Bits Bucket And Craigslist Finds For March 6, 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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Name:Ben Jones
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I have been tracking craigslist single family rental adds in several Sacramento sub markets for nearly a year now. Compared to April of 2007, the number of adds have increased 90-120%, and the rents seem to be 8-10% lower in March 2008. In the bubble area in which I live, houses seemed to rent up in about 30-60 days last year, with many of the people moving to Sacramento from other states (midwest & Oregon/Washington). Today, houses seem to be sitting on the market for 3-6 months before they get a tenant, some longer if they are overpriced. There are many, many 3,000 to 4,000 SF houses for $1800 to $2200/mon. $.55 to $.60 per square foot. There is a much greater supply than there is demand.
Look at this! In Sedona! Ben, is this a good area. I am going to contact these folks today.
http://flagstaff.craigslist.org/apa/596303637.html
I’m not total sure, but I think that’s in Village of Oak Creek, which the locals call Village of old people. Not sure how they get away with calling it Sedona, but even the mail addresses say that. Sedona is also a VOOP, IMO.
Is that why you moved to Flagstaff?
Outdoor sports.
“Outdoor sports.”
When do you find the time?
He fires up the BenBot.
Maybe he has “people.”
As a resident of the Village of Oak Creek, I disagree with many of these comments regarding the folks who live here. We are located just seven miles south of the center of Sedona, we have a Sedona zip code and branch of the Sedona Post office. Our telephone exchange is a sedona prefex and we are listed in the various telephone directories as “Sedona”. We are also in the Sedona School District and the Sedona Fire Protection District.Years ago this community was known as “Big Park”, indeed that is the name of the local elementary school.
I suspect that the only reason that the community has not become part of the Sedona Municipal boundries is that we do not border directly with the City. We are separated by national forest land.
A further comment is that since we are unincorporated, there are are lower taxes. However, this does also reduce our services. You only get what you pay for.
Sign of the times? That rental sounds nice. I’m sure it would have rented for MUCH more a year or two ago. It’s in a pretty area with great views of the red rocks. Wonder if there’s a HOA, though.
As a former “local”, we called VOC the “Village of Old Creeps”. I think they get away with calling themselves “Sedona” because they share the Sedona post office. I could be wrong.
For “outdoor sports” northern AZ is truly God’s country.
Another sign of the times: FINALLY, some truth in advertising.
This morning I was listening to the radio and a commercial for Ditech came on. The lady’s voice said “Are you looking at an adjustment in your variable rate mortgage like a deer caught in the headlights? Stay tuned for advice from the millionaires club right after this message from Ditech…”
Then came a ten second sound bite for Ditech, followed by more inane chatter by the aforementioned lady.
This ad was obviously made for a national audience, but what they don’t seem to realize, is that here in Seattle, the Millionaires club is a homeless outreach program.
So here’s how Seattle renter heard the ad:
“Are you looking at an adjustment in your variable rate mortgage like a deer caught in the headlights? Stay tuned for advice from your local homeless shelter….”
Truth in advertising.
i wish i could find a deal like that -old people or not
Old people don’t bother me. I prefer living near them. They’re quiet and have no annoying rug rats around. No big pickup trucks, no loud music, etc.
It IS nice to have neighbors who have gardening as a hobby instead of loud partying.
Plus, living around folks with short memories and large gardens cuts down on the grocery bill!
I don’t have a problem with retirement folk. But they alone don’t support much in the way of jobs or outside activity. And the Oak Creek Valley is isolated, so them and tourism (which is seasonal there) is about the only game. Unless you get into timeshares, which IMO are a curse. As far as the natural beauty, the developers are doing everything they can to screw that up. I wish it wasn’t so.
But I thought flowers grew faster when exposed to really loud rock music? (Rap music just makes them fight?)
Oak Creek, yes locals might call it something else, but it’s climate is ideal, the area is God aweful beautiful, you’ll get 4 seasons, and the temps should be quite liveable if you find Phx too hot.
I used to climb down the canyons around there in the hantavirus days. Hahahah, like living on the edge.
You’re right Ben. The Village of Oak Creek is NOT Sedona. Sort of like calling Compton “Los Angeles,” or New Jersey “New York.”
In other news, my crystal ball called the recession months ago. Now my crystal ball says that Oct 6 will be the day the economy tanks. Mark your calendars.
Too bad rents in Gainesville are pretty bad and house prices barely budged
It doesn’t help that they’re charging homeowner’s insurance rates like we’re on the coast. Maybe an insurance expert could clarify, but what I hear from homoaners is that their rates are insane. A lot of people don’t carry (and then get stuck when they have a house fire…oops).
The rates go up a lot each year and that is pushing up rental rates from the bottom.
Just wait until all of these giant new rental places open. There’s Wildflower, University House, Jefferson on 2nd, Cabana Beach Phase II, The Bartram, Legacy (if they build it), The Enclave (??), and there are the Jackson Sq condos, The Loft, The Regency at Duckpond Phase II, and unfinished Stadium House, all underoccupied. Oh, and Oxford Place II. Hm, and I think I spied for sale signs at The Regency Phase I.
Oh, and there’s this guy.
UBS shares sink on Alt-A writedown talk
ZURICH (Reuters) - Shares in Swiss bank UBS AG (UBSN.VX: Quote, Profile, Research) fell on Thursday on speculation it had sold a huge portfolio of risky mortgages at a deep discount and planned to announce another massive writedown in the first quarter.
Analysts said they believed UBS had sold its Alt-A investments — U.S. mortgages ranked between prime and subprime — to U.S. bond manager Pimco (ALVG.DE: Quote, Profile, Research) for 70 cents to the dollar, taking a deep discount on a 26.6 billion Swiss franc ($25.7 billion) portfolio.
http://tinyurl.com/35kufe
CNBC this am had a denial that it was anywhere close to $26B
… this quarter.
Ex-Morgan Stanley CFO wants to buy your pension plan
Duff looking to purchase corporate retirement assets and liabilities
By Mark Bruno
March 5, 2008
Companies eager to deal with their underfunded pension plans have a new option: Sell them to former Morgan Stanley chief financial officer Phil Duff.
Mr. Duff, who was the founder and chief executive of hedge fund FrontPoint Partners, has started a new investment management firm that focuses on addressing institutional investors’ long-term funding needs.
Duff Capital Advisors officially launched today, with the help of up to $500 million in capital from private equity firm Lindsay Goldberg. Among other services, the new firm aims to buy corporations’ pension assets and liabilities—assuming employers are comfortable offloading their plan assets and obligations to a third party.
But Mr. Duff noted that such arrangements have become somewhat common in the U.K. in recent years. He added that his new firm is in the early stages of conversations with U.S. employers that are “looking to separate their pensions from the operating companies,” and noted that DCA may be acquiring a U.S. pension plan in the near future.
Mr. Duff said that, in general, DCA is looking to provide customized investment strategies and advice to “any organization with long-tailed liabilities.” He noted that corporate pensions are “certainly at the top of that list,” given the number of companies burdened by underfunded defined-benefit plans.
DCA will also work with health-care funds, government funds, endowments, foundations and even sovereign wealth funds in search of new ways to address their funding issues, Mr. Duff said. The firm is in the process of securing between $1 billion and $1.5 billion in seed capital from financial institutions for several of its investment strategies.
http://tinyurl.com/28v9hk
It’s a great idea for the companies (if priced right). The quarter-conscious execs will get a one time boost. They also won’t have to deal with the hard problem of reducing the pension because it’s underfunded. (Lucent dealt with quite the PR disaster.)
I’m glad I’m not depending on a pension/SS for old age. I also hope I keep my wits about me and can manage the money into those years, because obviously the country has decided that social structure is A Bad Thing.
So you get paid now instead of getting paid when you retire?
Yes, because I can invest the money with realistic returns.
Pension managers are not incentivized to deal with the unrealistic assumptions, so they kick the can down the road. Witness SS. Lucent was another good example.
Hell, if my corp decides to screw us again like this, then give me my pension now. I can do a massive cram course via Txchck etc!! in managing my own pension funds rather than watch some Other imbecile squander my earned funds.
Boy, have I some learnin to do.
Send suggestions, cause I know my corp is probably looking and salivating over getting rid of all our underfunded pensions the EZ way. Sell em.
This is just like the CDO scam, give me some money and I’ll take care of your liablilites. What happens when he defaults, the company or the Govt will be asked to bailout the poor poor workers (who would actually be innocent this time). New century M.O., privitize profits, socialize losses.
fire sale?
LONDON (MarketWatch) — UBS may have sold a portfolio of Alt-A securities worth 25 billion Swiss francs ($24.1 billion), according to an analyst at J.P. Morgan.
http://tinyurl.com/3ag2xo
My guess: They “were” worth 25 bn Swiss francs, before the fire sale…
Sounds like UBS has royally screwed up the comps…
‘”We see the speculated level of 70 cents on the dollar as realistic in a fire sale,” he said in a note to clients on Thursday, adding the current market price is probably 84 cents on the dollar.’
PIMCO buys and now how can anybody keep Subprime at 0.70. Pimco really screws up an enormous number of MTF. Liquidation will force more liquidation.
CNBC this morning had a denial (words on screen, not actual interview) that it was nowhere close to $26B.
Ga. bills target high foreclosure numbers
http://tinyurl.com/3yab4q
We all know the government can fix this - not.
Leigh
After reading the coffee discussion yesterday, it struck me that now only renters can afford high priced coffee shops ;-).
Well those of us who bought pre-bubble can afford it too…Although I normally only go to SBUX for those iced coffee drinks in the summer.
People’s varying degrees of obsession with FourBucks is something I will never understand.
1. Make a pot of coffee.
2. Make a tray of ice.
3. Decant the coffee into a pitcher and add milk, sugar and corn syrup “chocolate” sauce. Store your pitcher of brown glucosetest fluid in the Subzero.
4. In the heat of the AM, pour a couple cups of the gluey homeruint coffee over some of the homefroze ice, or, optional, dump the whole deal in the homeblender and homerender it into a sickeningly sweet slurry.
Et voila. Magic! You are your own frapper for pennies a day. It’s more convenient to drive to the outlet and sit in the exhausty drive-thru and pay the angsty barrista $4 for a drink you’ll suck down in 5 minutes? What to the ev.
renting affords me and the wife those little extras we like
such as no debt which is my favorite
btw sbux coffee is rank imo
just wanted to pipe in to defend SBUX, which seems to be the recipient of a lot of hate.
maybe my palette is bad, but i think SBUX tastes great (and no, i don’t drink Maxwell House)
Any coffee from a paper cup tastes like, well, paper. In Starbucks’ case, like burnt paper.
I like their plain ol’ drip, too, but I still make my own most the time. It’s just a little treat when I’m stuck somewhere, waiting, having to kill time for some reason.
Coffee made from good beans,crushed at home, put into filter in chemex, smells divine. And Sbux does not smell yummy. I am not even a coffee drinker.
Night/ Day.
Back when I was picking beans in Guatemala we used to make fresh coffee. Right off the trees I mean. That was good. This is shite, but hey…
When my sister visited Bolivia, one of her pictures was of the coffee roaster in the back yard of the people she was staying with. Looked like a small job cement mixer with a flame under the cylinder. Apparantly pretty common in middle class homes there.
I kind of doubt that the type of people who bought subprime would be starbucks drinkers anyway…………..imo
Odd….given the subprimers’ penchant for living beyond their means, flaunting faux wealth, and keeping up with the Jones’, I would expect them to be SBUX regulars.
Another misconception. “Subprime” loans were not only sold to lowlife n’e'r do wells.
Uncle Buck waterboarded:
March 6 (Bloomberg) — The euro rose to a record against the dollar on speculation the European Central Bank will keep its key interest rate at the highest in more than six years while the Federal Reserve reduces borrowing costs.
http://preview.tinyurl.com/3yd2dn
deflationists buying skateboards:
March 6 (Bloomberg) — Crude oil rose to a record $105.96 a barrel in New York as the U.S. dollar fell to its lowest ever against the euro.
Gold and copper also advanced to all-time highs as the sinking dollar made commodities priced in the U.S. currency cheaper.
http://preview.tinyurl.com/35gxo7
I was actually thinking about getting a skateboard. One of those big, surfer ones. Wow, oil at $100. That’s what the oil bulls were yammering about in Texas - 25 years ago! Yesterday someone posted that they had never seen silver go up a buck in one day. Goes to show how short a time most have been watching. I saw it go up $1.5 and down the same amount the next day over twenty years ago. Over and over.
Keep this up and it might be back to an inflation adjusted amount in another 10 years. Gold should be at $3,000 just to stay where it was when I bought my first bits. It is fun to look at.
Mother always said not to argue with a man in his house, but I am surprised at your stance on gold, considering you ran a metals blog.
Wake me up when you get over $2,500, then I might be in the money. I’m suggesting you haven’t been in this game very long.
Ha! I’ve been in ‘the game” even longer. I’ve got my circa 1976 Krugerrand on a gold chain! John Travolta style!
I wish I had kept mine, but when I found myself broke one day, I sold them. My first husband bought gold at the top of the market. When we split, he pushed a stack of Krugerrands (which had lost half their value in something like a week) across the table to me, like they were poker chips. He was a very bad husband, but he did have style.
“I’m suggesting you haven’t been in this game very long.”
BINGO
I’ve got my circa 1976 Krugerrand on a gold chain! John Travolta style!
Hah, awesome.
Tell ‘em to google “Hunt brothers,” and get back to you…
their bankruptcy cases were interesting too. Another lawyers’ full employment act that lasted for several years.
What made them interesting?
I truly believe that when gold passes the magical $1000 line, that there will be a rush of MSM articles, and that could yield a fresh run upward. I’ll guess gold will reach 1200 and silver 25.
That leads to the question watcher should be asked. Are we talking about trading, or buy and hold? Two completely different things and IMO one group profits on the other.
..rush of MSM articles causes a run upwards…
Good, solid fundamentals are driving the gold market.
“Good, solid fundamentals are driving the gold market.”
LMAO…… Care to name those “good solid fundamantals”?
LMAO…… Care to name those “good solid fundamantals”?
Those would be fear and panic. ; -)
Buy silver/gold/wheat/iron/steel/real estate or be priced out forever!!!
Dumb sheeple…..
Watch residential burglaries skyrocket a’la 1980 if silver actually takes off. My parents and uncle got burglarized and we we lived in a very rural location. The thugs ultimately got caught but not before the silver was pawned.
The thing is, the Hunt Brothers were absolutely right. They understood that silver is a tiny market that should go to the moon with a minimal amount of investor interest.
They nailed it.
…and pissed off Wall Street… which then enacted legislation to crucify the Hunts.
The moral of the story is: Only insiders get to make the big money.
The Hunt Brothers were wrong and early. They tried to corner the market in an undeliverable contract. They could have gotten out for a large profit, but they waited until the BOT made the contract forced liquidation only. It is not the first nor the last time that the futures exchanges have done this. It recently happened in the BOT bond pit, there were not enough deliverable bonds for the series that was traded. Why should there be a short squeeze for one series of bonds when another series of bonds has the same yield?
The Hunt fiasco killed the silver market in futures. It is also a reason I do not trade the PMs, the market is small and illiquid. As a trader I would be very nervous if long in any PM (at this time) the long/short ratio is 8:1. Hedgers are selling not speculators.
Making my first silver purchase this weekend, unless I get snowed in again.
We had long conversations about this on my M&Ms blog. Personally, I see precious metals as a sort of insurance. (unless you are trading, which is different). A SHTF insurance. But anyone that suggests they only go up is denying history. Look at the 90’s.
So be honest with yourself about WHY you want to own silver and you’ll be fine.
I invested in reworking jewelry for me. My family has many pieces from the 1800’s so I harvest the diamonds and make them into rings. It’s kind of fun but I won’t be visiting the jewelers until this mess is over. 2011.
p.s. I would never sell any of my rare diamonds or pearls.
Do you know what’s happening with natural stones like sapphires and rubies? I bought about $500 worth of them from a wholesale dealer around 5 yrs ago.
I keep just enough gold and silver to bribe the border guards. I figure I’ll need 3 oz. per person. PS. I bought @ $480 & have about 100 silver dollars for smaller items. I also find ammo to be a valuable trading item.
$9.37T of national debt (not counting Social Security, Medicare, and other stuff) and adding somewhere around $400B-$500B+ debt a year plus the multi trillion dollar ramifications of the housing bubble mess make me a gold owner. While I don’t buy into the various Mad Max scenarios I occasionally read about, somehow this debt and our deficit spending will have to be addressed, and the likeliest way to me is inflation.
Make your purchase; as for me I’m trying to decide when to sell. I collected mine when silver was cheap for the kids to look at and if needed in the future to barter with. Wish I’d have sold out with the Hunt brothers high and put it all in Microsoft. Would have been way ahead of the game. This time I’ll sell and pick a stock to ride; good times and bad time telecommunications are not going away.
“… good times and bad times telecommunications are not going away.”
True, but the telecommunications field is overcrowded with infrastructure; many players fighting over the same customer base.
The telcos and cables are evolving into becoming mere bitstream providers (a commodity product) and not much more. The only way commodity providers can compete is by price, thus endless price wars are their future.
IMHO (FWIW).
“I was actually thinking about getting a skateboard. One of those big, surfer ones. ”
That does look like fun. And I am old. But I never could stay upright on the original little ones. All the good toys came too late for me.
thornburg:
NEW YORK (Dow Jones/AP) — Home-mortgage lender Thornburg Mortgage Inc. disclosed Wednesday that its failure to meet a $28 million margin call caused a series of cross-defaults, and said that JPMorgan Chase Bank NA, which made the original margin call, will “exercise its rights.”
Thornburg (TMA) shares plunged 39% in after-hours trading.
http://preview.tinyurl.com/2pt7ny
Hey Ben, as per my question yesterday, I am not a troll. I met some of the folks here at the last DC HBB meeting at the Capital City Brewing place at Union Station. I can;t help my IP address but I swear Im not a realtor/troll.
Spook
That’s pretty funny, when you have to plead your case for non-banishment by swearing you’re not a realtor. LOL!!!!!!!!!!!!!!
I got a serious poke in the ribs when I was introduced to someone who was a freshly-minted realtor, and I said, “Oh, a useless profession that’s going the way of the travel agent.”
I got a talking to later too. ::grin::
You had everything right except for the “profession” part.
I wanted to say “job”. That was my lame attempt at self-censorship.
I remember you had interesting stories about being a contractor. Obviously, I need to have more beer next time.
I saw it yesterday.
Suzanne researched this (screen name) posted after you.
I believe the comments were to her.
I can’t remember who posted that Ben spanked ya, but I believe it was an error.
Leigh
Ben spanking Suzanne. Now, there’s a visual.
Spook, I thought Ben was referring to Suzanne, I researched this! If you look the comment is in his box.
He spanked suzanne. But it was hard to decipher.
Technically, Suzanne in the commercial _is_ a realtor.
merrill runs for the exits:
March 5 (Bloomberg) — Merrill Lynch & Co. will eliminate 650 jobs, record a $60 million charge and stop making new home loans through First Franklin Financial, the subprime lender that former Chief Executive Officer Stan O’Neal bought in 2006.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a9NCAnGbEBXs&refer=worldwide
Halting loans? What are the rest of the people going to do? Liquidate what they have? And then what?
Will the spankings never stop?
So, where do the Merrill people drink these days? Could be some interesting stories once the pink slips start arriving…
City Paper (DC’s version of the Village Voice but with less intresting journalism - you can stop laughing now) has a big cover story on how great it is to be unemployed and collecting unemployment.
Senator: SarbOx a burden for banks, may have worsened credit crisis
Elizabeth Dole crafting bill that would make Section 404 compliance voluntary for banks
By Nicholas Rummell
March 5, 2008
Two Republicans from North Carolina plan to introduce legislation that would make compliance with certain provisions of Sarbanes-Oxley voluntary for banks. Observers say the chance the proposal will pass is small, however.
During a Senate Banking Committee hearing yesterday, Sen. Elizabeth Dole said she wants to make compliance with Sections 302 and 404—two of the most controversial provisions of Sarbanes-Oxley—voluntary for banks. Ms. Dole claimed the provisions have “overburdened” financial institutions and may have exacerbated the current economic crisis.
North Carolina, which Ms. Dole represents, is home to several of the country’s largest banks, including Bank of America and Wachovia.
In a statement released by her office, Ms. Dole noted: “We must ensure that businesses and shareholders receive benefits from these regulations that are commensurate with the burdens they create. This balance does not currently exist, and the costs of these requirements of Sarbanes-Oxley— while well intended—outweigh the benefits.”
Rep. Walter Jones introduced legislation last year that would allow bank holding companies, savings and loan holding companies and insured depositories to voluntarily opt out of Sections 302 and 404 certification requirements. The bill languished in the House Financial Services Committee, but Mr. Jones has asked for a committee hearing on the issue.
Section 404, the most controversial of Sarbox’s many sections, requires public companies to assess their internal controls over financial processes and then have an external auditor verify that the controls work. Several business groups—as well as lawmakers on both sides of the aisle—have said the section is too costly and detracts from the overall benefits of Sarbanes-Oxley. In her statement, Ms. Dole noted: “For many banks, this has been one of the most costly requirements because it involves extensive testing and documentation.”
In response to such criticism, the Securities and Exchange Commission recently postponed the 404 compliance deadline for auditor attestation for small public companies until 2009. The SEC is now conducting a study to evaluate the costs and benefits of the provision.
Section 302 requires executives such as the CEO and CFO to review and certify that internal controls were evaluated. Such certifications, which also list significant changes to internal controls, must be included in financial reports, according to the provision. Violations of Section 302 can result in both fines and jail time.
http://tinyurl.com/2p384d
So, let me get this straight….
Had banks not been forced by SOX to keep strong financial controls and have those controls tested by outside CPAs, then they wouldn’t have made risky Ninja loans or invested heavily in CDOs.
I simply do not see how 404 compliance has anything whatsoever to do with banks making reckless investment.
Then again, Elizabeth Dole was the CEO of the American Red Cross when they were issued a qualified audit due to lack of basic internal controls. Good ole Liz doesn’t have the time be bothered with all those messy internal control requirements and neither should her banks.
Anytime some congressional snake says “voluntary,” they may as well be holding a neon sign that says “I WAS BOUGHT AND PAID FOR BY LOBBYISTS.” Hello, you were elected to pass LAWS, not waste my tax money jawing about effing “guidelines.” Don’t bother. Corporations will take that umbrella back when it rains, “voluntary” guidelines or not, and everybody know it.
A banker is a fellow who lends you his umbrella when the sun is shining and wants it back the minute it begins to rain. —Mark Twain.
SarbOx caused the Fed to lower rates to 1%, for people to borrow far more than they had any intention of repaying, and the lenders to drop all standards completely?
Wow! That’s one heckova impressive piece of legislation if it do all of that. I wonder though does it do sheets as well?
Daniel Gross: “If even Google is showing a decline of economic activity in a big chunk of its domain, it can mean only one thing: We’re in the portion of the economic cycle that rhymes with
shmashmession.”
Long-term T-bond yields drop again = good news for folks hoping to refinance into fixed rate mortgages?
Not when MBS is selling for .70 on the dollar. T-bond yields only provide a floor for all interest rates, not the ceiling. The difference is called spread, and the spread reflects how critical the market is of risky credit.
Hmmm.
Believe it or not, some of the Googlaires that I have talked with think that recessions don’t apply to them.
I suppose we will find out if that is true.
bennie and the feds:
March 6, 2008 — TOMORROW is when it could start to get really complicated for the Federal Reserve.
More tricky than it already is? Yep!
The Fed, of course, has been cutting interest rates for more than eight months with little to show for the effort.
And another reduction in borrowing costs - maybe the heftiest yet - is expected when the central bankers meet later this month.
http://tinyurl.com/2pe67y
I am sure ZIRP will cure all of our problems… as will $130 a barrel oil, or worse… right!
Report: Minority Neighborhoods Have Disproportionate Burden of Subprime Loans
http://tinyurl.com/32989o
This concentration means these minority communities will shoulder most of the negative impacts of the subprime crisis — foreclosures, sinking property values, lower tax bases, abandoned homes and higher crime.
The report recommended that policy makers protect borrowers and tenants from foreclosures and pass mortgage reform legislation.
No surprises that many center cities will see their share of the housing debacle. But it’s nearly impossible to protect people from themselves (white or minority) as long as that pot of gold is within reach.
The contemporary American city, like our society, has become very fractious. Outside my window I can see where SFH costing nearly $1M are but a block from apartments that rent for maybe $500 - $600 a month.
By now local pols must be getting just a tad nervous because nationwide this burst bubble has brought very disparate parties into such close proximity. If they were certain the fallout would be “contained” they would not be getting worried.
I drove by a Countrywide office on Lasalle yesterday, they didn’t look too busy.
Hey, I work near that office. (If you mean the one by Cafe Iberico.)
They never look busy.
Yep, the Bay Area is like that too. I am at present residing in Mountain View, a town of fairly shabby housing stock that sells for $800k and up (mostly up), surrounded by even shabbier rental housing and rising gang activity. I’d be pretty nervous if I had blown a million bucks to put down roots here.
You’d not only be nervous, you’d be dumb.
Right now, there are multitudes of very nervous and very dumb people in the Alt-A Bay Area.
[Alt-A = SF Bay]
Indian Wells,CA has a hidden “neighborhood” where they rent to their servants. The “neighborhood” can’t be seen easily, hidden is the word, and my mom can hunt down anything.
Stats are that IW,CA has 4,800 homes, 4,900 residents. Only occupied 2 mos per yr, rest of yr vacant. Owns the State 111 hwy through Indian Wells. Speaking of neighbors, La Quinta/Indio Coachella just down the road. DH or desert hotsprings is just up the road a bit. Recall, that ex prisoners are let off inside of 2 hr range of prison when released. DH is just inside.
I wonder.
“disparate parties into such close proximity”.
FHA increases:
WASHINGTON — The government Wednesday raised the maximum for mortgages in 14 high-cost California counties that could be guaranteed by the Federal Housing Administration to $729,750 from $362,790.
http://www.latimes.com/business/la-fi-fha6mar06,1,3888364.story?ctrack=2&cset=true
How odd to see a massive increase in the FHA limit from $362,790 to $729,750 just as homes that sold for $729,750 in 2005 are making a pronounced slide back towards $362,790…
they still have to qualify or have equity to refinance. Don’t get too excited.
Prices would not be rapidly falling back towards $362,790 if no-down/no-underwriting liar-loans were still prevalent.
That won’t matter save for 1.5% lower interest. You still need 20% down and afford the principle.
The interest is higher.
There are now three tiers of MBS being set up. 1) loans 50,000 - 400,000 2) loans 401,000 -600,000 3) 600,000 to 729,750\
The interest rate on groupos 2 and 3 are higher than on grp 1. grp 3 is about 1 pt higher than 1
“afford the principle”
That’s the biggee, even at 0% interest.
Once again, we all know this:
WHO can afford or want to buy houses at the $700,000 level.
they still have to qualify or have equity to refinance. Don’t get too excited.
Nothing that can’t be fixed by a legislation removing such nonsense requirements.
Non-Fing-issue……..NEXT!
Why don’t you explain this to the writers at the SD Union-Tribune? They still don’t seem to “get it”…
FHA raises housing loan limits in county
Move will affect most California mortgages
By Emmet Pierce
STAFF WRITER
March 6, 2008
In a move that could help thousands of distressed San Diego homeowners, the Federal Housing Administration yesterday announced that it will raise the limits on mortgages it guarantees to $697,500 within the county.
Lenders welcomed the move, which is expected to provide relief for some borrowers whose adjustable mortgages are resetting at higher rates just as home values are falling.
‘“It benefits your banks and other holders of loans,” he said. “They can take some loans off their balance sheets and sell them. That allows them to free up capital so they can make new loans.”
Not everyone is happy with the plan, however. Los Angeles economist Christopher Thornberg said raising the limits for FHA, which was created to help low-and moderate-income households, was a bad idea.
The action will reward speculators who took on too much debt when mortgage underwriting standards were loose “and the taxpayer becomes responsible for those losses,” Thornberg said. He characterized the program as a bailout.’
Will lenders have a choice between cramming down unrepayable mortgages on their books, or selling them off to GSEs? And will the GSEs pay “fair market value”?
Why would a GSE that already is having issues buy non-performing paper?
“Why would a GSE…”
Taxpayer-subsidized loan guarantees, perhaps?
I’m pretty sure the markes would freak out if something like this to be pushed onto GSE against GSE’s middle to top management will…
Because when the GSE goes belly up there will be an outcry for the government (taxpayer) to bail it out.
Thus saving the banks.
Of course the master plan is to change the lender bag-holder holding junk and foreclosure bound loans to the GSE’s ,so the taxpayers can pay for the losses and hold the risk of this junk paper . Do you really think the lenders are re-writing these junk loans right now to hold them forever ? They are just stalling for time until they can get this operation set up ,but they needed to get the loan amounts increased first .
I just would like to know when they are going to raise some tax to pay for this . Maybe we should all just write a 20k check and send it to the government . Wouldn’t it just be the powers idea of Justice to pass a bill creating a renters tax because these are the only people that have money to pay for the gamblers .
carlyle defaults:
March 6 (Bloomberg) — Carlyle Group’s publicly traded mortgage bond fund failed to meet margin calls and said it received a notice of default.
Carlyle Capital Corp. missed four of seven margin calls yesterday totaling more than $37 million, the Guernsey, U.K.- based fund said today in a statement.
http://tinyurl.com/2cbtlc
I thought NODs were a problem solely faced by FBs. Does this mean Carlyle Capital Corp. is now officially a FB?
Cry me a river for the Carlyle Group Crime Syndicate. I pray they lose every last dime.
turn those machines back on!!!!!
AMEN!
Carlye Group:
I don’t even have my first homemade cup of joe.
“You smell that? Do you smell that? Napalm, son. Nothing else in the world smells like that. I love the smell of napalm in the morning. You know, one time we had a hill bombed, for twelve hours. When it was all over I walked up. We didn’t find one of ‘em, not one stinkin’ dink body. The smell, you know that gasoline smell, the whole hill. Smelled like… victory.
(Pause)
Some day this war is going to end…”
Apocalypse Now… Robert Duvall
Carlyle group… many have their 3rd/4th home in Indian Wells.
I can hear them now..waaaaaaaaaah.
Hey, fellow DC area HBBer’s. In the pursuit of generally sound persona6l financial practices, there is a community shredding event in No Va on March 15th. It is on the campus of George Mason University. Perhaps it goes against the grain to occupy the same space as that horrible George Mason real estate group (DC is different!), but a chance to shred 5 boxes of personal papers without having to feed them into a small personal shredder 3-5 pages at a time should be enough to overcome the problem.
http://www.nbc4.com/sponsors/5340872/detail.html
Environmental Results Of Dec. 8, 2007, NBC4 Community Shred Event:
71,509 pounds of paper were shredded.
That’s 35.75 tons!
More than 608 trees saved.
More than 250,282 gallons of water saved.
More than 144 barrels of oil saved.
More than 2,145 pounds of air pollution reduced.
What do they mean.. How does shredding paper save trees, etc
Maybe they recycled the shredded paper into new paper? I don’t want to go for the environment. I want to do it because shredding personal papers is boring.
maybe that’s it, although i’ve heard that all the mountains of collected newspaper just sit and rot.. only thing that’s cost-effective to recycle are metals and a few, select polymers.
Aside from being 3K miles away, it’s too late for my boxes of stuff. Office Depot had a shredder on sale, $99 for $69. Does 10 sheets, paperclips, CDs..Then the clerk gives me a receipt with a $40 rebate attached. Bingo.
Well it’s likely that shredded financial documents are worth more than newspapers. Newsprint is about the cheapest, crappiest paper that exists, and being used doesn’t improve matters. In many office recycling programs, you’re NOT allowed to put newspapers in the recycling bins because that contaminates a recycling stream of nice used bond paper.
As for recycling newspapers, it’s not a zero sum game. Yes, you usually DO have to pay to haul them away. The question is does it cost LESS to get rid of than regular trash.
From what i understand, the general rule is that if you must pay money to have something collected, recycling it is not cost effective for that material.. it has a negative value. If they pay you to take it away, recycling is cost effective.
As far as paper production, the cheapest way to make any sort of paper starts with wood as the raw material. In contrast, the cheapest way to produce aluminum is with recycled aluminum.
Look, used newspapers are trash. Whether your locality recycles them or not, they HAVE to get them hauled away. If they can pay less to have them hauled off than bananna peels, fast food wrappers and, coffee grounds you’ve come out ahead. There was a real problem with idiots at local governments bugeting this as a profit center rather than loss mitigation. But it’s certainly true that there is little demand for used newsprint. I’m not asserting that attempting to recycle it always makes sense; it truly is a marginal case. I’m just saying that if it costs to have it hauled off than to landfill it, it makes sense to do it.
why does something have to be cost-effective to make it worthwhile?
i get ya.. we’re just talking two different things.
Trash is trash. Trash has no value, or it has a negative value. IMO, the term recycling should be reserved for those few waste materials which are not trash.. ie they have positive value when recycled into some product.
By my definition, paper of any sort is not a recyclable.
And just because the govt applies fines, fees or various costs that effectively force a material to be disposed of in a particular way, thereby “saving” money, such costs don’t make the material any more valuable.
So, not only do attempts to recycle not always make sense.. as you say.. but they very rarely make sense, economicaly speaking.
the flip side is it’s an immature industry and there’s a whole lot of money to be made here.. doing so is actually one of my favorite daydreams.
AdamCO, money isn’t everything. But it’s what we measure everything with. ; -)
Because in general - if it’s not, it’s a sign that it isn’t.
With recycling in particular, it’s very easy to use more energy inputs doing recycling, than it takes to make from scratch. A better way to deal with the problem is what the Germans did - make the manufacturers responsible for recycling the product at the end of the life cycle. That way you have at least some incentive in the process to produce products that are in some way disposal efficient.
A better way to deal with the problem is what the Germans did - make the manufacturers responsible for recycling the product at the end of the life cycle.
Yes, absolutely. I’d love to see the US move in this direction.
The cheapest, cleanest, and most renewable way to make paper is with hemp. Too bad we have outlawed hemp because of lobbying from the paper industry and enforce it with fascist drug laws.
As far as making manufactures responsible for recycling the product, you are doing nothing but using force on another individual and violating their right to build and sell products to meet demand. You legitimize government regulation of private and free transactions.
What we need to do is enforce property rights and prevent individuals from destroying the property of others via pollution. Then, individuals will be forced to care for their own property and will be unable to “socialize the losses” caused by their pollution of other’s property.
It will not be long now until our economy crashes due to the unsustainable nature of our consume and trash culture. When the dollar becomes worth less than old news papers, then you will see our culture change as people are forced to be productive with what we have.
It doesn’t seem to be all about hemp-prejudice. The USA does have one or two small hemp mills still in operation.. there are only maybe 50 worldwide.
One problem is hemp is a seasonal crop, so you need to harvest, gather, transport and store an entire year’s supply of raw material somewhere, which costs serious money upfront. And the processing technology is primative and expensive.
Its interesting that cigarette paper is 50% hemp..
http://mojo.calyx.net/~olsen/HEMP/IHA/iha01105.html
The USA does have one or two small hemp mills still in operation.
There are only two licensed farms in the US. Licensed == paid by the government to grow hemp as part of our national strategic hemp supply. Raw hemp cannot be imported, only sterilized hempseeds are allowed into the US.
Hemp can be grown year round in Texas and requires no fertilizer or pesticides.
Incidentally, hemp oil was crucial in the production of paint. A special law was passed in the 40’s to allow the paint industry to continue to use hemp until they could fully transition over to lead based paint.
Use of hemp oil instead of motor oil in your car would make changing your oil easy and environmentally friendly. You could just drain you car on your lawn. No more worrying about spilling oil on your driveway!
Germans also have excellent recycle and selling of used clothing which gets bundled and shipped to other countries that buy the bundles and small vendors sell to locals. Hopefully they find good clothing, not crap bundled. It is a gamble to see if your bundle has good stuff.
Interesting documentary seen while in Brussels.
No trash in European streets. Not like the good ol Usa.
Also another environmental use from a real tree is anti fungal, anti bugs, NEEM oil. Just saying.. bedbug problem in England/worldwide cause of massive amounts of people traveling today and no DDT usage.
Germans also have excellent recycle and selling of used clothing which gets bundled and shipped to other countries that buy the bundles and small vendors sell to locals.
Used clothing is handled pretty efficiently in the USA. That which isn’t sold in thrift stores, secondhand shops and resale stores typically goes to Latin America or Africa.
And just think, if your car starts burning a lot of oil, it’s a GOOD thing!
What DD and ET said. Did you ever wonder where the T-Shirts commemerating the “victory” of the team that DIDN’T win the championship went? You’ll find people wearing ‘em in Sierra Leone.
“No trash in European streets. Not like the good ol Usa.”
Neapolitans may disagree .
Fidelity Fined in SEC Probe of Private Jets, Escorts, Ecstasy
http://tinyurl.com/yoo5je
So they are on drugs!
Jeesh
Leigh
i have alot of $$$ with fidelity and i did not get any ecstasy?
what gives?
LOL!
Ya don’t strike me as the estasy type.
Leigh;)
They’re supposed to be out there making people’s retirement fantasties come true - and all they’re really doing is rolling around on the floor in a giant “cuddle puddle”.
OMG - and it gets better!
In an order filed yesterday, the SEC provided details of a bachelor party in Miami for Fidelity traders that was reported in a 2005 WSJ front-pager. Allegedly, Wall Street firms provided private jets, the illegal drug Ecstasy, and paid for female escorts for attendees, which included Fidelity traders. The party also featured the hiring of a male dwarf for a “dwarf tossing” contest, a practice that has been banned in many places.
WSJ
Sounds very late Roman empire, doesn’t it? Did they have vomitoreums also?
You regard that as wrong?
Most bachelor parties were held in Las Vegas, change of scenery.
Dwarf tossing banned??? This country is indeed going down the tubes.
First they came for the dwarves and I did not speak out because I wasn’t a dwarf….
Wonder if they hired Weeman from Jackass for the dwarf toss?
All the crap going on in the market, and they focus on Fidelity. The SEC is truly worthless.
My 401k at my current job is with fedility and there funds blow, I had vangaurd before and there funds area far far superior in every way…
My Roth IRAs with Vanguard. It did very well in ‘06 and ‘07. This year, not so much.
Evidence of the next Bubble -
Gore Invests $35 Million for Hedge Funds With EBay Billionaire
Gore invested the money with Capricorn Investment Group LLC, a Palo Alto, California, firm that selects the private funds for clients and invests in makers of environmentally friendly products, according to a Feb. 1 securities filing.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a7li9Nhmhvg0
Too bad there is no (private) market for green stuff…
Makes you wonder, if Al Gore can turn $2M into $35M, is he getting smarter or is he getting special favors.
Anyway, with GM starting to trumpet all of their wonderful Hybrid products, can the rest of the world be far behind? Living in AZ I have to wonder how long these batteries are going to last because our heat kills them fast.
He apparently studied Hillary’s experience with cattle futures.
Don’t forget the soybean spread. REFCO is now out of business.
I wonder how many times that moron has flown in private jets back and forth to meet his new partners.
If Gore is a moron, what does that make Bush?
Not Gore, thankfully.
Neither is a moron. Both have successfully pulled the wool over their constituent’s eyes.
Who was it that said that “the two major parties are the hairy ass cheeks surrounding the stinking bunghole that is predatory capitalism?”
New Spasm Jolts Credit Markets
By Liz Rappaport, Joellen Perry and Deborah Lynn Blumberg
Word Count: 1,095 | Companies Featured in This Article: Ambac Financial Group
“This unease is also filtering to other kinds of lending, pushing up interest rates on everything from municipal…”
Do I hear 14%?… who’ll give me 14.25 % ? … yes, that gentleman over there from England bids 14.15% …
From MoneyNews.com
Night Court: Florida Foreclosures Force Long Hours
St. Lucie County, the poster child for Florida’s growing mortgage crisis, is seeing the first ripple of the coming wave of home foreclosures.
The civil court is adding night hours to keep up with the caseload.
Home foreclosures have jumped to 715 filings a month from 40 to 45 before. So clerks will put in extra hours, working till 9 p.m. four days a week, to catch up, Clerk of Courts Edwin M. Fry Jr. told the Stuart News.
“The case load has become just horrendous,” Fry said, “and we’re trying to find a solution.”Court staff had already been working on Saturdays for the past four months, but they can’t keep up.
For now, paying overtime is more efficient than training new workers, and it’s far from clear how long and deep the crisis will be.
“The number of foreclosures doesn’t look like it’s going to slow down this year, so we might be doing this for a long time,” Fry said.Florida’s total of 30,178 properties with at least one foreclosure filing is the nation’s second-highest state total after California, according to foreclosure tracker RealtyTrac.
The state’s foreclosure activity was up nearly 158 percent from January 2007. Texas is No. 3 nationwide.Action was necessary. Foreclosure filings threatened to backlog the entire court system if nothing was done now, Fry said.
“We’re obligated to take every case we get and handle it in a timely manner,” Fry said.”The whole court system relies on us getting this work done. We keep asking attorneys out there to be patient,” he said.
An auction of condo units not under foreclosure is unusual in Milwaukee. About 20 people registered to bid at Tuesday’s event, which was held at the Wisconsin Club.
However, when the auction started, only about four people actively participated, Leszczynski said.”I was surprised there weren’t more paddles going up,” he said. Two of the units were sold to an investor, two to owner-occupants and one to the parent of a Marquette University student as a dwelling for his child.
There was action at the auction of some downtown condos Tuesday night, but only five of the 21 units being offered were sold.
http://www.jsonline.com/story/index.aspx?id=724989
condos in milwaukee?
i know there was no bubble in the midwest. how much is the average sfh in milwaukee? is there a need for condos?
Probably costs less to build per square foot than detatched houses due to common walls and roofs. Not much savings on the land though.
You see very, very few condos in small towns. In Oil City, I saw maybe 2 or 3 condos buildings. One of them was rental apartments, another one was a nursing home, a third one may have been a hotel. Probably none were real condos.
Milwaukee only has about 600,000 residents and the metro area is about 1.75 million people, but it’s an old, urban city. Of course it’s going to have tall buildings and condos and lofts and everything else a 150+ year old industrial city has.
This article reminds me of my childhood fear of twisters, growing up as I did in Tornado Alley. I believe twister damage may be an apt metaphor for the destruction which rapid deleveraging inflicts on financial structures.
Deleveraging’s Vicious Spiral Picks Up Speed
Word Count: 530
De-leveraging rolls into more markets
Safer ‘agency’ mortgage securities hit as investors sell to meet margin calls
By Alistair Barr, MarketWatch
Last update: 2:46 p.m. EST March 6, 2008
COMMON SENSE
No Answers Yet To a Trillion-Dollar Question
By JAMES B. STEWART
March 5, 2008; Page D3
I have had a scary thought about the nature of our union of states. Only the federal government has the unconstitutional power to print new money and borrow indefinitely from the Federal Reserve. If the vast majority of the people in our country are insolvent and living on debt, then all of the state and local government must be insolvent because their only source of revenue is their generally insolvent population base.
There is only one option for state and local governments, cut their budgets and spending by the same amount as their citizens. The problem we have is that most state and local governments are more inclined to take on additional debt (if they can) or raise taxes (if they can) than to cut spending. Ultimately, when the dollar fails the local governments will also fail because they suffer from inflation just like everyone else.
When this happens you will have a bunch of needy state and local governments appealing to the Federal Government for handouts of freshly printed money. These handouts will come with so many strings that all the separation of powers will be meaningless! The Federal Government will have effectively conquered the state government by bankrupting them though the direct taxation of the state’s citizens and the devaluation of the states currency.
Now if we ever get a world wide currency, you have the perfect template for the takeover of previously sovereign nations.
and in news you can misuse
http://news.yahoo.com/s/ap/20080306/ap_on_re_us/sharing_chores
So.. diamonds? Flowers? Go Shopping? Dinner and dance? nope..
Being 35, male, and having never lived with a girlfriend, I don’t mind cooking or cleaning. My mother is a terrible cook, so I learned early in life if I want to eat something decent, I better learn to do it myself.
Just don’t have matched china and sterling silver while you’re still single. I dated a guy like that once and my gaydar never stopped buzzing.
Hahahahaha!!!! I haven’t heard that word in a while.
maybe he should go back to la?
I guess I’m safe. Made in Thailand earthware (though I usually use the plastic) and made in who-knows-where stainless. I won’t have real silverware until my mother dies and I’m convinced that she’ll outlive me out of spite.
MIL decided we would be jealous if she gave her set of silver to her daughter, so they went ahead and picked the same pattern and gave it to the two daughter-in-laws.
I never felt the need for silver. Husband feels ambivalent. We want to sell it, but I’m concerned about the right thing to do. I hate to be ungrateful.
If it’s truly silver, just consider it as part of your silver holdings. You can always melt it after she dies.
God bless you.
A man that cooks is a delight to his wife and inspiration to the soul. I think that’s from the book of Proverbs.
I don’t recall that one (not that it isn’t), but I know this one’s in there:
“Better to live in the wilderness
than with a contentious and angry woman.”
blano you must be single.
Correct, lol.
and bitter
There are over 200 new SFRs listed on San Diego’s ziprealty.com used home inventory since 3/4/08. Many are 4br homes offered at below $500K, some indicating “bank owned” in the ad copy. Two years ago, 4br homes below $500K were not available. It looks like the red hot spring sales season is underway…
“Are we talking ourselves in to a recession?” asks BizWeek….
http://tinyurl.com/3anvvl
Let’s blame the bad economy on…us?!
That’s a good place to start.
Collective blame is a good place to convince fools to look for primary causes: “You have met the enemy and you are they…”
Rent: $4495
http://www.my-dwelling.com/apartment.php?id=113
Accidental landlord?
Leigh
You’re only a landlord if you have a tennant. Let’s see how that works for her.
My thoughts exactly.
I might have considered it, but the washer and dryer aren’t stainless steel.
4.5 freakin K a month.. no pets? …they can bite me
And i want two million bucks in small bills with non sequential serial numbers…
oh.. and please put the mushrooms on a top.
Huh?
Sounds like you’ve had all the ’shrooms that you can handle!
I was down in Key West over the weekend.
It is a microcosm of the housing bubble.
Every third house was for sale. On every street (it is a small island and I walked most of it)
Even on the center of the universe MAIN street (Duval Street) – there were business and houses for sale. Many empty store fronts
Condo building was going on everywhere (for $500,000 - $1,000,000 at least)
I saw at least a few houses for sale that I saw last year for sale
The average person down there probably makes $30,000 (all service sector)
“Everyone wants to live here” and “Key West is different”
There was at least 400 “for sale” poster on a realtors window. And at least 100 “foreclose” sale posters on the same building
Every ad in the realtor magazine has “reduced” or “make offer” on it
Talking with people who live in the island – they said housing was down at least 50% with no end in sight…
Will send some pics in to Ben.
I’m considering going to Key West for Easter weekend, and the hotel rooms I’m seeing are e-trocious. Beaucoup foreign visitors? Anytime I”ve gone, there’s been a fair representation of Europeans and Canadians, and it’s got to be moreso currently in light of the weak dollar.
I wonder if any of those FOR SALE houses will rent to a damm Yankee for the weekend…
i was there like 10 years ago. from what i remember there are only 1 or 2 nice hotles in the area and the rest were dumpy moldy motels so choose wisely
i also remember the food being very bad, but the sun was great and so were the drinks
Check it out during FantasyFest in October. They get 2K per weekend for those moldy hotel rooms.
I did some research for a friend of mine who wanted to vacation down there I found tons of homes available for weekly rental in the Keys. Of course, it doesn’t appear that I saved the site to my favorites but I think I just googled Homes for Rent Florida Keys and came up w/a very long list. Good luck.
TY
The average person down there probably makes $30,000 (all service sector)
Or $0. Lots of homeless. At least last time I was there. I always figured if I end up homeless, Key West will be my destination.
HGTV’s Dream Home giveaway house this year is in the Keys. I entered. Kind of hope I don’t win. How would you sell a million dollar white elephant in this market?
It might be fun to wipe out the comps, though.
Found this on Craigslist and flagged it. Can you believe this genius?
Sarcasm off,
Leigh
Jeremy Blunt, the “New Breed” Investor, Reveals…
Discover How A 24 Year-Old Kid Does Real Estate Deals Using None Of His Own Cash or Credit… And You Can Too!
And I’ll Even Show You How For FREE…see below…
http://www.jeremyblunt.com/
Probably the same scam as the flipping bimbo bartender. They “wholesale” or broker deals between extremely distressed sellers and investors and then try to scalp 3-5%. We used to do that in the stock market when there were real spreads before decimalization.
Tx,
In this climate, jerks like this are prolonging the pain and perhaps contributing more said pain to the economy.
Oh well, he has the right to do so…grrr.
Leigh
I disagree.
It’s a legitimate model of arbitraging informational inefficiency.
Distasteful? Yeah, probably.
They’re not making money selling real estate any more, so they’re selling their “secrets”. There’s a radio commercial running on Sirius right now that’s doing the same thing.
Must be the same people that trained Casey
…and they never got HIM to stop widdling on the carpet.
He used to have a full head of hair before 2007. Now he relaxes at the beach in collared dress shirts, thinking of other ways to make money.
Should have been attached to the preceding post.
Wouldn’t that be a receding post?
State bill would suspend foreclosures
Deferment proposal would give subprime borrowers a one-year reprieve
By Jennifer Bjorhus
jbjorhus@pioneerpress.com
Article Last Updated: 03/05/2008 09:43:02 PM CST
Borrowing a page from New Deal-era lawmaking, Minnesota politicians are pursuing their most direct effort yet to stem the state’s growing tide of foreclosures: defer them for a year.
The Minnesota Subprime Foreclosure Deferment Act of 2008 would halt foreclosures of subprime or exotic “negative amortization” loans for one year, though still requiring homeowners to make minimal payments during the stay.
The deferment would buy struggling homeowners time to work with their lenders and wait for a possible federal solution to the crisis, lawmakers said Wednesday.
An estimated 15,000 homeowners statewide would qualify, helping about half the 33,500 homeowners projected to slide into foreclosure this year.
With a Republican governor and opposition possible from the banking industry, it’s not clear how such a quasi-moratorium will fare politically. A hearing before the Senate Commerce and Consumer Protection Committee is set for today.
Gov. Tim Pawlenty has yet to take a position on the bill, said Brian McClung, his spokesman. Industry groups said they are studying the Depression-era-style proposal and haven’t taken a stand. But at least one Republican lawmaker said he’s wary of any legislation that tries to rewrite established contract law.
(article continues)
http://www.twincities.com/ci_8468206
WOW. Are we there yet - LOL.
Leigh
i sold some silver futes this a.m. on that spike over 21 for an few week trade. i will sell some more if it goes up. not trading any gold and holding the core.
bought the ndx here at 1747 with a tight stop for the day.
i’m fairly certain that silver will drop from the 21.20 to at least the 18 range over the next month. as certain as you can be as a trader, that is! remember, i did call the recent move from 15 to over 20, on HBB, but i tend to be right 50% of the time..
Buying silver. Crystal ball sees it going up to $47 by next year.
I thought there was a slow down here in Texas. They just keep building out, way out.
Jerry Jones, Lincoln Property team up for Prosper complex
Prosper is an exurb which will eventually become a ghost town.
Sounds like the perfect place for a real estate seminar.
According to a WSJ article today, FBs can’t refinance their exploding first mortgages to cheaper fixed rates because the holder of the second mortgage won’t let them!
It seems that second mortgages and home equity lines once routinely allowed borrowers to refinance their first mortgages by agreeing to remain the second lien.
But now the second lien mortgages see an out — perhaps the FB would be forced to pay off their mortgage, which could otherwise be worthless. Except with negative equity, they can’t do that either!
This just goes to show how vulnerable you are when you have a second mortgage (and how risky second mortgages are). And now millions of Americans have them. A result, in part, of allowing the mortgage interest deduction for non-purchase mortgages when they took away deductability for other consumer debt. How do HELOCs help homeownership?
So… sometime later today or tomorrow we should hear the politicans yapping about requiring subordination for second mortgages so that FBs can refinance the first.
I’ve heard worse ideas, though.
You read it here first, folks!
DFW homes are undervalued by 30%? Where do they get these numbers?
Study: Dallas-Fort Worth homes are undervalued
of course they don’t bother to mention that the “undervalued” houses are all out on some godforsaken former cow pasture 45 miles from downtown with buildable land all around them.
there’s a reason they are “undervalued.” Doubt anyone trying to buy in the Park Cities or M Streets thinks DFW is undervalued.
The DFW equivalent of the Inland Empire?
No because in the IE, you theoretically can drive to somewhere interesting (east to Las Vegas, west to LA, beaches, etc.) In this part of DFW, you can drive north to Okmulgee or south to the state penitentiary in Huntsville.
I live in the Tidewater area of Va (Norfolk, Va Beach, Chesapeake,etc) and recieved my SF tax appraisal mid Feb. The appraisal increased the land value of the dwelling and structure by approximately 1%. I decided to appeal since sale prices are down about 5-7% in my neighborhood. Last night I opened a notice from the city (Chesapeake) that reduced the value of my home by $30K - the 5-7% reduction since the last yearly tax appraisal. I am floored. No way I thought the city would willingly reduce the base and take a voulentary reduction on taxes. Perhaps the hue and cry of the pi$$ed off citizens forced the issue. Absoutely Amazing. 3/01/08 inventory = 6514 with $320 K median. 3/01/07 inventory = 5106 with$355K median. 3/01/06 inventory = 1951 with a $369K median. Nothing is moving. All kinds of radio and newsprint commercials with “Now is the best time to purchase real estate” propaganda with a new twist. The homes are being advertised not with a specific asking price but with a range - SFR offered for sale at $415K to $440k. Anyone familiar with this premise and how/why in the world would it be effective?
Anyone familiar with this premise and how/why in the world would it be effective?
My guess is that they’re establishing a floor to discourage lowball offers. Which means they’ll probably get no offers.
It’s a laughable tactic.
Somebody tells me they’re asking $415K to $440k. Why on earth would I offer 440K? hahahahaha.
You might if you just came out of a “cuddle puddle”.
Greetings from Norfolk, VA. I grew up in Chesapeake, and have been reading the blog here close to the beginning. There are now ads on the radio in the region regarding refinancing ARM and IO loans. I’ve also heard some mentioning foreclosures. The cities won’t be able to hide from the declining home values.
Was in Charlottesville yesterday. Client mentioned that she was shocked to see that assessment of her house/property (western Albemarle County) had gone down for the first time ever. Also seemed surprised that there were three houses in her neighborhood for sale, one of which had been for sale for a couple of months. Said she was surprised they hadn’t sold, because the prices seemed pretty good. Also said her brother (a realtor in Md.-suburban DC) was still doing fine.
There’s still a lot of denial and/or cluelessness out there.
Home of the Hedge funds
Greenwich Residential, Milbank Avenue and East Elm Street; 1 2 4 5 Idar Court; 147 Holly Hill Lane, Greenwich, CT Condominiums, 34 units Greenwich 2006-FL4 Wachovia Bank The loan is 60 days delinquent and sales have not met expectations. Servicer is working with the borrower on a resolution.
WAMU put on negative watch by s&p
Have a feeling we’ll see a retest of the S&P support levels soon - perhaps next week.
Time to buy the dip again soon?
I think it’s time for a bigger tourniquet. Lucked out and caught the pop up in jwn yesterday, it’s on it’s way to 30.
I am not sure this will display correctly. The last 3 weeks of data has not been too good for 85249 zip code of Maricopa county for the sellers. This area is in Chandler, AZ and has had a large amount of building and speculation. This is where I made my bubble money and hope to move back in another year or so when the houses are 1/2 price off the Sept. 2005 prices. This information is taken from the real estate section of azcentral.com
Home Sales in 85249
County Week Sold Median Number Median Price Number Sold Median Price
Starting (past week) Price Sold (same 4 weeks
(past 4 weeks) last year)
————————————————————————————————————————————-
Maricopa 02/08/2008 13 $360,000 53 $398,659 161 $380,000
Maricopa 01/17/2008 11 $458,000 59 $443,079 138 $404,955
Maricopa 01/10/2008 4 $293,624 76 $439,414 169 $417,670
Maricopa 01/03/2008 24 $391,000 105 $450,000 194 $417,365
Maricopa 12/27/2007 28 $484,213 103 $454,204 212 $417,808
Maricopa 12/14/2007 23 $464,000 105 $441,017 173 $431,753
Maricopa 12/07/2007 21 $439,000 98 $426,707 157 $431,944
Maricopa 12/04/2007 14 $455,400 94 $426,707 142 $433,594
Maricopa 11/26/2007 35 $395,646 92 $425,457 150 $430,876
Maricopa 11/16/2007 28 $422,500 88 $428,752 130 $438,500
Maricopa 11/08/2007 22 $425,795 84 $444,254 142 $435,946
Maricopa 11/02/2007 14 $495,000 84 $405,606 149 $445,204
Notice the difference of 1 year on the cumulative sold the past 4 weeks. Latest information shows sales were 1/3 of what they were last year (53 vs. 161). To read the above information the column headings are:
County
Week Starting
Sold (past week)
Median Price
Number Sold (Past 4 weeks)
Median Price
Number Sold (Same 4 weeks last year)
Median Price
“Chandler, AZ and has had a large amount of building and speculation. This is where I made my bubble money and hope to move back in another year or so when the houses are 1/2 price off the Sept. 2005 prices.”
I am confident that you will be able to accomplish your goal. Just remember that some subdivisions will be so damaged (in many ways) during this bust that they should probably be avoided altogether.
CNBC snark?
A few minutes ago, Diana Olick mentioned that the NAR said that today’s pending sales report showed “stabilization” in the housing market. Then she made a point of saying, “their words not mine.”
And while it is a mantra here, I found it surprising for Mark Haines to respond: “Those realtors, they are just like car salesman, they will never admit that the market is bad.”
I had a little fun this morning writing an angry email to Bill Dickson of Dickson-Podley Realtors in Pasadena CA. Bill had written a long letter to the Pasadena Star News, saying that 30% decline last year in median Pas prices overstates the true decline [this is possibly true IMO] and that “it’s a good time to buy real estate if you plan to live in your home at least three to five years” BS! BS! BS! I said I was sure he knows as well as I do that the ratio of prices to rents remains absurdly high, and that instead of telling buyers to throw their money down a rathole, he should be telling sellers to reduce their prices to a point where buying costs about the same as renting.
Foreclosures at a record.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aTrusEALeA4s&refer=home
Many either couldn’t pay before resets, or got some kind of loan forgiveness and then later defaulted anyway.
It wasn’t so long ago that people were saying foreclosures were rising, but from a historically low level. We’ve blown past the average and the record, on the way to the stratospehere. I think we have two years at these levels.
Good thing BB is planning to gently persuade lenders to write down loans in order to reduce the future foreclosure rate…
it is already clearly at all-time record levels in San Diego.
The worst part is the MSM reporting it is the “Worst since 1945″.
While factually true that isn’t quite the same as the truth.
The truth? Worst. Year. Known. The records started in 1945. For all we know, this could be the worst ever in US history.
whew…walmart sales up. wasn’t that the general consensus during the holidays on this board that the discount realtors would hold their own and the specialty guys would be sol? we knew it was going to be a good year for walmart.
plastic gift card redemptions, hoarding food and depends undergarments
Walmar’t YOY increase was 2.6%, but from a recent posting (on this blog I think) and here: http://articles.moneycentral.msn.com/Investing/Dispatch/080226markets.aspx says the actual inflation rate for the preceding 12 months was Year over year, the PPI is up 7.4%.
I would think that these increases have been at least partially offset by consumer price increases, so it seems to me that retail sales are actually down.
Question to the financial gurus on this board — do you agree with Bill Miller that Countrywide stock is worth buying?
He was buying it at $20+, enough said!
Miller is either a nut, or has a ton of shares at a higher price he’s trying to unload ala cramer he is only out for himself and maybe few of his buddies, you can’t really trust any of these so called experts or analyst anymore they have zero credibility…
Who?
Yep. I have a good sized position due to advice from a very smart person who made me money on it before.
Im wondering if you sold any calls after the big meltdown BoA situation.
My inclination is that you bought calls on the meltdown.Unwinding a position?
I love you. chick….got my 20 year Reunion call from West Texas, wanna go with me?
silver futes down $1.20 today. good for about a 300% profit per contract today in a couple hours.
Overheard a Postal carrier yesterday saying that he was retiring and was selling his house here in Salinas. He said he lowered the price some and is asking $825K and expects it to sell quickly (this guy is in line for a JT). But the kicker is that he was buying a house in AZ and was to sign the papers yesterday and start moving his household. I didn’t know him but I was dying to ask if it was in Queen Creek. I would also like to know who’s given him the mortgage. It’s my understanding that if he has 30 yrs in he would get about 56% of gross income for retirement income. I would guess if he’s lucky he might make $25-$30K in retirement. Would sure like to follow up on this one.
But, as we all know, prices don’t matter anymore, so buying a house at 10x one’s income or whatever is perfectly normal?!
Now, I know that I’m a complete idiot, but is anyone noticing the 5yr Inflation Indexed Treasury yield on bloomberg?
current yield/ -.12
price 108-23
this does not look good.
Yes a nice negative yield.
Hi Voz!
funny thing those negative returns….please let me know when you go short treasuries…Im walkin on pins and needles.
Yeah, but with those TIPS they add to principal in correlation with the CPI. My quesiton is just how they handle that, do they send you a bill? Or do they reduce the amount that they add to principal? It makes a difference, what with compound interest.
The 5-year only has 4 years left. So the total interest on 100 is 8 which is less than the premium. Buyers must be convinced that even the BS, oh pardon me, the BLS CPI increases will be significant.
Too bad I didn’t buy more I-Bonds when the base rate was 3%.
question: does anyone have a good guess as to when the fed might have to start raising interest rates to fix the mess they are creating with inflation? thankyou for any answers to my question!
The FED will never raise rates in real terms. In other words, the FED is forced to maintain increasingly negative real interest rates or else the banks will fail. Because the FED is in the business of keeping the banks alive first, the dollar will always take a back seat.
Rates may go up, but only once the risk of deflation has passed. The risk of deflation will not pass until the dollar has been (or is in the process of being) hyper-inflated away. In other words, rates will not go up until it is too late to stop hyperinflation.
thankyou, while searching the web for hyperinflation i ran across this link that explains it very well. i will post the link below (warning pdf) for anyone else that might be as under educated as me! ha! ha! thankyou again for the info.
http://www.imf.org/external/pubs/ft/fandd/2003/06/pdf/reinhard.pdf
“…Owing to the collapse of financial intermediation, banking crises have been a feature of all modern hyperinflations. The large-scale deposit withdrawals and sharp increases in nonperforming loans that accompanied economic contraction made these banking crises extremely costly…”
What me worry, it is all contained!
Reading a little history, stumbled onto this quote:
“How miserable that man is the Governes a People where six parts seven at least are Poore Endebted Discontented and Armed.”
This from Governor Washburn of colonial-era Virginia, during Bacon’s Rebellion. The thing with Bacon’s Rebellion was that is was poor frontiersman rising up against both the Indians and the richer planters. It didn’t last long, the powers that be called in the big guns from Britain and it was stamped out in short order, partly because the rebels efforts were so divided between the Indians on the one hand and the upper classes on the other.
Anyway, I read that quote and I couldn’t help but see some parallels to our country’s present situation. Whoever takes over the White House this time is in for some fun.
REVIEW & OUTLOOK
Bernanke’s ‘Principal’
March 6, 2008; Page A14
ECONOMIC REPORT
Americans poorer than a year ago
Household net worth falls 3.6% in 4th quarter
By Rex Nutting, MarketWatch
Last update: 12:14 p.m. EST March 6, 2008
Geithner sounds confused. Is it deflation or inflation? Rate cuts aren’t helping either.
Oh, the humanity!!!!!!!
Agency Mortgage-Bond Spreads Rise; Markets `Utterly Unhinged’
March 6 (Bloomberg) — Yields on agency mortgage-backed securities rose to their highest relative to U.S. Treasuries in 22 years as banks stepped up margin calls and concerns grew that the Federal Reserve may be unable to curb the credit slump.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aWh0AFtXC9rk&refer=home
If the central bank called for “forgiving principal”, wouldn’t you charge more for the privilege of lending?
What are these people, five?
Homeowner Equity Is Lowest Since 1945
The threat of so-called “mortgage walkers,” or homeowners who can afford their payments but decide not to pay, also increases as home values depreciate and equity diminishes. Banks and credit-rating agencies already are seeing early evidence of this.
http://biz.yahoo.com/ap/080306/home_equity.html
What will it take to break through 1310?
been asking myself that all morning: Conclusion: bank failure
1305ish - What next? Lower?
Ok, it did it……..now what??
capitulation and rate cutting.
might wanna think about some long side index exposure on the S&P 1290, going into rate cut week.
Nice play
check that 1290, if it goes 5 sigma, we may be in the 1100’s by next weeks end.
that type of move would test emergency rate cut. WE have been primed for failures, banking failures. WE are seeing hedgefunds coming out feet first. Even GE has broken the buck. Ask the longs about GE and they just say, the dividend is good….Im a buyer of GE at 28 (touched 32 today).
long positions (in order of strength):
vertically integrated oil and natural gas (it may be time to short this)
gnnmea
housing
treasuries
high and low yielding currencies.
telecom (also have short position)
Chemicals.
with Ozzie, Japan, and the rest of Asia off so hard….it may be five sigma……..everyone is sufficiently scared.
Currency intervention is imminent. If Japan cuts, its trade war.
Look for a bounce tomorrow off the magic 12,000 DJIA floor…
March 6, 2008 4:39 P.M.EST
BULLETIN
S&P AND NASDAQ CLOSE AT LOWEST LEVELS SINCE 2006; DOW INDUSTRIALS SLIDE 214 POINTS
S&P, Nasdaq close at lowest levels since 2006
Financials take toll on Street
Wednesday’s bulls lost as investors fret over mortgages and banks.
• Ken Tower on nagging financial ‘cough’ Audio
• Crude notches first close atop $105 level | Gold falls sharply
after hours
Citigroup to cut mortgage assets
Banking giant to reduce mortgage assets by $45 billion, says it will consolidate operations in U.S. mortgage business.
MARKETWATCH FIRST TAKE
Let’s see ‘em
Commentary: Lenders squeeze some of the Street’s biggest borrowers
By MarketWatch
Last update: 11:37 a.m. EST March 6, 2008
If you wish to get an idea of the ugliness that is not reflected in the stock market.
look at
AAA 07-02
ABX-HE-AAA 06-2
ABX-HE-AA 06-2
Can you tell where to see this at, please??
Here’s a link to the eurobond site
http://www.eurobondonline.com/abx-HE-AA-06-2.Htm
Thanks S.
Dubai: “The UAE central bank said it would start allowing lenders in the UAE to borrow in dollars against their certificates of deposit amid a shortage in the US currency as people bet on dirham revaluation.
Starting from Monday, banks in the country will be able to borrow dollars for as long as three months or at the maturity of their CDs, whichever is less, the central bank said in a statement yesterday….”
http://tinyurl.com/2dh7hv
Gulf News
March 7
This is a financial world gone mad.
Sorry Mr. Blano
Markit.com
ABX Indices
http://tinyurl.com/35psag
Click on the series to see the graph
If you choose to look at the CMBX the charts going up are inverse. The higher it goes the worse the market.
Thank you!!
Fire sale prices…
ABX-HE-BBB 07-1 7 1 224 0A08AIAC4 9.09 98.35 9.09
ABX-HE-BBB- 07-1 7 1 389 0A08AOAC1 8.88 97.47 8.88
Now the Sht should really fly
Flow of Funds Accounts
of the United States
Flows and Outstandings
Fourth Quarter 2007
Federal Reserve Mar 6, 2007
Household debt expanded at an annual rate of
5½ percent in the fourth quarter of 2007, 1¼ percentage
points below the pace in the previous quarter. In the
fourth quarter, growth of home mortgage debt
decreased to a rate of 5 percent―the slowest quarterly
pace since 1997—and consumer credit rose at an annual
rate of 4 percent. For 2007 as a whole, household debt
increased 6¾ percent, about 3½ percentage points less
than in 2006. The deceleration of household debt last
year owed mainly to much slower growth of home
mortgage debt….”
Summary we’re F’d
government debt up 9.5%, personal debt up, income down, household networth down
Housing equity is 47.8%the lowest since 1945.
Federal Reserve
http://tinyurl.com/2oz8w3
Caution pdf
Think they will start saving money now?
Housing Market Spirals, No End in Sight
Thursday March 6, 5:30 pm ET
By J.W. Elphinstone, AP Business Writer
Low Home Equity, Record-High Foreclosures: a Limp Housing Market Looks Even Weaker
http://biz.yahoo.com/ap/080306/housing_woes.html
“On Tuesday, Fed Chairman Ben Bernanke suggested lenders reduce loan amounts to provide relief to beleaguered homeowners. But some experts think more help is needed.
“At the end of the day, these efforts will be insufficient,” Zandi said. “Policymakers will need to be more aggressive and put taxpayer money on the line to stem this. Ultimately, we will find a bottom, but it would be a mistake to let the market run its course.”"
How about you pony up the dollars first Zandi?
“How to have the Home You Want!”
“The major difficulty in achieving home ownership in the past was a mortgage system that had become archaic, far too expensive, and actually dangerous — for it encouraged high prices, hidden charges, and overbuying.”
“…the old mortgage system has often been a hindrance rather than a help in the achievement of home ownership.”
“Today, and in the future, those desirous of owning a home will wisely demand [a mortgage] free from hidden charges, lump-sum maturities, and the whole package of old system trials and tribulations.”
US Federal Government Home Ownership Pamphlet 1935
There are some interesting tidbits:
“‘Mortgage’ was just another word for trouble, and was fast becoming an epitaph on the tombstone of home ownership.”
“In Pittsburgh recently it was discovered that an old-style morgage for $2,500 had cost in interest and fees alone over four times the amount of the mortgage — and still remained in force for the full original amount.”
Wow, market hit the skids and broke through multi year lows on a falling dollar.
Roidy
Tonights headlines Reuters
LATEST STORIES
3/06 Bankruptcy fears roil markets amid margin calls [ID:nN06329420]
3/06 Mortgage sales push swap spreads to record wide [ID:nN06456698]
3/06 Credit woes threaten large derivative unwinds [ID:nN06256162]
3/06 Municipal bond prices rise but scare far from over [ID:nN06621436]
3/06 US foreclosures at record, household wealth falls [ID:nN06217059]
3/06 Banks to propose reforms given credit crisis - IIF [ID:nN06242609]
3/06 ABX battered as mortgage market woes grow [ID:nN06593272]
3/06 Bond insurer CIFG loses top rating from Moody’s [ID:nN06248455]
3/06 US Treasuries benefit from latest bout of credit fear [ID:nN06246135]
3/06 Thornburg off 51 pct on bankruptcy worry, defaults [ID:nN06212186]
3/06 US corporate bonds weaken as economic woes rise [ID:nN06563127]
3/06 Defaults spook investors, global stocks tumble [ID:nN06227326]
3/06 Bank watchdogs aim for tougher risk rules [ID:nN06219753]
3/06 Mortgage REITs plunge on Carlyle Capital troubles [ID:nN06419202]
>ANALYSES:
3/06 Credit crunch catches up with Goldman [ID:nN06312076]
3/06 US home price declines could make matters worse [ID:nN06239288]
3/06 Where have all the vulture subprime buyers gone ? [ID:nN06422029]
3/06 Battered muni bonds attract big crossover investors [ID:nN05479799]
Hoz, please remember…orderly selling…those who have not hit the panic button……..are weak, and feable…..
I called family tonight. Its important that you start to touch people who are close and need help, even if it hurts.
It’s here
This is for the legal team
Mealey’s Subprime-Backed Securities Litigation Conference
Location:
The Harvard Club, New York
Dates:
Thursday, March 6, 2008
* Master the concepts behind CDOs and other mortgage-backed securities
* Understand the problems relating to today’s structured finance and resulting credit crises
* Look inside the mortgage industry, its underwriting, risk analysis procedures and loan approval technology
* Get up-to-date on who is suing whom and the status of the recent wave of securities complaints
* Learn the key elements necessary for proving or disproving fraud and negligent misrepresentation
* Find out what to look for when it comes to disclosures, disclaimers and limitations on standing.
* Learn the role played by rating agencies, insurers and the feds
* Acquire the skills necessary to successfully prosecute or defend mortgage-backed securities suits
http://tinyurl.com/2cwa3o
LexisNexis
This is going to be wearisome in a few years.
Greetings from Stewart Island, as far south as you can go in the South Pacific…
Just back from a 3 day walk through lush rainforest, complete with birds singing their little hearts out, for us.
Nursing some beers, waiting for the 6:30 pm ferry back to Invercargil.
A local newspaper describes the NZ real estate situation as “extrordinarily shaky”.
Perhaps a 8.5 on the Richter scale?
U.S. housing prices are near record low levels in gold terms. Aladinsane and other gold savers might need to buy now or get priced out forever…
The Short View: US markets
By John Authers, Investment Editor
Published: March 6 2008 18:50 | Last updated: March 6 2008 18:50
…
A US house would now cost you only 220oz of gold. Over history, this price has tended to revert to an mean of about 350oz.
So, if disparate markets are put together, the US financial industry has lost more than half its value and US housing more than two-thirds of its value since 2001.
Either the US is on course for disaster or the moves on these markets are overdone.
Nobody wants houses and everybody wants Gold…
Patience, grasshopper.
US household wealth on the decline
By Krishna Guha in Washington
Published: March 6 2008 20:35 | Last updated: March 6 2008 23:00
American households are getting poorer for the first time in more than five years, Federal Reserve figures revealed on Thursday.
Data showed total household wealth fell $533bn to $57,718bn in the fourth quarter, as falling share prices added to the damage from dropping house prices.
…
The numbers came amid stress on the market for supposedly safe mortgages backed by Fannie Mae and Freddie Mac, the government-sponsored enterprises.
Shares in Fannie Mae fell 10.6 per cent to $21.70 – their lowest level since 1995 – while shares in Freddie Mac fell 6.9 per cent to $20.14, their lowest level since 1996.
The cost of buying credit protection against default by Fannie and Freddie rose to record highs of about 95 basis points as investors began to question even their creditworthiness in spite of the widespread assumption that they could not be allowed to fail.
The silver lining: It’s merely a slowdown.
PAGE ONE
Housing, Bank Troubles Deepen
Foreclosures Reach A New Record; Home Equity Falls
By SUDEEP REDDY and SARA MURRAY
March 7, 2008
Two crucial barometers of the nation’s housing market have worsened markedly in recent months, ratcheting up pressure on policy makers in Washington for action to stem the growing housing crisis and its widening impact on the nation’s financial system.
• What’s more likely to prop up the flailing housing market? Readers, weigh in.
• FHA Mortgage Limits: Look up FHA mortgage limits for your area
Among the latest trouble signals, the number of American homes entering foreclosure rose to the highest level on record in the fourth quarter of 2007. Meanwhile, homeowners’ share of the equity in their homes fell to a post-World War II low.
The unwelcome contrast provides stark evidence of how falling home prices are weighing on consumers. And it could add urgency to efforts by Federal Reserve officials to avert a larger wave of foreclosures by prodding lenders to reducing the principal — or total amount owed — on troubled mortgages.
Perhaps most troublesome for policy makers: The deterioration in household finances is expected to continue throughout the year as housing prices fall further. “We are likely to be living with a high degree of uncertainty for some period of time about the ultimate magnitude and duration of the slowdown under way,” Federal Reserve Bank of New York President Timothy Geithner said in a speech.
Euro on ’strong side’, dollar must come down - IMF
Reuters, Thursday March 6 2008
Dollar R.I.P.: `Biography’ Tracks Life, Predicts Grave Decline
Review by James Pressley
March 7 (Bloomberg) — Early in his “Biography of the Dollar,” Craig Karmin sits down with John Taylor, the chairman of FX Concepts Inc., a New York-based hedge fund that manages $12 billion in currencies. It was the middle of 2006, and FX Concepts was betting the dollar would rebound.
“The name of the game is to walk as close to the cliff as possible,” Taylor told Karmin. “Stopping before the edge of the cliff costs you money.”
So does tumbling into the abyss. That November — somewhat earlier than planned — Taylor and his colleagues changed course, becoming what he called “big-dollar bears.”