Bits Bucket And Craigslist Finds For May 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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No Bids At Auction…
http://www.lewrockwell.com/french/french88.html
Falling knives.
“Only a couple dozen people remained by auction end, and only a handful of homes were actually sold. There were few real bids even at the low starting prices that were only a third the price that similar homes fetched during the boom a couple years ago. “
Sounds like prices are down by at least 2/3s (-67 pct) from where they were at the peak. Why don’t these auction sellers just get past their denial and sell off their inventory at prices the market will bear? I don’t understand the advantage of holding on to falling knives forever.
Nobody wants to show that the emperor has no close…
Precisely. If houses sell for what they are worth, people will wake up and start walking away in huge numbers (or they’ll get really angry after realizing that they’ve been scammed.) This would result in unshackling 2 generations from their choking debt loads, which is unacceptable to the bankers, etc.
Maybe without liquor to cloud their judgment, the audience quickly figured out the auctioneer was raising his numbers without getting any actual bids. Why would someone make a real bid if he/she figured out it would quickly be trumped by a fake bid.
Why wouldn’t they give away free alcohol at the auction (the way they do at school fundraiser auctions)?
Is bidding against the wall illegal? Seems like fraud to me?
Because then people like us would show up, drink the alcohol, and not bid anyway.
That’s my modus operandi and I’m sticking to it.
Maybe I got the term wrong — the situation where the auctioneer adds fake bids by pointing at random people who aren’t bidding.
FPSS,
I like your modus operandi.
I don’t understand the advantage of holding on to falling knives forever.
Greed, sheeple mentality that prices will always go back up.
Yeah… I don’t get this great push by Comm-gress to lower the amount owed on houses - but when it comes to selling… oh, no - can’t lower those prices. Gotta keep em up there.
It kind of amazes me that with prices down ~70%, no greater fools showed their faces.
Isn’t down by 70% close to the more pessimistic forecasts on this blog?
Now, would I buy in Vegas now for 70% off peak? Hell no. Because I think we’re somewhere in the bottom of the 2nd or the top of the 3rd inning.
Look out below!
That’s a fun read.
I truly hate casual liars, though. That auctioneer’s assertion that a recent poll indicated “80 percent of the American people feel like we are at the bottom of the real estate cycle” is certainly a bold-faced lie - there is no reputable national poll that asked that question and got that response. It’s either completely fabricated, or it’s a really disingenuous interpretation and/or exaggeration of some other fact/answer.
And, anyways, the RE community is always telling us “nobody can time the bottom” - so why should be believe that 80% figure, even if it were true (which, of course, it ain’t).
The whole auction seemed like a big lie, with the auctioneer raising the price without actual bids. What a [high-grade expletive] scam.
Never heard that phrase before, “casual liar”, does that encompass generalizations?
Courtroom-steps Auction = Rapture Meeting
Speaking of Rapture…did you see the bit in the msm about people standing next to gas pumps, hands on pumps, praying?
What next?
Praying to the outdoor one-arm bandit?
priceless.
Maybe they are praying that God will “create” more gasoline.
For those of us who can’t vote for any of the current candidates, let’s discuss ways to let our voices be heard.
Maybe we are a tiny minority, but maybe, more Americans are getting sick and tired of how the govt is spending our money.
Can we throw the bums out? Who can we vote for, just based on responsible fiscal policies?
Ron Paul.
I hear people say “I don’t want to throw away my vote”.
“I’ll vote for the lesser of two evils”.
It’s this type of attitude that perpetuates this pile of sh*t goverment we currently have.
Mike
If we are going to throw our vote away, how about Ralph Nader? He seems to be one of the few still running for PREZ that has actually done what he says…
How about an independent ticket of Paul-Nader or Nader-Paul?
I am not sure, maybe its the lack of sleep and to much java…
I agree with you, lost.
Palametto, what do agree upon? The choices or the lack of sleep and to much java?
lol
I’m voting for Ron Paul. If he is not on the ballot then I’m writing him in. I agree with you SV Guy. This lesser of two evils crap is what got us into this mess.
Choices, actually. I’ve thought of that myself. Great minds think alike. And I also tend to have a lack of sleep sometimes and compensate with too much java.
Language is so ambiguous that an english major or knowledgeable english born speaker can have a great time with it.
I must say that what drives me crazy is the meaning of “those people” without identifying who they are referring to.
What the h*ll, I guess this is what makes the English language so interesting and keeps the “word-smiths (aka lawyers and marketing people) in business and in well paying jobs!
What can you say, “G*d bless America and the profit motitive.
lol
Yes, lostcontrol, I will probably also vote for Ralph Nader. Just haven’t heard much from him lately.
I don’t care if I’m “throwing away my vote,” I cannot vote for Clinton, Obama or McCain.
Nader it is.
Ron Paul is the most consistent politician for constitutionally limited government, freedom in the sense of liberty that this country was founded upon, and not spending away your money in the growing fascist / socialist Leviathon sneaking up on us all.
I voted for him today.
This “type of attitude” is the same as the “I don’t want to throw my money away on rent” horsesh*t. Americans don’t want to be bothered to think critically, they want to be able to say their guy “won”. Well, what good is winning when we get the crap we’ve gotten the last 30 years? Voters don’t realize its not about being on the winning side of the election that matters, its standing up for principles that counts, even when you lose every time.
try joining lp.org-cagw.org - ntu.org
and your state and local tax watchdog groups
TERM LIMITS & tying their retirements to a balanced budget “with everything included in the budget”
mwhahahaha…. the ideologues are now barking for term limits? Welcome to 1994.
Ex, I’ve held the same views for years. Tying their retirement to a balance budget is one way to give them “incentives” to spend less. Lip
The chorus grows save the FB
Price declines have become one of the biggest contributors to high default rates, Fed chief says. Stopping foreclosures is in ‘everybody’s interest.’
http://money.cnn.com/2008/05/05/real_estate/Bernanke_home_prices_and_foreclosures/index.htm?cnn=yes
Stopping foreclosures is in ‘everybody’s interest.’ Except those with money sitting on the sidelines waiting for a good deal. Oh wait, they’re un-american-bitter-renters.
Helicopter Ben must have forgotten his pilot’s training. U.S. housing prices are in what all pilots know as the “Graveyard Spiral”. As the spiral continues, inexperienced pilots realize that they are going down instead of up and think that by pulling back even harder on the control wheel the dive will stop. This improper action causes the airplane to dive even steeper, and is the mistake JFK Jr. made that resulted in his death. What he should have done, and Bernanke must do, goes against one’s instincts—to dive even steeper in order get more air under the wings to generate enough lift to pull out of the spiral. Increasing the speed of price declines is the only way to get sales and prices to rise without crashing our economy.
This is like counter steering a motorcycle. If you need to make a panic turn right, you turn the bars left and then right. This get the bike leaning to the right so you can turn right. It’s counter intuitive, but very effective.
Great analogy
I would say that he’s trying to autorotate with no forward speed.
bernanke is looking to price the first-time homebuyer out forever.
Bernanke is a politician. He wants to continue his role in the new administration.
Bernanke is a banker. Fed actions consistently serve the profitability of the banking industry. I cannot think of a recent Fed action that worked against banks in favor of any other segment of society.
Exactly.
EVERYTHING he has done — lower interest rates in the face of screaming inflation, opening up new ways to trade garbage for dollars, talking up bailouts, etc. — this is all done to recapitalize banks. J6 and the rest of us can rot in he** for all he cares.
I think we need a demonstration of sorts. Used to be, I thought abolishing the Fed was a bit extremist, but am beginning to change my mind.
“Bernanke outlined the steps that the Federal Reserve was taking to try to minimize the impact and scope of the foreclosure crisis.
The response includes working with community groups trying to acquire and restore vacant properties; encouraging lenders and mortgage servicers to work with at-risk borrowers; and developing new lending standards to prevent some of the abusive lending practices of the past from continuing.”
SO…..
1) Beg people to keep paying for a house they can’t afford.
2) Beg lenders to let people stay in houses they can’t afford.
3) Close the barn door after the barn has burned down.
In short. ZIP, ZILCH, and NADA
That article pissed me off.
No one reduced the loan balance on my student loan, and an education is more important than owning a depreciating asset.
won’t nest above.. but this one is to Sfobaygal.
I hope they line up all the crooks from this past 7 years,
including Greenie and BB etc, all of em, and ready aim …
And to think, little Jenna Bush is marrying Carl Roves assistant this weekend. Nice family lineage. Crooks,liars,thieves all.
WASHINGTON — As the House prepared to take aggressive steps to stem the wave of home foreclosures, Federal Reserve Chairman Ben S. Bernanke on Monday night endorsed the need for government intervention, saying that letting markets take their own course could “destabilize communities, reduce the property values of nearby homes and lower municipal tax revenues.”
http://www.latimes.com/business/la-fi-fed6-2008may06,0,5830243.story
un-freakin-believable
Home prices increasing 20% a year, according to Bernanke, were not a destabilizing force? But prices falling 10% is?
And I suppose overbuilding to the tune of 18.6 m vacant units in response to rampant housing price inflation was not a destabilizing force? How will propping up prices now on a permanently high plateau make this problem go away?
To put the 2008 qtr1 figure of 18.6 million vacant units in context, there were 13.4 million vacant units in 1997:
http://www.census.gov/hhes/www/housing/hvs/annual97/ann97t9.html
I may be dumb As*hat, however one of the GOVT’s concerns is that they are relying on equity in homes to serve as the primary retirement vehicle for boomers after the GOV fails in its promise to continue paying SS and Medicare.
imho
Bingo, lostcontrol!!!!!
Home prices increasing 20% a year, according to Bernanke, were not a destabilizing force? But prices falling 10% is?
I think the terrorists HAVE won. They couldn’t have dreamed of a better way to destabilize Amerika than to secretly infiltrate and do EXACTLY what Greenspan and Bernanke have already done.
Exactly, we overreacted to 9-11. We became fearful. We dropped the discount rate to 1% to out of fear of an economic pullback. We subjected our own citizens to humiliating searches at airports out of fear of another hijacking. We attacked a non-threatening foreign country (Iraq was impotent at the time) out of fear that one of our cities would go up in a mushroom cloud. This country needs to get its courage back. Truly, our reaction to 9-11 is not in keeping with our history of bravery.
The terrorists won a long time ago. As soon as we became scared enough to put in ridiculous institutions like the DHS and believed that the Patriot Act was a necessary thing, our foes understood we’d given in to our terror and compromised our freedom.
This is why we won’t get attacked. This administration etc have done it all for the terrorists.
‘make sure you don’t take anything over 3 oz, into airport’.
Yep, stick a fork in us, we are done.
Let me introduce you to Comrade Greenspan and Comrade Bernanke!
That’s what really fried my gourd when I read the actual transcript. If you haven’t read it, here it is…
http://www.federalreserve.gov/newsevents/speech/Bernanke20080505a.htm
You read it and all you get is that the biggest threat to the economy is falling home prices. No mention of out of hand inflation, no mention of the fact that home prices in certain areas were way over-inflated in relation to average incomes, and the proposls….OMG!!….what a friggin joke!! Hello socialism, here we come! Oh, and if you’re a responsible middle-class man, grab your ankles and pray that it’s quick.
did you scroll down to the bottom of the page and check out the graphs? pretty amazing and mind blowing how much info they have on non-owner occupied homes. that just goes to show how much they knew during this speculation mania and did nothing to stop it!!!!!!!!!!!!!!!
Holy mother of and of all that is sacred. What a grouping of Color Graphs/diagrams to illustrate the gigantic mess of such immense proportions. And they new it all along.
Of course they did. And again, it is a giant reshifting of wealth in this country, unlike any we have seen in any history books.
Like Rich Dad Robert Kiyosaki said 3 months ago on Larry King.. now is the time to buy. The time is now to make wealth. Well, yeah, if you are filthy rich already and you will be richer.
Say, ex middle class man, how do we look in servants uniforms?
Yes, the artificial manipulation of the mortgage market has served us so well. Keep it up, bubblehead Bernanke. You are three of the dumbest, most dishonest people I know.
…and today’s announcement by FNM of $2billion in losses exposes the criminality of Benny’s suggestions that the gubming take over the private banking system’s losses.
Way to go Benny. You better start practicing… “I am not a crook.” lol
Bernanke cares first and foremost about the bankers and the financial system.
He probably sees the lesser evil being to inflate away this problem by shovelling in as much money to the banks as necessary to make their balance sheets look okay.
This leads to a long slow decline in house prices, with very low interest rates, and a weak dollar, and will ultimately lead to stagflation I think. But it keeps the big Wall Street players happy. Paychecks and bonuses keep rolling in.
The alternative is making the responsible parties pay now, in a rapid rollercoaster ride. I think allowing a true bottom to be reached quickly will allow the recovery to begin all that more quickly. But heads would roll.
Their paychecks keep rolling in. We get $4 to $5 a gallon gas. That just won’t work long-term, and housing cannot be fixed with inflation without huge and quick wage inflation across the board, which also won’t happen.
No doubt this is Bubbles Ben Bernanke’s goal, but it is a stupid one, sadly.
dishonest, yes. not dumb - beholden to bankers, not US citizens.
I disagree. I think these idiots are true believers in their idiocy. I think they are both dumb and dishonest. They might be able to pass tests at Princeton but they have no intelligence when it comes to the real world. That makes them dumb and educated. I have seen nothing to convince me otherwise.
I don’t see how the housing market can find a bottom until these high muckety-mucks work through their denial about the fact that the housing bubble has popped beyond repair.
By the way, after many long years, I finally grasp the political meaning of a timeless childhood rhyme:
Humpty-dumpty sat on a wall
Humpty-dumpty had a great fall
All the king’s horses and all the king’s men
Couldn’t put humpty together again.
Ashes, ashes…
We all fall down.
I figure it’s a disconnect. These people have quite a bit of money themselves, so they have no idea how the normal citizens live. They are in their own world surrounded by the affluent, of which most likely don’t live paycheck to paycheck.
Someone get the tar, I will get the feathers! Which railroad should we send them out on?
I still think that the French had a great Idea with their guillotine. Justice was swift! Sloppy sometimes, but swift. Something that we forgot in our legal system.
Up until the early 1900s, the South didn’t have prisons. The inmates were rented out to the rich/connected politicians to build roads (private enterprise coming to the aid of the public).
Didn’t you just dig how in one breath he says that strict regulation is needed to avoid the lending abuses of the past, yet in the next breath he calls for FHA and Fannie/Freddie to expand their products to spur borrowing! WTF?!! So I guess he all for the gov pushing toxic crap, but we’ll make sure the private sector stays on the straight and narrow. HILARIOUS!!
reduce the property values of nearby homes and lower municipal tax revenues…”
Reduce the value and taxes how much? All the way back to what they were in ancient 2002? Is our economy so weak that this would be such a disaster? Do I want to know the answer to that?
And I’m still fuzzy on this “action” that government (i.e., my money) is supposed to take.
Are we supposed to subsidize an FB’s heloc-Escalade or heloc silicone boobs or heloc cruises?
Are we supposed to “Keep people in their {other 28 years of their unaffordable adjustable mortgage?
Renegotiate principal? How? By bailing out banks who would take the hit? By alienating every other person who agreed to any kind of purchase contract (like the shoes i bought last week?)
Refinance? For the millionth time, refinance into WHAT? They already bought at rock-bottom lending standards. If standards could get any looser, the bubble would have lasted another year, with McMansions being snapped up FB’s from the absolute bottom-of-the-strawberry-barrel.
Allow banks to indefinitely extend the terms of the loans at I/O 2% interest, essentially turning it into forever sharecropping like fuedal France?
Convert first-time non-heloc owner-ococupied loans to non-recourse, forgive the tax hit, and allow the FB to jingle-mail back into the rental that which is realisticially in their means, and take the bailout money from the personal fortunes of Alan Greenspan, Angelo Mozilo, David Learah, whatshisface O’Neill, that guy at Fannie Mae, and other assorted Wall Street jackals? Now we’re talking.
oops sorry, formatting gaffe:
Are we supposed to “Keep people in their (
oh bah, third time’s a charm…
Are we supposed to “keep people in their homes?” For how long? The other 28 years of their mortgage?
What a terrible world it would be if a guy could make $12/hr and still afford to buy a small house. And let me tell you, in many parts of the country $12/hr is still considered a decent wage. It would be terrible if the U.S. could once again compete on the world market due to truly “affordable” housing allowing companies to offer wages that allowed them to compete in the world markets. The horror!
Most people would get on their knees and thank the gods for their good fortune if they had a $12.00 an hour job here.
Here’s a great book about $8.00 an hour, no benefits America.
Deer Hunting With Jesus, by Joe Bageant
Well if they’ve got some engineering background, send them to Syracuse. Paper has a full page on how Lockheed Martin, Marquardt Switches, and Sensis are all hungry for people. I know LM has a mighty sweet transfer package or at least they did 2-3 years back (although it might have helped that they were scooping that particular worker from Raytheon)
Thats the reality, globalization. I’m not an economist, but a global economy eventually means U.S./global wage equality. The fall of the USSR and capitalistic china allowed our gov’t to play free and loose with liquidity. No fear of wage inflation with billions of new cheap labor on the global market. It may sound too simple, or obvious, but I’m just using common sense. I sense that the feds are trying to prop up housing to keep the sheeple from revolting against inevitable wage deflation.
“I sense that the feds are trying to prop up housing to keep the sheeple from revolting against inevitable wage deflation.”
I agree. I think the playerz thought they could strip the country of financial assets and get away clean…now I think they are belatedly worried about social and political disruption. Though,if you watch the primary voters, they seem ready to swallow any lie, as per usual.
Friend got an offer to move to Syracuse NY to work for Lockheed. He isn’t out of college yet. Syracuse has a lower cost of living than Hampton Roads (Southeastern Virginia, where we are both from), yet he can’t find many job offers that pay near that here. I think he is going to retract his acceptance and go to TN to work for Cisco instead.
I wish him luck where ever he ends up. I’d rather stay close to family fresh out too. I was lucky enough to snag a marketing position in my hometown for my first job.
NYCboy you are 100 percent right again! BY default, that is exactly what has been happening here in Northern Ohio. The pols have come around every 4 years promising economic revival only to slink back to DC and forget about us. I cant believe it, but young workers here believe $12/hr is a great wage. As a consequence, their superior generations have scant few qualified to buy their nest eggs and allow them to retire to those genteel gated golf course communities down south. Now, DC is going straight to the older generation and saying we’ll buy up those nasty mortgages and foreclosures to help you out. Without a calendar, how could I guess that its a presidential election year?!!
“NYCboy you are 100 percent right again!”
Music to my eyes.
What does having lots of bank-owned vacant homes with green algae in the backyard West Nile virus breeding pool do for the value of nearby homes?
…with McMansions being snapped up FB’s from the absolute bottom-of-the-strawberry-barrel.
Truly awesome imagery
Price deflation is Bernanke’s bogey man.
And price deflation is a function of credit restriction, resulting in a shortage of spendable cash.
Price deflation is also a function of 18.6 m vacant homes nominally valued at price levels where they won’t sell.
Ah, yes. A lot of these 18.6 m vacant homes used to contain that equity stuff, the stuff people used to convert to cash to support our 70% consumer based economy.
But house equity, being a product of the optomistic opinion of Mr. Market, has vanished along with Mr. Market’s fickle opinion concerning house prices.
So now we are stuck with a consumer based economy with consumers that have no money to spend.
Stay tuned for furthur developments.
Peak Debt leads to deflation… But B-52 Ben would chose the hyperinflation-currency crash-chaos path. What a fool he is!
Being Ben Bernanke (triple-bbb rated)
Is trying to use artificial in$emination to bring this eCONomy to life, although we aren’t to the danger point yet…
That’s when the Fed starts accepting laundry tickets in exchange for a few billion.
Speaking of insemination, this byline made me shudder:
May 5, 2008, 9:03 pm
Subtle Ben (Bernanke) Inches Closer to Barney (Frank)
Oh my eeeyyyyyes…..!
When are they going to be honest and hoist a hammer and sickle over the capitol building? Sheesh.
Markets Work Best! (er, until they don’t). Just like State’s Rights! (uh, until the states do things we don’t want them to).
May 6 (Bloomberg) — Crude oil may rise to between $150 and $200 a barrel within two years as growth in supply fails to keep pace with increased demand from developing nations, Goldman Sachs Group Inc. analysts led by Arjun N. Murti said in a report.
http://www.bloomberg.com/apps/news?pid=20601087&sid=ayxRKcAZi630&refer=worldwide
I smell gas subsidies in the near future from the Gubmint. No way J6P will put up with $6-$7 dollar a gallon gas without screams for government intervention.
We are fast approaching the Norton Line*, and once Commuter America’s sentence is commuted and they no longer have to serve time on road gangs, what then?
*the difference between the cost of gas to & from work, vs. net take-home pay
I think I did the math on that on an post a while back. On $31K a year, @ $4.00 a gallon with two people doing a 50 mile a day round trip commute each and after just normal (not outrageous) taxes and expenses, this left families in my area with about $200 after bills.
$5.00 a gallon would have these titanic truck driving locals on their knees…
Maybe then everyone wouldn’t be so hot to live way out in the country on 5-500 acres so they can “run a few cattle” and 4 wheel…
Please - how much does that average family spend on for cigarettes, beer, satellite dish, cell phone, McDonald’s, fancy spinners etc.
I bet if they had to ( and I think they will in the next two years or so ) pay $5/gallon, they could manage.
Jwhit, I am soo sick of “commuting” as part of the American lifestyle. Since when has it been regarded as anything but the act of a moron to live an hour’s drive from where you work? Waste of time, waste of gas, waste of everything. I’d call for a supertax on commuters, except that I’m a libertarian. Maybe five-dollar a gallon gas will nip this stupid lifestyle in the bud.
So we pay for the gas in taxes instead of at the pump. Brilliant.
A Gas Tax Holliday is “the economic equivalent of solving the obesity problem by making Twinkies, ho-hos, and deep-fried mars bars tax deductible
J6P has acceptted increases in housing, property taxes, phone bills, cable bills, groceries and increases in just about every service cost known to squeeze a profit out of a turnip.
The trickle down Corporate Profit Squeeze has just begun…and J6P has NOWHERE to run
..and he’s OUT of gas
Why can’t Wall St. subsidize gas prices instead of the gov’t?
they are, they are called airlines. Cost to airline to fly one seat-mile; 15c/mile; cheapest airfare 7c/mile.
Dang, my old diesel truck gets me places at 18c/mile.
You mean like this?
http://www.businessweek.com/ap/financialnews/D90GABT00.htm
Residential Capital, the mortgage-finance company owned by GMAC, said Monday that it might not be able to meet debt obligations unless it finds an additional $600 million by the end of June.
http://www.latimes.com/business/la-fi-wrap6-2008may06,0,1062196.story
More Fallout at UBS…
May 6 (Bloomberg) — UBS AG, battered by $17.3 billion of first-quarter losses at its investment-banking unit, plans to cut 5,500 jobs, or about 7 percent of the workforce.
The reductions will include as many as 2,600 positions at the securities division, the company said in a statement today. The bank also said it plans to exit the municipal bond business and sell $15 billion in distressed assets to a newly created fund managed by BlackRock Inc. UBS had a net loss of 11.5 billion francs ($10.9 billion) in the first quarter.
How many are in the US?
10K jobs here, 5K over there, and on and on. When do these start showing up in the gov numbers? Are these numbers and the associated trickle down layoffs that irrelevant?
Yeh, I was going to post that too..Aside from Blackrock they mention sselling off more of their MBS’s…to who? I mean all these failing company are dumping their failing MBS’s but now that the slide is increasing who is foolish enough to keep buying even if it is pennies on the dollar. Oh, I see, we are coming off the bottom.
http://biz.yahoo.com/ap/080506/earns_switzerland_ubs.html?.v=3
I love the smell of financial “industry” layoffs in the morning.
LOL - hilarious…
If you get the MBS at a big enough discount it is possible there is value there. If you have a pool with say 50% mortgage failures. The yield is still OK if you buy at 50% discount from original price. Plus you get some recovery on liquidating the homes. If you are talking about second position leans… well the math is still similar just depends on the discount… some of the secondary stuff is worth zero.
The idea is timing this so you can get an MBS from a bank that is desperate for capital and the discount is too large.
These numbers will never show up anywhere - didn’t you get the memo? The economy is great and is adding jobs in areas like construction and finance, or so I am to believe from last month’s double-plus-good job report, where we “only” lost 20,000 jobs!
If we are ‘adding’ construction jobs, how come, there are people I know from construction who can’t get a job?
6month and counting.
I don’t know, but I think, someone is cooking the books.
Or putting the #s in the wrong columns ,um, accidentally?
LAS VEGAS — For decades, this gambling center seemed nearly immune to the economic swings of the rest of the country. But these days, the city built on excess is seeing a troubling sign: moderation.
http://www.nytimes.com/2008/05/06/business/06vegas.html?adxnnl=1&ref=business&adxnnlx=1210071861-ITcpsn8xiERsZJ5hLAFCuQ
“Julia Lee, 27, of Los Angeles said she normally brings $10,000 on her trips here to play blackjack. As Ms. Lee picked up show tickets the other night, she said she had brought less than half that on this trip. “My parents are in real estate, and we’re worried,” she said.”
Think she’s sponging off the folks a little? “We’re worried” we might actually have to go out and get a real job huh Missy?
Pavlovegas’s spell over the country is nearing it’s end.
Those of you that wondered exactly just who it was that would pay $100 to see Barry Manilow live, can wonder no more.
They stopped coming.
…pay $100 to see Barry Manilow live…
Dude. Anyone who would pay > $0 to see Barry Manilow doesn’t understand the concept of “loss leaders”.
I’ve seen Barry Manilow, but only because the Hilton mailed me free tickets.
In the last decade, Las Vegas has tried to make itself over into this star-studded, nightclub-type experience, attempting to out-Hollywood Hollywood.
Look for a return to a more traditional Vegas - free buffets, generous odds, loose slots and reduced room rates.
I think there’s a lot of fat that can be trimmed from corporate profits in order to compensate for $5/gal gas.
Free room rates and reduced buffets, like they do in the Red Sea resorts in Egypt.
What kind of stupidity is this?!?!
normally brings $10,000 on her trips here to play blackjack. [...] the other night, she said she had brought less than half that on this trip.
Either she’s a card counter, or she’s not very good at math and stats. I reckon the latter. I can see spending $50 on the table just for entertainment — if you enjoy gambling, which I can’t figure out how to enjoy, knowing the house odds. But $10k! Even $5k?!? Utter madness, unless that really is pocket money to you.
I was playing some $5 poker pai-gow early one morning a few years ago and got talking to a pit boss, who told me how common it was now for 20-somethings to be gambling with this sort of bankroll, something he’d never seen before in his 17 years on the job.
I have never talked to any regular patron of gambling establishments who says anything other than “I almost always come out ahead. The least I do is pulling enough to pay for my trip”.
“she normally brings $10,000 on her trips”
Now that’s one heck of a “Trip”.
Yeah that’s a lot of blackjack. Nice cover for the folks maybe. Wonder how much is going up her nose…
I used to count for fun and except for one time $200 was enough to bad streaks at the $5 tables. $400 would have probably been ideal but I was a starving student.
I almost choked when I read that 10K figure. Holy crap, if I wanted to shed that kind of money, I’d be in Paris.
and I ain’t talking Paris, Texas.
of course not, Paris Casino in Las Vegas.
$150.00 - $200.00
http://www.bloomberg.com/apps/news?pid=20601087&sid=ayxRKcAZi630&refer=worldwide
wmbz, it would be nice if your comments had meaning, so we knew what your link was about. Your criptic nature is not attractive.
Doubts Raised on Big Backers of Mortgages
As home prices continue their free fall and banks shy away from lending, Washington officials have increasingly relied on two giant mortgage companies — Fannie Mae and Freddie Mac — to keep the housing market afloat.
But with mortgage defaults and foreclosures rising, Bush administration officials, regulators and lawmakers are nervously asking whether these two companies, would-be saviors of the housing market, will soon need saving themselves.
http://www.nytimes.com/2008/05/06/business/06fannie.html?_r=1&hp&oref=slogin
“We’ve taken tremendous risks by loosening these companies’ purse strings,” said Senator Mel Martinez, Republican of Florida and a former secretary of housing and urban development. “They could cause an economywide meltdown if they got into real trouble and leave the public on the hook for billions.”
What a commie. Bernanke and congress want to do SOMETHING. This guy better not stand in their way.
The man behind the curtain is a cross-dressing, herpes infested, dwarf. I mean no disrespect to all of you cross-dressing, herpes infested, dwarfs on this blog.
Uhhhh,… Dude! Now I have to start the day with that nasty visual in my head
You dissin’ my tribe?
“all of you cross-dressing, herpes infested, dwarfs on this blog”
You say that like its a bad thing!
Doesn’t dilution caused by raising capital throw current shareholders under the bus?
Fannie Mae to raise $6bn new capital
Fannie Mae, largest buyer of mortgages in the US, recorded a first quarter loss of $2.2bn, posted credit loss provisions of $3.1bn and said it will seek to raise $6bn in new capital as the deteriorating US housing market extracted a heavy toll - 14:38
Shareholders are owners. Corporations already provide total seperation of accountability between the action of the corp and the owners, now they should be getting gauranteed returns also?
If the company misperforms, the cost should go to the owners. In this case it’s in the form of equity dilution. Don’t like it? Maybe those owners should make sure the company is run correctly. But if it’s not run correctly, then the owners get to take a big bite of the sh!t sandwich. It’s the least that should happen.
I think my choice for a future HBB headline was “How will survive without FNM and FRM?”
Its sliding tword us.
Yup - need to raise the limits on those jumbo mortgages
Doubts Raised on Big Backers of Mortgages
http://www.nytimes.com/2008/05/06/business/06fannie.html?_r=1&adxnnl=1&oref=slogin&ref=business&adxnnlx=1210071911-XEz38Ukwfsv3f9gbnD3Bvg
Freddie and Fannie, which are enjoying new growth and profits, have largely resisted those pleas, people briefed on the talks say, because selling new shares could dilute the holdings of existing shareholders and drive down their stock prices. Though executives have promised to raise money this year, they refuse to specify how much and when.
Moreover, the companies are using their newfound clout to push Congress and their regulator to roll back the limits that were imposed after recent scandals over accounting and executive pay, according to participants in those conversations.
To keep profits aloft and meet affordable-housing goals set by Congress, the companies began buying huge numbers of subprime and Alt-A mortgages, the highly profitable loans often taken out by low-income and riskier borrowers. By the end of last year, the companies had guaranteed or invested in $717 billion of subprime and Alt-A loans, up from almost none in 2000.
Then the housing bubble burst. In February, the companies revealed a $6 billion combined loss in the fourth quarter of 2007, and both companies’ stock prices fell more than 25 percent in less than two weeks. Freddie Mac fell to $17.39 on March 10 from $24.49 on Feb. 28, while Fannie Mae declined to $19.81 on March 10 from $27.90 on Feb. 28.
Both companies have also recently changed their policies on delinquent loans, which they previously recorded as impaired when borrowers were 120 days late. Now, some overdue loans can go two years before the companies record a loss.
There are plenty more entertaining facts in the article. But why do congress Clowns merely ask these guys to reform their business instead of demand reform?
Fannie announced their capital raising plan mentioned in the story this morning.
http://www.fanniemae.com/media/pdf/newsreleases/q12008_release.pdf
Good article, but I have a problem with this sentence: “But some financial experts worry that the companies are dangerously close to the edge, especially if home prices go through another steep decline. ” I think that it should read “…especially if home prices continue their steep decline.” So many have been lulled by serial bottom callers into the belief that we’re at or near bottom that they don’t realize that the downward pressures on prices are still growing.
They are trying to give the false impression that the data show a steep decline occurred in the recent past, but ended. In fact, the most recent data releases suggest the downtrend has steadily accelerated right through the most recent observations (e.g., Case-Shiller/S&P -12.7 pct YOY on a national basis).
hey, don’t worry if fannie needs some cash they can just call in Franklin Raines 100K monthly payoff er…uh…monthly retirement.
What “new growth and profits” are they “enjoying”? Fannie reported a $2.2 billion loss this morning.
And the stock is up almost $1. Bad news is good news?
The cost of housing is now 10% less than it was one year ago. Isn’t that great news?
* In order to live, American now need to borrow only 90% of what they needed just a year ago
* Americans are a little bit more competitive against their peers in India and China where the cost of living can be lower
* Americans need to work less to get more out of life
Why isn’t the media celebrating our abundance of houses? Isn’t that a good thing?
Oh yea I forgot, the corporations that own the media don’t want us with more freedom, more time, less debt.
What they really want is obedient workers.
Nothing better than a bunch of emotionally empty worker/consumers who look to iPods, flat screens and pharmaceuticals to bring happiness.
Zombie consumers make the best hosts for banking industry parasites.
Pork, chicken prices may rise in next wave of food inflation
http://ap.google.com/article/ALeqM5hWfUr5-ANa2AI1BK42U7tjdpnC-QD90FLI000
As a result, companies are slaughtering animals to tighten supply. The move will temporarily increase supply, lowering prices, but as farms herds and flocks get smaller, it will raise prices.
Fieldale Farms Corp., a privately held chicken producer, is cutting its production by 5 percent starting in the middle of the month. Tom Hinsley, senior vice president, said he expects higher chicken prices by midsummer.
“They will have to rise, big-time, otherwise, there will be no chicken,” Hinsley said.
Pilgrim’s Pride said it plans to reduce weekly chicken processing by 5 percent in the second half of the year, and keep production down until margins improve. Smithfield said in February that it would slaughter 4 percent to 5 percent of its breeding sows.
The U.S. Department of Agriculture predicts overall food prices could increase another 4 percent to 5 percent in 2008. But consultant Jim Hertel, of Willard Bishop food retail consultants in Barrington, Ill., thinks that high commodity and fuel prices, plus demand from India and China, could push food inflation anywhere from to 7 percent to 10 percent.
I doubt that any tragedy would ensue if “there will be no chicken” happened.
Ain’t gonna happen. I’ve often thought of raising my own–they’re easy to take care of and eggs are over $3/ dozen.
Along with an abundant vegetable garden, it’s great to be as self sufficient as possible in unstable times. And it’s cheaper than hoarding.
I buy from a guy like that (eggs). He doesn’t kill his chickens, they’re pets. If I couldn’t get eggs like that, I wouldn’t eat them.
I heard roosters make better pets–they have more personality.
I had two of them as pets when I was in high school. They were great. They fell off a chicken truck and wandered onto our property.
Roosters are more bothersome to the neighbors - In New York CIty it’s legal to keep chickens but NOT roosters. They’ve become a little bit of a trend in hipster Brooklyn
My neigbor had roosters, chickens that laid eggs, and a Vietnamese pot-bellied pig on a 4 acre parcel before the area became Tollified. The rooster’s crowing didn’t bother me a bit. I had learned to sleep through the rumblings of the subway and incessant fire and police sirens when I lived in the city, so the bird’s noise was a welcome change.
Fast forward to present, when the “elite” discovered the Highlands at Thornbury or whatever they call the latest hoity-toity development. My friend is in local government, she tells me the development McMommies and whipped husbands are up in arms over a family who has chickens and roosters. The poultry family’s house borders the development, but is not part of the HOA so they are not bound by any covenants. The borough’s phone is ringing off the hook with complaints from the horrified McMansion elitists. They have taken to lying about the trauma their children suffer when witnessing the bloody murder of a chicken by a fox…WTF? foxes don’t commit their mayhem in daylight in plain view of McMansion brats…
anyway, there is nothing in the township code that prevents the keeping of poultry on a parcel greater than one acre. HELLO McMansion people, you moved into a place that used to be rural, check it out, Wawa dairy is right up the road…did it ever occur to you pantywaists that you might have a critter or two as a neighbor?
Those McMansion creatures have utterly and forever destroyed the character of this once lovely area. They are the pests, not the damm roosters.
You’re old neighbor needs to kick it up a notch with a rusty pickup truck under repair in the back yard, a few yard gnomes, pink flamingos, plastic spinning fake daises, and a conferate flag somewhere. Of course, they’re probably lovely folks who would never adopt this kind of redneckery on their own, but wouldn’t if be fun to know how much it appalled the new folks in the hood in their 4,000+ sq. ft. monuments to their own fabulousness?
You just made my blood boil.
If I was those homeowners, I’d definately junk up the place a bit. Get a 1975 Ford and make a point to remove all exhaust systems and start that biyatch up at 3 AM every morning.
Having a bunch of farmers as direct relatives, I feel qualified to offer the following helpful advice:
-Lose the chickens. Stock up on pigs.
-Farmers never take their broke/worn out vehicles to the junkyard. Tow them to the back fence and park them. Park them close together, so you can’t cut the grass with the brush-hog between them. Plant sunflowers.
-Ditto with any scrap materials around the place. Invite the relatives to bring theirs over.
-Open up the family shooting range on Sunday afternoons. Lose the .22s, bring the 12 gauges.
-Do a good old fashioned “range burn” on Easter or Mother’s day. If growing wheat, cut it on Sunday afternoon
-Sling a chain around a branch from your biggest tree. Hang an engine from it for a few months.
If these don’t work, I can help out with some more…….
Gulfstream-sitter,
If no one else has told you today,let me be the first. You are a genius..lol
Pretty funny, Gulfstreamsitter. I used to live next door to your relatives. Great visuals.
You underestimate the stupidity of people. Because, what would they eat, otherwise.
man does not live by chicken alone, but by every ponzi scheme that procededs from the mouths of liars.
“companies are slaughtering animals to tighten supply.”
And that’s what it’s all about, isn’t it? Don’t produce, cut back. That’ll raise prices and increase profits. Create want, not abundance. Heck, why even raise any chickens at all? Just produce one chicken a year and you can charge a million dollars for it and not have the headaches of actually running a business.
Let’s all sell “deals” to each other, that’s how you get rich.
The market is telling them (and the other chicken producers) that there is less demand than previously there was thought to be (and there is more demand for corn and grains). When your inputs are more valuable as fertilizer and your outputs are less desireable cutting back is what is supposed to happen. I’d guess that most of us believe that home builders are still overbuilding and should be cutting back, you can’t ask for an efficient market in one area and an unefficient market in another.
Also, look at the number of obese people here in America. I think as a society we could handle a little forced dieting.
Except that it is the most fattening food which is cheapest: high-calorie carbs, soybean oil, and high-fructose corn syrup, the staple diet of every American teenager and Wal-Mart shopper. [one good thing to come from the corn ethanol farce will be that Coke and fruit "juices" will be more expensive.]
And the veggies? Oh, they are being outsourced to Mexico, South America, and China.
Well, they’re only cheap because of the absurd subsidies on corn and soybeans. (Also cotton but that’s not edible.)
Ethanol. George W, Monsanto, Mega farmers, Corn to cows to fatten, corn fattens people, fat people get sick, sick people need hospitals/mds/Pharma prescriptions.More GMO corn,soy,and ruination of smaller farmers worldwide if they don’t kowtow to the conglomeration of Monsanto and George..
It goes on,on, on, on, on.
Oh and Monsanto does cotton too.
EAT MOR CHIKIN
that’s what the colonel is saying.
This is just exacerbating the world-wide food shortage, because the cost of feed & transportation to bring meat to market, exceeds what our domestic market is willing/able to pay. This forces more pressure on rice/pasta, as substitutes for fowl play.
The plot thickens…
the plot chickens…..
lol
Actually killing chickens to reduce future supply of chickens reduces the global food shortage. Animals eat several times their weight in grain over their lives to produce a fraction of the calories as meat. So fewer animals means more grain to feed people.
Some backup link for this?
2nd law of thermodynamics isn’t enough for you?
It’s in the third paragraph from the section on chapter 16.
http://news.bbc.co.uk/1/hi/programmes/newsnight/5313424.stm
Fish are relatively efficient at roughly 3-5 lbs of plant material per lb of fish, cows are worst 20+ lbs of plant matter) but bulk up on plants that grow on less useful land (grass) but then are fed corn toward the end of their life to add fat and flavor.
“Beef in the USA has a feed conversion of about 4 to 1; pork is about 3 to 1; and chicken is about 2 to 1. Even with low grain prices, beef and pork are more expensive than chicken. As grain prices rise, the relative difference between chicken and the other meats will increase. However, because of the biology of cattle and hogs, and the non-integrated nature of the business, the transition to higher beef and pork prices takes several months. Production of pork is rising as normal production is combined with the slaughter of sows that will eventually lower production. Beef production will increase in the short run as heifers are slaughtered instead of retained for cow-calf operations. It will take until next year for the dust to settle and for beef and pork prices to rise to levels that are appropriate for current grain prices.”
http://www.wattpoultry.com/PoultryUSA/Article.aspx?id=22606
That is funny coming from the poultry industry. But the figures are pretty close for pork and poultry, beef is closer to 6:1. Poultry 1.7:1 and Pork is 2.5:1. Modern practice of less fat in the diet. Beef was a decade ago 7:1, Pork was 3:1 etc.
Chickens are very efficient at converting their food into protein, probably only fish or reptiles beat them out. Kentucky Fried Gator anyone?
Are you kidding? Chickens are so inefficient that 40% of the nutrition they eat ends up in their excrement. The excrement is so nutritious it gets fed to other animals as feed. They’ve been dithering around for years trying to close this loop where farmers use cow waste for chicken feed and then take the barely digested chicken waste and feed it back to cows.
http://www.bloomberg.com/apps/news?pid=10000103&sid=ae4.Ko7FZld4&refer=us
Now, as a backyard animal, that inefficiency means the area you grow them in stays nice fertile and full of bugs and worms for the chickens to eat, and that’s not a problem at all. It’s probably a plus.
And your flower garden is really nice. Used to get our fertilizer from nearby chicken ranch, but it sure stunk driving by..
Good link, Bluto; I learned something.
The 2nd Law still does not support supposition to buttress opinion.
I have relatives who feed silage (fermented grains) to thier beef cattle, thier pigs eat the cow poop only. When a cow lifts its tail, the pigs come running, the lucky pig cathes it before it hits the ground. My kids did not believe me, but when they saw with thier oun eyes they stopped eating pork
Prices “will have to rise, big-time, otherwise, there will be no chicken,” Hinsley said.” — the Peak Chicken theory.
Bloomberg TV offered up 30 minutes of lies with Barbara Corcoran on NightTalk last nite. Along with the typical deliberate distortions and conflicting statements, I thought it was interesting when she provided a hard number that a full third of those who buy a “retirement” house or 2nd house sell that same house within 3 years.
What’s even more infuriating is she was repeating the mantra of buy now, it’s a great time ,while quietly unloading all her assets ( to her credit she dumped her real estate empire at the peak ). Same as Lereah, same as Mozillo, same as….
She’s been pushing that cr*p for a while now. It’s brilliant. If you can convince everyone out there that they should have 2 homes, think of how much inventory she could get rid of!
No need to fret over the RE cheerleader. They can’t “talk” anybody into buying a house when loans are unavailable. It just shows how out of touch some “experts” really are.
I have 3 homes under agreement on my watch list of about 60. All three are accepting alternate offers. I presume the contingencies are substantial.
What makes you think loans are unavailable? Perhaps the crazier ones that were in vogue a couple of years ago are hard to find. People with decent credit and real pay stubs can still get financing.
Indonesia considers quitting OPEC
http://biz.yahoo.com/ap/080506/indonesia_opec.html
“Our wells are drying,” he said in the nationally televised speech, adding that the country needed to concentrate on increasing domestic production, which has dropped to less than a million barrels a day even as consumption rises.
Indonesian subsidies have kept gasoline, diesel fuel and kerosene affordable for years to the country’s millions of poor, but most analysts agree that current domestic prices are unsustainable. Still, a large hike could trigger nationwide riots and would come at an especially sensitive time, with political parties jockeying ahead of next year’s presidential elections.
“We will decide the magnitude of the increase within two weeks,” Minister of National Development Planning Paskah Suzetta told reporters Tuesday, though he did not say when the public would be informed.
It’s likely the public will be informed at the pump and the results will be explosive.
Energy is going to be the next great ignitor of global tensions. Inflexible (and growing) demand meets finite supplies. Sooner or later the U.S. will have to drill anywhere it can to get at the oil still in our ground. We will increasingly be challenged by China for political influence around the globe in oil producing regions to try and secure oil supplies. It’s only a matter of time until we have a military confrontation with China over this.
The Chinese think so too. They’re busy building up their expeditionary forces (to include up to 6 aircraft carriers) and probing our weaknesses in space, cyberspace, and societally.
We are definitely headed for another Cold War IMO and the Chinese leadership - never having been seriously challenged at home (or even legitimized by the ballot box)- doesn’t understand the limits of tolerance in the International System. They’re like children who have never been told “no’ and will try to take what they want (look at their attitude towards Taiwan).
The U.S. will respond of course because it’s a matter of national survival in this regard. Things will really get hairy around 2020 IMHO.
By 2020 the US and China will be in the thralls of population decline. See the one child policy. There will be little aggression.
Perhaps China will do well in the comming recession. However, the will figure out we have falling consumption, falling prices and they hold devalued dollars. Since they depend on exports the economy will unglue at the seams. Expeditionary forces may seem like an unneeded expenses.
Besides and conflict with China/US is highly unlikely since both teams have nukes.
Proxies like Iran and Iraq or Nigeria/??? will probably be provided with toys to carry the battle.
I think we have a far supperior millitary and China is just not that stupid to try to challenge our carrier groups.
The one child policy only applies to the cities. The farmers in the countryside can have unlimited kids. The Chinese population is aging quickly and there will be a stabilization of the population growth, but that will be offset by the fact that the Chinese currently use a fraction of the energy per capita that we do in the United States. Even by reducing a population of 1.4 billion by 10% won’t be enough when each of the remaining people use even 50% of the energy per capita that we do.
Right now the Chinese are in the greatest buildup of their military ever. Much of it disguised under other areas of their budget. Priority 1 is the buildup of forces sufficient to invade Taiwan, second, the extension of expeditionary naval capability beyond the littoral (coastal waters) and into a full blue water navy. The modernization of their nuclear forces is another priority. Yet, why build current generation weapons when they can step right into the next generation which is where much of their funding is going.
The Chinese do have a huge reliance on exports because, to keep the country functioning, they have to gain jobs at about a 20 million per year rate to keep the folks employed as they enter the workforce.
This will change as their economy matures and the average citizens consumes more ( there’s that demand for raw materials and commodities again), and to ensure that the country can move forward and provide for this consumption, the government will be much more aggressive in securing these resources - particularly energy.
Finally- the Chinese leadership has a huge chip on its shoulder - ever read a Chinese history textbook? The West is the demon incarnate that unjustly deprived China of its deserved number one ranking among nations (true to an extent) - They don’t have a realistic view of the world because the government has never had to face real opposition. They believe this stuff and will act on it.
Our military is far better than China’s right now, but within 20 years, their focus on the future and our focus on the past will pay dividends for them (immature Chinese military doctrine notwithstanding - it’s one thing to have carriers, it’s something totally different to know HOW to use them).
I stand by my assertions and anticipate a real problem with the Chinese - far greater in fact, than the one we actually had (in reality) with the USSR. The Chinese are FAR smarter.
Chinese society will disintegrate into chaos if the government pursues (or continues) a huge, costly military buildup.
And it may even occur when a recession comes to visit and NO ONE in the whole country is allowed to vote for their leadership.
[well, except perhaps in some of the rural villages where they have permission to "try out" democracy on a local level]
Taiwan & Cuba are really similar little islands, slivers stuck deep in the skin of bigger countries.
Report from Michigan: I went to the coin shop for the first time in a few months. It was 11 am on Monday and it was crowded. They now have an armed guard at the door for the first time ever. I was glad to see this addition because I have had some misgivings in regard to security; but I have no idea what prompted this change. There were people exchanging dollars for Euros, buying coins and others selling their jewelry. Anyhoo, I just wanted to report on the addition of the armed guard. 2008 Silver Eagles were selling for $25, 9 bucks over spot.
$9 over spot! The armed guard must be there so the owner can rob you at gunpoint. Still, the premiums on physical metals are rising fast, and the jewelry sellers are classic weak hands. We are very early in this metals bull market; still in accumulation mode.
And it’s not as if the public has much to sell anyway…
1979-1980 was a giant vacuum cleaner, as people sold precious metals @ high prices (lines of sellers were not uncommon) and judging from the activity going on now, most of what they have to sell is along the lines of a 18 inch 14k Gold Zales herringbone necklace that they paid $483 for, that they can sell for $143 now.
And then the well goes dry…
From AmericanBanker.com’s Daily Briefing (one needs a subscription to read the entire article)
“Cards/Payments
JPM Chase to Buy 47% Stake in Target Credit Cards for $3.7B
The five-year deal - Target will buy the stake back at the end of the term - functions more like a loan than an outright sale, though it has characteristics of both.”
http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_baum&sid=a6cg26SnnbdQ
Check out this statement:
“Home sales and prices continue to plummet. Until buyers step in to absorb the glut of homes on the market, compounded by foreclosed properties dumped on the market at a time when credit availability is constrained, it’s hard to see why home construction should pick up anytime soon.”
What is it about inflated housing prices that Wall Street and the MSM doesn’t understand? It the (un)affordability that created the foreclosures, yet they seem unable to understand that fact when they complain of the mystery buyers not stepping up. Further, the article bemoans about new construction not picking up. Wasn’t it builders who fed into the frenzy with tossed together overpriced shacks, ultimately oversupplying the market? I’ve always had an element of respect for B-berg media but it’s retarded pieces like this one that make me question all media.
Oh…they understand it. To admit that unaffordability is the problem, will not only require them to admit their complicity in causing the problem but the solution to correct the problem. They do not want to correct the underlying problem, because it will put them out of a job. They want the Ponzi scheme to continue…
I don’t think they have any choice in how the Ponzi scheme plays out. They can barely delay the inevitable if that.
yea,…but they will play it out to the end, because they have no plan B.
The lack of economic and financial literacy is pretty amazing. I bitch in my head about it, but then I think to myself I can perhaps use that ignorance in the population to my advantage. I can invest wisely, while they invest foolishly in the next bubble. Unfortunately the government intervenes and you sometimes don’t know what’s going to happen.
“I can perhaps use that ignorance in the population to my advantage.”
Have you thought of starting your own hedge fund?
“The lack of economic and financial literacy is pretty amazing.”
I’m not amazed Arlington. The fact is there is a group of liars who have used silly, empty non-issues to get people to vote against their own economic interests.
No surprise at all.
What’s the Matter with Kansas was an excellent read about that people voting against their own economic interests for the sake of guns, gays and God rhetoric. As a result, they get neither the economic relief nor their perceived cultural benefit because the people they vote for forget those promises pretty quickly and move on to the needs of the lobbyists.
“Gods, Guns and Gays:How the Neo-Conservatives Destroyed America with Fear”
http://newyork.craigslist.org/que/zip/669236092.html
FREE POOL TABLE !!- 8FT BRUNSWICK POOL TABLE (New york )
, but our loss is your gain, just come and get it ASAP PLEASE.
Reply to: sale-669236092@craigslist.org
Date: 2008-05-05, 7:28PM EDT
“BRUNSWICK” 8 ft POOL TABLE. Best brand in the business. Solid oak. Leather pockets. Paid $5,500.00 for this just 2 short years ago. It is in great condition . Slate table top. Set of regulation pool balls and accessories. The table and balls and in GREAT condition.
house was forclosed, so everything must go
Pick-up only.
Call John at 631.68O.35l5..
any catch? Why doesnt he give it to a friend?
any catch…probably weighs 1000lbs…..
In college towns, people give away nice pianos and Hammond B-3 organs free all the time. The catch is always “You move it — get it outta my life.”
got to love long island
you should call him and ask how much for his harley?
Can anyone say “socialize the losses”?
Freddie and Fannie
“Each time Congress or regulators have given the companies new room for growth, their stock prices have risen. But so far the companies have balked at raising more capital. That hesitation has lawmakers concerned that when the companies raise money this year, it will not be enough.
In a March meeting, Freddie Mac’s chairman, Richard F. Syron, bolstered those fears by saying the company would put shareholders’ interests first. Michael L. Cosgrove, a spokesman for Freddie Mac, said Mr. Syron is committed to both satisfying the company’s public mission and creating shareholder value. Fannie Mae, which is in a regulatory-imposed quiet period because it will soon release financial information, declined to comment on capital-raising issues.
As worrisome as the need for new capital, some analysts say, are the companies’ books.
A report released earlier this month by Mr. Lockhart, the regulator, noted that although Freddie and Fannie had a combined $19.9 billion of “unrealized losses” on mortgage-related investments, neither company had reduced its earnings to reflect those declines. That is because they judged the losses to be temporary — in essence wagering that the mortgage market would recover before those assets were sold. Such a wager is permitted by the rules but difficult for outsiders to analyze.
Fannie Mae declined to discuss unrealized losses. Mr. Cosgrove, the Freddie Mac spokesman, said the company discloses all financial choices and downgrades all potentially impaired securities when appropriate.
The regulator’s report also noted that Freddie used accounting choices that gave it an immediate $1 billion capital increase. While those and other tactics are technically permitted, the regulator said, they deserve scrutiny.
Both companies have also recently changed their policies on delinquent loans, which they previously recorded as impaired when borrowers were 120 days late. Now, some overdue loans can go two years before the companies record a loss.
Attempted to post this earlier with a link, however appears it may have been gobbled up - from nytimes.com article
“Now, some overdue loans can go two years before the companies record a loss.”
Doesn’t sound like a model of accounting transparency…
Brilliant! Reduce foreclosures by waiting 2 years instead of 120 days to declare borrowers in default. By 2010 prices will have rebounded. Sounds like a plan.
Holy smokes… If i’m doing the math correctly, the GSEs are already below the 3% capital requirement and are playing games to avoid raising more funds.
Let’s start a pool on when the GSE’s will be publicly insolvent and taken over by the government. I vote for October, 2009.
DHI 15.56, -0.41, -2.6%) , among the nation’s largest home builders, reported a $1.3 billion quarterly loss on housing weakness and turmoil in mortgage markets.
Mortgage-finance giant Fannie Mae (FNM:Fannie Mae
FNM 28.60, +0.31, +1.1%) did even worse, reporting a $2.2 billion loss as credit-related expenses tore at its bottom line.
Troubled Swiss banking group UBS ( 33.39, -0.92, -2.7%) said it will cut 5,500 jobs and sell $15 billion in risky mortgage assets to BlackRock Inc. (BLK:BlackRock Inc) to offset first-quarter losses of nearly $11 billion.
14.5 billion, wow what a hair cut!!! and congress is going to have a congressional hearing as to why the jumbo maket is stalling?
i cant wait to watch that sideshow!!!!!!!!
Good post, man. Scary that the institutions set up to save the country during the New Deal are now dragging it down.
I think we need a thread on commercial leasing. During the past several years of the boom. Many people took on expensive leases for commercial property; now that the economy is failing and they are being forced out, the landlords are attempting to rent the properties for the exact same amounts. How much time should you allow a property to sit vacant before you make another offer?
During the crash in Silicon Valley: A building owner made us an offer to buy out our lease from our current building (~9 months), pay our move, do about $75K worth of work to his building + many free months once we got there. We had to put money in escrow, but we saved a ton of money and we ended up with a place that we could use for manufacturing.
It was a funny time.
I can’t give away a 2 story comm rental- here in peoples republic near dc
Maybe I am doing something wrong, however is anyone else having difficulties accessing RealtyTrac’s free listing of foreclosures website?
98 on the SKF. Nice hose job last week. 1400 spy. 1250 minimum target on the downside (not to say it will go there in a straight line).
Are you implying the bear market rally might be over already??
Blano you still holding some SKF? Hopefully you bought some on the way down. Downside risk is still minimal IMO.
Not at the moment. Minimal downside risk is why I last bought at 98, THEN rode it all the way down. Still going at it bass ackwards.
Minimum?
Holy crap!
Any good links?
Watch the web for climate change truths
http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2008/05/04/do0405.xml
Two weeks ago, as North America emerged from its coldest and snowiest winter for decades, the US National Climate Data Center, run by the National Oceanic and Atmospheric Administration (NOAA) issued a statement that snow cover in January on the Eurasian land mass had been the most extensive ever recorded, and that in the US March had been only the 63rd warmest since records began in 1895.
While global warming enthusiasts might take cheer from the NOAA’s claim that “average global land temperature” in March was “the warmest on record”, this was in striking contrast to a graph published last week on the Climate Audit website by Steve McIntyre.
Tracking satellite data for the tropical troposphere, it showed March temperatures plunging to one of their lowest points in 30 years.
On one hand our politicians are committing us to spending unimaginable sums on wind farms, emissions trading schemes, absurdly ambitious biofuel targets, and every kind of tax and regulation designed to reduce our “carbon footprint” - all based on blindly accepting the predictions of computer models that the planet is overheating due to our output of greenhouse gases.
On the other hand, a growing number of scientists are producing ever more evidence to show how those computer models are based on wholly inadequate data and assumptions - as is being confirmed by the behaviour of nature itself (not least the continuing non-arrival of sunspot cycle 24).
Of course this could also be clear evidence that the North Atlantic thermohaline circulation is dramatically weakening and could be on the verge of colappse. The result of THAT would be the Northeast and Europe freezing their asses off while the Southeast and caribbean roast. Sound familiar? Do your damm homework and dont quote a single year as indicative of a long term trend (or lack thereof)
The earth still spins and so do the climate doomsayers.
Earth Abides
This would, of course, be good for the housing market since “it is always a good time to buy or sell a home.”
Oil and resource wars are bound to happen, but wars are not likely over wind, solar, geothermal, and tidal or other types of alternative energy. Even if people determine that climate change isn’t occurring and that CO2 isn’t a pollutant, there are few reasons to think that continuing to burn fossil fuels at ever increasing amounts is good for the planet or its inhabitants. Maybe we invaded Iraq and continue to kiss Saudi a$$ for all their sunshine?
The Housing Crisis is Over (says Mr. Snooty Francais hedge fund clown)
http://online.wsj.com/article/SB121003604494869449.html?mod=loomia&loomia_si=t0:a16:g2:r5:c0.171366
Serial bottom calling has only just begun.
“For starters, a bottom does not mean that prices are about to return to the heady days of 2005. That probably won’t happen for another 15 years. It just means that the trend is no longer getting worse, which is the critical factor.”
This is a clever twist: If you don’t like what the data is saying, change your interpretation of the data to support your point.
Last time I looked, the trend in San Diego home prices was a nearly-vertical descent; now I can rest assured that a bottom is at hand, as the trend has stabilized.
He did a good job of cherry-picking data points, ignoring some pretty important factors: foreclosures adding to inventory, and existing homes ossifiying on the MLS. It seems he focussed only on new construction.
What a hack.
Oil and resource wars are bound to happen, but wars are not likely over wind, solar, geothermal, and tidal or other types of alternative energy. Even if people determine that climate change isn’t occurring and that CO2 isn’t a pollutant, there are few reasons to think that continuing to burn fossil fuels at ever increasing amounts is good for the planet or its inhabitants. Maybe we invaded Iraq and continue to kiss Saudi a$$ for all their sunshine?
Sorry for the misplacement of this rant. I should have placed this above.
Need for further drops “neglects the fact that a great majority of Americans buy their houses with mortgages. And if one buys a house with a mortgage, the most important factor in deciding what to pay for the house is how much of one’s income is required to be able to make the mortgage payments on the house. Today the rate on a 30-year, fixed-rate mortgage is 5.7%. Back in 1981, the rate hit 18.5%. Comparing today’s house prices to the 1970s or 1980s, when mortgage rates were stratospheric, is misguided and misleading.”
True as far as it goes. But mortgage rates, while low, are trending upward. And have nowhere to go but up from here as they come to reflect higher expectations of losses and higher expectations of inflation.
New “dancing people” mortgage ad seen online: Animated, Woman who grimaces and flinches as a large spider crawls up her body.
Who thinks up these thngs? This is the best they have? Are they trying to turn us all into bitter renters?
Perhaps the spider is appropriate since there was a web of deceit that existed in the mortgage industry.
I used to make banner ads myself, and the one company that always made the most annoying ads was Lower My Bills. Their ads included: A hissing Cobra, and an ear of corn with popping kernels. I can’t remember the rest. All of them had all 50 states represented some way or another on things like the cobra’s scales or the corn kernels. Amazing. But the thing is that I can almost guarantee that those ads probably performed very well. The saying in our office was that people are sort of like raccoons and like shiny things-hence banner ads with lots of little things in them.
“Fannie Mae reports $2.2 billion loss in first quarter and warns of “severe weakness” in market ”
2nd half of the crash up next just in time for summer
Fannie Mae loses $2.2B in 1Q; warns of “severe weakness”
Tuesday May 6, 8:14 am ET
By Marcy Gordon, AP Business Writer
http://biz.yahoo.com/ap/080506/earns_fannie_mae.html
The company said it expects “severe weakness” in the housing market to continue this year, bringing increased mortgage defaults and foreclosures.
I thought the worst was over??? Oh, that was yesterday’s news. Bailout Ben will be working long days on this bailout scheme.
RFMD earnings today I expect they also will annonce wide and deep layoffs ? I don’t know if this will pop the stock or not? I know hoz likes to follow layoffs so here you go.
That’s one of my favorite companies. That and PMCS. How I wish the two of them would get their s**t together.
RFMD price is at least 15-20% lower today than at the bottom of the bear market in Oct. 2002.
Laying off 80 in manufacturing. Nothing else reported
Apr 16 Marketwatch
This maturing wave of the downturn has a more “flationary” feel to me than the starting wave, which felt “staggier.” There is a huge range of change of relative prices, but overall I think the odds of a deflationary spiral are decreasing slightly.
SWKS and TQNT seems to be doing better in the Cell phone PA business. I like tech stocks that did not go below 10 bucks a share in the big crash. But I own no tech stocks now so really don’t have too much of a opinion on the share price. BRCM is a good one or used to be.
Then you must not like Cisco? Went into the 8s. I think Intel was at or below 10, so was AMAT in Oct. 2002.
Depends how long it stayed there for. CSCO looks like not very long maybe a couple weeks ? Brcm also touched 9. I mean stocks like VTSS CNXT MSPD LU RFMD AMCC stuff that fell down and couldn’t get back up .
Anyone else get the feeling that Bernanke is failing his mid-term?
The dude studied the great depression his whole life, and is absolutely convinced he could have avoided it.
Just maintain confidence and everything will be okay… All talk must be of “contained”.
Just keep the banks liquid, and everything will be Okay. Lower interest rates, push the discount window, and TAF.
But, the consumers can’t keep going further into debt, and can’t keep spending without the debt…. STIMULUS!
Oh, the banks won’t lend to the brokerages because the brokerages are WAY insolvant… Hmmm… just loan to the brokerages and prevent the first card of the house of cards from falling.
Just keep all the balls in the air, and everything will be okay….
But, we’re facing multi-trillions of dollars about to just go away as all the under-water people walk….. Crud! Well, we HAVE to stop house prices from falling. But how? Hey, I can’t do everything…. someone else figure that out.
And, as we’ve all been saying, none of this can have any long-term effect on saving the economy because there is NO WAY to keep house prices unaffordable forever.
House prices will come down, people will walk, bond holders will have to recognize losses… It is coming apart at the seams.
used to be wall street created the sh*tballls for everybody else….what goes around comes around. enjoy the taste wall street.
“But, we’re facing multi-trillions of dollars about to just go away…”
Exactly, the MSM talks Billion$ while the problem is Trillion$!
Is the Fed still sticking to its “low inflation” mantra?
May 6, 2008 9:53 A.M.ET
BULLETIN
CRUDE HITS NEW HIGH OF $121.49 A BARREL
Stocks slide down oily slope
U.S. stocks drop on disappointing financial results from Fannie Mae, and continued strength in crude oil.
Is prof bear still a deflationista?
$385,000 for a vacant lot? Are there two Americas right here in
Posted by Maureen Nolan May 01, 2008 6:36PM Syr Post Std.
People often talk about the two Americas when they talk about poverty and wealth. I think there are more than two.
Today in The Post-Standard Reporter Matt Michael wrote about a vacant lot on Skaneateles Lake that’s for sale for …385,000. Across the street, a couple bought a $390,000 house and tore it down to build a new one.
In Syracuse the city sells vacant houses for $1 to nonprofits to restore, low-income families with kids hunt long, hard and often unsuccessfully for decent apartments they can afford and young people rent new downtown apartments for $1,200 or more a month.
How many Americas are there in Onondaga County alone?
COMMENTS (4)Post a comment
Posted by VaCuse31 on 05/02/08 at 2:46PM
2 America’s is right, one worked hard and became educated to afford a lot by the lake or 1,200 downtown apt. and the other passes the blame onto somebody else.
Posted by VaCuse31 on 05/02/08 at 2:48PM
work hard, go to school and that buy what you can afford!!!!!!!
Posted by Flopka on 05/02/08 at 10:31PM
VaCuse, if you believe everyone in Skaneateles works “harder” than everyone else in Onondaga County (or indeed, that everyone in Skaneateles works “hard” at all), I’ve got some beautiful oceanfront property to sell you in Crawford, Texas for $500,000.
Posted by dablaze on 05/02/08 at 11:52PM
Flopka, if you think that hard work and an education does NOT get rewarded, then you are proving why you are a loser and stuck in the Syracuse ghetto. Many people could afford the $500,000 price tag of your “beach front” but they are too intelligent to waste their hard earned money on your scam sale, loser.
***************
Ahhhh…..raging class warfare in CNY. How many posts did it take to go downhill? See why homes sell so well here. The finger pointing and disdain from those that supposedly have made it is acid laced.
The elitist attitude and arrogance of those who believe in the borrow and spend reaganomic ideology is exactly what will make it come apart. It was a lie then and today the only means to defend it is to deny its complete failure.
Fannie Mae In Red, Seeks 6 billion.
http://online.wsj.com/article/SB121007526280870313.html
Hi I posted a few days ago about a house I was considering, I am a first time home buyer, I just would like an honest opionon, I am sick of hearing from a realtor “its a great deal, you need to buy now before you miss out”….This is what I originally posted:
What about lowballing a house that has obvious damage??? I am up in the Manchester, NH where a lot of houses on the market are bank owned and have freeze damage. I have been watching a house that is bank owned asking price 179 and they say the extent of freeze damage is unknown. Back in 2003 the house sold for 235 so the bank is already taking a hit on it, would it be appropriate to offer way less than the asking price??? 179 to me is way too high. I can’t wait till the market goes down in this area…I am patient but it’s taking forever. Thanks for your time!!!!
Make an offer of say 170 subject to inspection by the inspector of your choice. Then go hire the nastiest pickiest SOB you can find to inspect the place. Develop a laundry list of things that are wrong and approximate cost to restore. Then go back with your “new” offer of 145 or whatever it is you want to pay. Sometimes that works, if the bank has some documentation or backup to justify another price drop.
Txchick thanks for this great advice, would that work for a property that is listed “As Is”?
This inspection/negotiation does work for “As-Is”. It’s not really, totally as-is until you own it; then you can’t really come back on them for things you find later. But before you come up with a firm offer and they accept it and contingencies are cleared, you’re free to pick at the condition and price. Not you’ll always be successful, but these days it IS worth pursuing.
A friend of mine is selling a house that way, and every potential buyer has come back to kick down the As-Is price further, based on some really picky inspectors sometimes. He finally accepted one of the offers, and yes, for much less than the asking price.
As for picking the nastiest, pickiest SOB you can find, yep! Just don’t go overboard. One of the inspections on the aforementioned house asked for huge discounts for non-existent problems like the “wrong” kind of fence which is the same as everyone else’s, or a roof is past-age though it was replaced two years ago, or bad wiring in the garage — uh, a blatant attempt for sure because there IS no garage! (This cock-up will end up being reported to ASHI for whatever that’s worth.)
Why not.
Not in my opinion on the inspection contingency on an as-is listing, however, if you have any friends that are home inspectors or structural engineers, you might have them look at it. Note that NH doesn’t license home inspectors, I’d personally look for one that is a P.E. (professional engineer).
I’d be very careful at approaching that house that has any damage without an inspection by someone qualified to do so, esp. in NH, where any idiot can hang a sign saying “home inspector” and go about doing business. My wife and myself have been looking at homes in the area for 3-4 years, and there are more homes out there with structural problems than you think (I’m a structural engiener in the New England region, so I consider myself somewhat qualified to judge structural issues).
Your situation reminds me of one time I noticed all the new tile in a kitchen was cracked right along what is known in concrete design as a “yield line”. Well, go in the basement and the first think I notice is that there is obviously a column missing in the basement under the kitchen. Current owner put in new tile in kitchen and then, for no reason, pulled out a column, causing the cracking on the floor above. RE agent kept saying nothing was wrong with the house, and sure, it is easy to replace the column, would just take a couple days and a car jack, but who knows what else the current owner did that I wasn’t qualified to see?
Thanks for the info Bad Chile, I didn’t know that inspectors didn’t have to be liscensed in NH so I will be careful on who I get to inspect my future houses. You mentioned your wife and yourself have been looking for 3-4 years in this area, Is it just me or is it taking forever to hit bottom? I honeslty don’t know how anyone can afford houses in this area unless they are all working in Boston.
rent, rent, rent….the bottom hasn’t even come into view yet. Maybe in 2010. Don’t listen to the fools who tell you you need to “own property”& “build equity”. Save your dough and invest in safe investments. If the market scares you get CD’s at the bank.
How about lowballing a house that is in pristine condition. If that doesn’t work, just sit and wait. In a year or so Fannie and Freddie won’t be propping up the loan securitization (hard to guarantee loans when you are in receivership) and we will start the next big leg down.
Unless you enjoy throwing away money, sit down. Why would you buy a house with unknown damage, with prices headed in one direction…down. Embrace patience…or embrace poverty.
Very good point, I am just afriad the crash isnt going to hit us like it did the rest of the country.
“I am just afraid the crash isnt going to hit us like it did the rest of the country.”
I sometimes fear that too Corpsman.
I wasn’t happy in my previous town and so selling for a go-quick price was a no-brainer. But repurchasing after the sale? The NYT rent to own calculator (which I tweaked to reflect what hubby and I paid in to bring our former used homes up to current maintenance) said we could rent for 19 years before we paid more to rent than to buy….and I put my lower wishing price in the “buy” slot, not what homes are selling for now.
NH is my home state and I have several friends and family in the Manchester area. I’m kind of stumped how the state is hanging on myself, especially Portsmouth which has experienced an amazing escalation in prices. But I have no doubt that a major worldwide slowdown will be experienced everywhere. Ben has posted several NH newspaper links that have reported escalating foreclosure patterns in that state so it’s coming.
Manchester is slowly going down but the greater Manchester area (Bedford, Derry, Londonderry) are still really high. I constantly see listings for 900 SF capes for over 200K to me that’s crazy!
“Embrace patience…or embrace poverty.”
OK, that one’s going up on my refrigerator to ponder every time I think I might want to buy soon.
I just stocked the living POOP out the fridge (and everything else) on Saturday. I filled the Wife’s car completely with comestibles. I’m good for at least 3 months on non perishables and such. Prices have gone up as much as 15 percent on some items - particularly rice, flour, and vegetable oils and shortening. WOW. that’s in just one month. But HEY! CPI says food and fuel aren’t real inflation…
It’s appropriate to offer what ever you want. It’s an offer, they can reject it if they want.
IMHO if you can’t get a grip on the extent of any damage, you shouldn’t be making an offer.
Thanks for all the advice I will sit and wait.
If you’re a USN corpsman, and if you anticipate being moved around, don’t feel compelled to buy. It might be financially better to rent. You can “build equity” by saving money in a savings account and earning interest.
If you buy a depreciating asset, on top of having to pay closing costs, it may well be cheaper to rent for a few years than to buy, if you’re going to move in a few years.
I am not active duty anymore just got out last June.
Wachovia Now Doubling Its Shareholder Losses….
The company is now reporting a net loss available to common stockholders of $708 million, or 36 cents per share. On April 14, it reported a loss of $393 million, or 20 cents per share.
http://www.reuters.com/article/ o…NAS205720080506
More Leverage, more more…let’s really pile it on…
“The Office of Federal Housing Enterprise Oversight (OFHEO) also said it intends to further reduce the capital surplus requirement it placed on Fannie Mae FNM.NX upon successful completion of its capital-raising effort.”
http://www.reuters.com/article/ b…646376520080506
In the early 1980s, as S&Ls were experiencing growing losses, their regulator, the now defunct FHLBB, lowered the capital requirements for S&Ls to allow them to outgrow their problems.
Why am I not surprised that as FNMA and FHLMC continue to post losses their regulator, OFHEO, reduces their capital requirements?
How about a topic dealing with anger regarding the housing bubble and fallout? I live in the Bay Area, CA- which is the epicenter of the boom/bust. I’ve been angry about the housing thing for YEARS now. I’d say my feelings about it are probably borderline unhealthy. The fact still remains that even though the crash has been going on for well over two years in my area, prices are still way the hell too high for most people- even people like myself who makes a six figure income.
So I’ve been almost obsessed with this issue, waiting, hoping, wanting this thing to blow up. But will it? That’s the thing. I’ve been totally prepared to cut and run from the area for a few years. I’ve been saving up for five years, saving for what I’m willing to spend on a decent home, which is around 200k max. But the thought of having to uproot myself is daunting. My industry is not as well established elsewhere. So if we do move what we save now will probably have to be it as far as the home we can buy and how much we can sock away into retirement. So of course that only ads to my frustration because it seems ridiculous that hard working, highly experienced professionals like myself who should be able to afford the bare minimum would have to make a choice like that.
The other things that piss me off about this whole thing is that people in my area are still in an extreme case of denial. I can’t out my finger on it, but people still feel that the Bay Area is on another planet and that no amount of damage will ever prevent prices from becoming reasonable.
Anyhow, the topic in general is about anger and maybe how we deal with it.
I know the feeling. I like to go out and throw rocks at things (usually, bigger rocks).
Get this. My little town in SE Utah is undergoing big time speculation, nobody will sell land or houses as they all think the proposed uranium mill and possible nuke reactor and energy industry in general is going to create a boom town. A year ago, you could’ve bought this entire town, people would’ve lined up to sell to you cheap. Now everyone’s holding. The few things that are for sale are at ridiculous prices (and not selling).
Cognitive dissonance. A bare-boned piece of land, no water, no services of any kind, too dry to grow weeds, 5 miles from town in the middle of nothing, 40 acres for 100k. A few years ago I saw similar land selling for 20k asking and no takers. Expansive soils, to boot.
So…I consider it a course in human psychology. I’ve actually considered buying here, as I like it, but what to do? They think it’s different here (it’s not, no financing for anything), so they’re all being greedy. They’ll crash and burn and I’ll be enjoying my life somewhere else.
Being a renter gives you strange and mystical and magical powers - you can move yourself to other places at will…I say go, leave the Bay Area and don’t look back.
Correction - just talked to a RE salesman, the land is now 160k, relisted w/ new agent. It’s smack in the middle of the possible site for the possible rumored nuke plant… I can’t begin to describe how desolate this place out there is…
Don’t nuke plants need lots of water?
Old generation nuclear reactors, new ones can be high-temperature, gas-cooled nuclear reactor or even better the ones being developed in China (from technology developed at U Wisconsin in the ’40s) - we don’t use these because they do not allow the production of weapon grade materials. C’est la vie. By the time China has all the bugs worked out, we will be paying royalty fees for the use of the technology -just like fax machines developed by the US army and exploited by Japan.
The nuke folks are buying up water shares like crazy. The rumored site is about a mile from the Green River, they can pipe it over.
Hope it’s downriver from the melon growers…
No, wait. A new business opportunity. They can keep the fruit stands open at night using glow-in-the-dark melons. What an ad campaign that could be, a lot of ways you could go with that.
Or river running at nighttime. The river lights up the canyon all by itself.
Shoe, it’s south of town about 5 miles, take the Airport Road, then the San Rafael Desert Road (the one eventually going to Horseshoe Cyn), it’s about 1/2 mile down that road.
Someone should make sure they reserve some room for the anti-nuclear activists to camp. They may show up before there is even a budget. Of course, they will need very little as they can live off the land, not burn fuels, not poop, and exhale very little CO2.
Jetson,
I hear ya as I’m in the same boat. It sucks to try and live life without taking on massive debt, especially when you are competing with those with unconstrained lines of credit and the common sense of a lawn mower.
You might want to consider ego, Do you ever hear anyone talk about how they picked at winning stock? Or team? Or do they talk about the mistakes they made?
It takes a very big to admit his mistakes, And maybe an even bigger man to be able to point out another’s with out sounding like a “haha loser i told you so I was right ahaha sucks to be you”
So far the only way I can get through to any people i know about this bubble is basically explain what happened (the technical details, along with comments about the fraud) along with telling them that it wasnt their fault they were lied to by the powers that be.
As for anger I really want people angry at the people who made this mess and the ones who helped them
I agree with Ms. Utah….sometimes you just have to go. When my husband and I left SF in 1990, most of the people we knew literally said things like “how can you leave paradise?” Easily, actually.
Maybe a subtopic is regrets–and how to live your life so that you’re not burdened by them.
Regrets - like fleas on a dog…
Sometimes I feel like a hamster on a wheel, the faster I move, the father that I get behind, “not that there is anything wrong with that”.
lol
Waking up to 121.67 oil makes me want to sing out loud.
One toke over the line sweet jezus.
Sittin’ downtown in subway station
One joke over the line.
There’s a 2 joke minimum during happy hour…
Oil up to 122.25.
Mr Wizard, take me away!
I am bullish on the bear market.
Recommended reading
False Security: The Betrayal Of The American Investor
by Bernard J. Reis (Author), John T. Flynn intro
It might be a little hard to get, but worth the effort.
From the book:
“In the beginning the companies sold only mortgages, that is, a mortgage on a single piece of property to one investor which they guaranteed. Later, they devised two other securities which were designed to give the investor greater safety by reason of diversification, on the principle that one should never keep all of one’s eggs in one basket.”
1937
Ahhhh, the spring selling season is upon us in Northern Colorado . . .
For the month of April, 2008, here are the numbers for SINGLE FAMILY HOME and MULTI-FAMILY (Condo and Townhouse) sales:
In Fort Collins, down 24.15% in total # of SF home sales and down 2.97% in median price. New construction, down 17.39% in number and down 31.02% in median price.
Total condo sales up 13.33% in number, but down 18.98% in median price. New construction down 44% in number and down 58.87% in median price.
In Windsor, SF home sales down 23.8% in number of homes sold. New construction down 47.06% in number and down 14.44% in median price.
In Loveland, up 5.32% in total number of homes sold, but down 1% in price. For new construction, down 34.95% in median price.
In Greeley, total sales down 22.83%; median down 7.75% from last year. New construction down 36.36% in number and down 6.99% in median price.
In Boulder, 88 single family homes were sold, same as in April last year; median down 8.21%.
[Source: Information Real Estate Services, IRES]
Boulder’s the home of my old alma mater - I thought it was different there…
In Windsor, SF home sales down 23.8% in number of homes sold. New construction down 47.06% in number and down 14.44% in median price.
I’ll bet that all those people who overpaid to live in “Water Valley” must be feeling that they made a wise investment. If there was a bubble community out here, it was Water Valley.
For those not familiar with the area:
http://www.haydenoutdoors.com/store/p13details55.php
It’s an old gravel pit, these $850k to $1 mil lots are so low you can’t even see the mountains! Plus, across the street is a new 5 story Good Samaritan property. Now, the owner (Martin Lind) is drilling for oil and natural gas within the same area - beautiful.
Boulder’s the home of my old alma mater - I thought it was different there…
Looks like even progressive hippies are having second thoughts about jumping on the property ladder.
Anyway, Boulder is an overrated dump. It has all the charm of Santa Ana, Calif. Having lots of ethnic restaurants does not a paradise make.
When I went to grad school there, the campus was really nice, plus some of the old town, but I hated the rest of it. I couldn’t even find a place to rent (pets), so I bought a nice trailer and put it in a park on the N. edge of town. The trailer was tied down, but I recall coming back one day to find the very heavy steps (picture a small deck w/ steps) blown halfway down the street. I also recall one major wind storm that blew half the town’s light and power poles down. Couple that with a 2 foot snowstorm in late May and when I graduated I couldn’t wait to leave (not to mention the snobs). Sold the trailer and made a little money, helped pay my expenses to move far away. But I will say I met some very cool people there who I’m still friends with.
Is there a way to find out how many people got helocs based on last year’s market?
Would there be some kind of an indicator of how lopsided the lending got. Sort of like, 10 million families borrowed 100 million dollars based on peak home price. Does anybody keep track of the heloc mess?
Where is my AK-47?
I need target practice aiming at the oil ticker.
Wow,
I woke up to 280 comments this morning, at 8:30am pacific. Way to go, guys!
What are you, an investment banker?
Getting up at 8:30AM sounds like vacation to me.
Cracker,
Don’t be so hard on the guy. It’s nice to see that someone is getting a good night’s sleep.
lol
The Fed/Govt is going for broke! They are doubling down at the poker table. There is no plan B. If there actions do prevent deflation doesn’t work, we are all (the entire world) is scr*wed!
Again, I say, there is no plan B!
Middle-Class re-education camp mantra…
Please pull up and pay at the first window
Looks like the Western exodus isn’t just happening in California. The latest news from Arizona:
http://www.azstarnet.com/metro/237616
Maybe they could have an emergency fed rate hike.
I think it will come to that, at some point the fed will be forced to defend the dollar.
@ what point does it hit the great unwashed public that they’ve got to get out of things Dollar-denominated?
That will be when the dollar hits bottom, plebes are always the last ones to the party.
The great unwashed public has nothing but debt. How do we get our debt out of dollars? Why would we when it is falling?
“at some point the fed will be forced to defend the dollar”
yes I think so too, bernake is just buying time for his banking pals then he will have to make up with out creditors overseas unless he wants to pay much higher interest on treasuries.
Sorry, I would not count on it. This FED/Govt has only one game plan, and that is to prevent deflation. They have only one way of doing it-prop up home prices.
I repeat, they will not admit defeat! There is no plan B. Its double or nothing until the house (the world lenders) deny any more credit!
imho
Crude just hit $122 bbl…
So these saudis attacked us on 9/11, so we attacked Iraq, and the price of oil went from 20 to 122, which makes the saudis richer than God while we go broke blowing up Iraq…and buying saudi oil. Mission accomplished?
No, we helped Mr. Bush and Mr. Cheney’s buddies get richer. First slice. If you cannot help your friends, who can you help?
Oh man, scary!!!
I just talked to a used house salesman who actually acted like he reads Ben’s blog - he brought up all the points we discuss w/ no prompting and went on a tirade about how clueless buyers are, why those who can’t afford houses shouldn’t be buying, and how the government shouldn’t bail them out. He even mentioned that he was a fool to have minor credit card debt and was trying to get it paid off.
I don’t usually drink (can’t hold it), but I’m gonna go to Ray’s Tavern down the street and do some reality-checking. My entire paradigm is shaken…
Wooo hooo!!!…. Stocks up on record oil prices… yeee haw…. the economy is fine. Numbers don’t lie. Move along now
Rally is weak, check out the stochastics vs. the rsi on an spx weekly chart.
Oh I know but the CNBC shills are pumping this as a bottom. What is funny is everyone is trying to call a bottom and you end up with a suckers ralley. I really wish the FED would jack up rates and let these people get flushed down the toilet and out to sea.
Kudlow’s been doing that too for a week or two now.
unp hit a new high on weak volume, rth hit the 50 mma on a 10 day and is rolling over again. I think it will be difficult to push higher.
Matt, Where do you learn about your charts? StockCharts.com?
Ok, I’m doing that…….what am I looking for??
Stochastics have topped, rsi is just over 50.
Ok, I think I see that, thanks.
If we do continue higher, there is a lot of resistance from here to the 50 dma on the weekly at 1442.
Hi all,
I’m thinking of getting a place now, thanks to some recent San Diego drops. The place was sold in ‘05 for 617K, foreclosed on, listed in 08 for 417K, and has since dropped to 380K, at which point it started to receive offers.
(Gee, who would have thought you’d get offers as soon as it came inline with incomes?)
Any thoughts on this? Too early? Too late? It’s a pretty nice place, so 380 seems reasonable to me.
buy it only if have recession proof job. it is no longer the price/affordability.
If I were you I’d rent a beautiful house in La Costa.
Golf course views, ocean breezes, and a world famous aviary.
1) Is your ability to pay the mortgage secure?
2) Would the payments be manageable (and not at risk of increasing drastically, as in ARM financing)?
Gold is rising again with oil and the falling dollar. The Marketwatch page is totally screwed up with links going to the wrong article, but this one’s OK.
http://www.marketwatch.com/news/story/gold-futures-rise-crude-oil/story.aspx?guid=%7B488944DF%2DBB87%2D4C93%2DA2E4%2DF7E4834EE6D4%7D
The fund that Bill Miller of Legg Mason runs lost 20% in the first quarter based on his bets on Bear Stearns and Countrywide.
http://biz.yahoo.com/prnews/080423/new062.html?.v=49
Dutch bubble update:
My local government is increasing limits for starter loans. These are special loans on top of the maximum amount that the banks will loan to starters (usually 6.5-8x income). These government loans have an artificially low rate and for the first three years the rate is zero. And they only have to paid back when the home appreciates in value; bingo!
The new limit is around $280.000 (yep, that’s a starter home in a rural area of the Netherlands). And as if that is not enough, the loans are now available to everyone who lives in the Netherlands, instead of only people who already lived in the area (I think they are hoping to attract some housing speculators to push prices even further).
There are plenty of starter homes (in reality often ‘POS’ homes) for sale, but hardly anything is selling. Trouble is that asking prices are out of reach for almost every starter (including those with double incomes). Of course this higher limit is only going to increase prices and will only help the housing mob instead of these ’starters’. How stupid can you get? I guess they are already planning for a $300.000 ceiling for starter homes in 2009 …
on another slightly off-topic note:
now that prices at the Dutch pumps are closing in on the $10 mark it seems the sheeple ARE noticing. The TV news reports a dramatic surge (increase over 100% from last year) in sales of small cars and hybrids. Until a few months ago most drivers were not interested, but it seems the travel budget is now maxed out and they have to make choices. Small cars are not only popular because of high fuel efficiency, but also to stay within the limits of the budget (and that also applies to lease cars apparently).
I think this is the right time for the Dutch government to introduce a 100% CMD (Car Mortgage Deduction, including 0% teaser rate and free government-provided put option just like with homes), so people can still afford the big, inefficient cars that they want (are entitled to). And because there are more car drivers than homeowners in Netherlands, this CMD will work magic at the next elections!
Just for our enlightenment, what constitutes a “big, inefficient car” in the Low Countries? A petrol/gas VW Jetta?
no, something the likes of BMW X5, Porsche Cayenne, VW Touareg, Cadillac Escalade. Contrary to US opinion there are plenty of those dinosaurs out here on the small streets, still extremely popular with the posers that can afford them.
Lereah weighs in on RE market:
http://www.newsweek.com/id/135724
“We’re not at the bottom,” he says. “[People] want it to be near the bottom, but we’re not there yet. The leading indicators are still very bad. Pending home sales are still in bad shape. Mortgage applications are low … There’s still supply out there in abundance … This thing is going to get worse before it gets better.”
Of course, he also says he still owns 7 of his 10 condos, and that 6 of the 7 are “making money”. Liar–unless he bought them LONG ago or still has teaser rates, there is no way they’re covering his costs, much less “making money”.
Amazing, he will tell the truth now.
That was a good Kantor fake, if they were smart they posted from an overseas location.
I thought it was kind of telling that he still owns 7 of his 10 condos; guess he practiced what he was preaching to some extent.
Which clarifies something for me: he may have been more clueless than he was a lying b*st*rd. Maybe.
It will be interesting to see if the “investor group” he’s trying to put together ends up buying out his 7 properties… It could be his exit strategy!
Or the other thing I wondered about him still holding so many properties: was this a PR move by the NAR? In other words, is he really holding the downside risk, or is the NAR contractually obligated to make him whole on the downside, since having their Chief Economist dump his properties when things started heading downwards would have made for FAR too interesting a headline in the MSM?
He went from the home builders assoc to the NAR, then where? He may be the Typhoid Sally I am searching for
Fed auctions $75 billion to banks to ease credit stresses
Tuesday May 6, 1:27 pm ET
By Jeannine Aversa, AP Economics Writer
Fed auctions $75 billion to banks to ease credit woes, total is $435 billion since December
The smooth flow of credit is the economy’s life blood. It permits people to finance big-ticket purchases, such as homes and cars, and help businesses to expand operations and hire workers.
http://biz.yahoo.com/ap/080506/fed_credit_crisis.html
and there you have it in black and white. the US can only function if joe blow buy’s big screen tv’s on credit!!!!! more proof that are economy is built on a house of cards. when will the sheeple wake-up?
College drug sting snags justice, security majors, scores of others
http://www.cnn.com/2008/CRIME/05/06/sdsu.bust/index.html
Among those arrested, 75 were students, one of them a criminal justice major charged with possession of guns and cocaine, authorities said. One student allegedly dealing cocaine was a month short of obtaining a master’s degree in homeland security at the California school and worked under campus police as a student community service officer.
I think the current administration has set a poor example of ethics in government, so these kids should fit right in.
It’s all OK; this guy with a fancy-sounding French name explains why:
The dire headlines coming fast and furious in the financial and popular press suggest that the housing crisis is intensifying. Yet it is very likely that April 2008 will mark the bottom of the U.S. housing market. Yes, the housing market is bottoming right now.
When the rate of house-price declines halves, there will be a wholesale shift in markets’ perceptions. All of a sudden, the expected value of the collateral (i.e. houses) for much of the lending that went on for the past decade will change. Right now, when valuing the collateral, market participants including banks are extrapolating the current pace of house price declines for another two to three years; this has a significant impact on the amount of delinquencies, foreclosures and credit losses that lenders are expected to face.
More home sales and smaller price declines means fewer homeowners will be underwater on their mortgages. They will thus have less incentive to walk away and opt for foreclosure.
A milder house-price decline scenario could lead to increases in the market value of a lot of the securitized mortgages that have been responsible for $300 billion of write-downs in the past year. Even if write-backs do not occur, stabilizing collateral values will have a huge impact on the markets’ perception of risk related to housing, the financial system, and the economy.
We are of course experiencing a serious housing bust, with serious economic consequences that are still unfolding. The odds are that the reverberations will lead to subtrend growth for a couple of years. Nonetheless, housing led us into this credit crisis and this recession. It is likely to lead us out. And that process is underway, right now.
Mr. Moulle-Berteaux is managing partner of Traxis Partners LP, a hedge fund firm based in New York.
“Right now, when valuing the collateral, market participants including banks are extrapolating the current pace of house price declines for another two to three years”
This monsieur is just blowing smoke out of his effete French ass: there is absolutely no evidence that this statement is true; if it were, lending institutions would be valuing housing collateral at 50 cents on the dollar, which essentially means that you would need a 50% down payment to get a home loan on an accurate current appraisal.
I’ll wager Monsieur Mussels Berteaux understands nothing about bubbles and the value of housing stock, and couldn’t name 25 states in the U.S.
yes, I think this is from the article in Wall Street Journal?
totally ridiculous article, filled with wrong statements and conclusions. Probably the WSJ wants to help this hedgie friend with his bets in the housing/mortgage market.
This looks like a great opportunity for the CIC to teach the Democratic Congress a lesson on traditional Republican values.
Bush threatens veto of housing aid
By JULIE HIRSCHFELD DAVIS – 3 hours ago
WASHINGTON (AP) — The White House on Tuesday threatened a veto of Democrats’ broad housing rescue plan, calling it a burdensome bailout that would open taxpayers to too much risk.
The threat came as the House prepares to vote Wednesday on the package, which is aimed at preventing foreclosures and stabilizing the housing market. The veto threat signaled that despite growing GOP support for the measure, especially among Republicans from areas hardest hit by the housing crisis, the plan could become mired in a partisan spat over which party is doing more to help homeowners in need.
Fed’s Hoenig Says `Serious’ Inflation Risk May Prompt Rate Hike
By Steve Matthews
May 6 (Bloomberg) — Federal Reserve Bank of Kansas City President Thomas Hoenig said today “serious” inflation pressures may compel the central bank to raise interest rates.
“There is a significant risk that higher inflation will become embedded in the economy and require significant monetary policy tightening to reduce it,” Hoenig said in the prepared text of a speech in Denver. Consumers are gaining an “inflation psychology to an extent that I have not seen since the 1970s and early 1980s.”
The Federal Reserve must be prepared to quickly raise rates as the economy, now nearing a recession, recovers later this year, Hoenig said.
I thought the Fed had a goal of using inflationary psychology to offset deflation risk?