trying to get a bargain on anything else is being a smart consumer, but on housing its portrayed as a negative thing.
When will they realize that most of the suckers don’t have 25% down nor the document able income that is required at today’s prices. There cannot be a sucker rally with “other people’s money” if the other people won’t play; there is no way to regulate liquidity.
Got Popcorn?
Neil
You still in Reno ex..??
In the vicinity, yes.
Buyer pessimism can be self-fulfilling.
Great! I’m as pessimistic as they get. Where do I get my cheap house?
No, we ‘re optimistic. We are optimistic that housing will fall down to affordable rate. Not 10x income!
“The New York financial giant has written down more than $3 billion in the past two quarters. Dimon expects more to come, as Chase still holds some $50 billion in ‘risky assets,’ he said. ‘We made some mistakes,’ he said to the more than 750 luncheon attendees
we made some colossal blunders but please enjoy your rubber chicken gratis of course
The Boston Herald. “Boston Federal Reserve senior economist Alicia Sasser and Lawrence Yun, the National Association of Realtors’ chief economist, told a real estate conference in Cambridge that while Hub housing remains depressed, the market has already planted the seeds of a turnaround.”
but did they talk about the drought which will make those “seeds” useless
Stop me if you’ve heard this one,
Lawrence Yun, a physicist and a chemist are stranded on a desert ilsand. They have plenty of cans of food, but no can opener.
The physicist says “lets build a catapult and throw the cans against those rocks over there”
The chemist says “no lets build a fire, put the cans in it and they’ll burst open from expansion”
Yun say “no, both your ideas are wasteful. Now let’s just assume we have a can opener…”
David Leareah: “Oh don’t listen to those pessimistic bubbleheads, all those funny colored mushrooms are perfectly fine to eat! In fact, they’ll give you 10 pounds of muscle and 2 hour erections and a healthy complection. And the rumor that there are man-eating crocodiles is completely false. There are no crocodiles on this island!”
Those seeds must be the same seeds that are causing all of those weeds to come up in my yard.
Awesome, hydroponic McMansions for all. When one burns down, do the firefighters forget why they came?
Current Fed policy is to keep talking down the crash…prevent panic at all costs. Of course, Bernanke went off the reservation yesterday, and left Paulson flailing around, but as Kohn observed, these monkeys don’t perform “flawlessly”.
From the original post:
“Archibald also warned against first-time home buyers trying to wait out Regina’s hot real estate market. ‘Get into the market early,’ he said. ‘Prices are likely to go up and the earlier you get in, the greater the chance you’ll find a home that fits your needs.’”
Funny how this used-up USA meme is now alive and well in Canada. Any Canadians care to comment?
Someone needs to export some Joshua trees to our Canadian friends.
You may worry about the climate in Canada, but they’ll grow just fine if you plant them deep enough…
Most of the talk in the MSM up here is only about US subprime, and that we didn’t have the same problem. Even if the lending standards were kept normal (I’m not sure about this) there are still other run up factors such as RE cheerleading, flippers, etc. Either way there is plenty of evidence that Price-Income is out of line and not much concern about it. The few people I’ve discussed this with glaze over almost immediately.
I’m also seeing adds for 2nd and 3rd mortgages, no doc lending and such but not by the big lenders.
“SUBPRIME, SUBPRIME, SUBPRIME” - I love it. People are indeed sheeple.
Oh, yes. Absolutely. There is a real superiority complex up here. Americans are thought to be greedy, unregulated and dumb for their housing excesses, whereas Canadians are just being ‘clever’ when they buy investment properties. It is infuriating. People think we have better regulation on mortgages than we do. Not only do I know of a fudged stated income in my circle of friends, I also am aware of HELOCs, 5% down (on a 40 year mortgage) and even 0% down. It’s different here, it’s different here. Everyone says it. The longer this lasts, the more they believe it.
I am in Vancouver where our market is “different”, apparently. Our new slogan is the appalling “the best place on earth” and people are quite excited about the olympics (or, rather, no one I know is actually interested in the Olympics but assumes everyone else in the world is). I expect it will correct, the the real estate cult is strong here. In the meantime, our residential and commercial rents are also being pushed up and, in general, the cost of living is being pushed up. There is so much building going on in my neighbourhood that the skyline outside my window and on my way to work is actually blocked. It’s making me sad, because we used to be a friendlier, quieter, prettier place. Everyone I know who bought feels rich…and then simultaneously worried they will never be able to move up (ie sell their half a million condo for a million dollar house). Most people who didn’t buy are a bit depressed and feel left behind or priced out. I have begun to daydream about leaving the city. It doesn’t feel like my home anymore. They replaced my city with a pod city! Stupid developers.
You wouldn’t happen to know a publicly traded canadian homebuilder would you? I’ve been searching for one to short over the next year.
Most of the devlopers around my neighbourhood seem to be private. Maybe visit vancouvercondo.info and ask there. They would probably be happy to help direct you (they are bears).
Today’s forecast low in Regina is -17. Tomorrow’s forecast low is -19. Maybe rich Europeans and Latin Americans will be the next to buy there.
Doesn’t matter if it’s Celsius or Fahrenheit — that’s cold!
It’s Fahrenheit. I got the info off the Weather Channel website.
It is beyond crazy here. I live in Saskatoon, north of Regina. House sales are still increasing after record setting increases last year . Much of the original fever, IMO resulted from investors from equity-rich Alberta looking ot cash in on a fresh market after Calgary and Edmonton levelled off. I see no evidence that the population has increased substantially to justify a .7% vacancy rate we currently have. We apparently have a huge lack of supply, but I can’t see the reason for it apart from speculative buying.
Back before the Canada housing bubble, Regina was a dirty little city that no one wanted to live in.
“1. There needs to be a significant price correction to bring this market into balance. 2. The worst is yet to come in housing prices. 3. Losses on existing loans will be much greater than is generally expected.”
WOW. That just says it all.
“It was one of the most productive real estate markets ever.”
Is “productive” the term used when lemmings prance off the edge?
He means Realtors made lots of money, churning product.
Sort of like stock brokers churning your accounts to collect fees. Imagine. Flip a house 3 times in one year, vs. selling the same house on average once in 5 years.
Yes, the market was very “productive” in terms of commissions.
Why certainly! It’s used like this:
Lemming herding productivity was up 10-50% from 2000-2005, depending on the edge. We haven’t achieved those levels recently but we’re hoping for a return in the next 2 years.
In other news, the lemming population has been drastically reduced in recent years. Other large groups of lemmings are serious (perhaps also fatal) trouble. We in the MSM have no why this happened but it makes great news. We’ll keep you posted on this tragic story.
A flegling leaps because it trust it’s wings. A lemming leaps because everyone else is doing it.
One is pure wonder.
The other is sheer suicide.
The dollar has really dropped off of a cliff over the past 2 weeks.
http://quotes.ino.com/chart/?s=NYBOT_DX&v=d3
Looking at the 6 month chart the dollar has fallen 9.2% against a basket of currencies that are themselves inflating at least 5%. If this trend continues for the next 6 months then we will see a 25% fall in the dollar in one year!! This will represent 25% price inflation on imported goods!
Got food?
“This will represent 25% price inflation on imported goods!”
Including necessities such as oil, which we are addicted to. But the falling dollar also affects the local price of domestically produced goods that can be exported to those with more buying power.
“Got food?”
Not anymore.
Food is overrated.
Well, look on the bright side, maybe it will help with America’s obesity problem.
Some gal who does Technical Analysis was on CNBC 2 nights ago calling for a drop to 62 on the index.
So, we can safely assume it will be either a.) Much higher than 62 or b.) much lower than 62.
Which is why gold has a long way to go on the upside… those that sold off at $900 an oz. are going to regret it.
Sorry, but this has all the look of a mini-bubble to me…
http://finance.yahoo.com/q/bc?s=GLD&t=1y
“The theme now is that’s it’s a great time to buy”
Will a RE agent ever say its not the right time to buy? I have tried to argue this point with a RE agent who posts on the Idaho Statesman message boards. He says that now is a great time to buy, so I ask what he was telling his clients 2 years ago- he never responds.
“‘The theme now is that’s it’s a great time to buy,’ says David Rea, chief creative officer for RE/Max, who directs its advertising.”
Meet the new theme…same as the old theme.
I am a Real Estate Broker, (not participating in this market)
Any agent who even suggests that this is a good time to buy should be sued for the 10’s of thousands of lost money they will surely cost their future FBs. Any agent who really believes that this is “a great time to buy” is dangerous and should have their license revoked. Between 08-09 I see drastic reductions due to overbuilding. 50% is not off the wall. (Hey I got a real job!!)
When buyers believe that home prices will keep going down that is called “optimism” or “realism” but certainly not “pessimism.”
Excellent point. Yun’s pessimism comment verges on name-calling. Does Yun really think it is helping his cause to disparage the analytical skills of his association’s customer base?
HIS customer base doesn’t have analytical skills.
“In a recent case in Chicago…When we turned up to serve papers on her, we found she was 9 years old,’ he said. ‘Her uncle had stolen her identity.”
My city’s lookin’ fabulous today - way to go - this has to beat the strawberry picker stories hands down!
Santos L. Halper
But can she vote like dead people there do???
absentee ballot, of course!!
LOL good one!!!
What a lame excuse: I can’t pay the monthly nut cuz I’m nine years old.
I plan on using that excuse myself soon.
It is lame excuse. My 8-year old is always wiggling out perfectly good contracts with some sort of song and dance.
(And what a fabulous relative to have, too. I hope she doesn’t have too many more uncles. )
what sort of “identity” does a 9yr old have?
a name.. an address .. and a myspace account?
A name.
An address.
A Social Security number.
Kids get SSN’s now when they’re born don’t they? Or soon after.
There was a check box on my kid’s paper work to have their birth certificates sent directly to the Dept of SS. Their SS cards arrived about 2 weeks after their birth.
As Chris Rock said:
“Uncles will prepare you for life. You got your (identity) stealing uncle, your alcoholic uncle, your molester uncle. Everybody got that one molester uncle…..”
Hey edgewater! Didya hear the news today? Palatine has contacted a bunch of lawyers. The town wants to secede from Cook County!
Chicago and Cook County - the laughing stock of the nation. We sure have fine politicians in this state!
“Under questioning from Sen. Richard Shelby, Kohn acknowledged that the Federal Reserve did not anticipate hefty mortgage-market losses. ‘I don’t know that we fully appreciated all these risks out there.’ Kohn said. ‘I’m not sure anybody did.’”
We knew about it here. Ben has been warning about it for years.
I hereby nominate Ben Jones as the new Fed chief.
I don’t buy this one minute. I believe Greenspan knew exactly what he was doing by encouraging alternative lending products just before changing the bk laws. I believe there has been a search on how to squeeze the last bits of productivity from Joe Sp - and a mountain of debt is just the thing to push people into the part time and difficult jobs that we americans don’t typically “want” to do.
just cause I’m paranoid . . doesn’t mean the bastards aren’t out to get me. . . . . .
You are so right! And the banks themselves-year after year after deregulation, chasing the fee, rewarding the fee “catcher” regardless of product, while the units that brought in reasonable profits year after year get screwed. Small bonuses for the steady business units while the “sexier” units get all the money, and then when the losses hit, NO BONUSES for the steady units because you have to “share the pain” but surprise, surprise, none of the prior gains.
“Lenders including BankUnited and a wholesale lending unit of Wachovia Corp. have elected not to lend to some areas or properties because of declining prices. Other lenders have tightened underwriting guidelines for slumping markets so as to make financing nearly unattainable.”
This is the best paid industry in the U.S. And they get this money while exercising no independent thinking.
When prices were going up, they lent on ridiculous terms, and when prices are going down they won’t lend at all.
At no point do they come up with an assessment of what prices should be in the long run relative to incomes, rents or anything else and lend accordingly.
This implies an overshoot on the downside. Whereas Bernanke seems to want to prevent a return to fair value.
“Other lenders have tightened underwriting guidelines for slumping markets so as to make financing nearly unattainable.”
This isn’t necessarily a bad thing. If you require a 20 percent down payment and won’t lend more than 2.5 to 3 times income, then financing is nearly unattainable for most until prices come down. If this forces prices down faster, back in line with incomes, then this is a good thing. Until prices get back to sustainable levels, mortgage lending will be a very risky venture.
Morons…Yep, that’s what they were.
Of course they were moronic like a fox, but that’s a separate discussion.
More like demonic like a vampire
For the fox part, take a look at what WaMu is up to according to Housing Wire:
http://tinyurl.com/25uutn
WaMu is excluding loan loss provisions, expenses from foreclosures, and restructuring charges in calculating the bonuses for its senior executives. Housing Wire notes “WaMu’s [CEO] Killinger, whose base salary is $5.07 million per year, stands to make nearly $28 million in bonuses during 2008 under the terms of [the] plan — a bonus that can be earned irrespective of how the company manages its mortgage exposure throughout what many expect to be the toughest year in mortgage banking history.” Meanwhile, MaMu’s share price has tumbled 70% during the last two years and will likely fall further (what with them not having to worry about the effect of those expenses on the bank’s bottom line), but apparently these executives deserve huge bonuses. I don’t know how these crooks get away with this sh*t.
Is there any Fed oversight?! Shouldn’t any assistance by the Fed be contingent on crap like this not happening? Maybe send this off to those about to lose their houses to foreclosure to WaMu and let nature take its course. Let them eat cake?…let them have their property back in less than salable condition.
‘I don’t know that we fully appreciated all these risks out there.’ Kohn said. ‘I’m not sure anybody did.’
Tsk, Tsk, Mr. Kohn.
“‘I don’t know that we fully appreciated all these risks out there.”
Then you’ve just admittted you aren’t qualified for your job, please hand in your resignation on the way out.
Whocoodanode…
Hey, it’s the Fed’s f*cking job to analyze these risks. They failed to do so. And, yes, plenty of people (including people like me whose economics background includes the obligatory high school class and two classes at college) were able to identify these risks and understand their seriousness. But the Fed, who supervises the banks, couldn’t do it? And the congressional committees that oversee the Fed couldn’t see it? These people (at the banks, the Fed, and Congress) should all be held accountable and lose their jobs.
The miscalculation of these loan risks is already being used as a case study in the University of Arizona’s undergraduate business math classes.
It wasn’t incompetence. It was ideology.
Specifically radical laissez-faire Ayn Rand fandboism, coming straight from the acolyte Alan Greenspan.
Have to disagree with you on here. I’d argue that by keeping interest rates artificially so low for so long, that this was the exact opposite of laissez-faire.
“Rabobank reiterated that it had no direct exposure to subprime mortgages that were made to risky home borrowers who were later unable to pay.”
Wow, somehow this statement is scarier than if they had their fingers in the CDO pie.
Hmmm…. maybe should have read the article first instead of reacting to the quote. Just fancy speak on their end.
As we all know, regardless of credit worthiness a lot of people financed more than they could chew.
The RMBS vehicles are similar type of pie.
They don’t even know what their exposure is, and neither do most of the other lenders. They bought AAA rated securities that aren’t worth the paper they were written on. Call them CDS, CDO, MBS, or the various alphabet soup of trade bets, there are a lot more counter-party dollars in the trade than there are dollars available to pay out.
Everyone’s guessing at the “market value” of their securities.
“1. There needs to be a significant price correction to bring this market into balance. 2. The worst is yet to come in housing prices. 3. Losses on existing loans will be much greater than is generally expected.” “Lenders including BankUnited and a wholesale lending unit of Wachovia Corp. have elected not to lend to some areas or properties because of declining prices. Other lenders have tightened underwriting guidelines for slumping markets so as to make financing nearly unattainable.”
“‘We don’t call it blacklisting,’ said an official at a large bank. ‘We just don’t write the loan.”‘
Would somebody please let all the HBBer’s excited about the reported sales rat the Foreclosure Auctions and the Real Estate Agents on their bus tours of Bank Owned REO’s, that the idiots making those bids… Can’t Get Loans. Repeat! Banks are NOT making loans on garbage properties especially to garbage buyers
I can speak from personal experience (have a condo in Jupiter, FL for sale) that the only bids that are coming in are cash buyers; making 10-12 lowball offers on a weekend junket from New York. The bids are 50 cents on the dollar from 2006 prices. Those idiots on the foreclosure bus are still watching 2005 episodes of “Flip this house”.
” … the only bids that are coming in are cash buyers;”
Cash remains king.
Why cant you “cash is king” parrots look at a dollar chart since 2001? Your king has no power.
What is king right now (if you were going to try investing today)? There are a lot of bubbles…it is confusing to me. Even TIPS are overvalued now, aren’t they? If cash isn’t king, it’s a good friend to have!
‘Why cant you “cash is king” parrots look at a dollar chart since 2001? Your king has no power.’
Who the hell said the cash had to be dollars, fool? It’s an expresion.
Anyway, I was studying currency charts when you were dreaming of bootcamp. I don’t like your tone; konk!
Why does anyone quote the Iragi, er, NAR information minister?
“‘Probably the worst for the Boston housing market is over,’ Yun said. ‘It’s possible that we might see a notable rise in home-sale activity in the second half, or we might just see more of a stabilizing, no real major change up or down.’”
I asked my barber about the best way to care for my thinning hair and he suggested I drop by his shop every three days for a trim.
Wonder if Hedge Fund Analyst still has a job?
http://www.thestreet.com/story/10406322/1/hedge-funds-post-worst-month-in-five-years.html
markets down 4 months in a row? guess they werent quite fully hedged. tag em bag em’ Ive been waitin for this news.
Here’s how you make a million dollars, first you get two million and then…….
The theme now is that’s it’s a great time to buy.
It’s always a great time to buy. Buy this. Buy that. Buy something. Buy anything. Buy. Buy. Buy.
Until you have no money left to buy. Not to worry. Our government will send you some money so you can buy something, anything.
And has anyone heard news about Burnaaki asking Automobile Lenders to work with borrowers to reduce their car payments or reduce payments if they are behind? Or perhaps reduce balances owe?
Am I the only one who thinks that cars are overpriced? And have been for a long time?
I think so. When typical new car matches a typical year’s salary, I think it’s bad news. ($30K ish or so) I have no historical evidence for my thought pattern but I think even 2 income families are insane to buy a new car.
Instead of making cheaper cars they keep throwing “extras” in to keep the price propped up. I rather have a basic, reliable, car for a reasonable price.
It seems to kind of the same in houses (even without the bubble). It gets cheaper to build but it seem like they make them bigger, etc to keep up/justify the prices. I end up happier with 50’s ranches because it’s about the scale of home that I want. I’d have to get a custom build house now a days to *gasp* get only 1 bathroom. (I hate cleaning…)
Typical new cars aren’t $30k, although there’s certainly many $30k+ (++++) cars available. A chevy malibu is pretty nice and is around $22k. Or a toyota Camry. I bought a brand new BMW in 2002 for $30k! And the msrp of the new BMW 128 is $28,600. So $30k is above average.
Basic - reasonable car:
Honda Fit. pretty roomy, about $15k. Even though it’s small on the outside, it feels like it has more legroom than a Cadillac Escalade! I guess if you can give up the 6 ft long hood then there’s more interior space. Not a rocket ship but 0-60 in 9.5 is better than the 1990 average, and it gets about 30-35 mpg too.
Or, get a used car. Cars last much longer nowadays. 200k-300k with some care.
A chevy malibu is pretty nice and is around $22k.
Okay, I’m off by about $8K for “typical” car. My husband’s student loans were $32K and I thought we’d taken on an huge weight to until those were paid off. I guess I can’t imagine any car being worth that kind of money.
Also, aChevy Malibu is not what I see many people around me driving, especially families. I’m still thinkin the premise holds: new cars are waaay, waay to expensive for the average American family.
I agree that they do last longer and are generally better built than their predecessors, though.
No one is going to have any sympathy for someone driving a mercedes who ought to be driving a civic. Why is it we have sympathy for all these “dream home” wannabes in foreclosure again ?
Instead of that tiny tax deduction renters get, make it $600.00.
Say goodbye to OuroVerde.
From sparkle to grim
So here we are a few years into this debacle and the best we’ve seen is officials/CEO’s deny they knew anything like this would happen and please excuse all the losses we’re responsible for while pulling a huge paycheck. I’m beginning to despair that we will ever see anyone held accountable, fired, jailed, or sued for ill gotten pay. Is it no wonder ordinary people have no problem walking away from bad loans ?
It is disgusting. There is nothing lamer than an official/politician saying “mistakes were made” (shrug) as if mistakes just make themselves, all alone out there in the ether. Ugh.
Congress told them they could do no wrong. In 1995, Newt Gingrich’s “Contract with America” created the Private Securities Litigation Reform Act and enacted it over a Clinton veto. It was a gift to the corporate community to help with “excessive” lawsuits from shareholders and investors. Gingrich and his cronies arranged to move the bar for criminal prosecutions of corporate suits too, the main reason Kozlowski, the head of Tyco, walked scot free after all the shenanigans there.
Notice a trend? The republicans removed oversight from investors and their lawyers, from Joe Cop and his badge, and then when the got the executive branch told the SEC and FTC that government doesn’t work, so they should take a long vacation while collecting a paycheck… you know, for the good of the party and the country.
And now we’re where we are now. How could that possibly be a surprise?
NEW YORK (CNN/Money) - Ex-Tyco CEO Dennis Kozlowski received 8-1/3 to 25 years in prison Monday for his part in stealing hundreds of millions of dollars from the manufacturing conglomerate.
Former Tyco CFO Mark Swartz got the same sentence from Manhattan Supreme Court Judge Michael Obus.
Judge Obus also ordered Kozlowski and Swartz to pay $134 million back to Tyco, and Kozlowski was fined $70 million and Swartz $35 million — bringing total fines and restitution to $239 million.
http://money.cnn.com/2005/09/19/news/newsmakers/kozlowski_sentence/index.htm?section=cnn_topstories
By the way, I’ll bet Ron Paul voted for that law. Libertarians generally are in favor of reduced regulation. So, if you believe that there should have been better Fed oversight over lending practices, Ron Paul may not be your man.
Having said that, I imagine that Ron Paul would not be in favor of helping to clean up the situation either, which would at least be consistent. He’d basically put us to the pre 1929 era, with little regulation or safety net. Very good for robber barons. FWIW, recessions post 1939 have been much shorter than historical:
http://en.wikipedia.org/wiki/List_of_recessions
Check out the “Long Depression” of 1873: 23 years long!
And this supports that statement as well.
http://www.nber.org/cycles/
I couldn’t find any data about the depth of historical recessions, but I suspect they are not as bad since 1939 either.
This is truly a nightmare that all of us going through. A disaster that we (HBBloggers) could see coming, but others refused to acknowledge it. One hopes that in the coming months greedy people will continue to be punished.
“But it can’t go on forever, and everybody knew something was going to happen.’
That’s funny, I used to work with a bunch of nimrods that *didn’t* know something was going to happen… So I guess it wasn’t “everybody”…
“‘One of the lessons learned is that we need to be more forceful,’ said Fed Vice Chairman Donald Kohn when pressed by Sen. Richard Shelby to explain why bank regulators did not spot subprime mortgage problems earlier.”
Reality has finally beaten out a confession
“Kohn said, that the Fed was conducting an internal review of what happened. ”
Code for we will investigate ourselves and delay the report until after the smoke has cleared or we are out of office. Kind of like GW’s push toward fuel cells and research on global warming. Distract the masses with fake research while you continue with business as usual.
” Asked by Shelby if the Fed was afraid of the banks that it supervises, Kohn responded: ‘No.’”
A better question would have been - Is the FED owned by the banks?
“‘Through public speeches and private meetings with bank representatives over years, the Fed tried to warn banks about their exposure to risky subprime mortgages, Kohn said.” Some forcefull warning??
“The hearing provided a glimpse into how the Fed, which is most known for its role as the powerful U.S. central bank, communicates with individual banks it supervises. ‘A lot of people believe the Fed was asleep at the switch,’ Shelby said.”
Not asleep, in bed with the banks.
“Kohn defended the Fed, saying it was ‘a very hard sell’ for the Fed to get banks to focus on potential risks when the U.S. economy was booming and banks enjoyed record earnings.”
It’s like a cop saying, busting the bankrobber was hard so I let him go.
“Under questioning from Sen. Richard Shelby, Kohn acknowledged that the Federal Reserve did not anticipate hefty mortgage-market losses. ‘I don’t know that we fully appreciated all these risks out there.’ Kohn said. ‘I’m not sure anybody did.’” Will someone send him the entire history of this blog, and a list of the economists who saw this a mile away.
“As the U.S. housing meltdown forces hundreds of thousands of Americans from their homes, the extent to which fraud was a factor in the crisis is just coming to light. Many fraud schemes kept running as long as cash kept flowing from Wall Street. Once the credit crunch turned off the supply of easy money, the perpetrators simply walked away.”
This rotten apple goes to lawmakers who allowed the offloading of risk with little oversite, and to team Bush who fought the states that tried to end abusive and fraudlant lending.
Thank God, we have a democracy. If enough among us suffer hopefully we will vote the bums (on both sides of the aisle) out. If we persist with the same bunch of reps, we sure deserve what we are getting.
“Thank God, we have a democracy.”
Democracy works when the duly enacted laws are enforced. They’re not. We now have a Who Do You Know, and Let’s Make a Deal society. A long way from democracy.
And deserve has got nothing to do with it.
Arthur Prieston of the Prieston Group? Mortgage FRAUD “insurance”?
I thought the one thing you couldn’t insure was fraud? Oh and they provide “training” too! Gosh Artie, when NINE year olds are buying FIVE houses I guess the training really paid off?
“‘The theme now is that’s it’s a great time to buy,’
Must not be much of a job for a creative director since their only slogan so far has been ” Now is a great time to buy!”
Yun opening his propaganda yap again, followed by realtor Gord Archibald in Regina, Canada, singing the some old universal realtors song, “Now is a great time to buy,” followed by a rendition of, “It doesn’t look like the market is cooling off. Get in now,” and ending with “Interest rates are incredibly favorable.”
We can only hope the buyers in Regina, are logging onto this blog and seeing that Canadian realtor Gord Archibald is singing EXACTLY the same songs realtorwhores in the USA were singing in 2004 and 2005 and even 2006……and then look at the FB numbers who bought during that period.
Something really has to be done to rein in these realtors. I’m not a great fan of regulations but where the NAR is concerned, they need to know that if they continue to hype and suck in the gullible with deceptive lies they are going to get smacked - and smacked hard with heavy duty fines.
Well, I don’t necessarily place blame on Realtors for the mess. After all, they’re basically glorified shoe salesmen. The difference is that their tactics are different. They use fear to sell. So when they say things like: “golly-molly, home prices are going up… you’d better buy or be PRICED OUT FOREVER!”, all they’re doing is using the oldest sales pitch in the world and count on herd mentality to do the rest.
I blame stupid home buyers who are dumb enough to believe something a person who likely doesn’t even have a college degree to entrust 30 years worth of toil in order to buy a home.
A question:
Are Canadians using toxic liar loans like FB’s did in the States in ‘04, ‘05, and ‘06?
One would hope not since it’s so obvious how that worked out for the US.
Yes. But for some reason many people believe it’s not happening. But stated income and 0 down are here.
Also, we just introduced a 40 and even a 50 year mortgage. Prices climbed again, but still the common rationale is that the UN voted us one of the best places in the world to live in. No one notices the credit bubble, it’s weird. We are dumb.
“Yun thinks the biggest factor holding the market down involves buyers who hang back because they think prices might fall further. ‘Will (the market) decline further from this point?’ the economist asked. ‘Yes - if the buyer remains pessimistic. Buyer pessimism can be self-fulfilling.’”
Well in that case, I’ll keep being pessimistic, since it clearly is to my financial benefit.
“‘The theme now is that’s it’s a great time to buy,’ says David Rea, chief creative officer for RE/Max, who directs its advertising.”
Wow! I haven’t heard that one!
Actually, the time is right, but the prices suck.
“Yun thinks the biggest factor holding the market down involves buyers who hang back because they think prices might fall further. ‘Will (the market) decline further from this point?’ the economist asked. ‘Yes - if the buyer remains pessimistic. Buyer pessimism can be self-fulfilling.’”
Based on the statement Yun made, I suspect he does not understand the basic principles of finance.
Just out of curiousity as to what his background was, I went to the NAR website (realtor.org) to get his bio. I wasn’t able to find it, but…. was anyone else aware that the president of the NAR was a guy named, “Dick Gaylord”? That couldn’t have been a fun name to grow up with.
Yes, HBBers have amused ourselves with cruel mockery of the poor man on several occasions. Really, what WAS his mom thinking? Dick Gaylord?!
Maybe she secretly hated him. I’m pretty sure I’d hate him, if I knew him.
You know Olygal, I made a mental note when I wrote my original post to put in as postscript that said, “Olympiagal, insert funny, snarky comment *here*”. We must be on the same wavelength today. I’m originally from Seattle, so I’m thinking that must be it.
Maybe his real name is Richard. At times Dick is a nickname for Richard.
Yun knows his problem is gazillions of shell-shocked, underwater FBs and a pantload of excess inventory…
JPMorgan Chase & Co. will not extend the 30-day moratorium on foreclosures it backed last month as part of President Bush’s plan to minimize the housing downturn, CEO Jamie Dimon said. That moratorium is set to expire in the middle of March.”
“The New York financial giant has written down more than $3 billion in the past two quarters. Dimon expects more to come, as Chase still holds some $50 billion in ‘risky assets,’ he said. ‘We made some mistakes,’ he said to the more than 750 luncheon attendees.”
Up until now, Chase had been as silent as GS about their potential writedowns. I’ve despised this bank for years based on their draconian business pratices. They’re only about 10% off their 52 week high while Citi, BofA have been hammered 30,40%+. They never got that high to begin with so maybe that explains some of it. I’ve noticed they keep plopping branches down in my area like weeds that largely go unused so I wonder if there isn’t some overcapacity liabilities. They were a $15 stock back in ‘03 before Mr Magoo opened the floodgates, they’re still $38 now. (OT, but we should all be thankful Andrea and he married after child-baring years, that would be one fugly mutant.) Anyway, what say ye, HOZ, Tx? Still room to short?
RANT ON!
Okay, after reading this thread I am stil thinking and laughing out loud. May need a new keyboard after this laughfest is over. You guys and gals crack me up.
I think it is quite obvious that the entire REIC system is busted. Heck, when 9-yr. olds can buy houses then it is time to throw in the towel. At least the strawberry picker has a job. What does this kid do? Sell lemonade in front of the house for $0.10 a cup. Good grief that’s really gonna work out now, isn’t it?
Therefore, I say screw it all. Let the whole country implode and go to depression. Soup lines, no gas. the whole 9 yards plus a 15 yarder for unsportsmanlike conduct. This country needs a thorough cleansing of this a$$inine behavior.
Look, I am not saying we should go back to the 1700s, but come on. Enough of the finger pointing and when that doesn’t work, denial. Come on, I work in county goobermint and we don’t act this bad.
Combine that with the fraud, greed, fear-mongering by the realtors, theft, gambling, lying, etc. this industry is toast and well should be. What MIGHT have once been honorable, the transaction of a house, is now no more than going to the cheapest used-car lot you can find.
Heck, even when we hit bottom in 2-5 years, I may still wait another 5-10 after that and then again, may never buy again.
Why bother with all the corruption in this mess and then still have HOAs, taxes, insurance, you name it, they’ve got it. Ding you coming and going.
Anyway, enough of the rant. I am so fed up. Maybe my son who is 12 can get a loan for a home. I ‘ll let him deal with the problems and in 30 years he’ll be house clear by 42. WHOPEEEEEEEEEEEEEEEEEEEEEE!
RANT OFF!
Couldn’t have said it better myself, Dan. I can’t even look at one of Florida’s cardboard subdivision with getting a case of the dry heaves these days.
But, please keep in mind that, for all the widespread damage done, it is a minority relative to the overall population that participated in this mess. I will not indict all of my fellow citizens based on the actions of the lesser amount of FBs, realtards, mortage bonkers, bankers, etc. Although I do understand how you feel. (Oh, gawd, I just tuned in Senator Dodd on CSpan talking about the mortgage mess. Somebody hand me a barf bag. This guys sucks major wind.)
I can’t even look at one of Florida’s cardboard subdivision with getting a case of the dry heaves these days.
Palmetto: I just got off of an airplane this evening and brought you one of those special bags located in the back of the airline seats in case you have to look at one of those cardboard subdivisions.
when Palmetto, a long time poster, I think he’s like my dad, says this type of thing, I get very bullish. that and the OCDan post.
Funny this blog….its like I know people here, but Ive never even seen or met em.
PRICED OUT FOREVER.
Shop for food staples now, or be priced out forever.
Now that I have my 300 day supply of food, its my dogs turn to stoke up on 20 lb bags of dog food. Prices are only going up.
The clerk told me they are no longer going to be using plastic bags at most stores.
Save your plastic bags now!
Prices are going up like crazy for essentials.
but i’ve still got stuff left over from y2k..
You want plastic bags ? We have thousands upon thousands of plastic bags littering our roadsides here in eco-freindly California. Highway 87 is plastered with the damn things thanks to the recycling trucks being leaky as sieves. We also have many other interesting items beside or on the roadway thanks to the many nitwits who can’t understand why you would want to cover your trash loaded pickup bed with a tarp at highway speeds or why a ladder might need to be tied down before hitting a pothole at 70 mph. It’d be funny if people weren’t being killed by the gross stupidity of the truck driving public here.
More brilliance from environmentalist whack-jobs. They never bother to investigate the total amount of energy (pre- and post-production production) used to manufacture or use any good. H*ll, they can’t even name the four basic stages/considerations of energy consumption in the production, use and re-use/decomposition of any manufactured/processed good.
If they could, they’d ban paper bags, not plastic bags.
OC Dan-well said, but, just have to say, not sure what to do with the 15 yeard penalty, most people apparently don’t know, but, the 9 yards is a sailing term, think Pirates of the Carribean 3 sails by 3 sails, 9 sails meant all of them were up.
FYI.
3-month Treasury = 1.50%, 3-month brokered CD = 3.30-3.55%
6-month Treasury = 1.70%, 6-month brokered CD = 3.40-3.65%
Also, 30-year:3-month Treasury spread is now over 300 BPs.
people, we are seeing a 400bp spread, how juicy does it have to get for the bankers? Still 100 million goin to the Discount Window..Open Market Ops are wide open, TAF….wide open…
somethins gonna bubble. Oil hittin my number of 105 and gold hitting 1000…..gonna be the same day.
“Under questioning from Sen. Richard Shelby, Kohn acknowledged that the Federal Reserve did not anticipate hefty mortgage-market losses. ‘I don’t know that we fully appreciated all these risks out there.’ Kohn said. ‘I’m not sure anybody did.’”
Yes, they were all asleep at the switch. Whaddaya mean no one expected it? These people are supposed to be expert economists. They must be lying or even stupder than we thought. Ah, the uptake draft of a financial mania! Takes one’s breath away!
the NAR was stuffing their back pockets with cash on a regular basis. Looking the other way kept the cash rolling in.
2 to 3 yrs ago in here (or via housing bubble 1 predecessor site) there was talk every day of this massive (mostly foreign financed) credit bubble sustaining the real estate bubble - hard to beleive the Fed and other entities didn’t notice this TIDAL WAVE was coming