A Housing Happy Meal
Some housing bubble news from Wall Street and Washington. AP, “Standard Pacific Corp.’s first-quarter loss widened as the worsening housing sector forced hefty impairment charges, the homebuilder said Monday. The Irvine, Calif., company posted a loss of $216.4 million. The latest quarter included charges of $117.9 million to write down the value of unsold inventory and undeveloped land. The company also booked a tax asset valuation charge of $83.7 million.”
“Homebuilding revenue plunged to $348.2 million from $651.1 million last year, as deliveries dropped sharply and the average selling price slid 12 percent.”
The Wall Street Journal. “When hedge-fund chief Ron Beller’s investments in U.S. mortgages turned against him, he got a rude awakening to Wall Street’s unsentimental ways. In a matter of days, Peloton Partners LLP, once one of the world’s best-performing hedge-fund operators, lost some $17 billion.”
“At one point during the ordeal, Mr. Beller collapsed from exhaustion, according to people familiar with the matter.”
“MBIA Inc. swung to a $2.41 billion loss during the first quarter as the bond insurer faced ongoing deterioration in the credit markets and recorded billions in write-downs. MBIA was forced to reduce the value of its insured derivatives holdings by $3.58 billion. Net premiums written tumbled to $97.3 million from $171.3 million last year.”
“Initially, bond insurers only provided insurance to municipalities. But in recent years business was expanded to insure other debt, such as bonds backed by mortgages and consumer loans.”
From Bloomberg. “HSBC Holdings Plc, Europe’s biggest bank by market value, said it set aside a less-than-estimated $3.2 billion to cover bad loans in the U.S. The outlook for the rest of the year ‘remains unusually difficult to foresee in the current environment,’ the company said in a statement.”
“Mortgage insurer PMI Group Inc. said Monday it swung to a first-quarter loss, due to hefty payouts on default claims and charges to write off its investment in bond insurer FGIC.”
“The company affirmed its outlook for 2008 paid mortgage insurance claims of $825 million to $975 million.”
“IndyMac Bancorp Inc. said Monday it swung to a loss in the first quarter as deteriorating credit markets forced the mortgage lender to lower the value of mortgage-backed securities, and warned it would not post a profitable quarter in 2008.”
“The latest results included credit costs and losses of $249 million related to declining values of mortgage-backed securities. The company more than tripled its credit reserves to $2.7 billion from a year earlier.”
“‘With respect to profitability, we do not expect that Indymac will be able to return to overall profitability until the current decline in home prices decelerates,’ CEO Michael Perry said in a statement.”
The Miami Herald. “BankUnited Financial, parent company of BankUnited, lost $65.8 million for the first quarter. In response to a weaker economy, deteriorating residential housing markets and increased foreclosures, the Coral Gables-based company increased its provision for loan losses to $98 million for the quarter, up from $4 million for the quarter ended March 31, 2007.”
“BankUnited’s allowance for loan losses was increased to $202.3 million, or 1.61 percent of total loans, as of March 31. ‘This has been a difficult and disappointing quarter,’ Alfred R. Camner, BankUnited’s CEO said in a press release.”
The Daily Telegraph from Australia. “House prices in some parts of Sydney have almost halved as battling borrowers struggle to keep up with increasing interest rates. The falls - in Sydney’s west, the Hills district, and Sutherland Shire - are far steeper than previously thought.”
“In the past six months, 30 homes across Sydney have been sold for at least $100,000 less than was paid at the height of the property boom, many as a result of distressed mortgagee sales.”
“One property in Bankstown, bought for $500,000 in August 2005 sold in February for $215,000 - a loss of $285,000.”
The New Zealand Herald. “The median house sale price fell in April and the volume of sales collapsed 46 per cent from a year ago, the Real Estate Institute of New Zealand said today in its latest monthly report.”
“‘We thought that the March sales figure of 5,129 was low, due to a short month because of an early Easter, but April shows that the loss of confidence in the housing market is deeper than we had anticipated,’ REINZ President Murray Cleland said in a report titled: ‘Residential property sales slump further.’”
“Auckland city prices, which includes CBD apartments, fell to a median NZ$463,000 from NZ$510,000 the previous month, implying many apartments were sold at fire sale prices.”
From Reuters. “When a regulatory hurdle hit the Japanese housing sector last year, Tokyo assumed any delays would be short-lived. But almost a year later, a growing backlog of unsold homes threatens to dent already feeble economic growth.”
“‘Developers are running their businesses on a hand-to-mouth basis,’ said Hiroyuki Ito of Azel Corp., a developer. ‘We cannot sit back on condominiums that are not selling.’”
“Last year, several condominiums…in Higashimurayama in western Tokyo…were sold ahead of completion. Now prices are being cut as the builders pack up. ‘We had sold only half the 249 blocks that went on sale last year,’ said Mikiko Yoshida of Nippon Steel City Produce, a developer. ‘We have cut the prices by around 20 percent to boost sales.’”
The Telegraph. “There are 1.03 million properties up for sale in Britain – a 15 per cent increase on a year ago. There are 25 million homes in Britain. Richard Graves, an estate agent in Bridlington, East Yorkshire, said: ‘There are very few buyers coming in through the door, and viewings are well down.’”
“‘Properties are taking three to four months to sell, and there are a fair few that have been on the market for over a year. They were probably over-priced with and the sellers have missed the boat,’ he said.”
From Myvesta. “Record numbers of hard-pressed British householders are facing the nightmare scenario of losing their homes as the credit crunch bites harder. As property prices start to plummet and the mortgage market melts down, many borrowers are increasingly finding themselves in a vice grip of nose-diving negative equity and rising loan repayments.”
“Between January and March in England and Wales, a staggering 27,530 families - or 300 every day - reached the brink of being homeless.”
From Dominica Today. “Housing sales, mainly in blueprints, have fallen more than 50 percent in the last few weeks, said Dominican Housing Builders and Promotores Association (Acoprovi) president Jaime González, although realtors say it’s ‘politics.’”
“‘Right now nothing is being sold’ he said, quoted by newspaper Diario Libre.”
“‘Nobody wants to risk investing in a sector that has so much insecurity.’ He said housing prices have risen as much as 20 percent.”
“‘That has caused that the sector is restricted, which is left behind just a little bit in relation to came previously being developed because obvious when to a client it says to him that the house no longer costs a million pesos, but a million two hundred, obvious that the reaction is different. The client lies down for back, the business falls,’ (he) affirms.”
“Wally Perez, real estate agent for Remax, says this month’s sales are down. He’s only sold two, which he attributes to the electoral process.”
The Calgary Herald. “Year-over-year growth in new housing prices across the country slowed for a second consecutive month in March, according to Statistics Canada.”
“The federal agency’s New Housing Price Index, released today, said ‘this deceleration continues a downward trend that started in September 2006, due mainly to the softening market in Alberta.’”
“Regionally, for the 11th straight month, prices rose at the fastest pace in Saskatoon, with a year-over-year price increase of 46.2 per cent, down from the record-setting pace of 58.3 per cent in February.”
“‘Edmonton and Calgary continued to experience slow market conditions. Builders in both cities reported lowering their prices to generate interest and stimulate sales,’ said Statistics Canada.”
The Lantern. “Thankfully, there is now light at the end of the tunnel in the race for the Democratic presidential nomination. However, the oddest developments of the Clinton campaign occurred rather recently.”
“Ever since the start of the election cycle last year, Clinton positioned herself as a responsible adult in contrast to Obama’s apparent youthful idealism. But she effectively dropped that …when she decided to propose totally idiotic policies in response to the housing crisis and rising gas prices.”
“For the housing crisis, she wanted to initiate a 90-day foreclosure moratorium that would have exacerbated the problem exponentially.”
The Daily News. “The House approved the homeowner rescue measure by a vote of 266-154. Dr. John Gnuschke, a professor of economics at the University of Memphis, isn’t sure how significant the impact would be even if it were to pass the president’s desk in this form or some other.”
“‘I believe that the housing crisis and the associated increases in foreclosures will not be solved by additional government action and that further market interference will only prolong market adjustments,’ Gnuschke said. ‘Markets are powerful and punitive, and while we don’t always like the outcomes, government cannot continue to protect every company or individual that has suffered a loss.’”
The Washington Times. “It seemed like a win-win situation when the boom was raging. Many first-time buyers attained the American dream of homeownership while the 70 percent of Americans who already owned homes watched their household wealth soar along with house prices.”
“Federal and state tax coffers were filled with revenue generated by booming home sales and prices, and political leaders reaped millions of dollars in campaign contributions from the profitable real estate and mortgage businesses and Wall Street firms, all of which benefited from keeping the party going.”
“‘Everybody was happy,’ said Sheila Bair, the Federal Deposit Insurance Corp. chairman. No one in Washington wanted to break up the financing orgy and end the housing bonanza. ‘So long as prices were going up, not many people were complaining.’”
“‘Back then, we mainly looked at it as a consumer issue. I don’t think anybody thought it had economic implications,’ Mrs. Bair said. Few people at the time had ‘a full appreciation of the costs of these mortgages, or [realized that] if the market stopped going up [borrowers] would lose their ability to pay.’”
“In addition, a community reinvestment law passed by Congress in the 1990s required banks to go to great lengths to make loans available to minorities.”
“‘The political pressure to create a housing ‘happy meal’ was enormous,’ said George Cormeny, a former loan officer at Allfirst Bank who also worked as a legislative aide. The circular reasoning rationalizing the subprime lending boom became ‘unreal’ to any longtime observer in the lending world, he said.”
“‘A financial institution would be rewarded with a good score and heaps of praise for making increasing quantities of poor quality housing credit available to marginally credit worthy borrowers,’ he said. ‘The regulators had almost complete disregard for the consequences. … The costs of this social experiment will be large and linger for a long time.’”
The Plain Dealer. “An investigator hired to examine issues surrounding the bankruptcy of New Century Financial Corp. said senior management ignored ample evidence of rising default and foreclosure rates while allowing the company to write riskier loans.”
“The report said there was plenty of evidence that New Century’s corporate officers were aware of rising default rates in 2004. About 7 percent of the loans originated by New Century in 2004 - or about $1.8 billion - defaulted after borrowers made three or fewer payments. That compares with $312 million in early-payment defaults in 2003.”
“An internal review of the company’s nine operating centers in 2004 graded the performance of seven centers as unsatisfactory and two as needing improvement.”
“A senior New Century official afterward questioned whether the auditing teams needed to change their policies rather than have the operating centers ‘clean up their act.’”
“A Plain Dealer analysis shows that nearly half of the subprime loans written in Cleveland in 2005 by five of the country’s biggest subprime lenders resulted in a foreclosure filing.”
“Cleveland resident Myra Clarke had just gotten divorced, had just lost her home at a sheriff’s sale and had just gone through a bankruptcy to shed $38,000 in debt. But that didn’t stop Long Beach Mortgage, a subsidiary of banking giant Washington Mutual, from lending her $505,000 to buy six Cleveland rental properties in 2005.”
“Her bankruptcy file showed she was a nurse making less than $40,000 a year. Escrow documents included in the foreclosure lawsuits filed against her show she provided $96,000 to cover down payments and closing costs.”
“Those foreclosures were filed on Clarke’s six houses within eight months of her buying them, which indicates that she made few, if any, payments on her loans.”
“Robert Ruckstuhl is a Newbury Township mortgage broker and appraiser who has become a consultant for attorneys in foreclosure cases. Ruckstuhl…guesses that at least 25 percent of subprime loans written in Cleveland between 2002 and 2006 contained an element of fraud that should have stopped the loan from being funded.”
“There were about $1.75 billion in subprime loans written in Cleveland during that five-year period.” “It’s impossible, Ruckstuhl said, for lenders not to have known they were originating large numbers of fraudulent loans. ‘It’s a matter of what they wanted to acknowledge,’ he said.”
“Kathleen Engel, a professor at the Cleveland-Marshall College of Law at Cleveland State University, said…a prosecutor would need to prove that executives intentionally participated in the fraud. Part of the genius of subprime lending, Engel said, was how lenders and investment banks insulated themselves from potential liability.”
“‘The reason we saw such huge growth in independent brokers was because they wanted brokers to do the dirty work,’ Engel said. ‘They were able to put a shield between themselves and liability for wrongdoing.’”
“‘This was actual fraud at the highest levels,’ said Anthony Accetta, a former federal prosecutor. ‘It wasn’t an accident. It was not a failure of oversight. It was actual fraud, and we’re not doing anything about it.’”
“In the 1970s, Accetta prosecuted what was then the largest mortgage fraud case in U.S. history. He said the subprime-lending business model worked like a Ponzi scheme. The scheme ground to a halt, Accetta said, when investment banks could no longer cover up the billions in losses that bad lending created. Too many people had stopped making their mortgage payments, which meant not enough money was coming in to pay investors.”
“‘This is a national catastrophe, and the perpetrators [on Wall Street] are not being prosecuted,’ Accetta said. ‘It’s one of the easiest cases to prove because there are plenty of witnesses and plenty of evidence out there.’”
“Eric Forster, a Los Angeles-based consultant for mortgage fraud litigation, said the entire subprime mortgage industry was ‘fraught with fraud.’”
“‘What makes this crime wave unique is that, in most cases, the banks cooperated with the perpetrators,’ Forster said. ‘Once they discovered they could securitize loans and transfer the risk to some investors in China or Europe, there was no reason to underwrite the loans any longer.’”
“Despite the FBI and SEC investigations, Accetta said he doesn’t think the U.S. Justice Department ‘has the stomach’ to prosecute these companies, out of fear it would undermine confidence in those financial institutions and our capital structure.”
“‘So you’re left with prosecuting individuals,’ Accetta said. ‘This was systemic. It had nothing to do with this individual or that individual. There was no individual in any of the investment banks who could have stopped it even if they wanted to.’”
BTW, these Plain Dealer reports have lots of good details.
Yep. It looks like the RE tent is on fire and the elephants are running around stomping on all those FB Clowns.
Anyone seen Neil, he has the popcorn
lol
Here it is! More on backorder too.
My dad is obsessed with the economic theory that the markets truly fall apart in June. I’m curious to see if he is correct.
Got Popcorn?
Neil
“At one point during the ordeal, Mr. Beller collapsed from exhaustion, according to people familiar with the matter.”
Don’t worry about Mr. Beller folks. He just had a minor “sewer gas swoon” which usually accompanys the flushing of 17 Billion Dollars DOWN THE CRAPPER
I am surprised that amount of sewer gas escaping did not result in an explosion.
I’ll be in Flagstaff on wednesday, is there a good place to watch the Laker game?
Ferris Beller’s day off.
“When hedge-fund chief Ron Beller’s investments in U.S. mortgages turned against him, he got a rude awakening to Wall Street’s unsentimental ways. In a matter of days, Peloton Partners LLP, once one of the world’s best-performing hedge-fund operators, lost some $17 billion.”
“At one point during the ordeal, Mr. Beller collapsed from exhaustion, according to people familiar with the matter.”
“At one point during the ordeal, Mr. Beller, a 46-year-old with two decades of high-finance experience, collapsed from exhaustion, according to people familiar with the matter.”
*****
Two decades of experience?
In high finance?
That is certainly interesting.
Here’s a headline for the MSM:
“Clueless Veteran Pig Man Loses Shitload On Toxic Crap”
“Clueless Veteran Pig Man Loses Shitload On Toxic Crap”
LOL… now that would get me to buy a newspaper!
Nah…that’s a blog headline. Too much reality and truth to ever show up in MSM newsprint.
Oh good.
These folk never ever figured out that prime brokerage was always a one way street.
It’s always seemed strange to me that you never seem to hear about ditch-diggers or hod-carriers collapsing from exhaustion. Only people like Lindsay Lohan, Nicole Ritchie and now Mr. Beller. Poor things . . .
No, they just die of cholera.
“‘This was actual fraud at the highest levels,’ said Anthony Accetta, a former federal prosecutor. ‘It wasn’t an accident. It was not a failure of oversight. It was actual fraud, and we’re not doing anything about it.’”
Fraud was the rule, not the exception…
And it was also encouraged by our government through social engineering:
“‘A financial institution would be rewarded with a good score and heaps of praise for making increasing quantities of poor quality housing credit available to marginally credit worthy borrowers,’ he said. ‘The regulators had almost complete disregard for the consequences. … The costs of this social experiment will be large and linger for a long time.’”
It was a perfect storm, it seems.
Whereas az_lender, an admitted Republican, is satisfied with the bragging rights that accompany a client book still performing perfectly. Curiously, a clientele that none of the banks wanted a damthing to do with. (Mostly white senior trailer residents.)
You ensured lotsa skin-in-the-game, love!
The interest rate hardly matters. (It matters to you but you know of what I speak.)
10-4
it was racism
CRA of 1997? and 2003
loans for deabeats to ease whitey guilt
Except they are implying something that wasn’t really there.
He said: “In addition, a community reinvestment law passed by Congress in the 1990s required banks to go to great lengths to make loans available to minorities.”
Making the loans available meant they couldn’t decide not to lend in a given area just because most of the residents were minorities. It didn’t mean they had to ignore the person’s verifiable income or lend at stupid loan to income ratios. A family making $30K can afford to buy an inexpensive house. Maybe not one at 3 times income because a larger part of their income is going to food and very basic necessities than would be the case in a wealthier family, but at some level. However, that would require the banks to spend money to figure out who should get a loan and how much they could afford to pay back. You know, with skilled employees. That is what the banks refused to do. It would have reduced their margins.
I can verify income etc for small biz for close to 0$
how much effort is required ?
And so can I. Revenue correlates 1/1 with what gets deposited in the bank. What’s so hard about that?
The government never mandated lending to people who couldn’t afford the loans. “Social Engineering” was NOT the ’cause’ of the problem. Encouraging lending to marginalized borrowers (who aren’t just ethnic minorities, by the way) has been around for many decades before the Housing Bubble.
The problem was the premium YSPs that could be charged to subprime borrowers and the lack of accountability the lenders had to their own products from selling off toxic waste loan CDOs to suckers around the globe.
There is a lot of blame to be spread to Uncle Sam for sure, but it was the greed of the lenders that led to loose lending practices, and there was no wholesale change in laws governing lending leading up to the bubble.
The problem was lack of enforcement of existing laws and any oversight of a radically changing mortgage industry.
So the “government social engineering” was less regulation? I thought that was what you all wanted, so the “market” could work it’s magic?
I think some of our fellow readers still think that this is simply just a subprime issue. They forget that anyone of any income and FICO who could fog a mirror could get a loan. The next wave of option ARM resets that we will be experiencing is mainly for borrowers with FICO >700, since subprimers mostly did not qualify for them.
SHHHH! those little details make the loons run aimee.
The bad loans made to “disadvantaged minorities” are just one consequence of the government’s ill-conceived and coercive social-engineering schemes. The cost to this country of such frauds as affirmative action and minority set-asides, rather than merit, will continue to push this country down the road to Balkanization and Third World corruption and blight.
“House prices in some parts of Sydney have almost halved as battling borrowers struggle to keep up with increasing interest rates. The falls - in Sydney’s west, the Hills district, and Sutherland Shire - are far steeper than previously thought.”
We are some of the lowest interest rates in US history right now and the foundation is crumbling. What will FL and CA look like once interest rates creep back up to 8-9 percent where they belong given that we have hit the affordability brick wall at 6%? Once we reach the 6% equilibrium, there needs to be an additional 25% drop to adjust for changes in rates as they creep back up to normal. I wonder how much today’s investors are taking that into account and setting aside reserves to bring to the table when they want to sell.
What is your opinion of buying now with 6% rates and paying back in inflated dollars, or wait for rates to increase and assume that prices will fall further?
Your monthly payment might end up being the same today versus tomorrow.
I understand the argument that you should buy with the higher rate and lower price, since you can refi later if rates come down in the future. But I really wonder whether rates will come down anytime soon after rising to reflect the true inflation out there.
I also wonder if there is a true linear correlation between a rate rise and a price decline. For publicly-traded bonds - yes - for houses, I’m not so sure.
Prices will continue to decline even if rates do NOT rise. It is in the nature of a bubble that once prices stop rising, they must fall, because so much of the “value” was the expectation of appreciation.
New Zealand is @ around 10% floating interest rates, as it’s real estate market is imploding…
Talk about a double-whammy~
It’d be great if we would raise interest rates to say-6-7%. Then I could shovel more cash into CDs. As it is now, CDs are hardly worth it. At 10%, it’d be the safest best versus stocks.
And if the banks in NZ are paying 8% on 6 month cd’s, who exactly are they loaning it to?
I hear you. My house fund is tied up on 5% CDs. When they mature I’m looking at 3.5% tops for reinvestment rates if I dont pull out. Since I plan to buy in 2 years the stock market is too risky right now. So few choices for the debt free.
try these
pkk,sgl,jpz,igd
Hey taxme,
Those look like they are mostly returning the investment - the prices are pretty much declining as they pay out. What are you seeing for total return?
Historically there has not been a direct correlation, but in historical pricing markets there was an affordability cushion. I believe we are at a point where ppl just cant afford to pay anymore. In such a period, the correlation should be more closely tied. Regardless of rates, I wouldnt buy until 2010, because resets are the biggest factor right now. My dream would be high interest rates in 2010, as prices would be more depressed but obviously there are many outside influences that might make this an impossibility. Regardless, if we fall to historic norms in terms of pricing, I would probably buy and then decide what the stock market looks like at that time. If we have low rates, and I see value in the stock market, I might only put 20% down and try to make higher interest elsewhere. In a high rate environment I would pay all cash. I understand there is a different calculation if you can only put 20% down regardless, but that is not my situation. I just consider how much I want to pull out of other investments to put down on the property. As a result, my focus is not one of my monthly payment per se, but on outside forces affecting market pricing and the viability and expectations with respect to alternative investments.
I am in a somewhat similar situation with more than enough for 20% down, but I couldn’t pay all cash even if prices went down to 1995 levels (I’m in SoCal). I am also pretty picky about the city I want and even the particular neighborhood. I may have to pay somewhat of a “premium” given my pickyness.
The problem where I live is there is no new construction and only a few dozen foreclosures in my immediate area (and virtually none in the neighborhood I want). I just can’t get that “perfect storm” working for me.
This is the latest in happy talk from my brother’s favorite Mortgage Broker in the Reno area. It’s all good and there really is no reccession after all…well except in NV and AZ and So Cal and the Central Valley and the Midwest but hey it’s all LOCAL don’t ya know…..
Here goes:
“I’m feeling validated and encouraged. The information I’m getting to you is good information.
Last week I had said that prices should begin to stabilize and that we may even see a bounce. The bounce is always a good indication of the bottom. I was basing that comment on historical cycles of the economy, namely the crashes of the late 80s and 90s. Yes, it seems solid that we do this dance every 10 years or so.
Friday’s business newspapers were all reporting lots of stories of recovery signs. Language like, “There may not be a recession after all”, or “I think we’ve seen the bottom.”
Specifically, I was pleased with page C6 of the WSJ where Ryan Detrick, a senior technical strategist at Schaeffer’s Investment Research was quoted as saying, “Now we’re down near where we want to see the bounce. We’re watching there and waiting. At this time, we still think overall the uptrend on the market started on St. Patrick’s Day and is still intact.”
To my dear realtor friends in the trenches, it may not seem like you’ve seen the bottom. Ken Wiseman out in Red Rock, NV told me he is taking 3-5 new REO listings a day. He was predicting a turn in 2014. Ken’s basically in the eye of the storm in his territory. He’s feeling the category 5 winds of Katrina where he is working. But, I maintain, that if you move the focus of your vision out to satellite picture range, the U.S. economy overall is still very healthy. And as long as it stays flexible and strong, strong areas will balance and support weaker areas.
Who is rich today? Maybe we should try to find oil men and farmers to buy up our excess inventory!! It’s just an idea.”
WTF?
The neighborhood I want isn’t dropping anywhere near the inflation adjusted historical prices of 2002 or earlier. Unfortunately the wealthy knifecatchers are out in force this spring. There was even a bidding war on one house in the neighborhood. I think higher interest rates and down payments will be the only thing that will moderate prices there.
God, the quotes keep getting better and better (or worse and worse). Ben, I love your choice of headlines; but it must have been a tough choice between “Happy Meal” and:
No one wanted to break up the financing orgy
JP,
Exactly, when exec’s at New Century were aware of rising defaults as early as 2003 and 2004 that should have told them something right there! Gosh folks, let’s think back, how many of your true believer friends expressed the slightest concern this whole thing could be a house of cards back then? Anyone?
That would have been the absolute height of the “Re-Fi Craze” and any borrower with a pulse was allowed to dip into this mythical equity, cash out AND get a lower payment! (For a time) As LTV’s got stretched (as well as DTI’s) they were literally creating and manufacturing subprime borrowers. OTA.
Yup, but cashing out means that you have another loan — a HELOC — to repay. Plus interest.
I had my “happy meal” yesterday at a mother’s day brunch.
Now its back to tuna, brown rice and soups.
My chiropractor told me to store my food in paint tubs with dry ice and he was imperative that I, Annie Oakly, get a shot gun!
Not a rifle, not a pistol but a shot gun. gee wiz bang!
‘Not a rifle, not a pistol but a shot gun. gee wiz bang! ‘
Well, obviously you ought to get both, ‘Annie’. The more the merrier, especially when combined with a bonfire and a bunch of beer. I have a small darling gun that I regard as my handy dandy cutie, because the recoil of a big weapon hurts my dainty lil’ girly arms, and because it’s easier to wave around, like out the bathroom window if I hear Bigfoot lurking around in the shrubbery, or if I see something I don’t like on teevee. But I have a bigger one for emergencies, or for bonfires.
See, you don’t need Armageddon to appreciate guns. They should be for every day, like overalls and Cheetos.
Okay, fellow HBB shooters, we’re going to meet up at the range real soon. I’ll bring Ole Bessie and a few extra targets.
I was a tomboy, but now that I am all lady, the only gun I have ever used is a glue gun.
oly oly oly, have you ever heard about redneck coyote shark hunting? It’s kind of grizzly.
Oh, oly, i had a dream i was reading a seattle newspaper and the lines were so familiar and it turned out your were the writer. that was my once a month dream where i rent a place and people are living in the attic. ick.
http://www.endtimesreport.com/homedefense.html
Mossberg makes an excellent home-defense .410 shotgun designed with the ladies in mind. “Four-Tens” are more than adequate when it comes to stopping power, and are less likely to blast buckshot through walls and hit innocent people, like your own family members or neighbors.
Quite the image I’m getting of you, Olympiagal. Waving a shotgun out the window while husband is confined, Boo Radley-like, to the basement. Please be my neighbor!
What husband? I don’t have one, I mean, one that is ‘mine’, strictly speaking, in the strictest sense. They have to go home eventually.
But I would love to be your neighbor! I sense that you are a fellow who enjoys a good bonfire, and moss, and frogs, and that is what matters in a neighbor. I have a list. You can be right there in the top 5.
“or if I see something I don’t like on teevee”
thought I was gonna pee my pants on that line…..
Olympia, are you still wearing your tiara for those adventures?
Well, sure I am. I don’t hardly take it off. Why would I? Never, nohow.
Few people at the time had ‘a full appreciation of the costs of these mortgages, or [realized that] if the market stopped going up [borrowers] would lose their ability to pay.’”
No, Sheila, they NEVER had the ability to pay the monthly nut.
‘Back then, we mainly looked at it as a consumer issue. I don’t think anybody thought it had economic implications,’ Mrs. Bair said. Few people at the time had ‘a full appreciation of the costs of these mortgages, or [realized that] if the market stopped going up [borrowers] would lose their ability to pay.’
This comes from the mouth of the FDIC Chairman! WOW! Just when I think these disconnected comments may start slowing down, here comes another. No wonder we are in the pickle we’re in.
How on earth could ‘it’ not have economic implications, and how could anyone think it would not? Un-Damn-believable.
wmbz,
Sure. Strictly a “consumer issue”? The same said consumer that drives 2/3rds of our economy? The same consumer loans that were securitized and placed in tranches and then leveraged and hedged to the hilt by..? Oh just forget. Is sounding THAT far behind the learning curve intentional?
They forgot that consumers aren’t widgets, they eat and breath and make irrational choices. All their computer models forgot to factor in the HUMAN part.
MBIA: rotsa ruck, everybody. Suddenly a couple of days ago, I began to believe that my Calif muni holdings (still retained in the thought that I may once again reside there some day) included bonds issued by the city of Vallejo. Uh oh Vallay Ho! - but I read my brokerage statement repeatedly and found this was just a morbid fantasy.
Azzie, that scared me. glad it was just a fakey.
“Between January and March in England and Wales, a staggering 27,530 families - or 300 every day - reached the brink of being homeless.”
*****
What - nobody over there can rent someplace to live?
I have to say the bleatings of the media over “the brink of being homeless” are getting tiresome.
I’ve seen maybe a dozen of the new ex-middle-class homeless, so far.
They aren’t hep to survival skills, from what i’ve seen.
They’re really easy to spot, because hardcore homeless have a Mozilo-like tan, compared to them.
I have seen the type.
However, I’m not talking about those who are not homeless (the term is misused by those writing about bad mortgages), but those who may “lose their homes” because they cannot pay their mortgage.
There is a difference that should be recognized, if only because the usual house payment as a percentage of income is misaligned across much of the globe at present.
If “survival skills” includes the ability to to find a rental to live in, then the majority of them will certainly be OK.
Correction:
“However, I’m not talking about those who ARE homeless…”
MBIA Inc, PMI Group Inc., and IndyMac “swung to a loss” in the first quarter 2008.
Did these companies show a profit in 4th quarter 2007?
“‘The reason we saw such huge growth in independent brokers was because they wanted brokers to do the dirty work,’ Engel said. ‘They were able to put a shield between themselves and liability for wrongdoing.’”
Thats called plausible deniability. Thats one of the reasons companies outsource.
Skip,
But it makes SUCH… sense! Simply by having a “broker distribution channel” for their wholesale lines they created a lot of distance between themselves and the act. In the end though, what will going after ind. MB’s accomplish?
DinOR,
Exactly. There is no point in prosecuting 10,000 laid off mortgage brokers. The whole industry needs more regulation (and I HATE over-regulation). This won’t be over until the 401k’s mark to market.
Got Popcorn?
Neil
“In addition, a community reinvestment law passed by Congress in the 1990s required banks to go to great lengths to make loans available to minorities.”
Ah yes, the Washington Times just couldn’t pass up the opportunity to blame the darkies.
In fact the banks were in no way required to eliminate down payments and income servicing requirements for anyone, minorities or whites. They just couldn’t impose higher standards for minority communities. As we all know, the lending industry unilaterally threw out lending standards when it discovered that they could offload the risk, and just as unilaterally imposed them again when the secondary markets dried up. For everyone.
yogurt,
Thank you. Increasing home ownership from 68% to 70% didn’t create the problem. I think an equal amount of blame is due to the fact that the “banks” became “mortgage companies” when they looked at their “models” and wondered to themselves why they didn’t jump on this bandwagon earlier?
It is the HELOCs that are the worst offenders, IMO. That had nothing to do with increasing home ownership for minorities.
And, judging from what I see in AZ, those HELOCs were heavily promoted to minorities. Especially Hispanics.
Democrats Face Rescue Backlash
http://online.wsj.com/article/SB121055001830383807.html?mod=residential_real_estate
Don’t worry the new battlecry is to bailout the illegal aliens, not whitey!
And in other news annie got a gun!
my comment got eaten.
Bilingual Bailouts for everyone!
Help keep illegal aliens in mcmansions with taxpayer dollars—not!
From the article:
Austan Goolsbee, one of Sen. Obama’s economic advisers, says the campaign weighed the downsides of rewarding bad behavior against the economic harm risked by inaction…. The issue, he added, is the threat that dropping home prices pose to the entire economy.
I’m glad he looked at the risk of rewarding bad behavior. But, why do these people never look at the economic downside of housing prices not dropping. It is not at all healthy for future generations to spend two times as much of their income on housing as past generations. But I suppose that’s too long term for politicians….
Or maybe they want house prices to drop in real instead of nominal terms and will push inflation to achieve those goals. As far as I’m concerned that’s still an unfair wealth transfer from renters/savers to owners/borrowers.
Bring out your Debt!
“HSBC Holdings Plc, Europe’s biggest bank by market value, said it set aside a less-than-estimated $3.2 billion to cover bad loans in the U.S. The outlook for the rest of the year ‘remains unusually difficult to foresee in the current environment,’ the company said in a statement.”
RE: “Despite the FBI and SEC investigations, Accetta said he doesn’t think the U.S. Justice Department ‘has the stomach’ to prosecute these companies, out of fear it would undermine confidence in those financial institutions and our capital structure.”
WTF?
Cat’s outta the bag with this comment.
The Feds are gonna blow this all off.
People need to stop payin’ their taxes to stop the corrupt monster.
We’re not going to prosecute these criminals… because it would undermine the public’s confidence in the criminals? WTF indeed!
“We’re not going to prosecute these criminals… because it would undermine the public’s confidence in the criminals? WTF indeed!”
And we need the Justice Dept. for exactly what? Bush and his little henchman Gonzales did their best to gut Justice, and apparently they succeeded. So is there any reason to keep these thousands of Justice Dept. employees paid with taxpayer dollars, if they decline to prosecute criminals?
Apparently a large benefit of achieving too-big-to-fail status is receiving blanket immunity from prosecution, out of fear that law enforcement efforts would undermine confidence, thereby threatening the global financial system.
Unfortunately, as soon as hd74man or az_lender stops paying taxes, prosecutors are all too trigger-happy.
“Some housing bubble news from Wall Street and Washington.”
There seem to be an unlimited number of multi-billion dollar losses and writedowns to buoy Wall Street from one stock market rally to the next.
Asian stocks sink on credit crunch concerns
By Lindsay Whipp in Tokyo
Published: May 12 2008 06:18 | Last updated: May 12 2008 10:15
Asia-Pacific stocks were mixed on Monday, with downward pressure on many stocks on renewed credit concerns and the outlook for the US economy.
“‘This is a national catastrophe, and the perpetrators [on Wall Street] are not being prosecuted,’ Accetta said. ‘It’s one of the easiest cases to prove because there are plenty of witnesses and plenty of evidence out there.’”
“Eric Forster, a Los Angeles-based consultant for mortgage fraud litigation, said the entire subprime mortgage industry was ‘fraught with fraud.’”
—————————————————————-
I’ve been calling for indictments of those who perpetrated this massive fraud for months. Where is the outrage? Lots of apologists/distortionists step up and blame the end user and then backpedal after expressing some ideological stupidity a’la flat but where are the indictments?
Alt-A was worse than subprime!
‘Right now nothing is being sold’
translation - “right now everything is overpriced”
Mortgage cos. reveal damage from housing crisis
Monday May 12, 4:38 pm ET
By Stephen Bernard, AP Business Writer
Breadth of housing crisis apparent in mortgage cos. 1Q earns, but investors find some hope
http://biz.yahoo.com/ap/080512/mortgage_wrap.html
From CNN Money: 5 new rules for home buyers
It just has to be written by a realtor. I think there’s a reason why they don’t seem to allow comments on their site.
http://tinyurl.com/6dentj
I remain loyal to Dr. Paul for president.
Here is Ron Paul’s comments on the attempts by congress to fix the housing/credit crises released yesterday.
The House passed two bills attempting to rehabilitate the housing and mortgage market this week. There doesn’t seem to be any shortage of criticism and blame for the bad decisions, and rightly so. Lenders and banks do share much of the blame for the overheated market. Lending standards were relaxed, or even abandoned altogether, creating an exaggerated pool of homebuyers that led to ballooning home prices that many, especially real estate investors, expected to continue forever. Now that the bubble has burst, the losses are staggering.
However, many in Washington fail to realize it was government intervention that brought on the current economic malaise in the first place. The Federal Reserve’s artificially low interest rates created the loose, easy credit that ignited a voracious appetite in the banks for borrowers. People made these lending and buying decisions based on market conditions that were wildly manipulated by government. But part of sound financial management should be recognizing untenable or falsified economic conditions and adjusting risk accordingly. Many banks failed to do that and are now looking to taxpayers to pick up the pieces. This is wrong-headed and unfair, but Congress is attempting to do it anyway.
These housing bills address the crisis in exactly the wrong way, by seeking to hide the problem with more disastrous government bail-outs and interventions. One measure, HR 5830 the Federal Housing Administration (FHA) Housing Stabilization and Homeowner Retention Act would allow the FHA to guarantee as much as $300 billion worth of refinanced home loans for those facing threat of foreclosure. HR 5818 the Neighborhood Stabilization Act, would provide $15 billion in loans and grants to localities to purchase and renovate foreclosed homes with the object of then selling or renting out those homes. Thankfully, President Bush has vowed to veto both of these bills. It is neither morally right nor fiscally wise to socialize private losses in this way.
The solution is for government to stop micromanaging the economy and let the market adjust, as painful as that will be for some. We should not force taxpayers, including renters and more frugal homeowners, to switch places with the speculators and take on those same risks that bankrupted them. It is a terrible idea to spread the financial crisis any wider or deeper than it already is, and to prolong the agony years into the future. Socializing the losses now will only create more unintended consequences that will give new excuses for further government interventions in the future. This is how government grows - by claiming to correct the mistakes it earlier created, all the while constantly shaking down the taxpayer. The market needs a chance to correct itself, and Congress needs to avoid making the situation worse by pretending to ride to the rescue.
Link:
http://www.house.gov/paul/tst/tst2008/tst051108.htm