Bits Bucket And Craigslist Finds For May 17, 2006
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Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Double top in gold at the sessions end yesterday? I only got back in Wed. so it would seem a short lived run.
Also, I read “Alpha Strategy”, by Pugsley this week. The section on real estate speculation reads like a handbook for this bubble. For those who have read it, commentary?
I’m still leaning toward deflation, but my inflation hedges seem to be making the best gains at this point.
Dude : We’ll get inflation in the things that everybody needs. You’ll get deflation in the things we want. There is plenty of supply in the later but demand in the former.
Btw:Why are you chasing gold ? I see the poor mans’ gold - silver - performing better. It has had less investment in its miners.
Silver will make you money…on the downside. Silver is an industrial metal and IMO tracks more with expansions and contractions of economies. Silver did not even come close to breaking the 1980 high, gold did in nominal dollars.
Silver will tank along with gold in a deflation scenario.
Wheatie Penny, back when you were a kid (1981 or earlier)
Your content was 95% Copper, and now you’ve let yourself go and I Zinc (99.2%) it’s horrible what’s become of you, letting Gresham’s Law take over.
We’ll see. I see inflation and deflation happening simulataneously.
Inflation in commods. Deflation in crap.
I agree. I would follow what the big sovereign funds decide to back, IMO.
Deflation in crap.
Exactly. What do I care if an iPod drops in price. I don’t buy much electronic crap anyway.
I’m not, “chasing gold”. I trade the cycle through miners and ETFs about once a month. My DCA on physical is 650. My stop on physical will be about 750 so go ahead and try to drive it down to that point if you like.
One of the trades I generally like a LOT is CDE, so you could certainly say I like silver too. The PMs act in concert for my purposes but I feel a lot more secure being long gold about 3 out of 4 weeks. This last correction was pretty healthy.
I’m staying well ahead of real inflation so I’ve got no complaints.
“I’m still leaning toward deflation, but my inflation hedges seem to be making the best gains at this point.”
Stagflation?
For you anti-PM folks just scroll down a ways, there are a few interesting tid-bits in this piece…
http://www.321gold.com/editorials/willie/willie051608.html
How can somebody be anti-PM? That’s like being anti-pork bellies. The question is about investment. Don’t take it personal.
“Don’t take it personal.”
Impossible for the PM koolade drinkers. Facts, fundamentals and cycles get in the way of them and their fantasy wallet. Very much like the REtards.
Still drinking the strait-laced Kool-Aid?
No but reality is still getting between you and your fantasy wallet.
My fantasy wallet is made of rich Corinthian Leather.
I agree with you, Exeter!
Impossible for the PM koolade drinkers. Facts, fundamentals and cycles get in the way of them and their fantasy wallet.
My “fantasy wallet” is up almost 300% in the last 7 years, using no leverage and with essentially a zero expense ratio. How is yours doing?
Buy and hold Technovelist. It the bestest!
Gold and other precious metals are fundamentally different investments than real estate. And while some gold bugs, the fanatics, might be behaving similalry to the REtards, I don’t think its fair to group all the PMists in that bag.
Gold can be a very smart portfolio addition, especially as a hedge. If you are heavily invested in stocks that are dependent upon the existing financial order and its icon–the US dollar–then it *might* cover your butt in a severe shock to the system, such as our current housing/credit collapse. But make no mistake, it’s betting. The last three years have been very good for PM investors, but once the world economy recalibrates, gold and other precious metals will likely see a quick and pronounced drop. I was ready to sell if gold went down to $815 walk away with sizable “winnings” (against my mediocre mainline investments)–but this latest resurgence has me surprised. Anyone venture to guess the likelihood of gold crossing $1000 again?
Anyone venture to guess the likelihood of gold crossing $1000 again?
I’ll “guess” 100%.
Agreed. It might even do it this up cycle. The tell will be if it only dips far enough to hit my stops, then it’s a sure bet for $1000.
From the article: “Until then, the system burns as foreclosures mount, inventory bloats, and home prices come down much more, guaranteeing another ugly storm of bank losses in mortgage bonds.”
This is a description of the destruction of capital, the prediction of more balance sheet writedowns which will result in vaporization of money from the System.
The consequence of this destruction of money is the increased buying power of the money that survives.
Those that possess the surviving money will call the shots. Those without the money are hosed.
combo:
In a thread below, you are concerned about what’s going to happen to $62 Trillion of iffy finance, but still feel fine about the Dollar emerging from the wreckage, unscathed?
My thinking has never been that the dollar will remain unscathed. My thinking is, relative to most “things”, the dollar will increase in value.
Evidence of this can be seen daily: the dollar can buy more house this year compared to last year, more SUVs, trucks, big screen TVs, etc.
I can also buy more gold this month than it could a couple of months ago.
The World Currency League (WCL) is like the NFL. (w/o concussions)
Teams come and go, up & down the standings. The saddest thing to see is a former champion, living on past glory.
If the Dollar were an NFL team, it’d be the Oakland Raiders…
It cant buy more gas.
Economics Teacher: In 1930, the Republican-controlled House of Representatives, in an effort to alleviate the effects of the… Anyone? Anyone?… the Great Depression, passed the… Anyone? Anyone? The tariff bill? The Hawley-Smoot Tariff Act? Which, anyone? Raised or lowered?… raised tariffs, in an effort to collect more revenue for the federal government. Did it work? Anyone? Anyone know the effects? It did not work, and the United States sank deeper into the Great Depression. Today we have a similar debate over this. Anyone know what this is? Class? Anyone? Anyone? Anyone seen this before? The Laffer Curve. Anyone know what this says? It says that at this point on the revenue curve, you will get exactly the same amount of revenue as at this point. This is very controversial. Does anyone know what Vice President Bush called this in 1980? Anyone? Something-d-o-o economics. “Voodoo” economics.
combotechie:
dollar increasing in value relative to most ‘things’?
probably the dollar can buy more gadgets every year (within the US, as long as the steady drop does not turn into a rout) but certainly not more of the necessary items in life, or ’stores of value’ like precious metals or real estate outside the US …
Interesting how peripheral items are getting cheaper while the necessities of life are going the other way.
Gas now $3.67 in the Middle of Nowhere
Paid $4.07 in Brevard Country yesterday.
Fear doesn’t really set in until it isn’t a matter of price, but availability.
$3.87 in Palmdale this am.
RE: Gas now $3.67 in the Middle of Nowhere
I had to rent a vehicle to move some furniture for my son.
I ended up with a 2008 Dodge Ram 1500 4×2 with V8 &
auto tranny.
You could watch the gaz needle drop as you drove.
I genuinly pity anybody who is payin’ the monthly gaz bill and 7 year finance note for one of these POS dinosaurs.
The $10,000 House in Atlanta and the Tax Assessor’s Nightmare:
http://www.lewrockwell.com/north/north627.html
On May 12, the Atlanta Journal Constitution ran a story on this in its Metro section: “Tax Assessors Boggled by Housing Dip.”
Boggled, indeed.
The article reported on the $10,000 and $20,000 houses for sale. The reporter asked the right questions. They are the questions confronting tax assessors.
What is the value of a lot if no one can get a loan to buy it? How should you value a home that sits on the market for a year with no offers? When a neighborhood has several foreclosures, short sales and abandoned properties, do they set the market?
The problem is, the assessors do not have agreed-upon answers. Distressed property sales – sales by distressed sellers – are not supposed to count. But when distressed sales are the bulk of sales, what then? The article quotes the chief appraiser for Fulton County.
“We are trying to understand all these things,” said Manning. “What’s the right answer? We don’t know. It’s tough. I’ve got entire neighborhoods where all I’ve got is distressed sales. I don’t have any good sales.”
In fact, seven of Atlanta’s least-expensive homes are listed on average for $8,800 but taxed at an average value of nearly $93,000.
One of the houses is on the books at $101,700. It is being offered for sale at $5,900.
“The problem is, the assessors do not have agreed-upon answers. Distressed property sales – sales by distressed sellers – are not supposed to count. But when distressed sales are the bulk of sales, what then? The article quotes the chief appraiser for Fulton County.”
Shouldn’t the appraised value be the market price? If the bulk of the sales are distressed properties, isn’t that the market and shouldn’t those sales help set the value? It would seem to be more difficult setting a value if nothing is selling. Presumably that value would be less than the list prices of houses for sale. Some of the difficulty in assessing values seems to be conveniently arbitrary, designed to keep values higher than the true market value.
I have a simple answer. It’s what I told the Pinellas County property assessor last year in a telephone spot during a local radio show. It goes back to the basic definition of what constitutes a “SALE”.
Many years back I became a real estate broker, and had taken the basic courses in real estate. We concluded that to have a “sale”, there must have been “valuable consideration” given from the buyer to the seller.
In other words, the buyer had to PAY SOMETHING for their to be a sale consummated….something valuable, like CASH, or the family jewels.
A 100% or better yet, a 125% LOAN paper, given as a promise to pay is NOT valuable consideration. The buyer has no real interest in the property, therefore, no “SALE” has been consummated.
My position is that unless a minimum of 10%-20% down was the basis of the transaction, then it should not be counted as a legitimate sales transaction.
All this information is available in the tax assessors office. They have all the mortgage recorded information on hand. They can determine if the a real “SALE” had taken place, but they were all too happy to jack up everyone’s “assessed” values with every recorded transaction when this latest mania got started.
Hooray!!! Look at the new prices!! Boy, just think of the revenues!
This was all avoidable. But, just about every Assessor in the Country used the bogus transactions as justifiable data for higher assessed values.
So, here’s my answer. IF YOU USE “LISTED SALES PRICE” on the contract as the basis for your evaluations, then $10,000 is a legitimate price.
RE_ASSESS TO CURRENT MARKET VALUES, just like you did in the past!!
Your agencies brought this on your Counties and local governments. You LIED about the REAL VALUES to screw the owner out of his money. Now these fake values cannot be justified. RE-Value ALL properties based on comparable sales where there is “VALUABLE CONSIDERATION”.
CASH is valuable consideration. 100% financing is gambling with houses.
That is not a sale until the LTV is 80%.
That’s my solution. It would have put an end to the madness before it started.
Excellent. One of the ten thousand reasons I can’t stand the sight of a realtor. You try to talk sense and they talk about “comps.” If and when I ever buy anything, it will be straight dealing with the owner, even if he has one these parasites attached. If they won’t talk to me directly, there are plenty of other houses for sale.
What happens to a town like Greenberg, Kansas…what’s the value of any & all property after it’s all been turned into toothpicks?
http://www.gearthblog.com/images/images507/greensburg.jpg
Distressed sales? County Assessor’s: You’re dealing with a man-made disaster…value it as such.
I think there’s still some potential on the north side of town.
When distressed sales are the rule and no longer the exception, then they are the market value.
Yep, just as market value was often determined by fraudulent sales and inflated appraisals - just a few short years ago.
True, and yet you still get those agents calling the appraisal co., screaming that such and such can’t be a comp because it sold under market value. I bet appraisers love those calls. I don’t know if I could explain price discovery to these witches with a straight face.
RE: screaming that such and such can’t be a comp because it sold under market value.
No fookin’ honestly prepared appraisal today will pass any sort of conventional investor muster.
The majority of comp’s are not arms length transactions and the few that do occur probably entail a myriad fianancing concessions.
It’s totally queered data.
Markets are in a tail-spin and the origination fraudsters and appraisal liars are still in business resulting in a
a continuing full crisis in credibility.
Nobody believes anybody.
This is why Barney Frank and Co. are completely desperate for FHA/HUD and the GSE’s aka US taxpayer to become the bagholders of the future.
“The government and its licensed monopoly, the Federal Reserve System, made possible the housing bubble. Now they must face the consequences. So must people who want to sell their homes. Nobody wants to face the consequences. But eventually reality intrudes.”
Now that has GOT to be one of the best, if not THE best, commentaries on the bubble I have ever read. Says it all and tells it like it is. Really illustrates the dilemma facing tax assessors, too. Budget nightmares are already confronting local counties in Florida. And our local weekly fishwrap has a real “What about the children?” sob story about after school programs being cut because of tightening budgets.
Excellent point Diogenes. The RE Fraud System is seized up completely because of this very scam. This is the one gigantic sized obstacle in the way of the wishful fantasy of every increasing RE prices. The entire RE model in the US is merely a means to extract blood from those who trade in it. Taxes and fees from sellers, taxes and fees from buyers, all the while trumpeting how great of an investment RE is.
Also, just for the public record, where I’m involved in any future RE transaction, I will do EVERYTHING I possibly can to backdoor RE sales people, unless their business model changes in a very dramatic way.
You have my total agreement on this subject.
phew…. That’s a good thing jwhite. I’d be a tragedy if you objected. lmao.
“The entire RE model in the US is merely a means to extract blood from those who trade in it. Taxes and fees from sellers, taxes and fees from buyers, all the while trumpeting how great of an investment RE is.”
This is the checkbook for LBJ’s Great Society.
“I will do EVERYTHING I possibly can to backdoor RE sales people…”
Is that with the JT, or something more personal?
IMHO ,the real estate prices were so fake and not based on arms length transactions where the buyers really qualified ,that it was a fake market that is crashing .
I agree that if a person has skin in the game ,that might be a good comp . Another check and balance for a while might be the square footage or reproduction cost approach (which is usually not used in residential real estate .)
Since most of the boom prices were just made up and not really based on qualified buyers or long term demand or even based on a rental income approach ,all comps are suspect at this point IMO. Also, its very possible that the market will over-correct to even lower prices than income levels are at for a area because of to much supply . Also since you have ex-owners destroying property and that brings the prices down ,you have a situation where you have damaged property that is becoming part of the comp base . Projects out in the middle of nowhere that were bought by investors ,where they isn’t very much demand for housing ,will crash and burn and go down more than areas with viable employment .
It’s quite possible for houses to be worth zero! I don’t know why anyone has trouble accepting that. If you can’t find a buyer in several years, and there are dozens of identical properties right around it that are also looking for buyers, then it’s worth zero.
The $10,000 Atlanta home is a tax assessor’s worst nightmare:
http://www.lewrockwell.com/north/north627.html
cramer says W florida is back and booming- bob toll told him so
Yes, Toll said Naples was A minus or something like that, the other day. (Who made this guy a professor?) Then, the same day I had the post about the nice, hardworking FB stealing chandeliers near there.
Cramer said buy Bear Stearns stock, too, just before they tanked. Reliable adviser, that Cramer.
Cramer(bear stearns) vs. Cramer(w. florida)
Bwahaha.
Maybe it’s a decent market for Toll, that I can speak to. However, Naples is terribly bubbly, and has tons of homes on the market, with prices that are still deep in the “wishing” section (maybe that’s what Toll meant)?
A- in FL? Come on, the best markets in the country aren’t even A- markets. You think that there are going to be any that good in the biggest bubble states?
At the height of the bubble, Naples was the number one overvalued bubble market in the entire country.
I wonder how people must feel, who bought a house in a local Apollo Beach development where Toll houses over $500,000 are now alongside KB homes selling “from the $100,000’s”, as the sign says?
‘At the height of the bubble, Naples was the number one overvalued bubble market in the entire country.’
Thank goodness it has corrected, huh? Can the rest of the country correct now so it can go back to growth as forecasted by the experts? Does anyone wake up sometimes after a nightmare about this latest fad of “this-time-it’s-different” and say to their self “Holy crap, everything we own is tied up in some greater fool coming along and buying it”?
Anyone with a long term horizon (more than 10 years) should avoid all of south Florida. In 10 years it will be obvious to everyone that global warming is real and sea levels are rising. Anything below 30ft elevation (south florida) will be inundated. Not in 10 years, but in 10 years people will realize its coming.
We’ll see - I saw the same stuff written in 1998.
30 feet? Your religious advisor (al) does not even predict that.
Great, he should go buy their stock and shut up about it.
Rochester-area housing market showing some life
http://www.democratandchronicle.com/apps/pbcs.dll/article?AID=/20080517/BUSINESS/805170321
April home sales figures released Thursday by the Greater Rochester Association of Realtors show that sales and listings jumped significantly in April compared with the month before — 28 percent and 16 percent respectively, perhaps a result of the seasonal increase in houses that go on the market early in the year.
Closings were down over the previous year by 5.5 percent and purchase offer acceptances were down nearly 9 percent.
Good and bad news around these parts. I’m looking for a place and I’ve seen multiple offers on some properties, but those properties are usually fairly priced to start with. It still baffles me that an area with a barely stable population and a soft job market doesn’t get hit harder real estate wise.
I call BS on this. NYSAR hasn’t posted the numbers for April yet. For March 08, EVERY single county in NYS posted declining transactions measured YoY with the except of Yates County.
I am hearing about the same trend from RE scum through 3rd parties everywhere across the northeast. A flurry of buyer interest and contracts but at declining prices and financing is problematic. I find it hard to believe there are that many stupid people still out there. I don’t know anyone stepping up to buy. Nobody. I’m thinking the current group of clueless RE fodder is the extreme marginal buyer, hence the financing difficulties.
It’s still different here in Yates!
I showed up in downtown Rochester yesterday for a few hours. When I got off 490 and had to make a few turns to get to my destination (Bausch & Lomb Place), I remember thinking yikes, I don’t think I’d want to go THAT way i.e. the other direction. Kinda reminded me of a little Detroit.
Blano:
Strange how upper ny pa ohio has almost nothing to report, same with Erie Canton Youngstown Akron, all seem to have disappeared into the unknown. No major stories no major criminal charges against city officers heck not even a big drug bust. Only thing close is Cleveland and the foreclosure mess. Yet Kodak Xerox all are laying off in the area…do you think its a powder keg ready to blow, or is the meth labs just being ignored to keep everyone happy?
We’re still here. Many here dont realize that we’ve been in a major recession/depression for about a decade. Thats ten years! What you’ve seen in CA, FL, NV, AZ etc. is just the first two years of this punishment. Many of the better off here left for those aforementioned states and cranked up their fantasy with what they made off with from here. Our big county wide charity hospital just announced layoffs because of the big increase in losses; this after a coutywide tax increase just for them.
No, we’re spent. We’re like the people across the bay watching planes crash into buildings. Powerless to do anything about it, knowing it will end badly for all of us; all we can do is try to keep swimming against the current, dorsal fin up.
I going back to work Monday. Figured I’d have to if I want to heat my house next winter. Looks like my 300/ month heating bill will double. So much for retirement. Thanks for bailing out those investment banks, Boyz.
I don’t really know, but Carlos makes an interesting point about a 10-yr. recession/depression/economic thing. Some of this not so good stuff, i.e. recession, layoffs, foreclosure etc. become almost normal. I don’t even ask people how things are going financially anymore, for example. We all already know the answer.
There’s a huge text message scandal going on in Detroit right now re: the mayor and his now former chief of staff; frankly, I’m surprised it hasn’t gotten more national news ’cause it makes for great reading and is just as titillating and steamy as anything you’d get from Britney Spears or Lindsay Lohan. Page 1 stories with text messages about how your chief of staff is going to go down on you can’t be good for your family life or your political career.
Perhaps also, this part of the country just doesn’t mean as much as the other parts anymore.
Good article Rock.
I’ve been mentioning the impending nightmare of true value re-assessments that local gov’t, banks and owners have been dreading and fighting here in Wisconsin. Hence the sticky prices as they try to wait it out for the next GF nationwide.
Acceptance of these inflated and fraudulent assessments is the real bottleneck in local housing markets nationwide. The high Dream Price is important to everyone involved in this REIC Scam.
Now, nobody with any sense wants to buy and those that do, can’t get their Suicide Loans to prop up and continue this RE Sham
I can’t help trying to fathom the idea that the interest rates on $62 TRILLION of derivatives and mortages are determined by the LIBOR, and that this LIBOR is based on the “word” of various large banks, banks whose word is so suspect that don’t trust one another enough to loan each other money.
Sixty-two trillion dollars is a WHOLE LOT of money, folks.
The FED chairman is often referred to as the most powerful money man in the world, but maybe he isn’t. Maybe the most powerful money man in the world is some unknown Londoner who has the final say on what the interest rates on $62 trillion is going to be.
I find talking about money very distasteful, very pedestrian. You don’t have $62 trillion? Go get a job!
“I find talking about money very distasteful, very pedestrian.”
So do I. I think I’ll just ride my bike to Seal Beach and enjoy the day.
Life is short.
I wonder if they still store nuclear weapons in Seal Beach?
Got half-life?
I’ve been in a storage facility before - Remarkable places.
Is the Glider Inn Bar still around?
Good day to have a cold cold beer! 
….or 20.
It’s 5 o’clock somewhere…
Is the little venice area of seal beach still there? I used to love to walk the canals in the evenings and dream of owning one of those houses. Mom, bless her stubborn soul, has finally realized I’m not coming back and is finally trying to sell the monster house in old HB. My cousins who lived in RB moved in after the fires but she’s had enough. Not sure that she’ll get for it. It’s around 2100 sqft built in 1914 or 1922.
Not many of us natives left in OC. Our family used to own groves around Orange and up into the hills.
Deflatinary Jane,
Your either thinking of Surfside/Sunset Beach or Naples in Long Beach. There are no canals in Seal Beach.
Hwy50,
The Glider Inn is stlll there. I washed dishes there in 1968 and 1970. I moved up after that and bused tables at the Ranch House Rest. One block south. It was leveled decades ago. I lived a half block from both. We were the poorest family is Seal Beach in the 60’s.
I love San Diego now.
Back from Seal Beach. Four tankers are still anchored and empty a couple of miles off shore (I am assuming these are the same tankers I see there week-after-week).
Some rambling thoughts and speculative thinking:
The tankers aren’t sailing off to bring back more oil because oil demand in this country is declining, also stripper wells are being brought online and their trickle adds to domestic production.
People complain that they are paying more for gas, but maybe not. They may be paying a higher price for gas but because of the higher price they are buying less of it, so it just might be a wash, or close to it. Stories of less congestion on the freeways support this hypothisis.
Also used car dealers are flooded with inventories of low gas mileage SUVs and trucks. Everyone wants to sell these guzzlers and nobody wants to buy; people want the economy cars instead.
FWIW.
“Maybe the most powerful money man in the world is some unknown”
Note the year recorded:
More thoughts… on old songs… that bear revisiting
Something from the ”Old Man’s School”
Lyrics from the song: Migration
Album: Walking Man (1974) James Taylor
“Distant hands in foreign lands are turning hidden wheels,
causing things to come about which no one seems to feel.
All invisible from where we stand, the connections come to pass
and though too strange to comprehend, they affect us nonetheless, yes.”
That’s a good one, hwy.
Haven’t seen this discussed yet:
Home Ownership Preservation Loans
I think the next line of attack should be using low-cost government loans to help borrowers pay down unaffordable mortgages.
We need to take a systematic approach that pays down enough of these mortgages to make them affordable.
And it can be done at zero cost to taxpayers.
The FDIC is calling for up to $50 billion in new government loans that would pay down a portion of the value of over a million existing loans. (The Treasury would sell debt to fund the plan.)
We’re calling these new government loans Home Ownership Preservation Loans - HOP loans for short.
Eligible borrowers could get a HOP loan to pay off up to 20 percent of their mortgage.
Mortgage holders would get the cash. As their part of the deal, they would restructure the remaining 80 percent into fixed rate, affordable payments. And they would agree to pay the government’s interest for the first five years.
That way, the HOP loans would be interest-free to the borrower for the first five years.
After that, borrowers would begin repaying them at fixed Treasury rates.
This would give borrowers a breather, and dramatically reduce the chance of foreclosures.
As another part of the deal, the mortgage holders would agree that the government would be paid first after any sale or refinancing of the house.
As a result, taxpayers would be protected from any losses, even if the borrower cannot repay the mortgage for any reason.
The plan would leverage the government’s lower borrowing costs to significantly reduce foreclosures with no expansion of contingent liabilities and no net exposure to taxpayers.
http://www.fdic.gov/news/news/speeches/chairman/spmay1608.html
I’m just loving the desperate schemes being put forward to prevent the system from working itself out. Bwahahahaha!
Yeah Palmetto it’s getting entertaining on the ground level too.
What’s really funny is RE agents trying to get offers are hearing people say the shacks are not only over priced but over taxed.
RE agents: “Why… I’ve never heard of Buyer a person not making an offer because of the property taxes.”
Potential buyers: “Well NOW…you have.”
Screw the agents, property taxes best get every consideration from buyers.
My friend that bought another apartment the other week, against my advice, is now squirming over the taxes. He was one day from buying when I asked if he even knew what the taxes were - he didn’t. I looked up the property with him on the county’s website - that’s the first and only mention of property taxes he received - of course the agent never brought the subject up at all.
Buyers that don’t consider taxes deserve to fund bloated local gov’ts and six-figure pension plans.
Strange, but when I look at properties that advertise “low taxes” I immediately look at the assessed value to make a guess as to how much my taxes would increase if I were to purchase their overpriced property.
When I lived in northern Illinois, I would check out all the townhomes for sale in my subdivision.
I would really hate being the person who bought one of the townhomes. I looked at the listing sheet and saw immediately the property taxes were wrong. Sure enough, the agent had only listed the first installment as the taxes.
When I pointed this out the realtor, I was told “this is what the seller told me.”
That may have been true, but the realtor was from the area and certainly should have known better. Ethical and professional my a**.
Three years ago while visiting Austin, I went to look at some showhomes one afternoon with a friend. I asked about the property taxes which I had earlier been told were in the 3% range. The salesperson replied that he didn’t know and that no one had ever asked that question before.
Pay first is a good idea, but…
“As a result, taxpayers would be protected from any losses, even if the borrower cannot repay the mortgage for any reason.”
seems to be a bit of a stretch. Unless they are really talking about the governments second mortgage being paid first. This might be the suggestion for the biggest “voluntary” intervention in contracts yet.
“leveraging the governments lower borrowing costs” - how far are they going to leverage it anyway, and retain the “protected from any losses” promise?
This actually sounds pretty great, this leveraging the governments lower borrowing costs.
Note the banks get the 20% that would otherwise be a loss right away.
(What about those with “insurance” who otherwise get their 100% back on a default?)
What happens to the government’s money if the bank goes bankrupt anyway? I guess the creditors pay the goverment first later on sale. So the banks get the 20% now, and the creditors pay it back later?
Yeah, sounds totally great.
The orginal mortgager pays the government 5 years of interest, fixes the rate, and gives up the first lien on the property - but still takes on 80% of the risk in a falling market. (If my understanding of that is correct…)
I’m sure bankers everywhere will fall all over themselves to take advantage of this deal.
“I’m sure bankers everywhere will fall all over themselves to take advantage of this deal.”
That’s what I was thinking when I read it. The ones thaty go for it will probably do so only for the properties they estimate to be worth waaay less than 80% of the loan balance.
Fannie Mae getting desperate?
A few years ago we saw loan standards continually lowered by private lenders, to keep the securitization machine going. We all know how that ended. This year we’ve seen loan standards on government back loans progressively lowered. This weeks latest is Fannie Mae lowering down payments to 3%. Could we see the GSE’s headed down the same road? Is Fannie Mae desperate to prop up it’s own loan portfolio by trying to support house prices? Is the government setting the stage for an even bigger disaster down the road?
My main question is: Now that everyone knows so much more about MBS, who is going to buy MBS from Fannie Mae if they include the low-down payment loans?
There is an implicit government guarantee. A lot of people both domestic and foreign will buy these MBS. They are currently yielding 160bps over Treasuries. They have traded at 50 bps over USGs in July 07.
“Is Fannie Mae desperate to prop up it’s own loan portfolio by trying to support house prices?”
I’d have thought that it is Wall St. and the bankers who are pressuring their paid-for lackeys in Washington to get this done.
I have witnessed an incredible rise in inflation rates nearing 700%, in relation to corn…
Tastes best cooked in olive oil in a pot on the stove, by the way.
One good thing is that maybe this inflation will be good for the waistlines of America. Corn syrup just might be one of the major culprits behind the blubber.
I don’t think so: junk food often is cheaper than honest/healthy agricultural products. I think the risk is that eating habits and waistline in the US get even worse.
This is true. Also, communities primarilly composed of low wage earners tend to have stores that stock processed, cheaper items over fresh. Generally, where you live will determine how much you weigh, but the mean difference isn’t that high. I should also point out this was a US study on urban and suburban populations. Conditions outside the US are vastly different.
You may be right there. High fructose corn syrup is used is so much. I read the book “Fat America” and after that, I gave up on Soda. Basically Fructose is digested differently to sucrose and it goes passed into the bloodstream. Speculation is this is reason for Diabetes bubble. (In more ways than one).
On news recently, I heard an article that Heinz Ketchup is a heavy user of HFCS and is now looking at ways to sweeten the tomato to cut down on it’s usage. (I bet you didn’t know that Heinz has a VP of Ketchup !)
it’s no longer a US problem. In most parts of Europe (plus DownUnder and even Asia) a large percentage of adults and especially children are overweight too. They are all catching up to the US lifestyle and waistline.
Maybe adults can soon get a little relieve from higher gas prices (walk or use bicycle instead of car). And if energy gets a LOT more expensive, maybe natural food products will get cheaper relative to processed food …
And I’m the Duke of Mustard.
I know. I’ve seen an impact on wheat and my story is a sad one.
The price of a bottle of my Hefeweizen beer imported from Germany has risen from $1.99 to $2.89 per bottle.
Oh, the humanity.
There’ll be beer riots in the streets soon.
Another tale of Government greed and Stupidity: Clearwater Beach.
The saga continues.
For regular readers, I occasionally post updates on the Florida Gulf Beaches.
You may recall my tales of “Aqualea”, the HYATT project that is at the center of the City’s beach renovation project. This project was obviously the motivation to re-make the entire beach frontage on Clearwater Beach with their new “beach-walk”.
It’s made to look like the other prominent beaches, including Hollywood, Miami’s South Beach, Jacksonville/Atlantic Beach, etc. It requires a meandering sidewalk made of colored stone or paving blocks or decorative concrete all along the waterfront with lights, plants, seating and a short retaining wall.
Originally Clearwater Beach had a parking lot right along the beach frontage with a short retaining wall. However, there was not enough frontage for Aqualea to build this huge tower at the center of the beach. Solution: Close the main right-of-way to traffic.
Extend the property line for Hyatt into the existing roadway. Move the roadway out to where the parking area was. Make a new “smaller roadway, and build the “BEACHWALK” to pacify the public. Hyatt got they best spot on a newly expanded beach. The lumpenproles got the new beach walk. The new beachwalk was recently opened. Every other high-rise in Clearwater (that wasn’t cancelled) got finished. Hyatt is still building their CONDO/Condo-Hotel, with fencing and barricades all around. (About 1/2 done).
There is, of-course, a problem. All that parking that they turned back into a nice beach area for the uber-rich left the lumpenproles with no place to put their conveyances. Every week-end, the traffic clogs the causeways and bridges onto the island as motorists drive around for an hour or 2 looking for a place to put their cars. The once free parking areas are all now revenue makers for the City, at continually increasing prices (now about $1.25 per hour), with meters everywhere, and meter-cops working overtime. To alleviate some of the over-flow, the City opened a portion of the Causeway to parking (free), though it is often FULL, just the other side of the last bridge to the island. What this means, of course, is that instead of getting out of your car and dragging your umbrella, cooler and chairs about 50 yards from the old parking area to the beach, you now can carry them 1/4 mile. For the yet-to-arrive Aqualea residents, well,………. you can just walk across the street.
One good thing, though. To make it easier to walk over the bridge, the City is just completing a new pedestrian bridge. This was really needed as the foot and bike traffic was too high to fit into the 4-ft wide bridge access that currently exists.
The Beachwalk, I admit, is quite nice and is an improvement. The City, to relieve the congestion, has hired one of the big-time Real Estate brokerage companies to locate a spot to build a 300-car parking garage. A good place for it would be where Aqualea is going up. I expect it will be adjacent to the South Beach parking, but who knows?
I write this because like some many other beach communities that derived their revenues from “tourism”, most all of them decided that higher property assessments made their focus on REAL ESTATE TAXES as the primary source of new funds for the future. Who needs tourists and their sales taxes when you’ve got 1000’s of “luxury condos as your tax base. But the consequence of this has been higher taxes for everyone, including all the shoppe-keepers and small business owners.
Just this past week there was to be a Hearing of some sort over TAXES. One long-time business owner (one not torn down for a condo) complained over the radio that his property tax on his business had gone from $5000 per year to $45,000 per year.
Isn’t it great to be a municipal government! Need more revenue for you “projects”, just send out a higher tax assessment.
One good thing for business owners, however, is the lack of competition. Bull-dozing much of the former Hotel/Motels and small shops left the existing eateries with more customers than can be seated at normal grazing hours, so I guess business has picked up some to off-set the higher tax costs to the owners.
I don’t know where this will eventually end, but from what I have seen, there are a lot more Hondas than Maserattis and Lambourghini’s. But if you are making up tax rolls, then the higher you can jack up the price, the more revenue you can extort.
Taxation without representation? You bet! But then, what can you do?
Oh!, and one last thing while we’re P*ssing away tax-dollars. The City improved all the side-walks along the adjoining roadways to allow better access. They also decided to “beautify” the island by planting palm trees all along the boulevards. There’s just one problem. The palm trees were planted in the middle of the new sidewalks, making them unpassable for a large group. Where most groups tend to walk abreast to carry on conversations, they continually need to re-align themselves to get around the trees.
The side-walks needed to be another 2-3 feet wider if they wanted trees in them.
Good planning? You know it. But no worries. If this proves unsatisfactory, there’s plenty more tax money to do it again.
That’s the problem I see in every community. The “windfall taxes” from high assessments have made spendthrifts of local governments, and they thought it would never end. They are now catering to the “new rich” who are nothing but PAPER TIGERS. Good Luck keeping the revenues flowing.
Do you know if they’re using tax increment financing (TIF) for the renovation project? seems they’re always proposign that here and it doesn’t seem fair to existing business property owners to have to make up the difference.
I am uncertain of all the financial arrangements. I believe that the City simply drank the kool-aid. They saw all the old projects of $200,000 condos being replace with $2,000,000 Condos and that meant MORE MONEY. Revenues increased, more new places being planned. It happened in every Beach Community in America…………the “new paradigm” don’t ya know.
But sense you took the time to read my missive, perhaps a visual would be informative. Go to: http://www.beachtourism.com/pier.htm, where you can get the Beach Cams. In frame 1, is the new Beach Walk. In the fore-ground is the current South Beach parking lot. There is another parking lot, about 2x that size north, beyond the view of the Aqualea project. Between the 2 lots, all along what was the old boulevard was an expanse of parking for tourists and beach-goers.
If you look to the right at the row of businesses, you can see the remnants of the old Gulfview Blvd. As you see, it runs directly into the new Aqualea building under construction beneath 3 tower cranes. This clearly demonstrates that the right-of-way needed to be vacated for this project to continue. Also note all the new Palm Trees and sea grass planted along this vicinity of beach. You can’t see it, but there’s a McDonalds just this side of the Aqualea project along the old boulevard. Note the wide expanse from the Beachwalk to the old shoppes.
The large building behind the Hyatt project is the Clearwater HILTON.
All the other tall, massive buildings in the distance, not well visible due to camera focal range, are NEW multi-million dollar CONDOS. One is currently negotiating with the City for submerged water rights for their private marina. I believe they already got them, and the City is helping provide part of the costs.
You can get a better look at the tower cranes and see how large the Aqualea project is by looking at FRAME 2. It is taken from the pier, that you see in FRAME 1. You can see that this becomes the focus of the new Clearwater Beach. Thanks to the City Council and Mayor. It was one of those Govt./Business arrangements that have become so prevalent in recent years, I suppose. Hyatt gets the beach re-made around their new project. The City gets a “Beach-walk”.
Though not relevant, just for reference, the 3rd FRAME is the City Marina. It is located just East of the PIER where Camera 2 is sitting. IF you walked off the pier and kept walking in straight line for about 200 yards, you would run into the Marina.
It’s still a great beach, but it’s sad the cruise -zone was basically removed. What are high-school kids and beach-week cruisers going to do without that?
The new ‘boom-box’ craze has really screwed up making public cruising a part of the scenery, as it has become a complete annoyance, so it was inevitable.
But I feel for the kids that are looking for places to hang out. The Beach used to be a great spot. I think the City is trying to push out that “bad element”.
Have a nice day at the beach!!
Wow. The marina is about the only thing I recognize. The grand old hotel gone, parking screwed as you note. It wasn’t broken, but they fixed it anyway. Hope the pols choke on the deficits.
That’s certainly one aspect of this saga that I find absolutely irresistible: how will local gov’ts handle the dearth of tax revenue in coming years?
Some say there will be deep cuts, some say cuts are “impossible”.
But in either case now is certainly not the time to let them get their hooks into you any deeper by buying something, because it will be the immobile who will pay the price - in whatever form that price comes - BK cities or soaring taxes.
That’s the downward spiral that I see happening:
-Property value goes down……
-Taxes go up, or services get cut and crime goes up (due to lack of services, or lack of police)…….
-Because of increases in taxes or crime, property values go down……lather, rinse, repeat.
I’m real glad I’m not a homeowner right now. They are becoming big, non-mobile targets for any number of tax generating schemes.
Expect to see proposals for taxing renters/increasing income taxes, because we are not paying “our fair share”
That’s something to watch for right there. Will this give rise to local/muni income tax movements?
RE: I’m real glad I’m not a homeowner right now. They are becoming big, non-mobile targets for any number of tax generating schemes.
BINGO!
As the transporation infrastructure begins to collapse from overuse and shoddy maintenance, your property values may be subject to more pressure than just from the tax man.
how will local gov’ts handle the dearth of tax revenue in coming years?
- Wage freeze. No raises for anybody.
- Hiring freeze. Usually the first step before layoffs. When somebody quits, they just won’t re-hire for that position. Puts additional strain on those employees who remain.
- Layoffs. Not common for municipal jobs compared to the private sector. You know those cushy city jobs where supposedly nobody gets fired. But as things get worse, it will happen.
- Services cut. First it will be smaller, cosmetic changes. Hours cut back, library stops ordering new books, grass in the parks only gets mowed once a month instead of twice a week, etc.
As the recession drags along, cities will have less money and fewer workers. The workers remaining will be handling much more than they did before. More primary services will be cut, offices will be closed more often, fees will increase, equipment won’t get replaced or repaired when it breaks, potholes grow into sinkholes, etc.
The thing is, when the economy goes south is when demand for public services INCREASES, right when those same services are being cut back. People cancel their cable and internet, and go to the library to use a computer, which is already overcrowded and underfunded anyway. People take the bus instead of driving to save on gas, which increases the load on public transit while at the same time the budget is being cut. People want to take the kids to the public pool for a cheap family outing, but the pool gets closed.
It’s a vicious cycle. And it’s what we’re in for.
Wage freezes and layoffs put more people in foreclosure jeapordy, adding to the downward spiral.
Maybe they (local gov’ts) should SELL some of the crap they BOUGHT during the bubble. Including buildings. Cut down on the recurring maintenance expenses and associated staffing.
“It’s a vicious cycle. And it’s what we’re in for.”
This cycle has already happened in CA. In the 80’s, city library hours were cut, city offices were closed for one day, or hours were cut back. Public transit was overcrowded and the budget was cut. Fees on public transit, and bridges were raised.
Yes you’re right about this being a vicious cycle. History repeats itself because we forget the bad times.
What every one of these “attract the rich: projects fail to realize is that there is a limited supply of really wealthy people in the country, <3%. As you wrote, most of the folks are wannabe “Paper Tiger” who’s actual wealth is probably in the high negatives if standard accounting practices are used.
“Build it and they will come” will be the ruin of many nice little towns IMO.
I had a sad discussion with a friend whose job depends on advertising high rise $500k condos and similar “rich people” toys like large ranches and conservation easements. The idea that some of these condo projects might not go forward in Dallas wasn’t even conceivable to him. Even though the conversation started because a big multi-year project in nearby Arlington,TX fronted by a local billionaire just stopped.
They aren’t building condos between the ballpark and the new Cowboys stadium. Are those holes in the ground in Dallas still absolutely guarenteed to sprout $500k condos?
Not a problem, apparently. A lot of rich people in Dallas, I hear.
A Living Nightmare??? Home Values Down OVER 90%
Recs
1 May 17, 2008 – Comments (0) | ADD RELATED TICKERS
For less than the price of a decent used car, you can buy a home in Atlanta today.
Actually, real estate agents list a dozen choices for $10,000 or less.
Step up in price to $20,000 and your choices expand 10 fold.
The prices seem absurd but they are part of a real estate market suffering with rampant foreclosures, mortgage fraud, abandoned investor properties, a collapsing mortgage industry and other ills. The market is unlike anything seen in metro Atlanta in years and it has local tax assessors and appraisers as confused as anyone.
What is the value of a lot if no one can get a loan to buy it? How should you value a home that sits on the market for a year with no offers? When a neighborhood has several foreclosures, short sales and abandoned properties, do they set the market?
Therein lies the problem for tax assessors.
As Fulton’s chief appraiser, Burt Manning finds it hard to believe any parcel in Fulton is worth less than $10,000.
Still, real estate listings prove they are.
“We are trying to understand all these things,” said Manning. “What’s the right answer? We don’t know. It’s tough. I’ve got entire neighborhoods where all I’ve got is distressed sales. I don’t have any good sales.”
In fact, seven of Atlanta’s least-expensive homes are listed on average for $8,800 but taxed at an average value of nearly $93,000.
The cheapest, at 336 Adelle Street in the Lakewood area, comes in at $5,900. Tax records list its value at $101,700.
The problems are pronounced in areas like West End, Lakewood and Vine City.
Wayne Flanagan, a RE/MAX agent who sells bank-owned properties, said in zip codes like 30310 and 30315 values have taken a nosedive faster than public officials can account for.
“There are some price ranges like $20,000-$80,000 where 90 percent of the properties on the market are foreclosures,” Flanagan said. “You’ve got one bank competing against another. It’s a spiraling situation, downward.”
The agent said when tax values and true values are way apart, it can keep properties from selling and further depress values. Flanagan said he’d had a $95,000 deal on a duplex fall through recently because it was being taxed at $300,000. The buyer didn’t want to be saddled with taxes at that level.
http://www.ajc.com/metro/content/metro/atlanta/stories/20…...
The fallout will be incredible. Forclosures skyrocketing. Bankruptcies Skyrocketing. Tax revenues evaporating. Jobs and services lost. All for what? The American Dream turning into a living nightmare.
And they tell us the credit crisis is behind us? Enjoy the eye of the strom while it lasts, the fun part is about to start.
And this is Atlanta….Not Michigan or Ohio…..You think 30% price reductions were a big deal? Just wait for CA(13% of America’s economy), FL, AZ, and NV. Now add in TX and Carolina’s deterioration, you have potentially about 50% of the new home market in America about to implode.
Sorry for the repost from above.
“The fallout will be incredible. Forclosures skyrocketing. Bankruptcies Skyrocketing. Tax revenues evaporating. Jobs and services lost. All for what? The American Dream turning into a living nightmare.”
I agree. And I credit our “Ownership President”, George W. Bush~~~!!
While it is true that homeowners are more responsbile citizens, George really didn’t understand Cause and EFFECT. Homeowners, typically, are owners because they are more responsible, hard-working, credit-worthy people who make owning a house part of their long-term investment strategy. Their efforts at keeping properties and neighborhoods maintained made home-ownership a good long-range investment.
Idiot George, along with his minions at the FED and Banking institutions, thought that increasing home-ownership would make more people responsible, hard-working, credit-worthy Citizens. He was WRONG. The plan was WRONG.
The plan: Make it affordable, with cheap money lending to get 70% ownership.
That was putting the cart before the horse.
Con-artists, drug-dealers, low-lifes of every strip were able to “buy” houses in your neighborhood. If the didn’t just abandon them and steal the “equity”, the turned them into ghetto houses. They did not fix them up and make them into more valuable places to live, even when they got extra money in the mortgage for such “STATED” purposes. They just took the money and ran.
It has taken 5 long years for the idiots in the Federal Government to BEGIN to implement some kinds of RESTRAINT and ENFORCEMENT of laws to prevent FRAUD. The Fed, Attorney Generals, Office of the Controller of the Currency, Treasury (Paulson), and every other Federal Agency just watched as all this unfolded………..and the leader of the pack……….took “CREDIT” for having the highest level of “ownership” in the history of the U.S.
Giving away houses to useless parasites will NOT make them responsible Citizens.
It will make them whiners when they don’t get to “cash out” the next round of “appreciation”, the veritable “free money” you get from owning Real Estate.
Thanks, Guys, for your great handling of the US ECONOMY.
Hyper-inflation, no raises, high taxes, no earnings. It’s great! Just make sure you try to keep the Real estate prices HIGH, as we out-source our jobs to India.
Free-market my *ss!!!!
You are so unpatriotic. The president has an MBA you know.
Just stop this liberal thinking and start shopping. Ask not what your country can do for you but how much can you spend for your country.
and of course, the answer to all the problems is to elect a guy who thinks there are 57 states
You mean there aren’t ? Perhaps he got it from the Ketchup label.
Stan - LOL - great follow-up. Love the quick wit here.
It’s what happens when you vote for a guy you’d like to have a beer with. Wasn’t that the lame excuse used to get everyone to vote against their economic interests? They didn’t disclose he was a bought and paid for empty skull.
Not sure if areas like Syracuse, Buffalo/Niagara Falls/Rochester are appreciating, as some recent news reports claim, but it’s pretty clear that the recent relative winners will be the relative losers, and vice versa, over the coming 2-3 years. Even with heating costs, northern tier of states from Western Great Plains east to the Hudson River will outperform the national average.
I agree that upstate NY should be doing well relative to other, now imploding areas, but they are still hobbled with skyhigh property taxes. This idea that non-productive people should be maintained by taxpayers in high-cost areas is killing the upstate economy. If states equalized welfare payments, then the non-working folks would gravitate to cheap areas to live, leaving areas like upstate NY to recover economically.
BS. You may as well stand on the shaky lie that upstate never had a bubble so prices won’t fall. There was a good REASON why houses across upstate NY were 50k in year 2001. And there is no good reason why those same shacks sit with 150k prices tags and owners living in a fantasy.
So you’re saying prices in upstate NY have tripled in the last 7 years? I can assure you that in Buffalo that is not even close to the case. I would venture to guess Syr and Roch didn’t either.
Taxes and low incomes won’t allow for that.
Don’t try to wheel out the ‘housing prices to the sky’ boogey man around here, pal… We aren’t having any of it.
Upstate is a big place. Southern Tier region, Capital District region and Andirondacks saw insane speculation that still exists. What do you call $750k condos in Glens Falls? How about towns in Warren County such as Stony Creek, Warrensburg, Thurman, Johnsburg typical prices are 200k for something livable and there is no work for 50 miles in any direction yet those same shacks were 30k in 2001?
Do maps still show Buffalo and Rottenchester?
Don’t try to wheel out the ‘housing prices to the sky’ boogey man around here, pal…
I can speak from experience that a house in Jay, NY was bought for $90K in 2001 and appraised for $220K in 2007. The house is the same today as it was in ‘01, no significant improvements to account for that increase.
Incomes have not doubled… expenses from taxes to food and energy are significantly higher. Jobs are either construction, seasonal tourism/service, or government. Tell me again that there hasn’t been a bubble in upstate NY? Oh, that’s right. It’s different up there.
Exeter - Upstate IS a big place. Paul in Jax specifically mentioned Buff-Roch-Syr. although you can find a few examples of $750k here, it’s typically new construction. The house I live in sold for $43k in 1979. It is appraised ar $135k and you’d be hard pressed to get more than $150k for it. Pretty much mirrored inflation. This is in one of the best ‘burbs in the Buffalo area.
As for you $750K condos, are those wishing prices or sales? As you pointed out, there are absolutely no local jobs to support that pricing…
Northeasterner - One group I know of that bid that area up to insane prices is the snowmobilers. It’s not uncommon for 15,000 or more of them to hit that area on any given weekend that there’s snow. They outnumber the locals by 2-3-4:1. I’ve personally ran into people from NY, PA, NJ, VT, OH and Canada up there. Maybe more. There’s a LOT of out of state $$ up there.
But again, the western part of the state has nothing to draw people like that here. You will not find many houses that would sell at 3x 2001 prices. You could make an argument that they shouldn’t have increased at all from that point (or 1990 for that matter) as being bubblicious.. There are sooo many jobs leaving this area it isn’t funny. You can still buy a LOT of house in a safe ‘hood for $100k here.
Even in the Hamptons, Homes Are Slow to Sell
The Hamptons are crashing and IMHO heading for 1998 prices.
http://tinyurl.com/6s3t9t
A good friend of my Wife died there last year. His home is in one of the toniest areas and it’s still on the market.
They’re toasted.
Either they could afford them, and just have to keep paying the piper, or they are getting dumped on the market, and causing more pain.
Vacation spots, even fancy ones, boom hard, and crash harder in every country, every last one.
ARS victim watch
http://www.bloomberg.com/apps/news?pid=20601109&sid=auLgrx4IofzQ&refer=home
“Nobody knew,” plus every other excuse in the book.
Reminds me of a thought I’ve always had, about man as he is dying and entering some other dimension, trying to call back to his compatriots on earth: “Hey, you guys have got it all wrong!”
Madison, WIsconsin -
City of Madison takes over troubled condo project -
http://www.madison.com/wsj/home/local/286837
I received the New car dealer flyers this week and some targeted mail. A couple of contests. I always look to see what the minimum prize is and then schedule to stop at the dealers on chore trips. I just hand a salesperson the “winning ticket mailer” and ask for the minimum prize, no test drive, etc. Got a $5 WalMart card and a $5 Starbuck card today. I am so cheap! LOL
The sales personnel looked miserable. Dead dealerships.
Hoz,
Whats your take on THB?
volume has dried up, and with it liquidity?
caught some TMM during the spells of 1.40ish.
no coupon passing for me this week, I haven’t rung the registers in quite some time.
TBH, apologies for the lyxdexkia.
got stung my a bee this morning while mowing the front yard, stepped on it no less. Lesson for you kids, dont mow barefooted, unless you are using an old school mower, one that does not use energy, other than your own personal ability to push it to turn the blades.
one of these days Im gonna start spending more than 30 seconds hammering out some poorly worded post.
Avoid TBH. Liquidation moves only.
I also bought TMM at 1.55 and then again on the drop to 1.55 from 1.68 on Thursday bought more at 1.55. Bought more Westport, about to make a breakout big time, especially if oil goes to 140. They might actually make moneys!
If you see this, have a great weekend!
Stay away from Pale Ale.
And remember what Mr. Warren Buffett wrote in the current annual report:
“You can occasionally find markets that are ridiculously inefficient or at least you can find them anywhere except the finance departments of some leading business schools”.
Hoz trading rule number 9, Add caution to caution. This market does not smell right, taste right.
thanks Hozzie,
always value you opinion.
I’ll do you one for a South Texas Chrysler dealership. anyway, a good family friend bought the dealership about 6 years ago. He ran the dealership very well during the housing boom, couldnt keep the truck and SUV’s on the lot.
He entered into a contract to sell the dealership late last year, but the deal keeps hitting a snag. The snag is the floorplan financing. He is taking back 20% of the paper to get the deal done, and he is having trouble moving units.
Not good, methinks the deal is gonna fall through. His wife works as the finance director for a multi-location Honda outfit, and she is doing very, very well. I asked what he thought of GM, and his exact statement (been in the business for over twenty-five years)….”The (GM) product in the pipeline is the strongest he has seen in about six years”…and he is one of the last diehard Chrysler guys. He is leaving the business with no plans of returning, ever.
Not sure if this was ever posted before but WOW…..If this is what is next to come, we should be scared.
http://imageevent.com/platow/defectivehouse?z=2&l=0&c=2&n=1&m=30&w=4&x=0&p=60
Makes you wonder about all those people buying foreclosures that have been empty without heating or air-conditioning. I bet the moisture damage will not be a selling point. Previous occupier, Mr and Mrs Black-Mold.
What makes me wonder is why anyone would waive a home inspection.
I saw this happening here in the Bay Area. The newspapers had articles of people buying a house without the inspection.
Remember this when you all make fun of us desert dwellers.
The leakage problem with our new roof in the Philippines turned out to be a gutter, along the top of the concrete wall under the roof. Rather than use a pipe (what a concept), the water runs in a channel along the top of the wall, then into a pipe at the front of the house that takes it down the outer wall and away. That is, unless it overflows the inside edge of the channel and over onto the second floor roof. I hate rain.
I really liked this article by Gary North about the head-in-the-sand disaster of property tax assessors who are ignoring distressed-sale values and thus driving prices even lower:
http://www.lewrockwell.com/north/north627.html
My wife wanted to interest me in a REO she found, but I declined to even look at it for exactly the reason North cites - I would be screwed with twice as much property tax as would apply is assessment = sale price, because a greater fool or two paid twice as much in the last “good” sales, long ago.
Whoops - searched for Gary or North before posting the link, and before reading the full thread. MY comment should be just an add-on to Rock Trueblood’s post above.
I posted a while back about my retired parents needing a loan to make their obligations for the month. I think it was in February. I ended up giving them a small amount (~ $300).
They stopped by today to repay the loan (plus some unexpected interest that they insisted I take) and to fill me in on their situation.
They ended up doing two things. First, they have both gone back to work. Second, they called the HOPE number and were able to refinance into a fixed mortgage @ ~4% less than their original loan. They rolled their vehicle payment into the loan and will still come out about $400/month ahead of their old payment.
Their original loan was through one of the Citi’s. It was then sold to Novastar and then to Wilshire (?). Their new loan is through Wells Fargo. WF told them that they do not resell or trade their loans.
My father also said that yesterday he was contacted by ‘a government agency’ (he could not remember which agency) that was interested in talking to him about the various parties he dealt with during his original purchase. I don’t know if they interviewed him over the phone or if he is supposed to meet with them at a later date.
“My father also said that yesterday he was contacted by ‘a government agency’ (he could not remember which agency) that was interested in talking to him about the various parties he dealt with during his original purchase.”
Unless it has something to do with the Hope Now stuff or something similar, this makes no sense. Big red flag maybe.
Without knowing anything, this is just fraud probably.
Fannie’s new watchdog
Paulson says it’s time for a ‘world-class’ regulator, but don’t expect to see action till the housing market recovers.
By Colin Barr, senior writer
(Fortune) — Treasury Secretary Henry Paulson is talking tough, but don’t expect Washington to bring Fannie Mae to heel till the housing crisis eases.
Bill would make new loan caps permanent
By Barbara E. Hernandez
STAFF WRITER
Article Launched: 05/14/2008 03:52:39 PM PDT
Local congressman Jerry McNerney, D-Pleasanton, has penned legislation to change the current federally-backed Freddie Mac, Fannie Mae and Federal Housing Administration loan limits from temporary to permanent.
The loans from the Federal Home Loan Mortgage Corp. , Federal National Mortgage Association and the FHA were raised to $729,750 for a single-family home as part of the Bush administration’s Economic Stimulus Package until the end of this year. With Rep. McNerney’s legislation, the new amount will become a fixture for Bay Area buyers.
“The foreclosures in San Joaquin County are horrendous,” McNerney said. “It’s affecting all sections of the real estate market and we need something that will help stabilize the market and instill confidence in the market.”
McNerney said that creating new legislation ensuring the loan limits is a way to help homeowners maneuver through tightened credit and a slow housing market.
“Making it permanent may make it more likely to help,” said Cynthia Kroll, a senior regional economist for the Fisher Center for Real Estate and Urban Economics at UC Berkeley. “It’s clearly early days to know if that temporary increase is going to help or not.”
Shocked, SHOCKED I am.
I could not have seen this coming
“Signs of change”
I noticed, without commenting, that the World Bank signs on my weekly grocery drive were different shortly before the Wachovia announcement. The signs all still said World Bank but they were temporaries over the permanents.
The day after the announcement, or thereabouts, the temps came off and it said Wachovia on the permanents.
Noting this because I just realized the connection today, when I saw a temporary sign over the local Auto Zone sign. The temp says Auto Zone, not sure what would/could be underneath. But I don’t know that name brand/change needs to be as quick with an auto parts store as a bank.
Now I know what to look for, though.
I work at a local community college that has been growing exponentially since its opening in the early years of this decade. Fueled by explosive residential growth on the outskirts of the city, we’ve added classes every semester, including early morning 6am classes. This is a total commuter college and I am anticipating not “making” my numbers for my scheduled summer classes which means I will not be commuting to the campus this summer (which is okay with me). I will be able to see a trend in the numbers of students who continue to register for distance classes there. It will be interesting to see whether gas prices will have a significant effect on Fall enrollment. High gasoline prices are going to hit our students, most of whom work at least part-time, very hard. Interesting year ahead for education. I predict a lot more bus riding in the middle/high school kingdoms.
I was thinking this as well.
Back when I was in college, I’d have to buy gas every day or two, just scrounging up whatever change I could. Worked my way through the whole thing, and lived very frugally.
Can’t imagine what today’s kids are doing.
The Seven Habits of Highly Effective Bank Regulators:
Seven habits finance regulators must acquire
By Martin Wolf
Published: May 6 2008 19:52 | Last updated: May 6 2008 19:52
“Simply stated, the bright new financial system – for all its talented participants, for all its rich rewards – has failed the test of the market place.” Paul Volcker, April 8 2008
Paul Volcker is the giant among contemporary central bankers, both literally and figuratively. He it was who had the moral courage to crush inflation as chairman of the Federal Reserve between 1979 and 1987. When Mr Volcker speaks, people listen. What he had to tell the economic club of New York last month was well worth listening to. His summation, cited above, was so devastating, because so true.