Bits Bucket And Craigslist Finds For May 7, 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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Country Wide Takes away C.Lines… Getting tough on Vegas.
http://www.bloomberg.com/apps/news?pid=20601109&sid=adSiHtVyQXmc&refer=news
“Frozen credit and real estate declines are putting a chill on spending and hurting the economy.”
Doesn’t sound like helicopter drops are having much impact, unless to drive the prices of food and energy skyward…
Hurting the economy?
Paulson Says Markets Emerging From Crunch
“I do believe that the worst is likely to be behind us,” Paulson told the newspaper in an interview.
http://www.cnbc.com/id/24493133
“Arthur: ‘It’s at times like this I wish I’d listened to my mother.’ Ford : ‘Why, what did she say?’
Arthur: ‘I don’t know, I never listened.’”
Paulson, proud member of: “Axis of See No Evil”
(Bernanke & ’ssshrubery are the other Evil doers)
For him, yes. He’s made his fortune (a billion dollars last year alone, if I recall), and has helped drive Americans into poverty. That’s enough to make him happy, so the “crisis” - people being able to afford food and gas, the dangers of affordable housing, and him not being able to get a bigger weekend yacht - have passed.
Professor,
Do you know anyone who got busted at San DIego State drug bust yesterday?
I am a little too close. I am told one of the leaders is a 22 year old kid who used to babysit for my two kids. His parents are friends…not real close friends as they moved to Encinitas a few years ago. This kid was a month away from getting his MBA in “Criminal Justice.” Go figure.
http://www.signonsandiego.com/news/metro/20080507-9999-1n7drugs.html
No — I am not part of that social network.
Those kids caught in the SDS drug bust give a whole new meaning to the term “higher education”
With a drug conviction, he can easily run for office and win in some places. He’ll also do well running a hedge fund, especially if he was doped up on something that totally disconnects him from reality!
Is he the one who asked the arresting officer if these charges were going to prevent him from becoming a Federal agent?
The cop should’ve said, “No, we’re going to make you an undercover inmate to test your mettle. If you do real well, we’ll look at your file afterward.”
I find it interesting that Vegas and Nevada ads are all over the major Utah newspaper (Salt Lake Tribune) lately. They’re really pushing to get Ute-oids to come and spend their money there.
It shows you just how tapped out their traditional So Cal clientelle is…
Massage For Number Crunchers… The Mogambo Guru…
http://www.atimes.com/atimes/Global_Economy/JE07Dj01.html
The St Louis Fed, which for the decade until April was run by the monetarist William Poole, has constructed its own measure of broad money, Money of Zero Maturity, which is a reasonable proxy for M3; it consists of M2 plus institutional money market funds minus small time deposits.
From the beginning of 2008 monetary expansion has sharply accelerated. In the three months to April 21, the latest data available, MZM expanded at an annual rate of no less than 28.7%. This extra-rapid expansion is not surprising; the Fed has been terrified that the US financial system is about to collapse and has been making funding available in large quantities in a variety of ways. Indeed, on May 2, the Fed, concerned about the credit-card financing market, allowed banks to use credit-card-backed AAA bonds as security for Fed loans.
The seasonally unadjusted consumer price index for March was up 0.9% (an annual rate of around 11%) and only a heroic seasonal adjustment of 0.6%, double the next-largest seasonal adjustment for any month in the last 10 years, brought the figure down to an acceptable 0.3%.
The Bureau of Labor Statistics explains on its website that its seasonal adjustment methodology changed in January; should it be the case that this is being used to suppress consumer price inflation, even the dozier members of the media will come to notice after another couple of months have passed. In any case, it is likely that by the latter part of 2008, consumer price inflation in the US will be running at more than 10% and that even the heroic mavens at the BLS will be unable to suppress that information completely (though on past form they will undoubtedly try.)
When in doubt, print more money and hope for the best…
They will suppress the truth by simply cutting out anything that goes up while continuing the substitution BS. Did you know catfood is a good substitute for people food? Right… Or, perhaps they’ll factor in real estate prices that are declining to “prove” that inflation is “contained” while ignoring food, energy, health care, etc. AND the fact that housing is STILL unaffordable.
“Inflate or die” is their choice… assuming it is an “or” and not an “and” choice considering what hyperinflation usually brings.
Time for a revolution?
I know many here are justifiably angry about all the proposed bailout packages, designed to keep housing prices at unaffordable levels for as long as possible.
Many of us have been calling, writing, faxing, e-mailing…all to no avail.
Could we muster up a group that is large enough to go to Washington and stage a protest?
Any ideas on how we can initiate a concerted, organized effort to get out the message that taxpayers DO NOT WANT to bail out idiot borrowers and lenders?
What can we do to try to ward off all the misguided policies?
I think the Federal Reserve needs to be included as well. Bernanke is driving us toward disaster.
“Many of us have been calling, writing, faxing, e-mailing…all to no avail”.
I have signed every relevant petition, sent e-mails and made phone calls. It has fallen on deaf ears for the most part, as we all know D.C. is lobbyist/money driven and very few in that cesspool give a rats patoot about the long term good of our Country. I have no solution to the problem, if pitch forks and torches would have any effect I’d head that way, however there just aren’t enough people that rilled up. They expect their Nanny to fix any problems.
Keep writing/calling/etc. to your representatives. You say “to no avail”, but really, what have they done? So far, we’re winning.
Steve W: the glass half full, W for winning
Let congress talk, and talk, and talk, and talk. Let them do that. It’s congress, they have to do that.
So far, the only taxpayer bailout we’ve seen of substance has come from the Fed to banks, in terms of low federal funds rate and TAFs, and that crazy thing that happened with Bear Strearns. Now that is pretty significant, but what they do with treasuries is outside of democratic oversight, so a million man march for financial responsibility will do nothing but make them laugh.
I understand that e-mail petitions are automatically excluded in Congress, and thus a waste of time. Only hand-signed petitions with verifiable signatures count. Or so I’ve, repeatedly, over the past few months.
Congress always does what will bring in the most votes and contributions. The notion of right and wrong is irrelevant. Witness the endless resurrections of “immigration reform,” despite overwhelming public opposition. McCain just announced the launching of his Spanish-language Web site, which should not be necessary for legal voters.
RE: very few in that cesspool give a rats patoot
“rat patoots” in a cesspool-I’m in awe!
The people have all the power - they just don’t realize it. If everyone just stopped paying his mortgage all at once the banks would die, the FED would go away, and the rest of the government would be reduced to begging, snivelling whiners. YOU have the power, people. What we need is a National Mortgage Boycott. NMB would totally trump the TAF.
Actually, if Obama gets elected, I’m hoping that enough members of the “taxpaying” class (the few % of the population that pays the bulk fo the taxes) simply stops working for a few years. I’ve already been planning my mid-life retirement.
and I can’t stop paying my mortgage because I don’t have one! Everything’s 100% paid up. I’ll get screwed under your “plan”. I think a tax boycott is the only thing to do. Only the “savers” (the group our government hates the most) will be able to do this, but I suspect they pay 90% of the taxes….
Well, you we should all stop paying taxes too at the same time just for extra dramatic effect. I am all for that plan, I have no mortgage either - just thinking of all of those poor innocent FBs out there and how they should quit complaining and take charge.
If you stop paying taxes altogether the gov will come after you. Instead, what if there was a coordinated “adjustment” of withholding for one month. This would be an effective temporary cessation of revenue to the gov while theoretically remaining legal.
I meant stop paying taxes by stopping work. (Of course, I’ll get taxed on investment income, but it’s still a lot less then they’re getting now.)
By all means if you can stop working then have at it. I was just suggesting that if enough people adjusted their W2 withholding downward by increasing their deductions for even one month it would significantly reduce the cash flow to the gov while not throwing the individuals into quarterly payment territory.
But the folly is that if the gov needs money they’ll just make it appear out of thin air like they always do.
hmmmmm…… Ayn Rand solution to the problem ala “Atlas Shrugged”
The producers go on strike. Let’s see how the “looters” view that kind of a strike.
I like it.
My guess is that if we keep pushing the middle class and poor we eventually will get riots and a major spike in crime. Take a look at what’s happening in poorer nations. I think many believe food stamps are for the poor. Food stamps ect, are for the elite, so they can continue to strip the remaining middle class without riots. The majority will follow the law as long as their children have food and shelter. Take that away from any man and you likely have a violent criminal who will steal from anyone with money and will fight to change the system. The elite will fall back behind their walls leaving the few remaining middle class and poor to deal with the rath of the destitute. A poverty driven Ayn Rand philosophy will rule the streets.
BB&T CEO pushing Ayn Rand objectivism on the UNC business school curriculum:
http://www.bloomberg.com/apps/news?pid=20601109&sid=as6BR0QV4KE8&refer=home
” ‘Ayn Rand has a kind of absolutist ethics,’ Brook said. ‘She believes in right or wrong, good and evil, but based on secular principles, not religious principles, and I think there’s an appeal for that now.’ ”
Money may not buy love, but I guess it does increase the size of one’s soapbox.
There are and have been people who work terribly low paying jobs as part of their protest against government and to keep from having their money taxed and used for things they detest. So yes, this “Atlas Shrugged” thing happens, albeit on a small scale.
In an NPR article I heard about two years ago, this was to avoid paying for the Iraq war. And yes, they even found people who claimed to live lives of poverty for that very reason — low income means no taxes (in most places). It was a very remarkably low number of people, I might add.
Even when I have lived in high tax places (e.g. Germany before their tax reforms), almost everyone worked to earn up at least up to a modest level, thus paying lots of tax. It was only the high-end earners who chose to work (more) or not. In our case “partly not”, as my wife did NOT work, specifically because of the huge marginal tax rates of the time. But many Germans I knew thought that discouraging wives from working was a good thing anyway. Sigh.
A large part of funding for gov’t comes from borrowing and devaluation of the currency. It’s one of the reasons many people support a gold standard. With a hard money standard, the govt cannot simply devalue the currency to maintain it’s spending. All spending then would need to come from taxes, and if we were actually taxed at the rates needed to support current spending levels…well, at least some of that spending would have been curtailed long ago.
“The producers go on strike. Let’s see how the “looters” view that kind of a strike.”
this is allready happening to some extent, but not the way you intended. The “producers” being the chinese and the saudis; they are less and less willing to accept our worthless dollars.
Speaking of producers and such… we all know 95% of TV is a waste, but this really is ridiculous.. apparently after barely one month/half of new shows( post strike) the Season finales are here. Must be nice to only work 3 months out of the year
“Money for nuthing and the chicks for free.”
Who is John Gault…
dropping out is becoming more and more appealing—but where to go? that is the question.
Well well, pressboard. I’ve been telling my debtors this story for years, but of course they don’t do it. Wendy, early 60’s in age, repeatedly makes remarks about my “owning” many of the residents in the RV park where she lives. I say nonsense Wendy, if you all stopped paying me I wouldn’t have much power at all. But they don’t. Because at the moment, their lots and mobile homes are still selling for more than any they owe me. These borrowers have their own reasons for valuing a well-ordered situation, and perhaps you too would prefer that debts to you be paid than not paid…if your money is stored in a bank or other financial institution, you probably don’t really want the banks to fail. If your money is stored in a cardboardbox, maybe that’s a different story.
I’ve been writing almost every member of Congress and also signing petitions such as that on angryrenter.com and always commenting on articles in major papers and CNN. Of course, my effort won’t do any good, but I think if the vast majority of homeowners and renters really knew what Congress was trying to do, 80% would be outraged. Get the word out and do your part!!!!! STOP THE BAILOUT!
” and a major spike in crime. Take a look at what’s happening in poorer nations. ”
Come on down to Fl. , or just check out the local news online…it’s happening ,and picking up daily.
Indeed it is. Crime is definitely up in California as well.
Several cases of stolen vans and SUVs smashing into stores, and stealing entire ATM machines in the DFW area recently. Apparently, they were doing so well that one of the five was too slow to run away when our little suburban police force caught up during their most recent getaway.
My wife: “This country is so soft.” (I think she wanted some shooting.
)
http://www.wfaa.com/sharedcontent/dws/news/localnews/tv/stories/wfaa080507_wz_atmtheft.d8a1fa22.html
M.O. was stealing the entire machine by crashing through walls with a stolen vehicle.
Don’t mean to get all Pollyanna on ya, but seriously, if you’re not registered to vote, register. Pick a party - my preference is Dem, but if you need to go Rep, or Green, or Libertarian, whatever, pick one. Then become active with your city (ward, county, whatever) party committee - get on the committee if possible, but get to work regardless. (Best way to get on the committee is to get elected, but get appointed if necessary, there’s usually vacancies). Volunteer for candidates (hold signs, serve hot dogs, do door-to-door literature drops, work phone banks, write letters) and make small contributions ($10 now and then is plenty). Show up at caucuses and primaries.
This may all seem lame and hopeless, but you would be surprised how much lasting influence even a tiny amount of effort will get you. Find like-minded people to work with, work for the common interest, and get out the vote on Election Day. Truly, I ain’t kiddin’, it works. Problem is it takes effort and the results aren’t immediate, so most people are easily discouraged. But a little persistence will pay off. Most people just want good government, be courteous and reasonable and offer good government and you will find that most people are on your side.
First…the $5500 pool table is still available i guess….
http://newyork.craigslist.org/que/zip/669236092.html
“Set of regulation pool balls and accessories. The table and balls and in GREAT condition.”
I’ve got a set of regulation balls for them.
What…….no cue stick jokes???
We make them out of spare Joshua trees.
Aren’t cue sticks skinny?
LOL - I think that at least 90% of the Craigslist entries that were linked on Ben’s blog were very quickly flagged for removal. A little too much sunshine? Pull them blinds down!
FREE POOL TABLE !!- 8FT BRUNSWICK POOL TABLE (New york )
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 $5,500.00 for this just 2 short years ago. It is in great condition . Slate table top. Set of regulation pool balls and accessories. The table and balls and in GREAT condition.
, but our loss is your gain, just come and get it ASAP PLEASE.
house was forclosed, so everything must go
Pick-up only.
Call John at 631.68O.35l5..
FHA, A huge task… This Fruit loop Frank and cohorts are not going to give up. I just hope for a veto, that would be the right thing to do, as if that counts in D.C.
http://www.washingtonpost.com/wp-dyn/content/article/2008/05/06/AR2008050602985.html
Great! Our only hope now is the wisdom of Bu$h. Aw, the f-cking country is bankrupt, in every way imaginable.
I heard a blurb on the TV as I was leaving the house this a.m. that the White House is prepared to nix what the President considers a bailout.
He threatens alot more vetoes than he goes through with. He almost never actually vetoes anything that shovels money out to the voters.
The Shrub has not been good for much (and I’m a Repub), but I believe he will be good for this.
If he does not veto this garbage, he will be abandoning the very poeple who ellected him….
First, even though I’m a liberal Democrat, I don’t think this bill is a good idea.
But Lurker, he abandoned this country in January of 2001. You seriously think this is a defining moment for the miserable failure that is George W. Bush.
Unless of course you are referring to the five people on the Supreme Court who actually elected him.
I am a independent, so I call how I see them, yes bush is the worst prez ever, my comment is more along the lines of the typical bush supporter would be agaist this bailout bill, and the dems are either foolish or don’t understand that they are pushing the 40 percent of poeple who are not fiscally incompotent away by supporting these bailouts…If any of the current canidates said I will not support any bailout irrisposible lenders or borrowers and I support the imeddiat withdrawl from iraq they could easily win this election, the problem is that the silent majority is never heard, rather the vocal subprime trash(ACORN trash) and feermongering warmongers are heard….
what does he care if he “abandons” the people who voted him in.. he is out of a job in a few months. Not like he is running again, god help us.
AZ, how can you think this guy is good for nothing, but this? Confusing times.
RIOT!
Food Fight!
Perhaps all my correspondence sent to Patty Murray is having some effect? Perhaps I’m not the only “bitter renter” writing letters?
“Some lawmakers have raised similar concerns. Sen. Patty Murray (D-Wash.), who heads a Senate panel that oversees housing appropriations, said Congress needs to ‘get real’ about the FHA’s ability to manage more troubled loans. “
Congressperson, Mary BonoMack is useless. Can’t say anything original, a puppet for george.
Glad your Patty is getting the idea.
I think W plans to stay the course on this veto proposal. He is a smart politician, and this provides him with a great opportunity to stay relevant and uphold conservative Republican values in the waning days of his second term.
Bush says he’ll veto foreclosure relief legislation
The president says the measures under consideration in Congress will benefit speculators and lenders.
By Maura Reynolds, Los Angeles Times Staff Writer
May 8, 2008
WASHINGTON — President Bush declared Wednesday that he would veto the foreclosure relief legislation under consideration in Congress, surprising Democrats who believed that they had administration support for key portions of the bills.
In brief remarks after meeting with congressional Republicans, Bush issued his veto threat, complaining that the legislation would “reward speculators and lenders.”
“I will veto the bill that’s moving through the House today if it makes it to my desk, and I urge members on both sides of the aisle to focus on a good piece of legislation that is being sponsored by Republican members,” Bush said.
Can someone please explain to me what “FHA modernization” means???? Exactly why would someone who opposes bailouts regard this as a positive?
Quite frankly, I think it’s fine if lenders want to write-down the mortgage balance, but why do we need the FHA/GSE involvement if they think the resulting mortgage could be paid off by the borrower?
————————-
But the bill also includes elements intended to attract the support of Senate Republicans and the White House, both of whom have expressed concerns that Frank’s FHA rescue plan could amount to bailing out lenders and borrowers.
Those elements include “modernizing” the Federal Housing Administration (FHA) - for which both the House and Senate have already passed their own bills - and more stringent oversight of Fannie Mae and Freddie Mac, the two government-sponsored enterprises (GSEs) that guarantee the purchase and sale of home mortgages in the secondary market.
http://money.cnn.com/2008/05/07/news/economy/frank_omnibus_housing_bill/index.htm
These days, “modernizing” means “water down the requirements to accomodate that people are lazier/poorer/whinier than they were in the past.”
Some time ago, somebody posted an excellent little news report from the 1930’s, docmenting how FHA(?) is now letting young families buy a house “for the same monthly payment as rent” and how that was putting jobless contractors back to work. Remember the “ample” closet space? Of course, you needed 20% down to get the loan.
I guess Modernizing means they are breaking away from those pesky requirements from the 1930’s.
In Washington speak, modernization most often means updating the old computer systems and imaging decades worth of records. It doesn’t sound like a big deal in the business world - or rather it is a big deal but so absolutely essential that a for-profit buisness would just do it since they know they have to. If the FHA really has never gone through a modernization, then it is possible that it takes someone physically accessing a file box buried in a warehouse somewhere (forklifts mightbe involved) to pull up records - could take weeks if they have a backlog and produce a huge error/lost file rate. A good modernization would allow an employee at a computer to call up the same records in seconds. But, especially with the government contract bidding requirements, it is expensive.
If members of congress have enough people in their districts whining about not being able to get their records from a given agency, voting for a bill that actually has modernization money in it must be very tempting.
From the article:
the lender would have to cut the debt to no more than 85% of a home’s appraised value. If the FHA-refinanced loans went into default, the FHA would pay the lender the remaining principal owed.
According to which appraisal? This seems like an important point. If the bank writes down the loan from the original appraisal that the loan was based on, then the whole thing sounds like a way for the govt to take on future losses in exchange for banks recognizing losses so far, which they would have to do anyway.
If a house has fallen 15% or more from it’s original appraisal and the owner is nearing foreclosure, then the bank doesn’t really lose anything here. It just writes down the loan and recognizes the loss (a loss it was going to have to recognize anyway) and then hand the piece of crap over to the govt. The bank is then protected from future losses.
“The bank is then protected from future losses.”
Bingo. Forget about saving homeowners. The apparent true purpose of the bill is to get $300 bn of taxpayer monies in place to take bad gambling debt off the banks’ books.
And the banks are the ones who need to get stung or else they will keep making available this crazy financing. And the most irresonsible and bad-at-math FB’s will continue to be the ones setting the prices of real estate.
Why should it be a national policy to keep the American public in as deep debt as possible? Shouldn’t the government supportive of affordable housing without having to sell one’s soul to the company store?
These rescue bills are just sops to the financial services sector under the guise of “Helping Families” ™.
If you want to help families, let house prices get back down to traditional levels and don’t force people to go heavily into debt for much of their lives.
A national policy which supports funnelling so much money into housing and the REIC crowds out other spending and investment which could be much more beneficial to the society.
Amen, neuroromance!
RE: If the FHA-refinanced loans went into default, the FHA would pay the lender the remaining principal owed.
What other private mortgage entity, other than FHA/HUD would have the balls to guarantee mortgages in mass markets that are in substantial decline or collapsing-and nobody has a clue as to where the bottom is.
The appraisal business is so corrupt and compromised at the moment, there’s no way is anybody going to get a legit number.
The “punch the number we tell you to” is more than alive and well.
Barney Frank should be tarred and feathered and run out of town on a rail, for involving the use of FHA/HUD as a bail-out mechansim for the Pig-Men.
“Quite frankly, I think it’s fine if lenders want to write-down the mortgage balance, but why do we need the FHA/GSE involvement if they think the resulting mortgage could be paid off by the borrower?”
It’s a deal sweetener, courtesy of Uncle Sam, to entice banks otherwise not interested in writing down the value of principle to do so in exchange for a taxpayer-provided guarantee that the written-down principle will be repaid in full when it is refinanced. I believe the taxpayer-provided guarantee plays quite a similar to the role to the $29 bn guarantee which supported the BSC purchase by JPM. It basically puts non-parties to private contracts on the hook for helping to make both the lenders and the borrowers who perpetrated this mess better off than they otherwise would be.
From a political standpoint, these guarantees (along with the $300 bn guarantee that comes with the D-ratic bailout package currently up for vote and possible veto) are touted as “no cost to taxpayers,” even though the last time I checked, insurance could be rather expensive. If insurance is provided with no premiums, then an unfunded liability is created whose costs will be borne by future generations of taxpayers in case insured “events” occur which require claims to be paid. In a sense, Social Security (aka Old Age, Survivors and Disability Insurance) is no different, setting up a promise of future benefits payments with no honest accounting for the present value of future benefit payments.
It’s a deal sweetener, courtesy of Uncle Sam, to entice banks otherwise not interested in writing down the value of principle to do so
I disagree here. It’s a hell of a lot more than a deal sweetener. The losses that banks are going to realize are going to happen regardless, and they will have to write down the loans in recognition of those losses regardless. The principle being written down isn’t just a magic decrease of principle, it’s a loss. Aside from this bill, there may be some issues/debate about when that loss is recognized, but it WILL be recognized.
The govt is basically capping the losses on loans to 15%. If a bank is only going to lose 5% in a forclosure process this doesn’t apply as it doesn’t make sense to do for the bank, why would they write down the loan to 85% when they can get 95% back anyway? Of course, the cost of foreclosure is expensive and all that, so most foreclosures might lead to a near-15% loss anyway but the point is the same. The govt is saying to the bank “We are going to shield you from anything more than a 15% loss at the cost of the tax payer”.
Alternatively, if an owner is upside down, but can still make the payments and continues to pay down the loan as normal, that will not require a loss (write down) on the part of the bank and the bank will just continue to service that loan as normal. So this doesn’t appear to apply to all upside down houses, only where foreclosure (or some other form of loss for the bank) is imminent.
Good morning… well it’s over…..
The Housing Crisis Is Over
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.
http://tinyurl.com/63gcjo
whistling through the grave yard.
If anything, this crash is gaining strength because now the doubters and cheerleaders no longer deny that there was a bubble and it has popped.
We are in the opening scene of Saving Private Ryan where they are in the landing craft heading for the beach.
That was a great scene.
“see you on the beach”
I vote for the specuvestors and their mortgage brokers to be at the front of the boat when the ramp is lowered.
If you’re a fund manager, shouldn’t the WSJ make you reveal whether or not you are long or short the housing industry/market?
There was a similarly optimistic piece in my local rag yesterday by Larry Kudlow. Sorry, no link. They probably don’t care how stupid they sound.
Yeah, this author convieniently forgets to factor in foreclosures, which are fueling the price drop. There may be 100,000 less new homes, but those new homes are competing with a record number of foreclosures, short sales, and resales.
Plus, even if it should turn out that we see “slowing in home-price declines,” that doesn’t mean we are not going to see further declines. I have told several relatives/acquaintances that we may see “slowing in home-price declines,” so what? The actual prices could still end up another 30% farther down, or whatever. Just maybe not this year. And that’s just a maybe.
This piece in the WSJ really makes you wonder if these “experts” are truely clueless or just simply biased or have a huge financial stake in “bottoming out” of the housing market. Every single data point that she cites or assumption she makes doesn’t fit with the reality we see unfolding everyday on this blog.
the “experts” have a stake. Buffet sees the credit crisis getting better. He goes from “financial wepons of mass destruction” to “its all contained”. Wonder if those short s&p puts have anything to do with his change of attidute…
I prefer comments which reflect current data, not pure, unanchored opinion.
Slump Worsening
Purchases of new homes plunged in March to the lowest level in almost 17 years, while the median price fell the most in almost four decades, according to the Commerce Department. Sales of previously owned homes fell in March for the seventh time in eight months, according to the Realtors’ group.
Friedman in the Times is repeating the same line,with no numbers or hard data to back it up. All the globalistas are now repeating the same lines…no reference to the devalued dollar, the hollowed-out economy or job losses, let alone accelerating foreclosure rates…hey, no problemo, the big boyz say it all good. From Friedman this a.m.
“There are two important recessions going on in the world today. One has gotten enormous attention. It’s the economic recession in America. But it will eventually pass, and the world will not be much worse for the wear. The other has gotten no attention. It’s called “the democratic recession,” and if it isn’t reversed, it will change the world for a long time.”
Friedmans (2 ) ,milty and this one, were both wrong, and thus the ruination and decimation of the middle class. The complete outsourcing of american jobs to foreign lands.
Hope he gets it in the end..
JT?
And the beat goes on
Housing slowdown has hit London’s richest boroughs, say Savills & Knight Frank
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/07/bcnsavills10.xml
and the jig is up
Irish housing registrations fell 45 per cent in April when compared with the same month in 2007, according to a briefing note from NCB Stockbrokers this morning.
http://www.ireland.com/newspaper/breaking/2008/0507/breaking34.htm
That’s because all of the Irish are buying up my neighborhood. Bwahahahaha. How’s that working out?
I think that Ireland is revving up its fromer #1 export industry: people. Apparently there is a sizeable number of illegal Irish in the US, and they have taken a cue from hispanic illegals: they are demanding amnesty!
As someone opposed to illegal immigration, let me say that includes all illegals, from wherever. No exceptions, no special deals.
Does that include Cubans?
They even have a website:
http://www.irishlobbyusa.org/
As long as the give legal status to any American citizen that wants to move to Ireland I would be ok with that. But something tells me that isn’t ever gonna happen.
Housing rescue package set for House vote
http://tinyurl.com/53sfm7
This is starting to look like quite the political setup. I just don’t see the upside for the administration to not veto this legislation. A failure to veto risks the prospect that credit for a housing market recovery which is already underway will be claimed by the come-lately D-ratic Congress.
Paulson Sees Credit Crisis Waning
Treasury Secretary
Calls Fed’s Moves
‘Inflection Point’
By MICHAEL M. PHILLIPS and DAMIAN PALETTA
May 7, 2008; Page A2
WASHINGTON — Treasury Secretary Henry Paulson said U.S. financial markets are emerging from the credit crunch and that “the worst is likely to be behind us,” marking possibly the most optimistic comments yet from the Bush administration on the financial crisis.
Mr. Paulson’s comments, made in an interview Tuesday, reflect Treasury’s view that the administration and the Fed have already taken steps necessary to quell the situation. Bolstering that notion, the White House Tuesday threatened to veto legislation that has become the cornerstone of the Democrats’ response, a rescue plan that would provide government insurance for some $300 billion in troubled mortgages.
“There’s no doubt that things feel better today, by a lot, than they did in March,” Mr. Paulson said.
Blame tranfered to next admin.
Check.
Goodluck HilBama.
After last night, I think it’s just Goodluck Bama.
I wonder what the politics is behind the bill and the veto threat. I would think Real Estate/Financial Services sector contributes evenly to both Republicans and Democrats.
What is the political benefit of a veto?
A veto might hurt the Democratic sponsors of the bill, as it might seem that all the lobbying and contribution money has been spent for naught.
Just a guess.
I am somewhat embarrassed to be a Californian today, thanks to the absolutely ridiculous grandstanding & bizarre behavior by Oakland mayor Dellum regarding the ICE situation.
please take note that this idiot does NOT represent the views of the majority of LEGAL residents; just read the SFGate comments section below the story to see that people actually want existing laws to be enforced.
even for ultra-liberal SF Bay area the feedback is surprisingly conservative.
What is ICE?
Immigration and Customs Enforcement
aqius, got a link? What has ICE done this time that the panderers don’t like?
Eh, SFGate gets floods of conservative comments about immigration articles. I’m fairly certain that conservative bloggers find them and link to them and have people who read their blogs who don’t live anywhere near the bay area put in their two cents. It happens on other issues, too — the comments on that site are invariably waaaay too conservative for the most stereotypically liberal city in the country — but it’s particularly intense for immigration.
I am more conservative than most in the area on the issue (that’s not saying much) but even for me a lot of those comments are just ridiculous… it’s clear most of those people don’t live here.
In this part of Florida, illegal immigration was a major facilitator of all the crappy overbuilding. One of the scams that I got wise to was how illegals in this area would come here, supposedly to work in the fields or other ag jobs. This would enable them to get subsidized housing for ag workers. Once they were set up that way, then some would blow off the ag jobs and get construction jobs. Of course, the housing managers would look the other way on this. Now that the bubble has bust, a number of these characters around here work for companies that the government outsources to for public works, like road improvements. There’s one project I drive by every day and it seems like the same crew is out there, the same five guys leaning on the same five shovels looking into the same hole in the ground. I mean, for weeks now, that same hole is there. I dunno if they’re trying to lay cable or shore up the infrastructure or what, but I’d sure like to know what’s in that hole that makes it so fascinating.
eminsd me of taking the Blue line in Chicago,wknds it goes all haywire for “working on”, but as you get shuffled from one bus to another then to a train to the airport, you see NO WORKERS supposedly working on the tracks.
Maybe those “workers” are those five guys you keep seeing!
Send them back up so they can finish the job.
I’d sure like to know what’s in that hole that makes it so fascinating. Must be the bottom of the housing crash.
All three of our monarchy hopefuls are promising the big rock candy mountain to the invaders. “Conservative” McCain is in bed with LaRaza. It OK to be racist as long as you are not white.
I believe that McCain employs Juan Hernandez as his “hispanic outreach” guy. (Google McCain and vicente fox) I’ve heard news reports mentioning that Hernandez was the former Mexican presidents unofficial ambassador to the Mexicans in the U.S. It is kind of funny that the illegal aliens need an unofficial ambassador. Most foreigners use embassies and consulates.
Even more outrageous that US gov’t agencies and many private orgs (like Banks) accept the “Matricula Consular” card issues to illegals in the US a legal identification, especially since this ID is not considered a legal ID in Mexico, in part because it is so easily to counterfeit.
If 91% of whites voted for a white candidate like blacks did in NC, we’d all be labeled racists and have to offer up reparations.
And imagine if there was an organization called “The Race” which claimed to represent the interests of “white” people.
I think its called the Senate.
They only represent the interests of rich people.
UBS senior official detained during investigation by U.S. government - Hmmm.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aNHEUuWKtL_M&refer=home
The word is Europes largest Bank has been ripping off the US Treasury, rather, us.
So tell me, what is the difference if the corporatists rob the treasury by way of cheating or the corporatists rob the treasury via massive tax breaks?
A matter of semantics I suppose…
Excuse my ignorance but what does this mean for the ordinary man/woman in the street in Vallejo? Does it affect them or is it party on time?
Vallejo votes to declare Chapter 9 bankruptcy
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/05/06/BACH10HUK6.DTL&tsp=1
It means think twice before investing in municipal bonds. Last time we had a wave of Municipality bankruptcy filings muni bonds took a swan dive, no investment is safe. But at least if you invest in your pantry you will have something to eat.
If that ordinary man/woman is a renter, they’re okay. Party on. Property owners… not so much.
In California, property owners may suffer a decline in services (as will renters), but Prop 13 limits property tax increases, so a city BK probably isn’t as dire as it is in other states.
This the 3rd rail, bigger then Medicare and SS combined. Taking on the civil service unions, changing work rules making government more customer friendly and if you are incompetent. 3rd warning: YOU’RE FIRED in 90 days or less.
Plus the outrageous cost of health and retirement benefits for these workers and their families.
——————————————
which have been shattered by spiraling public employee salaries
some fear terrorists- for me it’s municipal unions
I sympathize. Gray Davis was a shill for public employee unions, though they eventually got mad at him because he made SOME feeble attempt to balance a budget. Governator came in standing up to p.e.u.’s but had to make some concessions to stay in office.
I recall just a couple of months ago Vallejo narrowly averted a bankruptcy declaration. Is this an isolated case of a municipal bankruptcy, or a harbinger of more to come?
There is that issue with the sewer bonds in Jefferson County, so we know at least one other municipality isn’t doing too well. There must be more out there though, just hasn’t made the news yet.
They’re still wrestling with that one. They want to charge people who aren’t even hookerd up to the sewer a sewer “non-use” fee because the city sewers make for a “healthier environment” it’s actually been held up in the courts.
http://www.al.com/news/birminghamnews/index.ssf?/base/news/1210061783198420.xml&coll=2
Washington state utilities have been able to charge higher rates to WA consumers because they weren’t able to sell hydroelectric power to CA. (I think both lots of water and low water cases cause these kind of increases
)
Wow! 30 bucks a month for not services lol.
I look at the taxes I pay for no utilities, no roads, no security, no hospital or emergency services, no infrastructure, no transportation, no public spaces, and no governance as money well-spent to have them leave me alone.
I say, build green, get off the grid.
Or everyone who has utilities doesn’t pay for one month.
Everyone. renters/owners alike.
lol
If Vallejo files maybe Jefferson County will follow. It’s less embarassing if you’re not first.
When pension and retiree health care costs explode for already debt-burdened communities, do they try to walk away from those burdens or go for some combination of:
1) Uncompetitive wages for new employees.
2) Collapsing services.
3) Soaring taxes.
NYC went with the second option, which explains where it is. Others will follow.
I have come to favor bankrputcy. The rich who didn’t want to pay taxes for the past 25 years hold the municipal bonds, and the retired public employees who grabbed retirement riches in exchange for less for those who came after are due the pension and retiree health care.
In the case of pensions, they can be wiped out by cutting Social Security on a dollar for dollar basis. For retiree health care, the special privilege can be wiped out by universal health care. Then we’re all equal.
“NYC went with the second option, which explains where it is. Others will follow.”
Oh yeah. It’s coming and in a major way.
It will be interesting to see how MBIA and AMBAC perform if muni bankruptcies are widespread. Owning some MBIA-insured muni’s, I am not overly confident, and that’s one of the reasons why I have kept muni’s to a smallish fraction of my holdings.
No matter how they perform, they will retain their “AAA” rating - even if they spiral into oblivion!
Just think how newsworthy it will be when Ahhnold stands on the steps of the Sacramento Capitol and declares that Cahlephonya is bankrupt. That’ll get the world’s attention.
To those who hold Vallejo municipal bonds, it means hopefully their bond insurance holds, otherwise they are out of money. If you are an employee of the city of Vallejo getting and inflated salary due to political irresponsibility and favoritism, it hopefully means you are screwed. Otherwise it means the city has to live within its tax base until major restructuring is underway, which may mean some decline of overall government services.
Well, Cops and Firefighters and their unions were being selfish and not giving into pay cuts. Nice from people that are supposed to be in the profession to save/help people, not get rich. Some CAL-FIRE middle management (note–not the ones actually fighting the fire, just the strategists that sit at ICP all day) make close to $300K due to overtime. Cops aren’t that far behind, with many rank-and-file officers in this state making $100K-150K. All these salary improvements over the past decade were based on the notion of ever-increasing housing prices. Oops.
It means no mo borrowing to build and fix roads, buy firetrucks, build jails, etc… Same taxes, same folks on the payroll, everything slowly deteriorating.
Party for the short term. Find somewhere else to live for the long term.
‘Vallejo votes to declare Chapter 9 bankruptcy’
http://www.youtube.com/watch?v=_wCJ9WmX9Zw
RE: Excuse my ignorance but what does this mean for the ordinary man/woman in the street in Vallejo? Does it affect them or is it party on time?
The only way you’ll unload your house to get out of Dodge is to a cash buyer.
No one will finance a property in a deadbeat town.
Lets see what the pre-existing housing numbers look like today.
http://www.bloomberg.com/apps/news?pid=20601087&sid=annT.V2NMZrY&refer=home
Oooh….not so good.
I think “pre-existing” housing would be tents on building lots (or maybe the mobile office).
jawboning:
May 7 (Bloomberg) — Federal Reserve Bank of Kansas City President Thomas Hoenig said “serious” inflation pressures may compel the central bank to increase interest rates. The dollar rose against the euro.
http://www.bloomberg.com/apps/news?pid=20601103&sid=a1c5xT6tZU.k&refer=us
This kind of statement provides an extra “pop” in stock market prices, if the Fed “unexpectedly” does not raise interest rates down the road in response to burgeoning inflationary pressures.
questional:
WASHINGTON – Just months ago, ethanol was the Holy Grail to energy independence and a “green fuel” that would help nudge the country away from climate changing fossil energy.
Democrats and Republicans cheered its benefits as Congress directed a fivefold increase in ethanol use as a motor fuel. President Bush called it key to his strategy to cut gasoline use by 20 percent by 2010.
http://www.signonsandiego.com/news/business/20080506-1349-ethanol-food.html
Ethonal is becoming like real estate. There is so much bad information going around from corporations and marketers who are completely biased and everyone wants to hear that it will answer all our problems.
Except for Brazil.
They cheered cause they all owned Monsanto stock.
That is like being close friends with the gollum.
Fannie Mae Wins Cheers Despite Loss
http://www.nytimes.com/2008/05/07/business/07fannie.html?_r=1&ref=business&oref=slogin
“As the market recovers, we will be a prime beneficiary,” Fannie Mae’s president, Daniel C. Mudd, said in a conference call with analysts Tuesday morning. When the housing market finally stabilizes, the company will “feast” on the mortgages it is currently buying, he added.
Those sentiments were bolstered by Fannie Mae’s regulator, the Office of Federal Housing Enterprise Oversight, which announced Tuesday that the company had been released from growth limits put in place in 2006 when audits showed that the company had been manipulating its books.
The regulator also cut the capital reserves that Fannie Mae must hold, in essence betting that the safest course, for both the company and the housing marketplace, is for Fannie Mae to invest more aggressively and with a thinner cash cushion.
They have done such a fine, honest job in the past few years, why not give them more room to “feast.”
“Feast”ing on rotten meat does not bode well for the one doing the feasting.
I feel sorry for OFHEO, that writes nice reports about how this is stupid, but then has to stand their sticking the meat in their jaws.
mo’ money
May 7 (Bloomberg) — Federal Reserve Chairman Ben S. Bernanke, seeking ways to stabilize money markets, will ask Congress for authority to pay interest on commercial-bank reserves this year, a person familiar with the discussions said.
The central bank isn’t authorized by Congress to begin making such payments until 2011. Allowing interest on bank reserves may allow the Fed to pump more funds into the banking system without pushing its main policy rate lower, in effect separating action to boost liquidity from monetary policy.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aOm_fLe0pDxk&refer=worldwide
The man behind the curtain wants to keep making helicopter drops of liquidity into the hands of bankers through untraditional channels while officially claiming in the headlines that the Fed has ended its series of FFR cuts.
P.S. If home prices ever stop dropping like a rock, maybe some of these monies will find their way back into the housing market.
worry if the loan securitisation process kicks off again.
IIRC, in the early 1990s the Fed dropped the monetary reserve requirements to near 0 and have held it there ever since. They now even allow MMF sweep accounts to reduce the demand deposit base. A bank’s monetary reserves are such a small percent of assets that the receipt of interest won’t make much difference to the income statement.
The Fed threw away it’s most powerful monetary tool simply to please the bankers. The bankers howled when at one time Volker required non-interest bearing deposits of I believe 10% or 20% of DDAs and 5% of short-term savings.
FONTANA - A bank employee stumbled upon a foreclosed house used to grow marijuana, leading to the seizure of an estimated $4.5 million in drugs in two houses and an arrest Saturday.
Angel Wayhang Kou, 30, of Rancho Cucamonga was booked into jail on suspicion of cultivating marijuana, maintaining a residence for drugs, theft of utilities and conspiracy.
http://www.sbsun.com/sanbernardino/ci_9164347
With modern geographic info systems, “theft of utilities” should be blindingly obvious.
Frustrated owners try to unload their guzzlers
http://www.boston.com/lifestyle/green/articles/2008/05/06/frustrated_owners_try_to_unload_their_guzzlers/?page=1
At the same time, consumers like Chrystall are flooding the market with used SUVs, trying to trade in hulking Hummers for compact Corollas, and getting thousands of dollars less than they would have just a few months ago. In April, the average used SUV took more than 66 days to sell, at a 20 percent discount from vehicle valuation books, such as Kelley Blue Book, compared to 48 days and a 7.8 percent discount a year earlier, reported CNW Marketing Research, an automotive marketing research company.
(Similar to selling an obsolete mcmansion?)
At his Mini dealership, Chambers said people have been turning in Chevrolet Suburbans for the tiny British car in recent weeks. He currently has a one-year waiting list for the coveted Smart Car, an 8-foot-8-inch vehicle that gets more than 40 miles per gallon.
(Gas sucking and environmental destroying Hummers and SUVs are everywhere, but you have to wait a year for a Smart car? US automakers are always slow to the fuel economy party, but this will especially hurt what’s left of Ford.)
“an 8-foot-8-inch vehicle that gets more than 40 miles per gallon.”
I’ll say it AGAIN - I had a 1989 Civic that got 43 highway. This is “progress”?? Aiyiiiiieeee!
I forget the year exactly but my bother and SIL owned a late 70’s VW Rabbit diesel that would regularly get over 50 miles to the gallon.
In 1979-80, a diesel VW Rabbit sold for like 50% over sticker if you could find a new one @ the car dealerships…
Diesel was around 2/3rds the price of gas, back then.
Checked the local CL ads for fun yesterday - lots of Suburbans for $7-9k less than 5 years old.
Also noticed a LOT of Ford Explorers being sold by suburbanites (judging by the photos). They all had wishing prices though, $2500 is not a good deal. I’ll take it away if they pay me $250. Speaking of, my neighbor drives a 90 something Exploder and man that thing creaks so the suspension must be totally worn out.
The good thing about SUV’s is that many will end up in the junkyards. The poor people who traditionally buy the hand-me-downs can’t afford the gas.
The GS call on $200 bbl…a sign the top is near?
That’s what? 7-8 dollars a gallon at the pumps?
I remember when I thought the $100 bbl call was a sign of the top a couple of years ago.
The call then was $105 in 2009. oops bad call. It is not so much that oil went up, it is the 30% drop in the dollar.
Right — good to keep a global perspective, or else one could easily get confused by the Peak Oil gang…
Sure, Mexico, Russia, England, Indonesia…they are all just lying about falling production. They just don’t want to sell their oil for $122. Eyes wide shut, prof?
Nah — just trying to not get fooled by short-term, unsustainable trends in supply and demand.
There are many unsustainable trends in the world now, one of which used to be ever increasing world oil production.
I called 105, I expect sharp pull back to 106…dont confuse long calls.
White House Threatens Veto of Anti-Foreclosure Bill (Update1)
By Alison Vekshin
May 6 (Bloomberg) — The Bush administration signaled it will veto foreclosure-prevention legislation being advanced by House Democrats that would offer states $15 billion in grants and loans to buy and refurbish abandoned homes.
“The principal beneficiaries of this type of plan would be private lenders — who are now the owners of the vacant and foreclosed properties — instead of struggling homeowners who are working hard to stay in their homes,” the White House said in a statement released today in Washington. House Democrats plan to advance the measure tomorrow.
This veto prospect looks like a tempting opportunity to uphold conservative Republican values, steal some Democratic thunder and thwart some future Democratic campaign contributions in the process. The WH has already passed a massive stimulus measure, some of which is targeted at the housing market, so they have good political cover. Where is the downside to a veto?
Housing rescue package set for House vote
By JULIE HIRSCHFELD DAVIS – 1 hour ago
WASHINGTON (AP) — A broad housing rescue package aimed at preventing foreclosures would have the government step in to insure up to $300 billion in new mortgages for struggling homeowners.
The plan, designed to stabilize a key sector of the shaky economy, is set for a House vote Wednesday. It would let the Federal Housing Administration insure more affordable fixed-rate loans for borrowers currently too financially strapped to qualify.
The White House says President Bush would veto the measure, calling it a burdensome bailout that would open taxpayers to too much risk. That’s despite Democrats’ attempts to attract Republican support by including a grab-bag of measures Bush has called for.
Excellent.
I heard a rumor last night that GB is looking at a house in Dallas that’s about half a mile from where I live. It’s a big zillion dollar place across the street from the lake but I find that hard to believe. The source was pretty good though.
I was kind of hoping he’d be looking at a small room in the Big House.
He needs to share those small quarters with the rest of the cohort thieves.
Nobody really expects Bush to actually LIVE on his PR pig farm converted Crawford “Ranch” chain sawing brush now that the Good Ole Boy photo ops won’t be necessary
I will try to find out where one can obtain or see the film “Crawford” referenced here:
http://www.austinchronicle.com/gyrobase/Blogs/News?oid=oid:612855
I guess it’s still on the festival circuit, seeking a distributor. This month it will be at the Berkshires and Little Rock film festivals.
I heard that Bush was interested in some vacant property in the Park Cities area. Either way with the Bushes moving to Dallas and the Bush Library coming here also, it will be Al Qaeda central here.
I read that too. The place on Garland Road - no way. You could fly a plane or helicopter right across the lake and plow into the front of the house with nothing to stop you.
TxChick-
Is that the Belle Nora or whatever it is called - that has been for sale for 2 years or so?
Yep, that’s the one. Like I said, I don’t believe it.
If this is it its very nice!
http://www.luxuryportfolio.com/property/dallas/_magnificent_pre_war_estate_built_in_1929_.cfm
That is an absolutely stunning house.
If I had the money (to buy and maintain it), I’d buy it tomorrow.
Gorgeous!!!!
I heard from a friend that lives in HP Bush was wanting to make a deal on land in Park Cities too, but there was some problem with it (maybe it was too small for the house they wanted??).
I can’t believe they would live in Dallas and depend on the DPD to keep the terrorists and riffraff away.
GWB ahs also bought a nice piece of property in SA for his retirement needs. I’ll chip in for moving expenses:
Bush’s Paraguay Land Grab
The news circulating the continent about plans to buy 98,840 acres of land in Chaco, Paraguay, near the Triple Frontier (Bolivia, Brazil, Paraguay) is the talk of the town in these countries.
http://www.counterpunch.org/cp10202006.html
I believe the story was originally placed in The Guardian and has been debunked.
http://usinfo.state.gov/media/Archive/2006/Jan/12-623470.html
I thought the Bushes were building a 98,000 acre ranch in Paraguay so that when he leaves office he’ll be safe–and a long way from the mess he created. Still, if he actually does follow through with his veto threat (which, Republicans have been known for ultimately backing down to the Dems on all these bailout provisions thus far), he’ll gain at least a little respect in my eyes. I can’t believe I just said that!
That “little respect” you speak of will be a tiny spec against the enormous montage of failure that is him.
There would be 500,000 homedebtors selected by some Frankian means who would have Bush to blame for not being able to dump toxic debt
Not sure if this has been posted here yet. Interview with David Learah. He’s still a tool.
http://www.newsweek.com/id/135724
“You knew there were a couple of [regional] balloons out there, and [I] said you could have a couple of these balloons pop,” Lereah says now. “But I didn’t think this would turn into an all-out bursting of a balloon for the whole nation.” He, like other prognosticators (including Greenspan), points to his lack of understanding of the profound effects that subprime lending was having on housing markets. “[I] just didn’t realize the scope, the extent, the magnitude of the loose underwriting—not looking at incomes and wages, just providing so many mortgage loans based on [expected] future price appreciation rather than the creditworthiness of the borrower,” Lereah says. “That got so out of hand, and none of us realized the magnitude of it until it was too late.”
Wow - I needed to get my blood pressure up this morning - thanks for helping me out!
At least he is a more honest tool, now that he no longer works for the NAR.
‘“[I] just didn’t realize the scope, the extent, the magnitude of the loose underwriting—not looking at incomes and wages, just providing so many mortgage loans based on [expected] future price appreciation rather than the creditworthiness of the borrower,” Lereah says.’
I frankly find it a bit amazing that DL did not discover blog wisdom circa 2005. We collectively laid out this case right here well before the mortgage market blew to smithereens. It took no degree in rocket science to see where things were headed.
And of course it’s a lie. He knew perfectly well what was going on, but was being paid to try to keep the party going.
If there has ever been a case to revoke a PhD based on making ones’ profession (and alma mater) look bad, this is it.
None of those who work in the industry realized the magnitude until it was too late? Come on, I don’t buy that for one second. I’m as naive as they come on housing and economics and even I could realize the magnitude.
What a liar he continues to be.
They knew. They turned a blind eye to it because everyone was making money. Don’t let any of them fool you.
Well if you judge people by their actions… Well the stock sales by the insiders at homebuilders would seem to indicate that THEY saw what’s comming. The percentage or RE agents who bought their own speculative properties would seem to indicate that they were drinking their own coolaide.
” I spoke with Lereah frequently during the boom, and I always found him to be a smart, thoughtful observer. ”
That says as much about you as it does about him. Maybe we all define smart differently. Many sales were going through at 10-20 times earnings and Mr smart guy NAR didn’t realize?
“You knew there were a couple of
[regional]balloons out there…”Some teenagers were getting balloons for high school graduation.
When the last cameraman leaves…
The Marreros were not the first to win a new house on television only to find they couldn’t afford the place.
A Texas family who won a house in a Home and Garden Television sweepstakes were hit with a massive tax bill in 2005. In Kansas City, a family featured on Extreme Makeover: Home Edition had to raise money to keep their house.
A producer from Extreme Makeover said he would not comment on the Marreros’ plight.
Perfect example of how just throwing money at a bad situation doesn’t do squat in the end. It just means more good money thrown after the bad.
Folks who’ve never had anything have no idea of how to manage resources when they recieve a windfall, it’s all gone in nothing flat.
This is exactly why I no longer watch the show. I don’t have a problem with providing shelter. But you have to be intelligent about it. My car is a POS (at least it’s MY POS!) but do you think I would benefit from having it replaced with a Ferrari? I couldn’t afford the insurance, repairs, or even basic maintenance.
I am always amazed(I shouldn’t be) at broke million dollar lottery winners.
“Folks who’ve never had anything have no idea of how to manage resources when they recieve a windfall, it’s all gone in nothing flat.”
In 2005 my siblings and I sold a family beach house. Each one bought two new homes. I kept my cash in bonds. I’m flush
and still a bitter renter. My own sister called me a “nothing with money”. She lives in a guest house in Palo alto, drives an ‘84 maxima and owns two unproductive condos in PA and santa cruz. I’m going shopping.
The Marrero family would have been better off if the show had just rehabbed the rowhome they occupied. But that wasn’t glitzy enough for the production. American audience seems to be on this All Flash No Cash binge.
Whenever anyone wins anything like this, they should immediately sell it wholesale, pay the taxes and pocket the rest. Sheesh, I thought everyone knew that!
That story is just disgusting on so many levels. The “winner” looks like he’s been spending too much of his money on junk food.
Town nearby is the location for next week’s Extreme Makeover. A part of the show that you don’t see is that there is a big fund raiser before the construction to raise money for family to pay the new taxes and upkeep.
For Floridians, looks like that bogus CSX deal (the one where the state would purchase the tracks from CSX for a light rail system, while CSX would still have use of the tracks AND have no liability for any accident caused by CSX) has died an ugly death. Thank God. Jebbie must be pissed, rumor had it he was a major proponent of the deal and working behind the scenes to make it happen.
CSX runs the MARC commuter trains in MD and while the system usually works pretty well, when something goes wrong it’s obvious that the dispatchers in FLA don’t know anything about passenger trains. The older conductors vastly prefered the old B&O days.
JEB! was also responsible for the SBA fiasco. Local fla governments kept their excess funds in medium term investments with the SBA. JEB! personally appointed the head of the SBA before leaving the government. He then formed Jeb Bush & Co. Went to Lehman Bros. and got a fat commission by selling CDO’s to the SBA. Billions in tax payer dollars were lost.
But hey, the Bushies got richer and we still vote Republican.
You were going to get a light rail train too? They are putting one in here in Norfolk, VA. I think it’s going to cause all sorts of issues with traffic. They are tearing down the library for the station, and have no real plans for the replacement. After it’s gone they will look to build a huge new library for sure. It will be managed by HRT, who has a history of mismanagement AFAIK.
support the veto
http://www.whitehouse.gov/contact/
then later you can declare how much smarter you are than Bush etc…..
Absolutely, flat. Thanks for posting that.
The headline of the following article is positive, but a couple of lines buried in it stand out:
“But the boost in sales comes with sagging home values. April’s median sales prices — the point at which half the houses sold for more and half for less — ranged from 72.5 percent lower in Wayne County to 13.7 percent down in Livingston County.”
“For example, Detroit had more foreclosure sales in April than regular sales (570 of 932 total), and the median sales price for the month was $9,200, down 68.8 percent from $29,450 last year.”
http://www.detnews.com/apps/pbcs.dll/article?AID=/20080507/BIZ/805070389
I read an article on MSNBC (can’t find the link) about hidden inflation in services, based on changes in service quality.
We’ve seen shrinking package sizes for the same goods, but the BLS adjusts for that. Adjusting for service quality is more difficult.
In the past, this has been used as an argument for inflation being overstated — that quadruple bypass costs more now, but is more likely to save your life. Now quality may be going down.
The example given is the airlines.
Here are some more: restaurant service, teaching, product customer service, construction, entertainment - pretty much everything except the techiest of tech. Would also cause productivity to be overstated.
I used to have printing done by a Southern California company that bragged that it offered 500 postcards for $95 plus shipping. The shipping was about 12 bucks, IIRC.
They still operate at the $95 price point, but nowadays, you’re only getting 250 postcards. It’s now more than 12 bucks for shipping.
For the tech traders out there:
One Laptop Per Child News
All the laptops (to date) have been delivered with LINUX and not Windows. Microsoft now has its hands in the OLPC pie with the installation of Charles Kane as the new president of OLPC. The problem is can Windows run SUGAR (Mr. Walter Bender “is the architect of an open-source interface known as Sugar, which runs on the Linux operating system and is designed to allow children to easily collaborate on documents, art, music, and other projects.”).
IMHO the project fails with Microsoft and fails with the pricing target, but it is a nice dream.
http://www.technologyreview.com/Biztech/20711/page1/
Great, just what we need……starving kids in the Congo logging on to MySpace.
What has happened so far is kids in South America becoming computer literate.
Since the US has not intervened in 10 years while it was wasting its resources in a futile effort in the Middle East, it is amazing to me how far SA has come. No wonder they adore President Bush.
Does this OLPC thing deserve any of the credit though??
In Peru, not in Colombia or Brazil - Peru pursued the assistance.
this supports CLNE energy long call strategy, as well as, TMM.
its not a 3 dollar stock, its a 13 dollar stock. TMM is a story unfolding.
I applaud the company’s attempt to end-around Microsoft by going open source, but that’s not the best attribute to pitch to bureaucrats, Third World or otherwise.
“Wait, this laptop isn’t equipped with Word and Powerpoint? How else will these children learn to become low-level functionaries?”
On the plus side, many will learn how to operate Nigeria email scams. Some may even learn about the stock market and how to destroy wealth through that more complex scam. So much to learn, so little time!
Yea, I guess they will just have to learn how to program, and administer UN*X boxes instead of the low level functionary role.
Political Perceptions: Is It Curtains for Hillary?
Doesn’t look like it yet. She’s going to have to be dragged kicking and screaming from the stage.
Who is still donating to Hillary’s campaign? More importantly, what are they expecting in return?
We could end up with a NY senator who owe’s a lot of people some really, really big favors.
Reportedly, she wrote a check to her campaign for 6-7 million bucks last month.
Nice way to raise money - writing checks to yourself. How very Clinton!
Who is still donating to Hillary’s campaign?
She is…
http://news.yahoo.com/s/ap/20080507/ap_on_el_pr/primary_rdp
Well, it probably is her last chance to grab the brass ring. If Obama wins she probably won’t get another chance until 2016.
…she probably won’t get another chance until 2016.
We saw how well that worked out for Michelle Kwan.
This candidate has mighty deep pockets to be considered one of the peeps. I can see where this candidate thinks that repealing the gas tax and saving me $30 - fueling the car I don’t own - should cause me to fall to my knees in praise.
Which market, lol
“…A lot of investors are still wondering what, if anything, the government can do next to stimulate the market. I don’t doubt that there are still things government agencies can do to signal official intentions, but there doesn’t seem much they can do actually to influence real supply and demand in the market for more than a few days. As expected, their many interventions are losing credibility. Institutional investors seem to be using every rally as an opportunity to get out of their positions, while retail investors are filling internet bulletin boards dedicated to discussing the stock market with anxious and angry comments….”
May 7, 2008
http://piaohaoreport.sampasite.com/
In penny-pinching plan, some lawmakers look at minting coins of steel
ASSOCIATED PRESS
Further evidence that times are tough: It now costs more than a penny to make a penny. And the cost of a nickel is more than 7½ cents. Surging prices for copper, zinc and nickel have some in Congress trying to bring back the steel-made pennies of World War II. They’re looking at using steel for nickels, too.
What the heck, outsource the stamping of US coins to China, like everything else that we manufacture!
Congress should make all our coinage out of recycled beer cans. They would get Green votes. The light weight & cheap appearance of aluminum slugs would match the value of the currency.
This marks the END of the Empire.
IF you study history, you will note that the Roman Empire began its decline with the debasing of its currency to pay its many troops in foreign outposts and to construct huge public projects.
The original coins of gold and silver reverted to copper and bronze. Shortly thereafter, Rome Collapsed, after hyperinflation made living costs too high for the average citizen. Public Employees got all the benefits of citizenship.
The same is happening here, but we can’t see it.
The ancient Romans didn’t have paper money, but somebody figured out how to “Silver Wash” copper coins, that gave them the appearance of previous nearly Pure Silver Denarius Coins, and perhaps it was the 1st time hyperinflation showed up, monetarily?
The ruse worked for awhile until the coins wore enough, for the copper to show through.
The Romans never figured out how to fake Gold, so the Gold Aureus never declined in value.
The exchange rate went from 25 Silver Denarii to 1 Gold Aureus (from 100 B.C., til around 200 A.D.) to around 4300 “Silver” Denarii to 1 Gold Aureus by around 330 A.D.
SPECIAL REPORT
Did Fed rate cuts help boost food prices?
The central bank focused on protecting the economy vs. fighting inflation.
By Greg Robb, MarketWatch
Last update: 5:28 p.m. EDT May 6, 2008
Sorry if this ends up being a repost:
http://www.detnews.com/apps/pbcs.dll/article?AID=/20080507/BIZ/805070389
All is well!! Still, a couple dittys from the article:
“But the boost in sales comes with sagging home values. April’s median sales prices — the point at which half the houses sold for more and half for less — ranged from 72.5 percent lower in Wayne County to 13.7 percent down in Livingston County.”
“Detroit had more foreclosure sales in April than regular sales (570 of 932 total), and the median sales price for the month was $9,200, down 68.8 percent from $29,450 last year.”
Holy crap - $9,200 median ???? Wow. I can’t fathom that. I knew things were bad in Detroit - but wow, just wow.
I like how sales increase articles are presented as an enigma.
“Sales are up despite prices going down” How is that possible?
Now that the housing crisis is officially over, gold is really getting hammered.
Yikes, a whole percentage point. That’s really ‘hammered’. How are your fiat holdings doing?
Dollar was up about 6 pct off its recent lows against the Swiss franc last I checked. I was very lucky on the timing of a 1-year Swiss franc CD which matured when the dollar was at par.
Amazing!
Otherwise rational people are trading in their gold holdings (the only true money) for worthless, unbacked, fiat pieces of paper totally devoid of any inherent value whatsoever.
Strange times we live in.
You scared me out of the Australian dollar positions a couple of months ago; I am waiting till about the 1st of August to buy them back, but cannot explain exactly why that seems like the right time. (AUD being a gold proxy of sorts.)
Australia’s commodity-based economy produces food, base metals, and gold. The AUD should strengthen considerably over the USD during the next few years, though there will be intervening drops. The same applies to the Canadian dollar (plus Canada also produces “energy” - oil, gas, uranium, and hydroelectric).
No too surprising, as gold did appear to out pace real inflation, so an adjustment is not entirely surprising.
california screaming:
Money Magazine) — Spring in southern Orange County has come on spectacularly. The autumn fires that blew smoke and ash into neighborhoods here also destroyed a lot of dark-hued scrub and chaparral. Now the hills along the 241 tollway are painted in bright green grasses and yellow and violet wildflowers. Near the end of the 241 lies Ladera Ranch, a nine-year-old (and still growing) planned community of 25,000. Nestled into the foothills, the place is a visual metaphor for the American dream, California division, in which the residents of the postmodern townhouses at the lower elevations aspire to the gated $4 million spreads at the top.
http://money.cnn.com/2008/05/01/real_estate/Regnier_Postcards_from_the_Edge.moneymag/index.htm?section=money_latest
This guy bought for 350K and is asking 469K and won’t lower his price because..
” But there are homes nearby listing for more than $80,000 below their asking price. Manley won’t slash his price, he says, “out of respect for the neighborhood.”
haha BS this guy is a ass
I was floored by the # of for-sale signs I saw in Los Altos / Los Altos Hills area last night when I went to visit a friend! There were 4 signs on his block alone. Realtor. com is showing ~ 150 homes.
I really thought that in well-established expensive neighborhoods, while prices will certainly drop signficantly because buyers know they’re no “rush”, you woudn’t see a glut of homes available.
It wasn’t possible, I thought, to get crazy financing on houses that cost $4M or more, so I reasoned you wouldn’t see too many FB’ers being forced to sell.
I must have been wrong, judging from the # of homes I see.
Some of these homes look like recent construction, like a person with a large enough lot to split (I think there’s 1 acre minimum zoning up there) built a home as a speculation.
While I think these homes will sell at *some* price (unlike other areas where houses will need to be bulldozed!), with the inventory available here, prices can easily fall 50%. There are just too many homes on the market in a very expensive area.
Ya know what’s weird? There is not one home for sale in my new neighborhood. There is only 1 home for sale in the neighborhood across the street (selling for $799k in a market where the median sold price is in the $200s—good luck w/that one, bub!) I checked out the heat map on one of the links provided above in the thread and Onondaga county has actually seen their foreclosure situation improve since 4Q2004.
Across town the social position declaration homes as I like to call them are flooding the market. So there is some panic/pain. The city of Syracuse has some major inventory issues (probably all Eurospeculators getting out of rental Dodge after the locals snickeringly sold out to them a year or two earlier)
But I’ve started to wonder if the older (40ish), smaller but well kept homes in the burbs close to Syraucuse may end up gaining in value as gas prices keep trudging upward and as the larger home owners move to downsize. If that’s the case, maybe I should be buying now?!?
“Syracuse has some major inventory issues (probably “Eurospeculators getting out of rental Dodge after the locals snickeringly sold out to them a year or two earlier)”
I’ve seen this scam repeated over and over again. This fact should scream to everyone here to KNOW YOUR MARKET. If you’re not in the local loop, you’re going to lose money. Eurospeculators or Vulva driving metro fools, it makes no difference. They buy high and sell low every single time. Trust me…. separating these morons from their wallet is a family tradition.
It’s really a 50/50 shot on that one, CA. I have thought for years that suburbs were a fad and that people would tire of the drives and hegemony and start coming back closer to the work centers. Then came exurbs, and the common stories of people driving 100 miles round trip in a Ford Expedition. Now, suburbs are still popular and people are downsizing cars, but will the “fill-in” really happen? I hope so and once this market is rational I’ll be one of the first to buy a house in the city since I hate driving and don’t care about what other people think.
Eurovestors - hahahahaha….They all came to FL and are buying up crap here. They’re bound and determined to take a bath in the USA one way or another.
recession proof cities
http://www.forbes.com/realestate/2008/04/29/cities-recession-places-forbeslife-cx_jz_0429realestate_slide_11.html?thisSpeed=15000
dc not listed even thought it’s grown from 1930 on
According to Ziprealty.com there are 2500+ homes for sale in Queen Creek Arizona. According to the city of Queen Creek there are 20,000 people in QC. I bet that translates into 1 out of every 5 homes is for sale. Wow!!
http://www.queencreek.org/Search.aspx?cmd=search&natlang=Yes&type=all&request=population&maxFiles=25
Two of my favorite mopes:
One cheats at golf and bridge, the other got out and kept his fortune.
“…Mr. Cayne, by contrast, has become a public piñata — blamed by Bear employees, a presidential candidate and others for the firm’s untimely end. His ties with Bear will be formally severed in June….
…The final straw for Mr. Cayne was Mr. Greenberg’s decision to charge Mr. Cayne a commission of $77,000 for the sale of his six million shares of Bear stock, a rate far above the maximum $2,500 commission that employees pay for a single trade…”
http://www.nytimes.com/2008/05/07/business/07bear.html?pagewanted=1&_r=1
Next month after the Morgan takeover is approved, may both of these mopes go retire to Florida’s Penney Homes.
hahahahah! That’s funny!
I think I would pay about 3K for that trade based on my per share rate but having never done anything remotely that big, who knows. I wonder if they also hit with the fees for removing liquidity from the market. LOL
“The sheer complexity, opaqueness and systemic risks embedded in the new markets – complexities and risks little understood by even most of those with management responsibilities – has enormously complicated both official and private responses to this mother of all crises.”
Mr. Paul Volker
April 8, 2008
HAL: I know I’ve made some very poor decisions recently, but I can give you my complete assurance that my work will be back to normal. I’ve still got the greatest enthusiasm and confidence in the mission. And I want to help you.
Pending home sales index fell 1% in March: NAR
By Ruth Mantell
Last update: 10:00 a.m. EDT May 7, 2008
WASHINGTON (MarketWatch) — An index of sales contracts on previously owned U.S. homes fell 1.0% in March from the prior month, the National Association of Realtors reported Wednesday. The index, which is considered a leading indicator of existing home sales, was down 20.1% from the March 2007 level.
MARKETWATCH FIRST TAKE
Pushing Paulson
Commentary: Treasury Secretary’s optimism might be premature
By MarketWatch
Last update: 10:04 a.m. EDT May 7, 2008
NEW YORK (MarketWatch) — Say this for Henry Paulson, unlike some other administration officials, the Treasury Secretary has been out front in battling the credit crisis.
But it’s fair to wonder just what he means when he says “the worst is likely behind us” as he did in an interview published by The Wall Street Journal on Wednesday. Ample evidence suggests that for many people, the crisis is just beginning.
Merrill’s Thain: Credit crisis easing
http://biz.yahoo.com/rb/080507/merrill.html
The chorus of “the worst is likely behind us” is growing louder.
I read Frederick Lewis Allen’s excellent “Since Yesterday”, which chronicled 1929 to 1939, and leaders and economists from the crash of 29′, until the collapse of our banking system in 1933, were saying the very same things we are hearing now.
Human nature doesn’t change much…
Trust politicians or financial reports:
“The cost of protecting Aegon’s debt against default rose on Wednesday after the Dutch insurer reported a 78 per cent decline in first-quarter profits.Aegon’s five-year credit default swaps added 13 basis points to 115bp, meaning it would cost €115,000 annually to insure against the risk of default over five years.
Aegon, which owns US insurer Transamerica, said its results reflected losses on investments and the erosion of overseas earnings due to the strong euro…”
FT Alphaville
IMHO the disconnect between reality and the stock market has never been greater. At some point mopes in the US stock market will realize that for the S&P500 to have a profit for the year, the 4th quarter earnings would have to be 50% higher than last year or record all time earnings.
Mr. Paulson “out front battling”. Sure battling for his friends firms on Wall Street. And now battling to prevent greater regulation of securities firms.
The worst will be behind us when there are jobs in Detroit not just cheap housing. I read that India and China were looking at outsourcing to Detroit. Less expensive than outsourcing to Vietnam.
The worst will be behind us when there are jobs in Detroit not just cheap housing.
————————
Couldn’t agree more.
It’s good for all of us collectively that the economic cheerleaders get their voices heard; chaos would ensue if everyone awoke to reality at the same.
Relax, and learn to love the NAR.
“The chorus of “the worst is likely behind us” is growing louder.”
Of course it is, that’s why stocks have recovered the past two months. With the bailout of Bear Stearns, the fear of a major bank or investment bank going under is gone. The Fed will be there to rescue any of them, so of course the feeling that the worst is behind us. If you had someone backing up your personal finances you’d also feel the worst is behind you and that it’s time to “party on”.
“the worst is likely behind us”
When he says “us”…he’s not talking about the US of US of A…He’s talking about those that have… $200,000,000.00 million plus in cash…you know… that collective diverse group of citizen’s that represent the “best” of our country…like: “Let us take our 20 million dollar horse “Blue Balls” and go to Churchill Downs for a bet on genetic gene pool manipulation and see who really has the fastest pedigree stud material…be sure to bring the pink slip to your new armored Hummer.
Existing home sales fall 1% with a revised drop of 2.8% for last months report. Revised huh?
http://www.bloomberg.com/apps/news?pid=20601087&sid=aLwEYJd4PU8Q&refer=home
Pending Sales of Existing Homes in U.S. Decreased 1% in March
http://www.bloomberg.com/apps/news?pid=20601087&sid=aLwEYJd4PU8Q&refer=home
The index of pending home resales fell 1 percent to 83, following a 2.8 percent drop in February that was larger than previously reported, the National Association of Realtors said today in Washington. The decline matched the median forecast of economists surveyed by Bloomberg News.
http://biz.yahoo.com/cnnm/080507/050708_pending_home_sales.html
“As anticipated, we continue to look for a soft first half of the year, for both housing and the economy, before notable improvements in the second half,” said Yun.
Yun and his fellow clowns have “anticiapted” this whole boom/bust from the start. They are sure to be correct about “notable improvements in the second half.” So the spring selling season is going to be a bust, but the fall and winter selling season will improve notably? How often has that happened?
Consumers taking it in the chops with rising food costs.
http://www.marketwatch.com/news/story/rising-food-costs-force-consumers/story.aspx?guid=%7B26B82851%2DCC1E%2D46F4%2DBDDB%2DC6AC2D31BED6%7D
pork chops?
Lamb… Have you SEEN the price of lamb nowadays?
Have you seen the price of arugula at Whole Foods (lol)
http://www.amazon.com/gp/product/images/0767915798/ref=dp_image_0/103-7980751-7627039?ie=UTF8&n=283155&s=books
Sheesh - wish we HAD a “Whole Paycheck” around here… I’ve got to drive 70 miles just for mediocre sushi…
that was a political joke
I know, but my complaint is grounded in very grim reality… Imagine this menu at every restaurant you walk into within 45 minutes of your home…
Tuesday, May 6th
Lunch Special: two chili dogs, french fries or chips & md Drink $6.50
Lunch Buffet:
Fried Pork Chops
Meatloaf
Fried Chicken Tenders (lots of sauces)
Creamed Potatoes
Brown Gravy
Corn
Green Beans
Turnip Greens
Purple Hull Peas
Macaroni & Cheese
Rolls & Cornbread
Have a Great Day & come see us please!
__________________
farmhouse lady
Sounds like soul food. I could make a meal out of that every day.
It is, and it’s often very good, but this is more like our daily diet - Can’t handle gutbombs all the time (I made this the other night- VERY tasty).
http://www.foodnetwork.com/food/recipes/recipe/0,,FOOD_9936_32691,00.html
Maybe he should do a soul food throwdown.
Sounds like soul food. I could make a meal out of that every day.
There is a place like that here in Conway AR (two actually). Both are very good family places, been here for years. Great food.
The President just announced he will veto the $300 Billion Housing Bailout Bill from Senator’s Frank and Dodd.
No matter how you feel about the President, today… in my opinion… he hit the ball out of the freaking park.
I would like to thank Mr. Jones and all the obnoxious posters on this blog for making their voices heard in Washington.
I have it on very good authority that Mr. Jones’ blog is not only widely read in Washington, but very widely respected.
Mr. Jones, you have made a direct impact on the history of this country, as of today.
Thank you, sir.
I won’t get into my usual anti-Bush litany, but, yes, today, thank God for Bush!
This is a first for me in the last eight years; I actually agree with him on this matter.
If the veto does occur, that may spook the markets since it may see that the bailouts only apply to some banks and not to every living, breathing creature that was affected by the housing bubble/bust.
Remember this in November.
It’s like the school bully punching the little guy for 7.5 years and then buying the little guy a burger to make up for it. While the gesture is nice, it doesn”t make up for all those past indescretions
Oh, you’d rather vote someone in who will come right in and undo it?
Think about that. Voting for the other clown is a vote to bail out every lowrent sucker they can drag out.
Or else vote Grandpa Simpson and bomb, bomb, bomb Iran?
Bizarro you made me laugh w/the bully anaology.
I’ve been comparing the stimulus checks to “guilt” flowers. I’d rather see some change in behavior to show sorrow for past actions rather than a gesture that’s too little, too late. (Not a spouse snark: Hubby not a guilt flowers type)
Maybe they’re realizing that we anti-bailout types are a politically potent force? We seem to be relatively literate, have some savings, and are likely to be regular voters.
Just depends on how many of us there are as to whether they should pay us any mind come September. I personally will definitely remember a bailout bill veto come November.
OK, I’m sorry but I have to gloat a little here. The foreclosure boom is starting to hit my neighborhood. Around the corner from me is a huge brick 2 story McMansion, probably 3800 sq ft. It’s owned by an insurance type. I walk by it everyday and I’ve always marvelled at the toys (Vettes, Tahoes, BMWs, 4 wheelers, boats (plural) parked in and around it. Not to mention pool, hot tub, massive gazebo, kid’s playhouse (emphasis on HOUSE), etc.
After my walk today I took a look at our local listings and what did I find? That house has been for sale for a month now, but no sign out front, and it’s on the market for 35K less than the last selling price - 424K, now 389K. BIG wishing price…
There are maybe 10 families in town who could afford that house and they are already trying to sell from what I see. I’ll bet most of the neighbors don’t know it’s for sale either. Am I just being a spiteful a** or what?
Have the toys start vanishing yet?
No doubt be traded in at the Fed discount window - they’ll take anything! Hahaha…
They have… It made me take a look (they live within easy eyeshot) Down to one boat, don’t see the Sea Doos, the Vette is there, the Tahoe’s gone (probably to work), the Beemers gone (haven’t seen that one for a while) Don’t know about the 4 wheelers.
…the Beemers gone (haven’t seen that one for a while)
The Beemer belonged to the coke dealer.
The wife’s “personal trainer” (Tahoe) will probably stop showing up too, when he finds out she can’t pay him any more.
Not even in kind?
OTOH, that’s a good way to get fitted for concrete shoes.
I did my pollworker thing yesterday, and heard a little gossip. Guy’s kid can’t sell his house, lowered the price 12K but got only 2 bites after months on the market. General consensus is housing is dead, but a retired MD at the table pooh-poohed it, said two of his kids just sold their houses and got their asking price (around median here). He thought the recession talk was political…I wanted to say, oh you’re a Republican too? LOL but we avoided politics there in the school gym. But he also said one of his kids was building a house in this new development nearby, 44 Ranch, and were planning to sell it. WTF? I tried to find out why but got interrupted. Man, lots of houses there for sale, in fact I had a photo on my blog with a line of signs last week. BTW, none of the 15 registered voters there showed up. Obviously they voted absentee!
Then I came home and found this statement by a local reporter on a govt listserv:
“I’ve heard from Western Montana real estate agents and developers that the influx of the so-called equity refugees (those retired teachers, for instance, who sold a California home for $800,000 last year and thought nothing of buying a place in Missoula for $350,000, therefore driving up prices here) has slowed dramatically over the past six months as the national housing bubble imploded.”
They don’t quite put it that clearly in the newspaper but, you know, people might take it too seriously.
When I got hom
It would be sad to think none of the 15 voters voted.
Good for you for volunteering!
NYMEX halted oil sales. After the massive inventory build up, many investors rushed to dump and they triggered a halt. I guess too many people drank Goldman Sachs Kool-Aid.
What are you on? Nymex is trading and oil is up.
http://quotes.ino.com/chart/?s=NYMEX_CL.M08.E&t=f
Unfroze. Look at USO. It stopped tradding shortly after 10:30.
They are going to run it to 125 because they can. Read Flynns’ comments, i will hit it again at 125.
Double down, shorty. I love a good show.
You’re on, you’re on!
http://www.carlspackler.com/videos/images/missthatputt.jpg
Matt, as far as charts, what do you recommend one read? Websites? StockCharts.com?
Speculators knock OPEC off oil-price perch
By F William Engdahl
http://www.atimes.com/atimes/Global_Economy/JE06Dj07.html
does anyone know a good “free” site to find recent forclosures? there are at least 10 abandoned homes in my neighborhood and i would like to see if the banks are actually reporting them. so any help would be appriciated.
There are none that I know of that “hand” all the information right over to you. But if there are specific houses you’re watching, try your county/city recorder of deeds office or web site.
Giving HOA’s fits
I had the old pickup jacked up last night in the driveway beating the hell out of a rusty suspension part…..trying to do my part to save my tax stimulus and fix it myself instead of paying an overpriced shop. I got a couple dirty looks from a few people, but I don’t see how my repair is any more disruptive to the community than the bimbo girls wearing sun dresses going around with wine glasses screaming and drunk every weekend.
What the hell do I care anyways, it’s a rental.
You should buy those girls a drink.
The girlfriend would kill me. Besides, I’d probably get lucky with one of those girls and next thing I Know, they would be taking old ‘Green
How the other .01% lives.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aGXjedykUjho&refer=home
Brokerage firms spend as much as 5 percent of their revenue on entertaining, Citigroup’s Fandetti said. On fees of $10 billion, that would come to $500 million for the industry.
That’s not unusual in the world of derivatives brokers, according to Willy Stemp, 52, a consultant at London-based Mark to Market Plc. Some entertain traders every night of the week in the hope of winning a client, said Stemp, a former broker.
“Brokers aren’t looking for highly technical Ph.D.s and MBAs,” Stemp said. “They’re looking for personality people, with a decent education and sharp wits.”
The entertainment can go further than expensive restaurants and bars. According to a complaint filed by former Tradition broker Brett DiLiberto in the Southern District of New York and made available on electronic databases, the firm “regularly paid prostitutes to entertain traders.”
DiLiberto, as part of his job, frequently “visited brothels masquerading as massage parlors,” and was “required as part of his entertaining duties to retain other prostitution services,” according to the complaint. DiLiberto also said he went on a January fishing trip to Costa Rica in 2006 that was an “extended orgy.” On one occasion, DiLiberto said he was recalled from vacation to attend a “customer drinking and drug party.”
“That’s Inconceivable!”
So much for the Cheney-Shrub legacy…
Community Sentiment
Stocks everyone is talking about.
Bearish:
Fannie Mae (FNM)
Cleveland-Cliffs Inc. (CLF)
Halliburton Company (HAL)
http://finance.yahoo.com/
Spring foreclousre is VERY hot in Phoenix.
http://www.azcentral.com/members/Blog/CatherineReagor/
“Last month, there were 2,969 foreclosures, or trustee sales, in Maricopa County. That’s a 25 percent increase from March’s pace, according to the Information Market.”
“And there are more struggling homeowners. Pre-foreclosures, or trustee notices, in metro Phoenix climbed to 15 to reach 6,143 in April.”
I think she mean “by 15″. So, have we finally peaked in the default rate? At a level on 1.5-2x the monthly sales rate?
http://www.dailyreckoning.com.au/us-fed-credit-card-debt/2008/05/05/
The FED, through a “new lending facility” are now taking credit card debt as collateral.
YIKES!
As far as I can tell, all of the new, Fed credit facilities are full-recourse loans like discount window advances. The credit terms are specified in Operating Circular #10. When the Fed lends non-recourse, or accepts collateral as payment-in-full, then is the time to say YIKES (upper-case, bold-faced, and italicized).
full-recourse or non-recourse, does it really matter, when Countrywide goes under the fed will be left holding all there garbage CDO’s and MBS’s that they used for collateral, and what could they recover from CFC even if they wanted to more toxic mortgages?
Countrywide isn’t a Fed member and isn’t an IB. It’s governmental borrowings are from the FHLB of Atlanta.
Baby Boomer spending is going bust.
http://www.marketwatch.com/news/story/baby-boomers-spending-goes-bust/story.aspx?guid=%7B5C845AB5%2D7FD8%2D4C3E%2D9D5F%2D818990B01806%7D
“One in four affluent 60-year-olds are downsizing their lifestyle by contributing less to charity, canceling vacations, reducing retirement saving or postponing retirement altogether.”
So how is reducing savings and charity downsizing one’s lifestyle?
” … postponing retirement retirement altogether.”
The solution to the Social Security underfunding problem is at hand.
There’s always Carousel!
LOL
Since I never “upsized” the way I live, now that I’m retired I doubt that I will have to “downsize.”
The rumble of deflation breaking loose from the ridge above.
Walked into a Big Palm Desert Target today, around
3:30 pm, oh say, after school, and there was maybe 20 people in the store.
Then onto a Vons grocery store in a good neighborhood and maybe another 20 people, when usually these stores post school pick ups would be FULL of people getting groceries and school clothes etc for kids/partners.
NADA, I coulda rolled a bowling ball down all aisles.
An on the street factoid-
Equipment operator I commiserate with on site from time to time asked me if I knew of a rental around my area in Dutchess county. This is the same guy who bought a “vacation” HOUSE in Rodent Island with his girlfriend last summer. He says, “I gotta get away from her” but I gotta get the Rodent Island house rented before I can find a place of my own locally”. So this guy is getting squeeze by life circumstances and is forced to choose between living a life of misery with his significant other or becoming a landlord on a house 4 hours away. Too bad as he’s a decent guy at work. Maybe a monster at home, who knows.
“Rodent Island”.
LOL.
That’s awesome. Reason #1 to never buy property with someone you don’t share a last name with.
Comment by Jwhite:
“Around the corner from me is a huge brick 2 story McMansion, probably 3800 sq ft. It’s owned by an insurance type. I walk by it everyday and I’ve always marvelled at the toys (Vettes, Tahoes, BMWs, 4 wheelers, boats parked in and around it. Not to mention pool, hot tub, massive gazebo, kid’s playhouse..”
Insurance huh? Never rule out the possibility that your neighbor is involved in the dope biz. Billions of dollars in dope sales annually in America. Plenty of dope peddlers supply a product which is nearly recession-proof. If it comes down to choosing between the Pampers or the dope, what’s the doper gonna do?
You’re probably right in a lot of cases, this one really is the District Manager for a large insurance corp. Funny though, lots of retrenchment going on in our area insurance wise. The District Manager for another big company was dropped down to agent and his district eliminated early this year. Strange.
test
Treasuries Little Changed as 10-Year Sale Draws 3.937% Yield
By Daniel Kruger
May 7 (Bloomberg) — Treasuries were little changed as the government’s $15 billion auction of 10-year notes today drew a yield of 3.937 percent, higher than most traders expected.
The average forecast of nine bond-trading firms surveyed by Bloomberg News was for a yield of 3.931 percent. The securities, which mature in May 2018, yielded 3.922 percent in pre-auction trading. The auction was the largest sale of 10-year notes since May 2004, when the government sold the same amount of debt.
In the March 13 auction of the securities, which was a reopening of the Feb. 6 sale of $13 billion of the notes, the Treasury Department sold $10 billion of the securities at a yield of 3.51 percent.
At that sale, investors bid for 1.79 times the amount offered, the lowest ratio of demand to supply since December 2003. The average for the past 10 sales of new or reopened notes is 2.38 times the amount.
Indirect bidders, the class of investors that included foreign central banks, bought 5.8 percent of notes sold at the March auction. That was the lowest since the March 2006 sale, which was also a reopening.
The firms surveyed are all among the 20 primary U.S. government securities dealers that are required to participate in Treasury auctions.
————
the prospects for higher rates appears to be at hand. I still think we are gonna hear more cowbell prior to any more significant damage to the indicies.
Speaking of Treasury issues, has anyone noticed the new I-Bond rates as of May 1st? Not even a token margin. All they give is Inflation+0%!
Yes and they have also reduced the maximum investment per year to 5k (from 30K). They want you to make your wealth in the stock market and housing market.
they?
I am we, not they…
Hozzie.
got my first taste of TMM today, the bottom is in.
I’ve been sending this letter to various Congressmen and people of influence:
I would like to voice my displeasure at the current housing bailout package being proposed in Congress. Responsible, voting, and tax-paying individuals are overwhelmingly against these series of proposals, which serve to do little other than rewarding reckless behavior and fraudulent activity during the “housing bubble” years earlier this decade.
Responsible renters are finally seeing housing prices drop in California, something that no government or non-profit agency could manage in the past decade. Although I appreciate the intent to “do something” for an economy that is obviously degrading, attempting to artificially “prop-up” a deflating housing bubble is not the solution. Too many people fraudulently filled out loan documents to buy what seemed like a never-ending money stream (a house) with no personal risk (no downpayment). Now that their collective gambling failed, they expect the responsible to bail them out from extravagant lifestyles and assets financed by “phantom” equity. Indeed, there was plenty of risk. The median housing price in Eureka, for instance, is $317,000 compared to a median household income of $40,000. A median house price of 8 times median income is unsustainable and the free market is attempting to fix this mess; government interference to prevent this will only ensure unaffordable housing for future generations…and, ultimately, if new buyers aren’t able to buy, the housing market will eventually falter anyway–just over a much longer duration; thus, creating an economic malaise that has the potential to extend over many years, similar to Japan’s experience during the 1990s.
Attempting to bail-out the fiscally irresponsible and morally questionable has already led to rampant inflation in necessary goods such as food and energy vis a vis the reckless action of the Federal Reserve in cutting interest rates well below the rate of inflation. Many seniors (who have a strong history of voting) who depend on Social Security and interest earned from savings are seeing their standard of living quickly erode as inflation eats away at a lifetime of savings. All for what, to rescue a relatively small (and predominately non-voting) segment of the population who refuses to take personal responsibility for their fiscal mistakes? Are they worth sacrificing the U.S. Dollar for? Are they worth the rampant inflation in food and energy now being borne by all of us? These problems are obviously all tied together. At the local CostCo, for instance, rice has been sold out for days as buyers fret over ever-increasing prices brought on by the dubious debts the country is already on the hook for, and the increasing consensus that the country will never be able to service these obligations. Why would we want to unnecessarily add several hundred billion dollars to that total? Do we wish to see food riots and rationing erupt in our country, similar to what many other countries are now experiencing, simply because we chose to focus on correcting the wrong problems and spend taxpayer money foolishly?
Please think twice about supporting housing bail-out provisions. Undeniably, there are still millions in this state and country who are responsible and wish to do the right thing; making government coffers pay for those who bought multiple “investment properties” with the intent to flip them for profit, or those who chose to lie on loan documents to defraud banks and secure a profit should not be bailed out!
Thank you.
Well phrased, sir. Thank you.
Good letter, but you don’t really get the attention for the Hedge and WS sources and banking industry that is condoned by our congress and senate.
IF I missed that part, please point out, as I would utilize that letter, but then Mary BonoMack won’t pay attention anyway.
Unless it is about money for the war that her bush wants.
Excellent, Anthony!
According to the National Low Income Housing Coalition, about 45% of all housing units in the final stages of foreclosure in New England are occupied by renters. These are the people who should get any bailout, especially if they lose security deposits.
http://www.boston.com/news/local/massachusetts/articles/2008/05/07/study_foreclosure_surge_hits_new_england_renters_hard/
O/T tech question. New computer, XP Pro as before, Firefox as before (both fresh installs). Now, after I have clicked on a link in a thread (like TxChick’s above), when I hit the back button I get taken to the top of the thread, not the point where I found the link. Any thoughts on how to fix this?
Open in a new tab
Note where you were in the thread, then do Control-F to get back to that point. For example, if it was a comment by hoz, just put the word “hoz” (without the quotes) into the box that opens up when you do Control-F. You’ll go right to hoz’s comment.
Hoz - do you know if there is a setting in Firefox (2.0.0.14) to make this new tab happen automatically?
Any thoughts on how to fix this?
Not a fix, but a workaround. Right click on the link and choose “open in new tab”
Not sure about firefox, but in IE7 you can open in a new tab by holding ctrol while left clicking the link. It’s a bit faster than right clicking and selecting the item from the menu.
Well, it’s faster for me anyway as I usually have my hand resting right by the lower left of the keyboard.
All - thanks very much. Might be something I did wrong in setup. but thanks to your tips I see that I can open the link in a new tab by holding down CTRL, or in a new window by holding down Shift, while clicking the link and both solve the problem. Thanks.
Look at it go:
Market Last Change %
Crude Oil 123.45 +1.61 +1.32
If I was China and wanted to take down the USA without firing a shot, $200 a barrel oil would be my bully pulpit to make it so, #1
China does not wish to take down the US. China cares about making 10MM new jobs every year. They will support the US as long as we keep buying crap.
The More-a-torium on buying useless crap is over.
“Please sir can I have some more?”
Oliver Twisted Banker
ya never talk to me anymore, hozzie…..I work.
If I was China and wanted to take down the USA without firing a shot, $200 a barrel oil would be my bully pulpit to make it so, #1
What’s more likely is that it would take down China’s economy. Fuel costs loom larger in the Chinese worker’s paycheck than in the paychecks of workers stateside. Which makes sense, when you consider that a typical Chinese worker makes an eighth what his American counterpart does. Motorcycles have been banned in a lot of Chinese cities. Chinese who want to get around without being pickpocketed or robbed at knifepoint on inconvenient and unreliable municipal bus systems have had to buy cars. The rise in gas prices means that what used to cost $100 a month is now costing $180. Out of a $400 monthly salary. At $200 oil, domestic Chinese consumption goes into the trash can. Last I heard, it was still just over 50% of the Chinese economy. And that’s not counting the effects of high oil prices on the demand for Chinese exports in China’s foreign markets.
it=oil=gas=transportation of the….
it works, until it does not….I have a large piece of metal in my driveway…..that covers metal and tires…think about it.
what are you talking about, dude?
confesion: long telecom, oil, natural gas, housing, transportation, consumer staples, low and high yielding currencies, emerging markets, and base metals….whats left as the market goes down?
unlock others for the sake of others?
I enjoyed this post…
it will probably bring down china before the us.
and I sold my oil stocks a couple days ago… oh well
I kept the stock i have and wrote 10 points otm calls against it. Huge divergence with oil making new highs and oil stocks not following.
Crude hits $123 bbl
http://www.marketwatch.com/news/story/oil-tops-123-poised-four-session/story.aspx?guid=%7BEA762176%2D5AA6%2D43E6%2D95E0%2D1B7C449ADDF4%7D
Consumer borrowing unexpectedly surges in March
http://biz.yahoo.com/ap/080507/consumer_credit.html
Borrowing on credit cards was up at an annual rate of 7.9 percent, compared to a 5 percent gain in February, while borrowing in the category that includes auto loans jumped by 6.8 percent, compared to a 2 percent increase in February.
I guess if you are already maxed out on your HELOC, robbed your 401k, and hocked the jewelry, you might as well keep pushing the only remaining option. I wonder how much of this credit card increase is due to the increase of fuel and food?
Mr. McGuire: I want to say one word to you. Just one word.
Benjamin: Yes, sir.
Mr. McGuire: Are you listening?
Benjamin: Yes, I am.
Mr. McGuire: Plastics.
If 80% of retail gas sales are on credit cards, and if 60% of credit card holders carry a balance, then about half of all retail gas purchases are financed with medium term debt. I find that to be crazy.
I pay mostly cash for gas, and it doesn’t cost me all that much either. I’m thankful I have one vehicle - a Subaru wagon with a stick shift, which is cheap to insure, has had no repair needs six + years running, and is near the top in safety ratings for front and side impacts. Here in Arizona I see mega RV’s and trucks aplenty with the drivers circling the gas pump islands waiting for someone to vacate so they squeeze in and whip out their plastic cards and swipe down their bank accounts.
I can’t imagine paying for gas with cash. Making extra trips in and out of gas station convenience stores and standing in line waiting to pay or get money back while people are buying lottery tickets and illiterate clerks are talking to each other about their criminal boyfriends would drive me nuts. I’d siphon first.
I buy everything with credit, so I have a record of purchase and get the ‘cashback’ points. I pay as I go.
Just wait and see what the jump is going to be this summer with higher pump prices.
Maybe it’s all the Mother’s day presents and cards.
you cant hide consumption behavior.
not if you count money.
Alt-A precious metals report…
I keep reading about manhole covers going missing all over the U.S. of A.
Apparently you can get around $10 @ your local scrap dealer for these.
Replacement cost is around $500 per manhole.
I think L.A. lost a dozen in just 1 week, as the metal traders have been busy.
two words for you sir,
thumb and print.
Question for the board: Anyone in Florida have any idea how long it is taking these days between foreclosure judgment and auction sale? Miami-Dade area.
Relative (tenant) has a landlord with a foreclosure hearing coming up very shortly. Any info would be greatly appreciated.
all I here from Chick is short to 1250. scalp SKF for under a hundred. Hoz is not making long calls, nor do I here a bullish tone.
whats the world coming to?
Stucco, tell me what is so. India pulls back on the twister?
http://www.youtube.com/watch?v=SjS60TaD_J8
Stock Market Crash - Robert Prechter on Bloomberg
Good vid - the most telling line is the unprecedented level of stock prices to book value today - over 4 X vs. 1.73 prior to the 1987 crash.
I’ve been harping on the Dow to Gold thing he mentions - down by 2/3 from peak but still over 10 X what it was in 1980. Only way Dow can go up from here over the medium-term, is higher inflation, i.e. lower real value of profits, priced in nominal dollars. Despite huge short-term moves, being long gold relative to equities still looks right.
Stock market always goes up. Buy stocks, be happy, and don’t worry about what Prechter was saying last October…
May 7, 2008, 3:59 pm
White House Economist Confident U.S. Not in Recession
May 7, 2008, 3:58 pm
Soros: Market Will Retest Its Lows
Stocks are currently in a “a bear market rally,” and will probably retest their lows of earlier this year, George Soros says.
May 7, 2008, 2:25 pm
Dodd Defends Housing Plan, Blasts Bush
Senate Banking Committee Chairman Christopher Dodd (D., Conn.) defended his plan to create legislation that would expand the Federal Housing Administration and insure up to $400 billion in refinanced mortgages, during an interview taped for C-SPAN’s Newsmakers program. He also blasted the White House and questioned President Bush’s leadership for threatening to veto similar legislation in the House of Representatives.