Bits Bucket And Craigslist Finds For May 19, 2008
Please post off=topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Airlines & Fuel Costs… There was a time when people got dressed up in their best clothes to travel on a jet plane, now they are not much more than a Greyhound Bus with wings. The solution is simple, charge what you have to, to make a profit. If a person can’t afford it then they can’t go. It’s really not complicated…
http://www.chicagotribune.com/business/chi-mon-airlines-fuel-survivemay19,0,4883439.story
As somebody that spent time in one of those flying cattle cars this weekend, I agree completely. The Constitution said nothing about the right to jet around the country. Don’t subsidize the airlines. Let them charge what it takes to turn a profit or let them go out of business. Instantly, we would have to focus more on regional train and bus service. Another bonus would be the fact that Airports would no longer resemble purgatory.
I couldn’t agree more. I hate flying and won’t do it unless I absolutely have to. I remember when I wuz a pup and it was a real event. The cabin crew was gracious and welcoming and it was actually a fairly comfortable experience. Even the food was halfway decent sometimes. Now, they throw a package of salted nuts in your lap.
“I remember when I wuz a pup and it was a real event.”
I remember those leggy outfits; then we became PC.
The nadir was surely when Southwest started using fat guys wearing shorts as their flight attendants during the dot-com bubble. I haven’t flown them since.
There have been many times when I was very thankful that leggy outfits are gone. I enjoy having good eyesight, and would like to keep it that way.
A lot of Americans have forgotten (or have never discovered) how nice a regional train ride can be. Trains used to be fun, if slower and less exclusive than planes. Bring back better quality food and bar cars on all trains, I say.
The next to last time my father had been on a plane was when he was flown back from Japan after serving in the occupation, in 1946.
He then spent over 30 years working at the local international airport (a few months here and there between re-orgs with flight benefits) but still didn’t fly.
The first time my parents came down from WA state to visit me in TX, they actually took the train East from WA to Chicago, then South to Dallas. It took 4 days which they enjoyed chatting and so forth - a very leisurely trip. My parents later flew down for my wedding (second time he had flown.)
I think my father preferred the train.
They liked the E-W tracks. The tracks South along the river were in noticibly worse repair, with less accomodating service attendants. This would have been in the early 2000s.
Took my bro to the airport once while wearing my ipod; watching people strip to board the plane reminded me of a scene out of Schindlers List.
(((shakin my head)))
Oh, yeah, spook, I hear ya. I just hate being wanded by some officious, squatty little middle aged lady with a face like a clenched fist, pawing through my stuff.
Hi spook
“Don’t subsidize the airlines. Let them charge what it takes to turn a profit or let them go out of business. Instantly, we would have to focus more on regional train and bus service.”
Uh-huh. The subsidies that airlines receive are nothing compared to what Amtrak gets, especially as a percentage of its overall revenues. End Amtrak’s subsidies and they are instantly out of business.
So, if my choice is Atlanta to New York in a couple of hours by subsidized airline or Atlanta to New York in 16 hours by subsidized rail… Hmm, that’s a tough one.
Bill is correct. Amtrak is kept alive my gov money. It’s been that way for a while now.
Now I would be sad to loose Amtrak. We took the train into Richmond then hopped bart into SF. The good thing about taking transit is it keep me from spending too much at Barney’s because I didn’t want to drag bulky items back. Two pairs of shoes was perfect. I remember transporting a double futon matress via bart to berkeley in the late 80s. I’m just not that adventurous anymore.
Mr. Jane brought up the topic of TB clusters while riding bart. Amtrak and other regional transportation modes don’t rely on air recirculators which makes them a big plus in my book. I’ve flown the cattle cars to HK and NY, pre-SARS. I also worked along side teams examining resistant strain pnuemonia in the mid 90s and I’ll admit, airplanes scare me - terrorists aside.
I could stand traveling by train more, if only it wasn’t as pricy as a plane ticket in many cases.
I took the EuroStar from London to Paris a couple of weeks ago it was great. The europeans are years ahead of us here in the US when it comes to rail.
I was in London and Paris just last week and the Eurostar to and fro, especially first class, couldn’t be beat. Train delays? Nope. Tracks backed up with 15 trains before us? Nope. Beautiful scenery along the way? Yes. On time? Every single time.
“The europeans are years ahead of us here in the US when it comes to rail.”
I beg to differ.
http://www.popularmechanics.com/technology/military_law/4247543.html
Um, what about the publicly built airports and the air traffic controllers, paid for by the government? Then there’s the public TSA put in place since 2001 and the publicly funded sniffer dogs, the airport police, publicly funded, etc,etc.
Amtrak is subsidized , but nothing to the extent the airlines are.
Of course, the biggest public subsidy of all are the interstate freeways. Many people think gas taxes build the freeways but that ’s only one small part of the extent of public subsidation and the freeways don’t have any revenue to give back except for a few toll roads
Uh-huh. The subsidies that airlines receive are nothing compared to what Amtrak gets, especially as a percentage of its overall revenues. End Amtrak’s subsidies and they are instantly out of business.
I don’t know of a single form of transportation available to the general public that is not subsidized by tax revenues. Even the sidewalks and gravel paths I walk on are paid for by taxes. End all subsidies to airlines and they are instantly out of business. I wish I could find the link saying that the airline industry as a whole has not made money for its stockholders, when all US airlines & their entire history is considered. Judging from the repeated cycles of airline bankruptcies gives some evidence for that. Does anyone here think airlines are worthwhile investments for individual stockholders?
Your choice for travel from Atlanta to New York is just that, your choice. I don’t want to pay more for your travel than I absolutely have to. Anyone who wants to fly that badly is free to charter or buy their own aircraft. The higher petroleum gets, the greater the advantage for railroads (which can also run on non-petroleum energy: wood, coal & electricity). Perhaps the day will come when travel along the interstates becomes so sparse tracks can be laid on the pavement and rail stations built at interchanges.
Notice I am not implying rail travel is inherently preferable to that by POV’s or aircraft, just pointing out the relative economies of these modes.
we focus = subsidized
hope not
bus is 76% subsidised and rail is worse-er
The candidates want to remove the gasoline tax, so that highways too can be 100% subsidized by general tax revenues. I am against this drunken scheme.
I fly 2-3 times/month. The service is disgusting. I’d gladly pay more.
I’ll fly business or first for all but the shortest flights. Why? It’s not that the service is better. Domestic First is marginally better. (Ever see the filthy scrap of “red carpet” that United lets its first passengers cross as they board?) (Well, the other reason is it’s easier to work in a first class seat, and I don’t like to sit next to some yakkety coach person or some screaming kid.)
The strategy is this: Mistreat coach so badly that it’s humiliating to fly coach! First gives about the acceptable minimum level of service.
I’ve long thought Airlines should simply raise the prices so they don’t have to play pricing games, with one class of passenger subsidizing others, etc.
RE: regional train and bus service.
The inability of this country to establish a profitable and functioning national rail service since the Arab Oil Embargo is a total and utter disgrace.
Similar systems have thrived in Europe and Japan for years.
Unfortunately for a country with $57.3 trillion in federal debt and obligations, a depleted manufacturing and industrial base, and a 50% populace base of non-producers it’s way too late to pull it all off.
Meanwhile, the rich are loading their Gulfstreams.
USA, no more Numba #1, GI!
yes, same story here in Europe. Plane tickets are often cheaper than the taxi that drives you to/from the airport (and sometimes 5-10x cheaper than parking your car near the airport during a short vacation). Trains etc. cannot compete because they don’t have all the nice tax exemptions that the airlines still have.
It is a shame that there is still no taxes on airplane fuel in Europe, while all other use of fuel is heavily taxed (except agricultural of course, another glaring exception). The Netherlands just introduced an extra tax for airline tickets, but everybody understands it is just another income source for the government and has nothing to do with the environment. Because of this small fee Dutch J6P is already driving to Belgium or Germany to get a slightly cheaper flight.
J6P thinks he/she is entitled to at least 4-5 cheap airline trips every year (we have too many vacation days over here). And that includes the right to be drunk and be extremely rude to other people during the flight. I definitely prefer the old times when airtravel was expensive, a special occasion to save for and look forward to.
Two things I think the higher fuel costs will do to the airlines and air fares:
- Put an end to the “hub-and-spoke” route structure used by most of the major airlines except Southwest in the deregulation era. High fuel costs make it increasingly expensive to route people over longer than necessary distances.
- Fares will more closely match distance traveled.
In addition, future capacity-related concerns (air traffic control, capacity at particular airports) may end up being greatly overstated. Not only may the growth rates of the past 30 years not be sustained, the number of flights could actually decline.
also, if airline tickets get REALLY expensive again, maybe a few remote beautiful places on the earth can be rescued from destruction by mass tourism. But I’m afraid that by the time gasoline gets too expensive for tourist flights, destruction will have run its full course.
NHZ, SE Utah gets hammered hard by ATVs, the wheeled locusts. We’re already seeing a decrease in numbers.
Woot! along those lines, I used to love to go xcountry skiing but F-ing snowmobiles would run you down. So would the dog sleds but seldom heard those and loved the sound of the bells at they approached. Lets hope snowmobiles decline as well.
‘NHZ, SE Utah gets hammered hard by ATVs, the wheeled locusts. We’re already seeing a decrease in numbers.’
That is SUPER news!
Maybe that is why 2 huge camoflaged 4 wheeel AVs showed up in the annoying neighbors yard across the street. More reason to park their cars along the main road behind the huge RV, rather than on the side street in front of their house…
ATVs. Would like to kick whoever invented those things in the b…s
ATV’s, I know what you mean. They should outlaw all ATV’s in UTAH. Especially in the area’s they are allowed. Come to think of it they should outlaw hiking in SE Utah aswell. And why the hell did they ever allow horses and wagons to go across SE Utah. Such a shame that anybody has ever been allowed to go there.
Yes I know, you only go on the graded dirt roads to take all those photo’s. Come to think of it they should outlaw taking pictures of SE UTAH as it is stealing the oura that is SE UTAH.
It is such a shame that they have graded dirt roads and trails to follow, they should not be allowed. The only way to stop these horrible people, ATV’s, hikers, snowmobiles, skiiers, Mountain Bikers, Photo bugs, etc..etc.. is to make them work 24 hours a day 7 days a week so they never can be allowed to have any fun and you special people with the the only allowable activity can hord all the fun. Well, what you consider fun anyway.
Put an end to the “hub-and-spoke” route structure used by most of the major airlines except Southwest in the deregulation era.
End of the “hub-and-spoke” will result in a lot of small/mid-size cities losing air service.
Southwest only serves 9 cities in California, the most populous state and only 6 in Florida.
Any cities served only by commuter aircraft of course, would have no air service at all.
The scary part is the temptation to scrimp on maintenance costs when other operating costs (e.g., fuel) are soaring and customer demand is waning (say thanks to a dearth of home equity ATM monies).
Got an uncle who was a mechanic for a major airline…He wouldn’t step one foot on an airplane to travel anywhere. Always talked about how they only had 4 hours of time to do 8 hours worth of work.
Scary, but borne out by various airlines recent maintenance-related travails. Working as a plane mechanic for a big airline must be a thankless task these days.
“Shareholder value” has encouraged short-term bottom-line profits at the expense of long-term capital investments and a sound vision for the future. I would gladly pay higher airfares in return for being treated as a valued customer, instead of enduring the surly, haphazard Soviet-style “customer service” that has made flying such an ordeal.
Old Aeroflot: Aeroflot
New Aeroflot: Everybody
I just booked 4 RT tix to Orlando (from Philly) for September on Southwest. $720 including all taxes and surcharges. I feel like I got a good deal on a pretty stable airline. Not fond of the cattle call / no assigned seats, but I can deal with it for a 2 hour flight.
Good price!
Managed to get $193 RT from Mpls to Orlando in July on Delwest (Northworst Airlines).
Get this, NWA decided to compete with an AirTran fare sale… well, by the time we figured out the dates that would work the AirTran seats were gone.
So, I checked NWA and lo and behold, they were still matching (ok, beating AirTran prices by $5 per RT ticket) even though the AirTran sale was over.
Not bad, RT non-stop and Worldperks FF miles… Look out wallyworld!
…
$550 RT Newark to Las Vegas…
I hate flying.
RE: Not fond of the cattle call / no assigned seats,
I always head right for the back and never have had any problems no matter if I was an A, B, or C.
It’s a better survival spot and you’re nearest to the latrine.
It was only an event because the government was restricting price competition, so airlines had to charge a high price (and competed with each other by offering tons of services). Most fliers don’t care about any services and mostly place value on arriving at their destination. Since the cost of filling an additional seat is very, very low (100,400 lb takes very little additional gas vs 100,000 lb). Ticket prices are a race to the bottom.
Airlines should charge by the pound. An aircrafts MPG is mainly influenced by weight and wind direction/speed.
I was recently on a flight and had an aisle seat mid-plane. A woman boarded and was making her way to the back. She was so widely obese she had to turn sideways and scoot down the aisle. Even then, her rolls of fat were spilling into all of the aisle seats. I watched her come towards me in horror, praying to the seating gods that she was not going to occupy the middle seat next to me. I would have felt ripped off if I would have had to share a large portion of my seating area with this person.
One of the good parts of being thin is that as America “supersizes” itself, my seat’s gonna get more comfortable.
The worst part for me about flying is that I’m 6′2″ and airline seats should apparently have a “you must be under 5′8″ to ride this ride” sign on them. If I’m not in exit row, I’m one miserable person by the time I get where I’m going. Making sure I qualify for at least AAdvantage Gold Elite status each year is an imperative.
No idea how taller people survive in coach.
RE: A woman boarded and was making her way to the back. She was so widely obese she had to turn sideways and scoot down the aisle. Even then, her rolls of fat were spilling into all of the aisle
Airline ticket cost should be based on a pre-flight weigh-in.
The scale could be intergrated with the item scanners.
When you get off the conveyor belt, you get your boarding pass; your ticket is immediately calculated; and subsequently charged to your credit card.
WTF should I subsidize the fuel cost of getting 300 lbs. x of extra fat to 30,0000 feet?
That must be the one sat down next to me for the Hawaii trip, Bertha Butt. I was in the middle-middle seat.
Argghh that was awful. Never again.
May 19 (Bloomberg) — California luxury home prices fell for the second consecutive quarter as banks required higher credit scores and down payments, reducing the number of potential buyers in the state’s wealthiest communities.
http://www.bloomberg.com/apps/news?pid=20601103&sid=a6svU0kprAG0&refer=us
“Mortgages are more difficult to obtain after the world’s biggest banks reported more than $300 billion in subprime-related writedowns and credit losses since the beginning of 2007. The value of jumbo loans, those over $417,000, probably fell below 10 percent of the entire mortgage market in the first quarter, Guy Cecala, publisher of Inside Mortgage Finance, said in an interview. That’s the lowest since the Bethesda, Maryland-based newsletter began keeping statistics in 1985.”
This sounds like bad news for California housing. What percent of family-size housing in California sold for below $417,000 as of the bubble peak (August 2005 or so)? I am guessing the percentage was near 0. With 38 m residents, California comprises 12.7 pct of the U.S. population, so I would think a jumbo loan market share below 10 pct portends badly for California luxury housing.
I am keeping an eye on those $600-800k homes and hoping in a few years to be able to buy one for cheap!
Me too. With no facetiousness, I’m eager to prey on the mistakes of the FBs. Some of the very same ones laughed at me for being a renter in my 40s. I’m going to be laughing with a roar!
Still open to the California coast, Nevada, and Northern California.
So, Ben and others report that the vast majority of Trustee sales are being delayed.
Makes sense… Here in Phx, we are 6000 defaults a month and 3000 forecsloures. Sure, some get cancelled, but less that 1000 a month. So, what happens to the difference? We must have 10-15K+ houses pending foreclsoure that are just hanging in limbo.
On the flip side, looking at places actually taken back, I findit hard to NOT run into people with multiple houses and multiple foreclsoures. To look at the properties, you’d think EVERYONE has 6 houses.
So, are they targeting the actual foreclsoures to mostly just hit the multi-property owners? Anyone that has just one house, and actually live in it, gets delayed, delayed, delayed hoping for some bailout?
Daryl:
That makes some wacky sense to keep actual homeowners in their homes, if they were really smart they would take the mortgage payments and pay down their CC debt. Imagine if we could live rent free for a year and wind up with ZERO CC debt, with just a foreclose/eviction on the credit report, it in some bizarre way it would offset each other.
That’s what I think is happening. I’m amazed at how delayed the trustees sales seem to be happening, and glad that it is not just a local phenomenon. I was beginning to think we were ‘different’ here…and that it was a sign that prices wouldn’t correct as quickly as other markets.
Maybe the lenders are making their decisions in anticipation (hopes) of bailout goodies to come. I don’t think that this is the major factor, and I’m not suggesting conspiracy, but the hopes of getting bailed out for making bad loans to multi-house speculators is probably pretty remote in any scenario. Particularly since so many of the borrowers made fraudulent representations and the lenders didn’t do their due diligence. Best not to have anyone looking there.
OTOH, FBs actually living in the houses and struggling to make it work will certainly engender more sympathy from the politicians. If lenders don’t feel that they can write everything off at once, triage would indicate that they hold on to those loans more likely to get help at some point.
I don’t see why a lender can’t write a better loan for a homeowner that really wants to be a homeowner and especially for a borrower who put some money into the house .But, than you get into the issue of why can’t the good pay borrowers get a break also .How do lenders sort out who is deserving . Perhaps if the original loan is at a absurd high adjusted rate ,but the borrower could of qualified for a better loan originally ,than maybe working out a better loan will prevent a foreclosure .There is the issue of the industries agents verbally promising borrowers that they could refinance into a better loan ,not that verbal promises are valid .
Anyway ,what is amazing to me is how so many borrowers did not intend to own the houses or condos they bought for very long and in some cases borrowers didn’t even want the locations or the size of the place or anything about the place. It goes back to the way real estate was sold during the boom where the idea was to get into anything or be priced out forever . People were buying property sight unseen over the internet for God sakes and promoters were bringing speculators in by buses to buy in the next advertised hot developments .No doubt many borrower bought far more house than they could afford , in strange places ,based on the notion that the higher priced houses would appreciate even more . I wonder how many borrowers now feel that they bought to much house and they don’t even need all the rooms they purchased ? How can it be a good loan when the borrower doesn’t even want the house anymore and the purchase had nothing to do with the borrowers true housing needs .It’s shocking how many retired (or soon to be retired )borrowers bought bigger places ,only to want to down size now ,but they can’t sell. How many people who bought that vacation home are now saying they don’t have time or money to
vacation ? There are a lot of people that are holding real estate that don’t want that real estate .
“Ben and others report that the vast majority of Trustee sales are being delayed.”
At what level is this decision made?
The chimp whose job is to sign the order is too busy throwing his turds at the zoo visitors.
You really think it’s at the level of the Board of Directors? I would’ve guessed lower myself, but you may have a point.
I’m trying to figure it out.
On the one hand they are probably looking at options for squeezing partial payments out of some people.
The banks are repo on mortgages they are holding first. In that case they get the collateral turned around earlier. The investor held MBS/CDO stuff gets low priority. Hence the banks unload stuff at slightly better market conditions. Since guys like CFC are also servicers on the MBS, they could do this pretty easily.
Also as everyone said they could be trying to work things out with investors.
All involved parties are trying to figure out how to best work the system. I’m sure a bunch of tax divorces are happening to have additional primary resisdences; along with junior getting a house from Mom and Pop realtor.
As homes foreclose in U.S., squatters move in
snip…
”In some regions, squatting is taking on new twists to include real-estate scams in which thieves “rent out” abandoned homes they don’t own. Others involve “professional squatters” who move from one abandoned home to another posing as tenants who seek cash from banks as a condition to leave the premises — a process known by real-estate brokers as “cash for key.”
“There are people who move in and know exactly who to contact and say ‘If you want this house, why don’t you come out here and offer me cash,’” said Detective Erin Camphouse of the Los Angeles Police Department’s Real Estate Fraud Unit.
“It’s just cheaper for the banks to do that rather than going into the courts,” she said. “The squatters are getting sophisticated and turning it on these banks who own the properties.”
She cited another case in which a Los Angeles man recently “leased” three abandoned homes to unsuspecting renters through Craig’s List, the online classified advertising company. The renters paid first and last month deposits, moved their belongings in and lived in the homes for several months.
“In one case, there were loose ends of rehab on the house that needed to be done and the crook wasn’t coming through or wasn’t completing it. So they offered to do it instead of paying rent. They put down tiles and carpet and all that kind of stuff. And it wasn’t until the sheriff put the lockout notice on the door that they realized something was wrong.” Continued…
In some regions, squatting is taking on new twists to include real-estate scams in which thieves “rent out” abandoned homes they don’t own. Others involve “professional squatters” who move from one abandoned home to another posing as tenants who seek cash from banks as a condition to leave the premises — a process known by real-estate brokers as “cash for key.”
“There are people who move in and know exactly who to contact and say ‘If you want this house, why don’t you come out here and offer me cash,’” said Detective Erin Camphouse of the Los Angeles Police Department’s Real Estate Fraud Unit.
“It’s just cheaper for the banks to do that rather than going into the courts,” she said. “The squatters are getting sophisticated and turning it on these banks who own the properties.”
She cited another case in which a Los Angeles man recently “leased” three abandoned homes to unsuspecting renters through Craig’s List, the online classified advertising company. The renters paid first and last month deposits, moved their belongings in and lived in the homes for several months.
“In one case, there were loose ends of rehab on the house that needed to be done and the crook wasn’t coming through or wasn’t completing it. So they offered to do it instead of paying rent. They put down tiles and carpet and all that kind of stuff. And it wasn’t until the sheriff put the lockout notice on the door that they realized something was wrong.” Continued…
http://www.reuters.com/article/domesticNews/idUSN2849018120080519
i swear the world is going to hell in a hand-basket.
leigh
In the nine months ended on March 31, UBS lost 25.4 billion Swiss francs ($24.3 billion), more than any other bank caught in the worldwide credit crunch.
Shareholders say Ospel and his fellow managers took a profitable Swiss bank and wrecked it on the shoals of structured finance and subprime mortgages.
http://www.bloomberg.com/apps/news?pid=20601208&sid=a3sm9FOrsWcg&refer=finance
great for Ben Bernanke and company to have such nice friends as these Swiss banksters that absorb all the junk from WallStreet with hardly a complaint …
NEW YORK — For David Simon, chief executive of Simon Property Group, the largest U.S. owner of malls and shopping centers, retail property this year is all about distress.
The credit crisis has made the cost of new loans expensive or impossible for commercial real estate buyers and developers. That could leave some with short-term debt scrambling for loans to complete their projects or hold on to new ones.
http://www.latimes.com/business/la-fi-malls19-2008may19,0,6571859.story
I have been noticing locally in Anchorage at least that there is more retail space for rent lately, and a lot of property being actively marketed for rent, though I don’t know that it is being rented successfully. However, not much commercial RE is for sale. What IS for sale just sits there, and it seems that right now they are much less likely to drop prices than the high end homes.
I think that commercial RE is hurting, but will generally trail residential RE, perhaps by as long as a year.
Simon says do distress.
http://en.wikipedia.org/wiki/Simon_says
Not Enough Oil Is Lament of BP, Exxon, Shell on Record Spending
http://www.bloomberg.com/apps/news?pid=20601087&sid=ajkO05voC8xU&refer=home
The cost to find and develop a barrel of crude between 2000 and 2007 more than quadrupled to $18 from $4, said Andrew Latham, vice president of exploration services at Wood Mackenzie Consultants Ltd. in Edinburgh. Demand in the period climbed 11 percent, or 8.8 million barrels a day, according to the IEA. Consumption will jump another 8.5 percent to 95.8 million barrels a day by 2012, the figures show.
Consumers are paying for the failure to find more crude. Gasoline cost an average $3.732 a gallon at the pump in the U.S. on May 12, a record then, according to the AAA. It takes $220,000 to fill a Boeing 747 with jet fuel, about double the price a year ago, Bloomberg calculations show.
Oil $200 may not be too far off.
What about Iraq? I thought we went there for the oil, er, uh, no, it was weapons of mass destruction, er, uh, to bring democracy to the region, er, uh, because if we don’t fight ‘em over there, we’ll have to fight ‘em over here, er, uh….
Have a nice summer driving season!
RE: What about Iraq? I thought we went there for the oil
Been my train of thought right from the git-go.
Unfortunately, the politico’s don’t have the ballz to say to the US public-these US boys are dying so you can drive your gaz guzzling SUV’s, and heat your 5000SF glue and vinyl McMansions.
It’s really not so hard to understand.
My guess is gaz spikes to $8.00/$10.00 per gallon, when O’Bama brings everybody home.
Alan Greenspan actually states this in his book!
.
What about Iraq? I thought we went there for the oil,
I initially thought we went there for oil as well, but now I’m thinking we went there to drive up the price of oil. We take Iraqi production off line, create instability, and our military ships and aircraft burn huge volumes of the stuff. For the people that produce oil it’s a win win situation, if we win they get the oil, if we don’t win and draw it out fore ever we drive up the price of oil. I’m thinking the Iranian nuk program and posturing are one and the same.
Tin foil hat off.
LONDON (Reuters) - Oil rose back above $127 a barrel on Monday, after OPEC’s president said the producer group will not call an early meeting and even at its September gathering was unlikely to boost supply as the world had enough oil.
http://biz.yahoo.com/rb/080519/markets_oil.html?.v=3
Didn’t shrubby go hat in hand to his buddies the Saudis and didn’t they tell him to eat it raw? Please, suh, can I have some more oil?
Although there will be some pain for a while, in a way this is a good thing. Now we can develop some cleaner, renewable energy resources and decent mass transit. We can let the Middle East go to hell in its own handbasket, instead of being constantly embroiled there. Maybe our armed forces can guard the borders instead of making the world safe for the oil companies.
I don’t understand the Bush bashing? The Saudi’s did not want us to throw out Hussein, the Shia’s are sworn enemies and Hussein was contained. Every President, in the last 40 years, kissed the Saudi’s arse, including Clinton. NAFTA was pushed by Clinton. Bush has threatenend to veto the bailout, stating “we will not bail out speculators”, while every potential candidate has embraced a bail out. Barney Frank and Sen. Dodd are Democrats. I don’t follow the HBB logic? or has misguided hatred clouded everyones thinking? No clear energy policy and wall street ties I understand, everything else defies logic.
NAFTA was pushed by both parties, with Bush 41 as a major cheerleader. As an Ex-Republican (the party left me), Bush 43 has been a nightmare. Ron Paul is the closet to a founding father we have, and the majority rejected him. Go figure. This isn’t the place for politics.
I understand giving Bush a free pass even less.
Whatever happened to those lofty campaign promises of “integrity”, “honor” and “character”?
I wouldn’t consider it Bush bashing. He is the chief executive of this country and he has led us into both an military quagmire and an economic crisis. If we are going to hold anyone accountable it should be the guy at the wheel. Dubya received specific warning about 9-11 but chose to ignore it to focus on Tax Rebate Check v1. He received specific warning–from his own father’s advisors–about the risks associated with invading Iraq but chose to go foward with his Napoleanic crusade. And yes, serious economists (see Dean Baker), and a number of well-informed average citizens on this board foresaw the coming housing/credit bust but the leader of the country–a man with an MBA–was caught completely unawares. The legislative and business environment is no excuse when you are President of the United States. The charge with the position is to defend the Constitution through personal leadership. And in that aspect he has failed miserably.
Bush bashing does not equal Demo loving. The HBB is an equal opportunity bash forum.
Seriously. Most on this forum see the higher-ups of both parties as scum and/or fools, in various fashions. Many (such as myself) actually feel like they’re mostly puppets, but still enjoy bashing them.
One of thing things I like about this forum is that we seem to be less polar politically than most forums.
Personally I think “Animal Farm” is one of the most poignant books ever written about politics. That small book speaks volumes.
Well said!
kirisdad,
This is my thoughts on the matter. He won the Electoral College election in 2000 however did not win the popular vote. This gave the media and the hard left carte blanche to go after him with no honeymoon. You have to understand 90% of the media hates him so every story is flavored with that hate for 8 years. And when I say media I just don’t mean news media I mean TV shows like Law and Order who attack him every week. By going in too light into Iraq and not finding WMD in Iraq was the beginning of the end of his widespread support. When Katrina came he screwed the political realities big time. Then he overcompensated by spending 100’s of billions to show he cared. He lost a lot of republicans right there. Holding on the Rumsfield to long sealed his fate with the people. The tipping point has been reached and nothing he can do will bring him back. To bad Carl Rove wasn’t working for McCain in South Carolina in 2000, history sure would have been different.
You have to understand 90% of the media hates him so every story is flavored with that hate for 8 years.
I guess you have a source for this somewhere?
I do not recall anything negative being said about Bush for about a year and a half after 9/11 and very little not dealing directly with the 2000 election being said in the 7 months prior.
I think the scenes of the looting of museums and government offices after the invasion while Sec Rumsfeld went on tv and said “its only a couple of guys, whats the problem” was when Bush’s popularity fell from the 90’s.
Yes I do, 90% of reporters voted for Gore and Kerry. Several different polls have confirmed this. Go read Bernie Goldbergs books you will see the evidence for yourself. You don’t remember before 9/11 do you? Many reporters trying to push the theory he really didn’t win in 2000. Of course he had support after 9/11 by the media any president would have. I am not defending Bush he has made his own bed, however there are clearly media agendas out there as well. If you don’t believe that why don’t you ever see media reports ever blaming the FB for their own mess? The current agenda is to support the demos massive bailout plans.
I might point out that “vote” and “hate” are two different things, but I am not too sure you would understand the difference.
How you connect hating Bush and not reporting on the Housing Bubble is astounding.
Your not really Alan Greenspan in disguise are you?
You (and others like you) really seem to believe that all the reporters and newscasters get together in a big, smoke filled room and decide how they’re going to report everything. I’m not sure why it is that people think that “the media” is organized enough to even attempt that.
Getting past the left-right, Repug-Democrap paradigm will set you FREEEEEEEEE!!
palmetto: Maybe our armed forces can guard the borders
Maybe if you wish hard enough you can recreate fortress America. The Middle East is like having a tiger by the tail - if you hang on you’re in trouble, if you let go you’re dead.
Fortress America now includes 3 foot strands of concertina wire on top of the Tijuana Wall, as better to keep newcomers out and wage-slaves in.
I see nothing wrong with having a sovereign US independent of oil.
Old and maybe already posted. No easy answers.
“US Senators threaten Saudi arms deal over oil prices
5 days ago
WASHINGTON (AFP) — A group of Democratic Senators Tuesday threatened to block a multi-million dollar US arms deal with Saudi Arabia, unless the kingdom ups oil production and helps cut soaring gasoline prices.
The senators introduced a resolution of disapproval on the arms sale, as President George W. Bush prepared to head for Saudi Arabia, partly on a mission to contain runaway oil prices.
“We are saying to the Saudis that, if you don’t help us, why should we be helping you?” said New York Democratic Senator Chuck Schumer.
“We are saying that we need real relief, and we need it quickly. You need our arms, but we need you to cooperate and not strangle American consumers.”…”
http://afp.google.com/article/ALeqM5iyoswDU3YRSzMFgn3hAQHAx-Xqng
We shouldn’t be arming the Saudis anyway. Screw ‘em. Let’s get clean, renewable, non-threatening energy sources on line ASAP.
As if the Saudis couldn’t buy their weaponry from somebody else?
Great
It is just as easy to get the weapons from France or Russia. Stupid government.
ya, however, why don’t we just take over the Sudis, Iraqis and Iranings land. If we are going to win, lets do it right.
How much worst can we piss off the Muslins? Ship the entire populations of all three countries to the US as refugees. We need someone to occupy those empty houses. We will charge it against their oil revenues that we subcontract out to our Oil companies.
Since we attacked Iraq for the oil, lets evict the inhabitants and ship in Americans to occupy the place like what happened in Israel!
This appears to be what our foreign policy is/will be anyway!
Gradualism kills the US at war everytime. If we are out war, lets go to a war-time economy and draft everyone between the ages of 17 and 55 (like WWII). This will help the economy and help business by supplying the war effort.
/sarcasm off
WASHINGTON (AFP) — A group of Democratic Senators Tuesday threatened to block a multi-million dollar US arms deal with Saudi Arabia, unless the kingdom ups oil production and helps cut soaring gasoline prices.
the USA is losing the power to make these kinds of threats
plenty of other places to buy weapons
World leaders should just get in a private luxury hotel room in Dubai, strip and measure off. Winner gets a trophy that looks like the Washington Monument or an Egyptian obelisk, depending on your national orientation. It would save us a whole lot of lives, money and heartache. Of course, Merkel and other similar ladies would be left out, but they mostly don’t create the trouble anyway.
Chuck Schumer is a complete ass I am from NY and him and dodd really need to be voted out, they are both complete and uter nit wits…The saudi’s would up production if they could, the reallity is there is no more additional production to be created, and even if they could we don’t have any additional rifining capcity to handle it, so it would be moot…
Senator Moot Point never met a tv close-up he didn’t like.
It’s been said that the most dangerous place in the world is between Schumer and a television camera. Same for Senator Martinez of Florida.
Great. Schumer, Hillary, and co. say let’s get tough on Saudi Arabia so we can get back to cheaper oil. And at the same time let’s have government force us to use less energy to fight global warming.
Doesn’t anyone see the disconnect here? Why not just stay out of the whole mess altogether? Let the situation resolve itself, if this and Ethanol subsidies are the best you can come up with.
I thought the most dangerous place in the world was between Senator Patrick Leahy (D-Vt) and a press conference in DC or a televised segment on Sunday morning from his “farmhouse in Vermont.”
The Saudis are sitting on a dwindling supply of oil, and they know it. As long as we have so many people in the US who insist on driving gas-guzzling vehicles for their suburban commutes, Bush doesn’t have a leg to stand on when he goes begging the Saudis for more oil.
Mr. Sandman, keep up the American Dream (bung, bung, bung, bung)
Pull out more oil than you’ve ever seen (bung, bung, bung, bung)
Give him a reason to duck and cover (bung, bung, bung, bung)
Then tell him that ’ssshrubery’s loan-star state reign will soon be over
Sandman, I’m so alone
Don’t have nobody to sell us go-juice on the basis of a loan
Please turn on your magic beam
Mr. Sandman, bring back the American Dream.
http://www.youtube.com/watch?v=n-c66SJPuUI
“We can let the Middle East go to hell in its own handbasket, instead of being constantly embroiled there.”
Unfortunately the U.S. adopted an autistic country in the region.
Sorry, palmetto, but nobody is going to “develop” anything.
“Improvements” in the system have been summarily thrown in the wastebasket.
The same self-serving politicos who have stymied progress in the past will continue to do what they know how to do: take bribes and talk a great game until they die or are thrown out of office to be replaced by another crook
While I liked the fact that we were able to buy cheap oil for so many years from the oil countries ,at the same time I feel that now is the time for America to start advancing our own energy sources. The thought of a situation where we are cut off from the oil supply we need to function is a scary thought .
Why is it that in the United States the powers/people always wait until the last minute to respond to situations that have been brewing for years . In the case of the housing bubble the damage was done by the time the powers even noticed. I hate all this guessing and arguing about energy needs and I think there just has to be the assumption that we need to start developing new energy sources as well as conserve energy as a Nation . I want my grandchildren to be able to live in a world that has energy .
ProcrastiNation
now is the time for America to start advancing our own energy sources. The first oil crisis of 1973 was really the time when the issue became obvious. The electorate and its leaders have been shuckin’, jivin’, and procrastinatin’ ever since.
—————
Why is it that in the United States the powers/people always wait until the last minute to respond to situations that have been brewing for years. Just human nature and the nature of large groups of humans, no avoiding it.
————–
we need to start developing new energy sources as well as conserve energy as a Nation . I want my grandchildren to be able to live in a world that has energy . No arguing with you there, but getting a nation of 300+ million people and numerous vested interests running the government to seriously do this is no easy task for any one individual or any small group of them.
Since 1973, we’ve invented trash-mashers, electric toothbrushes & waterjets, card games & pin-ball programs played on electronic devices (plugged into power grids), sport vehicles like motocross, sno-mobiles, ATVs so our oil usage increases, holiday decorations that require air pumps and even more lighting (for every holiday - Easter, Halloween, not just Xmas), spray scentors plugged into outlets, A/C when fans would do, and everything is built to be disposed of, instead of re-used. Have you tried to buy an engine component lately? You have to purchase the whole system, not just the leaking gasket anymore!
Lowe’s profit falls 17.9 percent in 1st-qtr in challenging sales environment
http://biz.yahoo.com/ap/080519/earns_lowe_s.html
But it is above the average analyst forecast of 40 cents a share.
YHOO has recovered all of the drop from a few weeks ago. Nobrainer buying into that one.
The Australian dollar rose to a 24-year high on Monday as rising commodity prices and a sell-off in the US dollar boosted the currency.
http://us.ft.com/ftgateway/superpage.ft?news_id=fto051920080621460381
Brazilian currency appears to be slightly below its record of 5/3/08, but also propelling higher.
We’re in big trouble if we achieve parity with the Australian dollar, and I don’t think they want that either. The Canadian dollar hasn’t been higher than the US dollar in 30 years. Aussie dollars have a much stronger and diverse economy backing them over the long term, IMO.
Stranded in Suburbia
http://www.nytimes.com/2008/05/19/opinion/19krugman.html?_r=1&ref=opinion&oref=slogin
txchick,
When I moved recently, I choose a neighborhood that was an easier commute to me new place of work. I now bicycle to work. When I lived in Tampa I commuted 13 miles which took 45 minutes on a good day and an hour on most days. I cannot imagine what is going on there now. Many people I worked with bought houses 30 to 60 miles away because they were much cheaper and bigger than toward the city. In those commuter-based subdivisions the stress must be horrendous.
Roidy
Started biking to and from work 9 miles each way three or four days a week last August. My stress has never been lower, and I haven’t felt this good since college.
Good for you! The answer to high oil prices (for now) is easy: drive less.
This is the hidden secret: Walking and riding bikes are actually preferable ways of getting to/from work than driving or even taking the train.
When I lived in Japan, I had a rail pass paid for by the company. It was a 30-minute subway ride to work or a 30-minute walk. I only took the train if it was raining. I noticed that time of day became a wonderful time to think and reflect on stuff (without risking freeway pileup).
Fortunately, my train ride was going opposite the normal commute, so I avoided scenes this this one:
Human cargo packed on Japanese train
Absolutely. There are no magic bullets. Solar and EVs are a good 15-20 years out before they really begin having the effects everyone hopes. That’s if all goes well. Between now and then, we just need to drive less and consume less across the board.
Tell your legislators to keep their slimy hands out of energy policy, they’ve already screwed it up enough. Let prices go where they may, and we’ll all figure out quite well how to get by. My prediction is that 70-80% us will be much happier for it in the end.
I wish we had a shower at my work. I don’t want to bike to work, then be “salty” all day.
Getting to be the time of year when a 7 mile ride when it is 110+ out wouldnt’ be much fun either, but atleast I could dive into the pool when I got home.
RE: When I lived in Tampa I commuted 13 miles which took 45 minutes on a good day and an hour on most days.
13 miles per hour.
We need more immigrants in cars.
wow, 45 minutes for 13 miles! I bike commute in the Bay Area (traffic isn’t all that great here either), and it takes me 45 minutes to go 10 miles to work. It’s nice to ride along the bay, and the tailwind on the way home gets me home even quicker.
Admittedly, the next few years will be rough for families who bought big vehicles when gas was cheap, and now find themselves the owners of white elephants with little trade-in value.
I traded my Explorer* in for a Vibe back in November. I got exactly what I wanted for trade in $$ (with some tough negotiating of course). I am SOOOOO glad I made that move when I did because I know I’d be stuck with it nowadays.
*NOTE: I never really wanted it anyway…my ex-husband did. We got it to replace my 2 door when I had my son so it ended up with me after we split.
Talking about the Pontiac Vibe, we went to look at the new 2009’s on Saturday. Nice car (its a rebadged Toyota Matrix), especially with the 2.4 liter engine.
What was especially interesting was how empty the dealership was on Saturday. Dealers can’t sell cars on Sundays in Colorado, so the big day here is Saturday. We went late in the afternoon and were the only shoppers there. It confirmed my “its that bad” suspicions.
We also went to look at Mini Coopers. There is only one dealer in the whole state, and that place was packed! It was part of a BMW dealership, and at the BMW side business looked slow.
Admittedly, the next few years will be rough for families who bought big vehicles when gas was cheap, and now find themselves the owners of white elephants with little trade-in value.
I’ve been waiting every week for my one-morning-a-week cleaning lady to tell me she wants more money, to pay for gas for the Ford Expedition she insists she deserves to drive (because she “likes” it).
I can’r wait to say, no way am I paying more for her gas guzzler…
The NYTimes weighs in on “foreclosure prevention” declaring that falling prices are unsettling the financial system, and that affordability has already been reached. Let government halt the decline in prices and those buyers on the sidelines will jump back in the market. And, oh yes, falling prices are “everybody’s problem”.
http://www.nytimes.com/2008/05/19/opinion/19mon1.html?hp
yeah, let’s see how affordable prices are if Bernanke allows rates to attain their free market value, and when mortgage conditions get back to what they were until about 10 years ago.
“…that affordability has already been reached.”
Maybe for investment bankers with $200 m golden parachute monies as a worst-case compensation outcome…
funny how they never mention anywhere that prices should have never gone up as much as they did. it’s always we can’t let them drop.
got idiots?
It burns me up when the Realtors (TM) repeat the same mantra as gov’t and the Wall Streeters…not blinking that prices doubled, tripled or even quadrupled in some areas in less than a decade, but “can’t be expected to drop” more than a few percentage points overall because buyers “aren’t being realistic”.
I’d love for someone to do Lexis/Nexis search and find out the exact number of articles/editorials the Times has done in the past 10 years decrying the lack of affordable housing. Now that the market is obliging and beginning the process of providing affordable housing they cry for the government to do something to stop price declines (not that any legislation will make a difference anyway). Why is that housing is the only thing that price declines are bad in? When the price of gas, food, clothing or damn near anything else goes down people start celebrating.
The NYTimes piece is a perfect example of a failure to understand market capitalism. Of course, the Times depends on real estate ad revenue, which colors its’ editorials, to the point where they publish these brain-dead editorials. They are still pushing residential RE, and not reporting the job losses on Wall Street.
As for my doctor friend who’s trying to sell her 1-bed in Manhattan, she told me her Corcoran agent owns 4 apts. himself, and believes that the market will “come back” in a year or two. At least she is clear now that RE agents are just sales people, with no real understanding of economics or market fundamentals. A small bit of progress, but late in the game.
Bingo! Any “liberal” who wants to prop up housing prices is a lying hypocrite! It seems like they don’t really want affordable housing, or if they do it’s by confiscating my money and helping deadbeats stay in overpriced housing.
I want housing to drop like a rock! Median house price should be 3.25x median income, and it would be if there was no manipulation or E-Z credit. (And I’m no bitter renter! I have a house in 94087, and land in 34768, both 100% paid for. Let my “value” drop. I don’t care.)
exactly, very un-liberal.
In the Netherlands the ‘liberal’ party is the biggest supporter for the HMD, that is the major culprit for sky-high Dutch homeprices (the HMD is also supported by the conservatives - christian democrats - who should know better as well). And the Labour party is the biggest supporter of huge rental subsidies, which are effectively homeowner subsidies as well. As a result all the big political parties are strongly in favor of some kind of homeowner subsidy
Liberal=hypocrite alas, so often true.
Have you taken a look at our budget deficit over the last 7 years. Brought to you by the party that advertises itself as the fiscal conservative party. How about foreign wars since GW took office. No hypocricy there right. How about the shreding of our constitution.
Good morning all. My little town (pop. 900) in SE Utah just had the mayor’s house go into foreclosure. Yup, real estate is loco, I mean local.
Sinkhole de Mayor
What… don’t you guys pay your mayor enough to live the lifestyle a public figure deserves?
/sarcasm off
and how’s life as a squatter?
The mayor doesn’t get paid anything, which is probably what he’s worth, seeing it’s a political job.
As for the squatting, no news is good news - so far all’s quiet on the squatter’s front.
Barbarians at the gate.
http://www.nytimes.com/2008/05/18/nyregion/nyregionspecial2/18Rrealnj.html?_r=1&ref=nyregionspecial2&oref=slogin
It happens in the suburbs, but can’t happen in Manhattan right?
I’ve already had an eviction in my building (and this is a rental!)
Three other families have moved out within the year. The bust is real.
Seeing that too. Was talking to a wall street guy on the UWS last week - his family is downsizing their rental now because next year’s possible comp reductions could easily driven them into negative saving territory otherwise.
Sensible move, all in all.
Retailers Downscale Their Luxury Lines
By JENNIFER SARANOW
May 19, 2008; Page B1
This Stock-Market Rally Is a Keeper … or a Tease
By E.S. Browning
Word Count: 1,015
VXO is at levels last seen in October and wasn’t that a great time to be shorting.
Yeah I’ve noticed that. I’m all in.
Added a good one in LOW the other day I think. Thought about HD as well - in the end though HD may not do too bad - they’re the “Wal Mart” of home improvement stores. I absolutely abhor them, but they appeal to the frugal.
I think TIF is a good short right now.
Ouro Verde
Vanguard Explorer Fund Investor Shares (VEXPX) is not one of my target lazy investments, nor would I put moneys in the fund.
my list and ratio of portfolio:
Vanguard 500 Index (VFINX) 15%
Vanguard Emerging Markets Stock Index (VEIEX) 10%
Vanguard European Stock Index (VEURX) 2 -5 %
Vanguard Extended Market Index (VEXMX) 10%
Vanguard High-Yield Corporate (VWEHX) 10%
Vanguard Inflation-Protected Securities (VIPSX) 10%
Vanguard Long-Term U.S. Treasury (VUSTX) 10%
Vanguard Pacific Stock Index (VPACX) 15%–20%
Vanguard Small Cap Growth (VISGX) 2 -5 %
Vanguard Small Cap Value Index (VISVX) 2 -5 %
Vanguard Total Stock Market Index (VTSMX) 2-5%
T. Rowe Price Africa & Middle East (TRAMX) 3-5%
The reason for Vanguard is that you don’t have to pay broker fees. You don’t have to pay as much juice to the fund. These ratios are there for a reason. When you start subbing indices and ratios anything can happen. Do not let some mopey Vanguard broker talk you into a fund like the explorer fund! VEXPX on a backtrack reduces the return-marginally for some but 20% vs 22%
“The reason for Vanguard is that you don’t have to pay broker fees.”
My sons were recently playing The Game of Life, which I believe had its birth in the Great Depression years (1930s). I was amused to read the Stock Brokerage card, which listed the firm’s name as “Broker and Broker.”
I’m not Ouro, but thanks, Hoz. Am looking for greener horizons myself.
Does anyone know anything about the Magellan fund as a 401K investment vehicle? Also, anyone know why we have had a sustained rally over the past few months? It seems the indices are almost back to where they were in January ‘08, despite some of the worst financial news in at least a decade (ie BSC failure).
Thanks Hoz, my broker is semi retired and not doing anything except collecting commissions.
In a month I will pick up tramx-vwehx-vustx. If I am already in treasury bills do I need vustx?
Even though my account crashed in the dot com, I held on to Intel and msft. I need diversity bad.
Many people buy a Long Term Treasury for par and hold it - for better or worse - a bond holder should look daily at Mark to Market. A fund buys a long term treasury bond and swaps it for the better YTM. A recent example was when the 5 yr TIPS had a negative yield to maturity. The bonds should have been sold and the moneys put into a long term treasury fund, when the TIPS came back down, swap back into the TIPS. From an investors view, the TIPS went up 7% in a month and down 5% in a month for a net wash of close to zero all by sitting; from the funds view they picked up 7% and ended up in the same position. The fund made additional moneys on the trade that a conservative/reasonable investor would have skipped for fear/risk of losing a good position.
Every bond holder should have been selling 10 year treasuries when the yield was under 3.5%. I was shorting the 2 yr treasuries when the yield was under 2%. Unrealistically low yields = borrowing money at less than 2%. I cannot go to my bank and borrow moneys at 5%!
Thus the reason for a long term bond fund. I hope that makes sense.
Sorry Hoz, but that went right over my head. Its hard enough to follow stocks. I better go paint my fingernails and have some chocolate.
I like chocolate.
Hoz - dumb question - are you referring to the regular Vanguard funds you list or ETF versions?
These are funds from Vanguards funds group. Phone: 800-662-7447
I’m in it already, thought there were ETF analogs. I’m all in mmkt now. Need to move out I guess but it always seems like the wrong time.
It can be any funds! It is the allocation in the funds that is critical to investment/ 100% in one fund eg S&p500 is only a 6% APR. But when spread across the board you get real returns of 22%.
12 mutual funds? and 11 of them Vanguard?
Seems just way too many to understand/balance effectively. I find four about the limit of what I can handle: VFINX, VGTSX (global equity,) VNYTX (state munis,) and VBIIX (intermediate term bonds.)
As my dear pappy said, if you can’t talk for 10 minutes about why a specific set of investments you own is better than a mutual fund with the same broad goals, just buy the fund. You don’t get any additional diversification, and fees are a little higher.
Surreal Estate
Foreclosure statistics tell different stories to different interpreters
Carol Lloyd
Sunday, May 18, 2008
This real estate market isn’t so much good, bad or indifferent as topsy-turvy.
Usually that’s because the market downturn hasn’t been an equal opportunity destroyer. Micromarkets reign and rarely move in lockstep. Still, once the analysts crunch their numbers, they come up with some figures that allow for a few broad generalizations: median home prices are slipping, for instance, or the luxury markets are booming.
Occasionally though, you get numbers that seem downright contradictory. This week I received two press releases from two competing foreclosure companies that had me head-scratching like an ungroomed bonobo.
…
In a rapidly changing market, there’s room for a lot of people to be both factually correct and completely contradictory. Although the numbers may not lie, how we make sense of them always involves a certain amount of storytelling - replete with sins of omission and virtues of emphasis.
Is the end is near or far? Someday, we will look back and know which numbers signified which way the housing hurricane was blowing. But now in the eye of the storm, it all depends on which story you want to tell.
E-mail Carol Lloyd at surreal@sfgate.com.
Carol Lloyd who writes the Surreal Estate for SFGate is frequently off the mark, and only one step up from a real estate shill.
Many of her articles are badly written and poorly researched, and I get tired of reading about how “San Francisco is different”.
I bet she owns a bunch of properties in the Bay Area, which would explain why even though she attempts to be objective and liberal, you can tell she is pleased that real estate here in SF is so pricey. Friends of friends know her, and I hear she is a snooty entitled be-atch who comes from money.
She bought at least one house a few years ago in SF.
If things keep going the way they are heading, she’ll be underwater soon.
Though no one here, especially in the Alt-A Bay, would talk about THAT.
“…Subprime credit card lender Capital One Financial (NYSE:COF) ended 2007 with its lead unit, Capital One, NA, in loss. With the 2007 merger with North Fork Bank, Capital One NA is now $97 billion in assets and closed 2007 with 86bp in defaults. With Q1 defaults running at 168bp (annualized), the larger of the three sub banks of COF is already above 2001 peak default rates.
The smaller unit of COF, Capital One Bank, which contains the group’s credit card assets, reported 517bp of defaults at the end of 2007. The Q1 2008 annualized default rate was just under 1,000bp or 2x 2007 levels. This bank is about 25% of the assets of the COF organization, so look for aggregate default rates to move significantly higher if this level of loss experience continues through 2008.
Keep in mind peak default rates for Capital One Bank previously were 670bp in 2001, so if current loss rates persist through 2008, this unit will write off 1,000bp or 10% of total loans.
A number of our colleagues have commented recently that credit cards do not seem to be experiencing unusually high default rates, but the results of COF’s credit card unit seem to contradict that view. Overall, in 2008 we look for loss rates among all US banks to at least double from the 80bp of defaults reported to the FDIC for 2007. …
We continue to worry about the rate of change in bank default rates going in to Q2 2008 and the rest of the year. We worry that the rate of change in bank default rates may not slow until 2009, a scenario that is pretty close to a worst case scenario for the US economy that sees many US banks at 2x early 1990s levels of loan defaults. If the rate of increase in bank loan defaults accelerates in Q2 2008 for most banks, then all of the proverbial bets are off.”
Institutional Risk Analytics
http://us1.institutionalriskanalytics.com/pub/IRAstory.asp?tag=281
Don’t worry, ’tis all contained!
Basel II in 2009 is going to be a boatload of fun for those chaps.
Bummer, their on of our newest, biggest, highest profile clients. Going to be first to go live with the next version of our software a year from now.
I’d hate to see them cease to exist.
I’m not getting as many Crapital One mailings as I used to. Too bad. I really enjoyed scribbling nasty messages on them, then mailing them back to Crapital One in those postpaid envelopes.
Holy sh!t storm…
Doesn’t qualifying as a “sale” technically involve a willing buyer and a willing seller? It seems that only 2 pct of California’s April courthouse foreclosure auctions actually led to a sale.
State foreclosure sales hit record high
By Sue McAllister
Mercury News
Article Launched: 05/13/2008 12:53:26 PM PDT
More than 1,000 California properties were foreclosed upon each weekday in April, setting a bleak new record for the state’s troubled housing market, while foreclosures in Santa Clara County surged 585 percent from a year earlier.
Last month’s foreclosures totaled 22,838 statewide, according to ForeclosureRadar.com, a Discovery Bay company that provides such information to subscribers. That’s an average of 1,038 foreclosure auction sales occurring each business day in April, said company president and founder Sean O’Toole.
In Santa Clara County, 500 properties were foreclosed upon in April, up 47 percent from March 2008, and up 585 percent from April 2007. The county ranked 40th last month among California counties in terms of foreclosures per capita, ForeclosureRadar reported.
The total worth of the loans foreclosed upon in the county last month was $292.4 million.
The foreclosure process begins when a mortgage lender or loan servicing company files a “notice of default” with a county records office, typically a few months after a property owner stops making mortgage payments. About four months later, if the owner has been unable to sell the property or get up-to-date with his payments, the foreclosure concludes with an auction sale of the property at a courthouse or other public venue.
For at least the past year, these auction sales almost always have ended with the foreclosing mortgage lenders repossessing the properties because no third-party bidders offered to buy them.
O’Toole said despite the fact that lenders are frequently offering big discounts at the courthouse auctions, 98 percent of the state’s foreclosed properties in April failed to find buyers, so the lenders took ownership. The properties then become known as “REOs,” for “real estate owned” by banks and other financial institutions. The banks then try to sell the homes through real estate agents who list them on local multiple listing services.
I don’t get why this flood of REOs does not show greater impact on the MLS, which for San Diego has been holding steady at about 18,500 used homes for sale over the past few months. I suppose that in due time, the REO flood will hit the market, but apparently not just yet…
One of my former fellow agents gets a LOT of REOs. I checked out his listings on the northernarizonamls.com site recently and almost all of them were asking retail prices [$150-250/sqft in Flagstaff, AZ area].
The great American staredown continues . . . .
A 98% rate of failure might be construed as a meltdown by some.
Pessimist. The glass is 2 pct full!
M&M’s - melt in your mouth not in your hands.
REO Inventory Now 34% of California’s Home Sales
Kerri Panchuk | 05.13.08
The term real-estate owned (or REO) is taking on new meaning in California, where REO properties recently accounted for 34-percent of the state’s home sales in April, according to a new report from ForeclosureRadar—a company that tracks all foreclosure data in the Western state.
ForeclosureRadar says the data collected in April hints at what lies ahead, and it’s not necessarily good news.
Reo Grande
REO Deedwagon- The foreclosure tour!
Bring out your deed!
Dumb question maybe, but I don’t get why they call them “real estate owned”. How does real estate own something? “Bank owned” would make more sense.
Good Times Are Drinking Times:
Empirical Evidence on Business Cycles and Alcohol Sales in Sweden 1861-
2000
Niclas Krügera and Mikael Svenssona
Department of Economics, Örebro University
Adolescent Health Research, Karlstad University
Abstract: This paper studies the relationship between the business cycle and alcohol sales in Sweden using a data set for the years 1861-2000. Using wavelet based band-pass filtering it is found that there is a pro-cyclical relationship, i.e. alcohol sales increases in short-term economic upturns. Using moving window techniques we see that the pro-cyclical relationship holds over the entire time period. We also find that alcohol sales are a long-memory process with non-stationary behavior, i.e. a shock in alcohol sales has persistent effects.
“…In a series of papers based on US data it has been shown that the short-term impact of increases in the growth rate of GDP is bad for your health (Ruhm, 2000; Ruhm, 2003; Ruhm, 2005)….”
atlasfink.oru.
See the government is trying to improve your health by lowering GDP!
“Using wavelet based band-pass filtering it is found that there is a pro-cyclical relationship, i.e. alcohol sales increases in short-term economic upturns.”
Wavelet based band-pass filtering and alcohol consumption don’t mix.
Does for me.
You won’t believe this, but as a photo industry consultant who’s working on a system to autodetect out-of-focus images after they’re taken, I use “wavelet based band-pass filtering” all the time! *AND* I consume lots of alcohol.
We really should have an HBB drinking game triggered every time a high enough government blowhard says something ridiculous and not even remotely true.
Cirrosis?
No kidding. I want the housing market to crash not my liver.
Besides, we’d be too tanked up before 8am to even post.
Participants wouldn’t survive a week.
“Always carry a flagon of whiskey in case of snakebite and furthermore always carry a small snake.”
W.C. Fields
As a teetotaler, I’ll volunteer to be the designated commenter.
Teetotally, dude.
‘We really should have an HBB drinking game triggered every time a high enough government blowhard says something ridiculous and not even remotely true.’
Seems to me that you are a genious!
http://economic-whinefest.blogspot.com/2007/12/beer-bingo.html
Note the date.
My apologies if this is a repost, as the date is a bit stale.
HOUSING: Foreclosures reach new high, more to come
Default notices tower over total home sales.
By ZACH FOX - Staff Writer | Tuesday, May 13, 2008 4:48 PM PDT
North County foreclosures reached a new high in April, and a forward-looking indicator suggests that the region’s foreclosure crisis will not be going away soon.
For the fifth straight month, the number of homes entering the foreclosure process surpassed the number of homes sold. Known as notices of default, the first step of foreclosure is considered a leading indicator of how many homes will hit the market within three to six months.
North County default notices leaped to 1,183 in April, a high for the housing recession that started in late 2005, according to a report released Tuesday by ForeclosureRadar, a tracking service. The number of homes seized by the bank —- the final step of foreclosure —- followed suit, jumping to 578, also the largest number yet.
By comparison, 875 homes sold in April, according to a real estate report issued this week.
If the North County real estate market were a ship, we would have to conclude it has capsized…
They did it with mirrors
A short ruse
May 18 2008 18:58
When buyers vanish from a market, sellers need to get creative. The banks have struggled to offload loans made to support leveraged buy-outs during the credit boom. One of the latest ruses is to target alternative asset managers, lending them the cash to buy a portfolio of loans at steep discounts to face value. A slice of the £9bn debt backing the buy-out of Alliance Boots should get away soon via this technique. The banks say they are mucking out the balance sheets, freeing scarce capital. But it looks like little more than window dressing as it represents an imperfect transfer of risk.
The LBO debt is moved off-balance sheet, yes, but only into a special purpose vehicle. Typically a quarter of the funding for this will be equity supplied by the buyer and the rest is non-recourse debt from the bank. As with a mortgage, if the borrower cannot service that loan, the bank would have to foreclose while hoping that the underlying asset – the LBO debt – is still worth more than the loan made against it. The banks have marked down the value of credits already, typically to between 88 and 92 cents in the dollar, so they do not expect to be taking these assets back. But the possibility remains….”
FT Lex
Just got hit on another slice of index puts. I’d like to see 1440 for more.
Don Sew just sent out a class 1 sell on the dailies (index), weeklies already in place. Any of you guys from SI know Don, he’s the best.
200 dma tagged. Bought some SKF too.
Ok, SKF bought, 500index 1437, R/R is 12:1. justifiable.
I’m about 75% in index puts and some SKF.
Sorry to be ignorant and I know you’re busy, but I wonder if you could answer a few questions for me.
I understand an index put means you’re bearish. Can I buy something like that at AmeriTrade, or do I have to somehow write a contract?
SKF is an ultrashort financials fund. I take it this means that whatever banks are doing, this fund does the opposite in an “ultra” fashion. So you’re actually buying the SKF at the market value because you think banks will do poorly and then in a week or a month or something you will sell it? Or are you buying something else?
What does “500index 1437″ mean? You bought 500 index puts at 1437?
What is “R/R is 12.1″ Risk to return? Are you saying for every $1 you stand to lose, you stand to gain $12? How would I buy into this?
Thanks for any help understanding what you’re talking about
I know it’s a lot of questions.
I bought SKF (very short term trade) when the S&P500 was tracking 1437 and change. The reward to risk is 12 to 1 . I am covering if the S&P500 goes to 1442, and the S&P500 should retouch 1390. The SKF is 2:1 in ones favor (4:1 when working against you- thus very short term).
I do not know Ameritrade but SKF is a NYSE listed ETF suitable only for relatively knowledgable traders and not suitable for many as an investment strategy. Read the prospectus.
Hoz, thanks for the answers (and the investment disclaimer
)
So by covering you mean that if the S&P500 goes to 1442 you’ll sell the SKF, and likewise if it goes to 1390? Does “cover” just mean to sell? So you’re using the S&P 500 to determine when to get out of SKF?
How does one acquire an “index put”?
Thanks again!
SKF is a “short ” position; due to my antiquity and my antique trading terminology. When buying a “short” position that was called “covering”. So I think of SKF as a short position, I should say “selling or closing out my position”. Yes I look at divergence between the S&P and sectors of the S&P. In this case S&P vs Financials. Financials are stuck at 1390 on the S&P and are the weakest sector of the index. Since financials have not participated in this 400 point rally, the rally is false and will tank.
And I just got out of my SKF - took a day traders profit and am going fishing. :>)
Thanks for the info. Good luck fishing.
You can buy it thru your Ameritrade account just like any stock or Mutual fund. I use Ameritrade to trade ETF’s and as I posted a few weeks ago had an opposite position in a financial ETF (IXG). Its 75% closed out now after yielding a 10% return, but guess it takes 2 to take a market. These funds are definitely not buy and hold and I find it helps to make sure you set exit and entry points ahead of time and watch it like a hawk. I haven’t looked into SKF but it almost looks like mnay here are using it as a type of short term volatility play? I only have small positions and am by no means a professional or expert investor!!!
Not me, Hoz. Looks like it’s going to close near the high of the day.
“Since financials have not participated in this 400 point rally, the rally is false and will tank.”
No and why would they ( financials ) homes prices have more to fall.
Do you see what Don Sew recommends by becoming a member of Silicon Investor?
Thanks in advance.
No, not anymore. He’s on a site called Marketswing.
Mirror, mirror on the wall…
Who’s kiting checks and who’s gonna fall?
Couple of minor observations, co worker who live’ pay check to paycheck as it is, has terible car loan terms(multiple car loans wraped in on trade ups), and just baught a house with FHA Loan and no money down, yes he and the wife work, so they can cover this, but they have no reserves, and now are financing a new TV and new furniture for said house….He and I are bout the same age, but I could never live this way, I have always had a need to have reserves on had to get me through at least 6mths in case of job loss or other unexpected issues, maybe becuase I never have or will relie on parents as lender of last resort, he on the other hand has been bailed on by parents/grandparents many a time, so living on pay check to pay check with no retirement savings does not faze him…
Other anyone else notice the level of gov/fed/wallstreet propaganda via the MSM has increased dramitcly lately, the paid shills are comming up with articles left and right telling poeple everything is ok, and the market has bottomed out, gold is bad, stocks are good, don’t pull money from 401k and keep it in the stock market, inflation is under control ect ect, I wonder if it is working, I know most poeple on the internet who would bother to read such articles are not being fooled, but is j6p?
These are usually folks with no long term (beyond this month) perspective. Just when gas and food prices are really starting to hit them, Uncle Sam has generously sent them a check to ease their pain. Now we will have some more hype about how things are going to be better to get them thru the Summer and soon it will be time to go into massive credit card debt for Christmas!
I track Lowes and HD reports as a decent, almost real time indicator of how the economy and especially housing is doing. Their reports have been terrible (Lowes released today) and if you go into one, its like a ghost town….
I think by Fall the true situation will be evident for all to see and it won’t be pretty. Of course we could have another stimulus package just in time for the elections…..;-)
I first noticed the Lowes = ghost town thing back in October 2006. And this was on a bright, sunshiney fall day in Tucson. A perfect day for doing home improvement projects.
What is roiling the l-t T-bond market this morning?
Want a good conspiracy theory? I don’t have a link or exact stats and apologize for that, but believe that the May 15 - July 15th time period is when the highest number of ARMS (ever) will reset. I have often thought that the most efficient way to help limit and contain the massive number of foreclosures is for our government and the banks to start buying the 1-10 year US bonds (esp. the 1 and 5 year) during this period, driving up cost and driving down the yield. This wouldn’t save everyone but on the margins a “savings” of .25 to 1.00% on resets might be a very efficient way to save a large number of mortgages from going into foreclosure. I KNOW the US treasuries are safe investments and very liquid so it has little risk for the gov’t and banks to help save themselves…. OK back to looking for the second gunman now……
Did you check out the grassy knowl yet, for suspects?
I am tired of conspiracy theories without data to back them.
–
“I am tired of conspiracy theories without data to back them.”
That is all that the inflationists seem to be able to do.
“What is roiling the l-t T-bond market this morning?”
Some markets are always out-of-whack, but “the l-t T-bond market” has been forecasting weakening demand and fall in the inflation rate. As I have said many times before, the inflation rate peaks 4-6 months into a recession and then falls sharply. When that happens inflationists would say that the CPI numbers are bogus.
Jas
Jas
I think you should look at the recent TIC data. Foreign outflow is far greater than inflow. It is not very wise to look at Treasuries as an indicator of inflation or deflation. The US Treasury market has a captive buyer that can keep prices artificial. The captive buyer is Social Security. A better indicator is long term corporate bonds.
If anything the bond market is suggesting higher inflation.
CBOT 10 yr treasury graph cbot.com
http://tinyurl.com/56bmjy
–
I know I have been ignorantly making money in the UST market for 16 years. It has nothing to do with inflation rate. It juts has a knee-jerk reaction when bad inflation reports come out. And the inflation reports are bogus too because govt manipulates the data.
Everyone knows that the US govt will inflate away its debt and one has to be stupid to buy USTs because they will not protect the buying power. The way to protect purchasing power is to buy gold and commodities.
Even Greenspan, the Maestro, is forecasting the 10-Year yield to go 6-8%. He must not know that the Social Security purchases will keep the rates artificially low.
It is nice to invest in a market that we know will be kept up artificially.
Jas
‘I am tired of conspiracy theories without data to back them.’
Not me. I am patient with such theories, as I understand that Bigfoot has no library access, and can’t be expected to come up with little footnote thingies. My only real requirement for conspiracy theories is that they be gaudy, far-fetched, entertaining and have leprechauns involved somewhere in them.
Jas,
Still expecting the great deflationary depression? Oil to $10? How have you been making money on your predictions; by siphoning gasoline from parked cars? Inflationists have inflation to point to; what do you deflationistas have?
I would not rule out a deflationary spiral. I do not think it is going to happen, just there are not enough data points to show mass inflation or deflation. Commodities are not inflationary of themselves, oil is demand driven. Demand driven price increases are not inflation.
The inflationary side shows $10T US dollars over seas looking for a place to hide. The deflationary side is the US is broke and has none of the $10T to buy tangible assets. Food going up is not inflationary because that is hedonic inflation, you don’t have to eat per the government.
–
“Jas, Still expecting the great deflationary depression? ”
Yes siree. The outright deflation would start sometime 15-18 months after the beginning of the current recession. That means some time in 2009H1.
There is lot of impatience about the lags in the economy. People simply don’t understand how serious the HB burst is. It would play out over a very long time and that time would include DD.
Jas
“Everyone knows that the US govt will inflate away its debt and one has to be stupid to buy USTs because they will not protect the buying power. The way to protect purchasing power is to buy gold and commodities.”
This is sarcasm or I don’t get it? Jas you are a deflationist?
Scratch one deflationista from their dwindling ranks…
Deluxe vacant-home tour: Executives are the newest squatters
Sure, it’s no secret that the Twin Cities metro area is suffering from a serious glut of homes for sale, most of which are seeing a price drop of 10 percent this year. But did you know that, according to the most recent research from the Minneapolis Area Association of Realtors, there’s a 15.9-month supply of homes worth more than $500,000 just sitting alone and gathering dust? That’s nearly twice the 8.7-month supply of those in the median-home-price range of $190,000-$200,000. And did you know that homes worth more than a million bucks are growing the stalest of them all, totally stripped of their copper furnishings and artwork and forced to wait out the 24.3-month supply of those just as opulent as they are?
So what’s a poor, expensive vacant home to do with all that time? Become a haven for a “home manager”!
A company called Showhomes, whose slogan is “from vacant house to valued home,” is making a killing furnishing, decorating, and managing the increasing number of high-end vacant homes for sale nationwide. In fact, if you want to live in the land of make-believe, you can use your own furnishings to dress up and live in the five-bedroom Hennepin County stunner pictured above for only $1,800 a month. Of course, you need to have pristine furnishings to qualify as a manager, and enough first-rate goods to fill up this mansion listed at $1.4 million.
Showhomes provides service to areas like Minnetonka Beach and Edina Country Club. In South Minneapolis, Lake Nokomis is the only neighborhood to make the sweet prestige cut. And the only “north” they know is North St. Paul.
But we’re wondering what a company like this can do with the more than 1,000 vacant homes in Minneapolis, nearly 800 of which are on the North Side. Perhaps the RNC can rent out one of these 72 foreclosed homes on the North Side that are selling for under $30,000. With some decorative painting on those boarded windows (elephants, perhaps?) and a little Ikea furniture, they could become exec-worthy in no time.”
http://www.reuters.com/article/blogBurst/domestic?type=domesticNews&w1=B7ovpm21IaDoL40ZFnNfGe&w2=B9IYAiV6g03xWUXstkq1JR&src=blogBurst_domesticNews&bbPostId=B7bZcWnYIFu4Cz46d9QM8LxpLCz34lgIqQ9JNSB2Ri6r5n9QiT&bbParentWidgetId=B9IYAiV6g03xWUXstkq1JR
ya just can’t make this stuff up!
leigh
Showhomes has been around a long time. They’re an obnoxious bunch.
Paying $1800 a month is hardly squatting.
It’s funny that you can find inexpensive “rent” (well, for the houses involved) where your renter qualifications are a lifetime of past conspicuous furniture consumption.
I’ve been looking at rental houses (and a few cheap purchases, to my shame) and according to the pictures my wife and I were likely born without the reinforced decorating genes that apparently afflict so many.
I suspect that not only did they buy big houses, the majority of the middle class went all out for decorating too. It has been remarked on before, but based on all the fancy furniture in view in the pictures, many must have fully charged up the credit cards to support their nesting habits.
The Old Titans All Collapsed. Is the U.S. Next?
By Kevin Phillips
Sunday, May 18, 2008
“…The most chilling parallel with the failures of the old powers is the United States’ unhealthy reliance on the financial sector as the engine of its growth. In the 18th century, the Dutch thought they could replace their declining industry and physical commerce with grand money-lending schemes to foreign nations and princes. But a series of crashes and bankruptcies in the 1760s and 1770s crippled Holland’s economy. In the early 1900s, one apprehensive minister argued that Britain could not thrive as a “hoarder of invested securities” because “banking is not the creator of our prosperity but the creation of it.” By the late 1940s, the debt loads of two world wars proved the point, and British global economic leadership became history.
In the United States, the financial services sector passed manufacturing as a component of the GDP in the mid-1990s. But market enthusiasm seems to have blocked any debate over this worrying change: In the 1970s, manufacturing occupied 25 percent of GDP and financial services just 12 percent, but by 2003-06, finance enjoyed 20-21 percent, and manufacturing had shriveled to 12 percent. ..”
http://www.washingtonpost.com/wp-dyn/content/article/2008/05/16/AR2008051603461.html
Sounds like once the banking sector tail starts wagging the economic dog, a nation’s days as an economic power are numbered.
The financial sector is merging with the federal government.
–
Bankers and financiers already control “the federal government,” especially the Fed. Whether it is formal or informal in a matter of the political climate. The whole game is to keep people in line while BFNYC do their thing – financial manipulation.
Jas
It doesn’t have anything to do with banking, per se.
It has more to do with the fact that most “rational” manufacturers realize that there is more money to be made by financing the product than making the product (or making a better product.)
The corollary to that conclusion is obvious.
–
Yes.
By Kevin Phillips is one of the best economic historians in America. I found his book Wealth And Democracy a great read.
Jas
Kevin Phillips is my favorite historian. I read his books the way I savor a fine wine. Very slowly so as to increase the enjoyment.
–
There is lot of facts (data) to ponder upon.
Jas
Wreckrium for a Heavyweight…
http://www.youtube.com/watch?v=6rfWuHK0uEQ&feature=related
Old House Arrest: Confinement to one’s quarters, rather than prison, by administrative or judicial order:
New House Arrest: Foreclosure
BULLETIN
LEADING INDICATORS RISE FOR SECOND MONTH; U.S. ECONOMY WEAK BUT NOT IN RECESSION: SURVEY
ECONOMIC PREVIEW
Continued weakness in housing seen in data
More awful inflation numbers expected in coming week
By Rex Nutting, MarketWatch
Last update: 10:16 a.m. EDT May 18, 2008
WASHINGTON (MarketWatch) - U.S. consumers won’t really feel comfortable until home values stop falling. They could be in for a rough year because there’s no sign that home-price declines are letting up.
And with home prices falling, fewer buyers are willing to take the plunge.
Chicago area kool-aid update:
I know three people putting their homes on the market. All say the exact same thing: “houses in our neighborhood are moving. I won’t have any trouble selling my house.”
Sounds like my brother just put in an offer on a new house that’s twice the sq ft as his current house (they don’t *need* a bigger house, just *want* a bigger house) without a home sale contigency.
Course he and his wife know I have been watching and studying RE market (thanks to this blog) for three years. Think they asked my opinion or ran their idea by me first?
No way, I might ruin their fantasy!
No way, I might ruin their fantasy!
I suspect that the mortgage company might take on that honor.
I now know four couples who have Chicago condos they’ve been unable to sell.
One couple moved from Chicago to Marin County, CA for work, the other three have either moved in together or are getting married. The couple getting married has had the smaller of their two condos on the market for about a year. One couple has had a long-term renter, but the others have all been paying two rents / mortgages for a while.
Six of ten leading indicators rose in April, including stock prices, interest rate spreads and housing permits. Those increases more than offset the sharp declines in average weekly hours worked and consumer spending.
So people are working less hours, which equals less spending money and consumer spending declined sharply. If the consumer is 70% of economic activity, how can this report be good news? It must be good news because the report spiked the market. As each economic report comes along and reports a souring economy, the spin turns it into a positive with the future indicating sweet boom times ahead. Odd….
The LA Times thinks steep drops in housing prices will help the economy…maybe they should talk to the NYtimes.
http://www.latimes.com/business/la-fi-housing19-2008may19,0,1859105.story
Wife and I noticed quite a few moving sale signs in and around Dutchess County over the weekend. I never thought much about them in the past but now it could be more evidence of foreclosure and what not.
I too live in dutchesss county, and there was a report not to long ago in the poughkeepsie journal that there were about 4100 subprime loans made in dutchess aloan, I’m sure that number is higher in orange county, in any case I expect all of them to get forclosed on, though that will be the tip of the iceburg, houses are still way overpriced, and way to many 500K+ McMansions from toll and len for an area with a 50k median income….
I heard 3500 but that was 6 months ago. Which side of Taconic are you on?
—————-
Sharing more than shelter…
http://www.chron.com/disp/story.mpl/business/5786433.html
If Americans started to share homes and cars, mostly out of necessity, just imagine the drag on the economy.
Jas
The radio show, ‘This American Life’ aired a recent episode outlining the mortgage debacle from a critical Greenspan decision that led many institutional and private investors away from secure Treasury investments, and into speculating on mortgage instruments. This link should take you to a page with a link to ‘listen now’. This episode (podcast) is available for free on iTunes as well.
http://tinyurl.com/5fl6z7
Not sure this matters much in retrospect, now that the Fed accepts mortgage paper as collateral to borrow Treasuries. It is all paper at the end of the day…
The FED has always accepted certain kinds of mortgage paper.
However, it has always charged a premium for doing so.
To be precise, it has accepted a wide amount of paper, and there’s a schedule for what it would accept, and for how long.
Unless, you are telling me that they are now accepting it at par and for longer, nothing much has changed.
I was just repeating what I have recently read in the news, which suggests there is something unusual about the current situation:
Fair Game
What a Deal: Trash for Treasuries
By GRETCHEN MORGENSON
Published: May 18, 2008
SAVING the nation’s financial system from reckless banks and brokerage firms is an enormous job, heaven knows. But somebody’s got to do it, so the Federal Reserve Board, with its taxpayer-funded balance sheet, stepped in.
To grease the gears of the nation’s seized-up credit markets, the New York Fed in recent months created three new lending entities. Together, they allow banks and financial firms to swap up to $350 billion of securities they cannot sell for cash or (“for”?) United States Treasuries.
They may not be accepting it at par (IIRC, it’s 85%), but they’re accepting it at WAY above market value. That’s new.
Whatever.
You can label this as a bailout if you want but it’s like p*ssing in front of the Niagara Falls, and claiming yours is bigger.
The largest mass of humanity ever assembled in one place (75,000) in the history of Oregon: Obama rally yesterday in Portland.
What would you expect in the People’s Republic of Oregon and the most liberal candidate in decades?
Being a McCain supporter must feel like pushing on a rope.
Are you supporting the McCain that doesn’t want a FB bailout or the one that does? I was against the bailout before I voted for the bailout. Sound familiar?
And presumptive Republican presidential nominee John McCain has proposed an FHA rescue plan that is similar in parts to Dodd’s proposal.
http://money.cnn.com/2008/04/10/news/economy/mccain_econ_plan/index.htm?postversion=2008041017
Sen. John McCain (Ariz.), who had earlier hewed to a free-market line, proposed a government refinancing plan of his own.
http://www.washingtonpost.com/wp-dyn/content/article/2008/04/11/AR2008041103709.html
Here in my little corner of OR, I’m seeing Obama signs in yards that had Bush signs the last time around….most interesting, to say the least.
I have been a (fiscally) conservative Republican all my life. Until they purge the party of it’s troglodyte wing and get that camel’s ass out of my tent, “I divorce thee”.
Yes but he will still spend less than the Republicans of the last 8 years on unnecessary wars and communist central government bailouts.
you think
I’m starting to like the hildebeest more every day. This other idiot is real piece of work
Leave my wife alone
but it was okay to crap on Cindy McCain last week
Hmmm…. Creepy loons like Rove, Scaif and Faux are getting behind HC.
Ya think they’re afraid of sumpin’?
No. We all realize that the only pair of nuts in the contest are on the woman.
Whoever wins…. on Jan 20,2009 would wish they hadn’t
Seriously jobs are dying for anyone smart in America, Things are not selling fast on ebay…Yet i did sell my late fathers Alladin magnifying Reading machine for $500 on 3 days….which means i probably sold it to cheap.
Its staggering we get 500+jobs a day on Craigslist in NYC that are 1099 commission only, and the biggest scam INTERN JOBS….and you have to be a college student to get them, the hell with retraining old people or getting a recent job in your field on your resume.
even major companies are scamming for recent college grad interns, and bush does zip. EEOC and labor laws be damned.
So what has OHdambama, and Hillhoreee or OldmanCain ever said about this….just clueless
Sad commentary on Oregon sports teams.
Not really, our stadiums don’t hold that many.
Anybody notice that SKF is still $9 above the recent low while the S&P makes a multi month high? What does this tell us?
I’ll take a stab:
1) I sold my SKF at the recent low;
2) Only a few large stocks are driving the S&P higher;
3) all of the above
It tells us you don’t like Democrats? Or Oregon?
I love Oregon.
Finance is getting its rational upcomance?
I’ll take leading indicators for $1000 please, Alex.
I’m guessing this might also be somewhat relevant:
Oil Producers Mask Decade’s Worst S&P 500 Profit Drop
If the oil specu-bubble pops, goodbye to the scaffolding on the S&P…
This article touches on that subject too:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aIpkmwRe3M00&refer=home
For a newbie,
I don’t know, what does this mean?
While the rest of the market is coming out of the doldrums, the financial stocks are still getting smacked.
Divergence, 40% of the market is not going up.
Hoz,
Thank you.
Another question for the wise ones on this board. Do you see the stock market continuing on its upward track? I know txchick saw the stock market rising until August (I believe that is what she said).
I still think we’ll see a selloff this Friday before memorial day >>>>>Sell in May and go away<<<<<<
Can’t wait.
My opinions are always fluid and since I have seen this divergence in the financials, not so likely.
Too bad Tiaa Cref won’t let me short.
Roidy
Financials are not going up as much as they did when the reverse index made its low and investors were buying ? Probably because of the perception that the home price crash is not over.
Lots of people selling stuff, trading in big cars for small, walking from homes, looks like deflation. I had alot of gold , oil and silver stocks last year and sold out a few months ago.
My 2$ and thats all its worth.
———–
Markets (Metro Areas) Hitting New Lows (PPSF, Radar Logic) Almost on a Daily Basis:
25 MSA Composite
Detroit, MI
Miami, FL
Phoenix, AZ
San Diego, CA
Manhattan Condo
Los Angeles, CA
New York, NY
Washington, DC
Sacramento, CA
San Jose, CA
Tampa, FL
San Fran, CA
Philadelphia, PA
Boston, MA
In general, the price decline for 25 MSA Composite has gone down from 20%+ Annual Rate to 15% Annual Rate during 2008Q1. The worst areas continue to have the high Annual Rate decline in 25-40% range.
Jas
The silver lining: A 40% annual rate of decline cannot continue for very long until a bottom is reached.
Mathematically speaking, things will appear to level off soon under that model. This will be seen as a good thing by pundits: Look Mary, the line has gone flat at just above zero!
Not only that, but very high (if spasmodic) monthly rates of appreciation are a likely sequitur to prices reaching that flat line just above zero.
Unless of course, you use a log scale…
Silly human: all real estate is local, not logical !
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/05/18/RERL10KMHC.DTL
We can only hope this may mean the eventual extinction of real estate agents. May they go the way of the dodo and the travel agent.
Realtors are today’s equivalent of an elevator operator: someone who sits in a chair getting paid to do what you could easily do yourself but can’t because the damn elevator operator is sitting in front of the control panel and has fallen asleep while reading her Robb Report so when you try to reach over and hit the button thingies she screams that she has much more expertise on the day to day changes of elevator operations than you do and so you let her hit the buttons while you try to convince yourself that she’s providing you a real service though you end up just feeling like a sucker and breathe a sigh of relief when the door opens and you can get off . . . .
I’m no Liberal. Unless he crashes and burns, I’ll be voting for McCain this November because he’s most likely to oppose FB Bailouts.
BUT It’s interesting to note what issue California Conservatives have deemed the Most Important facing us today:
http://www.savecalifornia.com/
If they can Save Marriage, and maybe get an anti-Flag burning amendment passed too, everything will be great here!
It’s not the issue itself, it’s the idea that judges should not be making social policy from the bench.
and presidents shouldn’t be bypassing congress and running the government by executive order.
Or signing statements.
Or by simply ignoring the law.
Or by playing dumb.
It’s not a social policy it’s a rights policy. That’s the way the system should work. The constitution protects minorities from the persecution of the majority. The judge is supposed to interpret the constitution. You can tell that the GOP has no legal leg to stand on as they have tried to get the constitution changed.
but your not opposed to wall street bailouts ? Why not have bailouts for all ?
I am opposed to wall-street bailouts. There’s no candidate that supports me on this.
sounds like voting for bush because he looks like a guy you can have a beer with. how stupid can that be.
UPDATE 2-EU watchdogs call for rating agency oversight body
Mon May 19, 2008 12:40pm EDT
http://www.reuters.com/article/marketsNews/idUSL1913176120080519?sp=true
“A burglar who respects his art always takes his time before taking anything else.”
O. Henry
A Call Loan, by O. Henry
http://www.classicreader.com/read.php/bookid.648/sec./
Stalwart P/E Shows Stocks Getting Pricey
By Mark Gongloff
Word Count: 492
“Stocks have had a nice run these past couple of months. The downside: They may no longer be a bargain.
The Dow Jones Industrial Average has bounced nearly 11% from its March 10 low, and many people think stocks still have juice. They argue that low interest rates and signs the economy might dodge a deep recession are good news for corporate earnings.
But a look at a stalwart measure of cheapness — the price-to-earnings ratio — from various vantage points suggests stocks might be dear. And a recent study about short-selling opportunities lends credence to the point….”
WSJ online
Dean Baker does not agree with a bailout either…
http://www.truthout.org/docs_2006/051908A.shtml
Update:
the wood spider i killed yesterday, turned out to be a flippin’ recluse brownie.
Sharks, spiders and possums. Anybody want to see my mother possum photo with babies? Photographers love to share stuff.
I was bitten by one of those a few years ago. Scary experience. My entire arm turned red.
Not to scare you, but my elderly neighbor lost part of her arm to one. But she was in poor health. Over 90% are not affected at all by them.
A house on my street sold in mid-April for $252k, that had sold previously for $191k in late 2001. The record just showed up today and this was the first sale on my street of 24 houses since early 2004.
The house had started off listing at around $375, then slowly dropped to $350, $325, $299, then $285. The former owners moved to Missouri in mid-2007 I believe.
Anyway, this is the geographically closest the bust has come so far, although the owners did make a 32% profit over 7 years, not to mention having a place to live for most of it. The house is a pretty nice 2200sqft 4/2 with a pool on a quarter acre. I’m guessing it would rent for about $1600 right now.
Wow, that would suggest that there is only another 20% down to go, then, based on a valuation of 120x rental cost.
Assuming we don’t overshoot, of course… Which we will.
Well you’re probably right, but seeing as how there is typically one house sold on my street every 4 to 5 years, with turnover of 2 or 3 houses per year in the entire 220 house neighborhood, then maybe I’ll find out about overshoot eventually but I’m not holding my breath.
Another house a few streets over is the same size as the one that just sold but with a bigger yard and is “sale pending”. The last list price on that one was $325 a couple of weeks ago. There is one other house for sale - a bigger 4/2.5 on a 1/3 acre lot listed at about $400, and it’s been on the market about two months.
With all the remodeling crews, landscaping crews, pool builders, window installers and painters around it looks like most of the neighborhood has decided to stay put for a while, which is fine with me.
u.s. economy
A bleaker outlook
Some economists are painting a rosier picture, but Ken Rosen says the numbers are worse and that the economy is already
in a recession. Stacey Delo reports.
(Click on link 1/2 way down the Marketwatch.com home page…)
There was also a piece about stray dogs in Moscow. That was pretty good, too.
Roidy
I’ve talked in the past about the Mexican drug cartels growing quite a bit of marijuana on Federal (BLM, Forest Service & National Park) Land in the Sierra Nevada, and the mind boggling amounts they grow… (20,000 plant gardens- $200K investment, $40 Million return)
Was talking to somebody in the know, and i’m told they’ve gone big this summer.
Their m.o. used to be growing it amongst other plants (Manzanita trees, for instance) but they realize how understaffed the Feds are, and are growing it more or less in the open, deep in the backcountry of the foothills, way off-trail.
This summer we’re talking more like 100,000 plant gardens…
These narcos have control over a lot of Mexico currently, in the same sort of fashion that Al Capone had over Chicago in the 1920’s.
The real Drug Czars in our war on drugs…
In Humboldt county, dope is practically the currency of choice. Almost everyone grows it, police turn a blind eye, and it essentially drives the local economy. I’m hopeful with the bust in housing prices, people won’t be able to HELOC themselves to buy dope up here, drug prices fall, and the economy tanks.
Liquidity-starved banks will see the cash profit potential in the drug trade and seek to take advantage of it, one way or another.
Home depot can add a few more classes on, err, alternative lifestyle decorating
They’re all over the desert mountains in southern California, too, even in the Mojave. Last year I found a half-dozen in the desert, accidentally. If you’re hiking out there, be careful. Many of those farms are protected.
Recreational drug consumption probably follows similar trends to booze in a recession. Good thing - I want those farms gone. It’s getting too scary to hike off trail.
Special Report Mortgage Meltdown
Senate deal struck on mortgage aid
Plan would let government back loans for at-risk borrowers. Key lawmakers reach compromise - taxpayers will not be on the hook if some of those loans go bad.
By Jeanne Sahadi, CNNMoney.com senior writer
Last Updated: May 19, 2008: 5:33 PM EDT
Stay the course! Above all, please don’t divert low-income housing funding to help lenders and speculators.
Bush says he won’t back bill to bail out lenders
By BEN FELLER – 2 hours ago
WASHINGTON (AP) — President Bush, acknowledging the economic “tough times” for many Americans, said Monday that he remains opposed to any homeowner rescue legislation that would be a bailout for lenders.
The president’s comments came as Senate leaders are working on a bipartisan bill to help strapped borrowers get government-backed mortgages, paid for by tapping a fund designed to help poor families. Bush did not comment on that proposed legislation directly. He has threatened to veto a House version of the bill.
“Laws shouldn’t bail out lenders,” Bush said after getting an economic update from Treasury Secretary Henry Paulson. “Laws shouldn’t help speculators. The government ought to be helping creditworthy people stay in their homes.”
Excellent. See, he’s not all bad.
is he lying again?
That’s a good report,, right?
I hate when people with no knowledge whatever of economics pretend to understand it. For example, the statement highlighted below in bold is complete bunk:
Editorial
Teeing Up the Next Mortgage Bust
…
Theoretically, when prices fall, consumer demand should rise, sending prices back up again. Unquestioning belief in that self-correcting mechanism is the reason many Republicans don’t want to do anything to prevent foreclosures.
PB.
its about persepctive and expectation.
Surgeon sells for 200k leass than he could have received 2.5 years ago.
Accountant buys “better” for 200k less after selling 2.5 years ago.
he didnt make 200, and she saved 200……the business of housing is never over, perspective and expectations change. Both are professionals, dont put blinders on…..most of the “real” people are always engaged in the business of life.
you cant time the bottom, and if you think, as I do….rates are going higher…think about it, Why is Hoz, alway short treasuries? The kool-aid party is over, and the global mob is deciding what the real economy is.
anybody up for a Debt Death Pool challenge?
Bear Stearns was the last casualty and it’s been quiet, too quiet…
Who is next to go?
pasta is cheaper than rice.
Im long, ethanol and french fries.
Selected Calpers Equity Highlights:
“Having glanced through the equities portion of the same Calpers report, we see no less than 641 thousand shares of Bear Stearns with a reported market value of 140 bucks per share, more than 22 million shares of B of A with a reported value of 48+ bucks, 23 million shares of Citibank with a reported value of 51+ dollars per share, 565 thousand shares of AMBAC with a reported value of 87+ bucks per share, 948 thousand shares of MBIA valued at 62 bucks+ per share and for a bit of international diversification, let’s not forget 819 thousand shares of good ole Northern Rock valued at 17.70 per share.”
“Calpers is soon due to release their updated June 2008 Annual Investment Report. Anyone want to place a friendly wager on the extent of losses that are going to be reported?”
http://www.financialsense.com/Market/wrapup.htm
_____________________________________________________________
Dude, where’s my pension?
Ouch. That’ll hurt.
this is a game I play here often:
“Premature victory laps and false declarations of victory are unwarranted. Declaring ‘mission accomplished’ does not make it so,” Howard Wolfson, Clinton’s communications director, said in a memo to supporters.”
tell me what is so.
http://realestate.chron.com/sales/Listing.asp?lid=2069-3450473
Is it my imagination, or did REALTOR Melanie screw up the aspect ratio on some of these pictures? The refridgerator in the kitchen shot looks 5 to 6 ft wide, and the dining chairs look like Roman loungers.
Is this an old REALTOR trick that I hadn’t heard of to make the house look bigger?