Named And Shamed
Some housing bubble news from Wall Street and Washington. CNN Money, “With prices crashing around the nation, home price affordability has improved dramatically in many U.S. cities…during the first three months of 2007 with home prices the most affordable they’ve been since the three month period that ended June 30, 2004…according to the latest Housing Opportunity Index released Tuesday by Wells Fargo and the National Association of Home Builders.”
“‘This measure can only take you so far in implications for the market,” said Dave Seiders, NAHB’s chief economist. ‘There’re several factors that the index does not capture.’”
“These include buyer expectations. Many are reluctant to act in falling markets. That sentiment can contribute to market overshoot, according to Seiders, in which prices fall lower than would be their logical bottom.”
From Reuters. “Impac Mortgage Holdings Inc, a struggling lender, said its survival could be threatened following a $2.05 billion loss in 2007, and that the U.S. Securities and Exchange Commission was inquiring into its operations.”
“Impac said its liabilities exceeded its assets at year-end, giving it negative shareholder equity of $1.08 billion.”
The Banking Times. “UBS, the Swiss investment bank that has so far recorded larger losses from the credit crisis than any other financial institution, has sold some of its mortgage-backed securities to BlackRock, the fund manager.”
“The disposal has been made for $15 billion representing a $7 billion loss on the nominal value of the loans. The bank had written down around $37 billion prior to the sale and analysts estimate that its exposure to US sup-prime mortgage debt now stands at around $17 billion.”
“UBS said the vast majority of the positions sold were subprime assets — the lowest quality of real estate loans, and so-called Alt-A assets — ranked one step above subprime, in roughly equal parts. The remainder was ranked prime.”
“The face value of the portfolio was $22 billion, meaning UBS received about 68 cents to the dollar on the sale.”
“National City Corp said on Wednesday that it may sell ‘problem’ assets or put some of them in separate entities, after large mortgage losses drove Ohio’s largest bank to raise $7 billion of capital.”
“Speaking at a Lehman Brothers Inc conference in London, Chief Executive Peter Raskind said National City is evaluating its alternatives ‘along with our many friends on Wall Street.’”
The Associated Press. “Credit ratings agency Fitch Ratings said Tuesday night it downgraded four of Standard Pacific Corp.’s ratings due to continued weakness in two of the homebuilder’s core markets. All four ratings are considered junk status.”
“Fitch cut the ratings because of continued weakness in the housing markets, especially in Standard Pacific’s key California and Florida markets.”
“Shares of Moody’s Corp fell after the rating agency said a computer snafu resulted in incorrect top ratings for complex debt.”
“‘Moody’s is simply telling the truth slowly, and there’s more truth to be told,’ said Janet Tavakoli, a consultant and president of Tavakoli Structured Finance in Chicago. ‘Up until now I thought the rating agencies were incompetent rookies in structured products. Now I’m suspicious that they may be crooked.’”
Business Intelligence. “Credit rating agencies, criticised for failing to warn investors about the risks of US subprime mortgage-related products, should support a proposed global industry oversight body or face more regulation, European Union market watchdogs said this week.”
“The new body should ‘name and shame’ agencies that fall short. Agencies like Moody’s Corp, McGraw-Hill Cos. Inc.’s Standard & Poor’s and Fimalac’s Fitch Ratings have been under pressure by investors, regulators and critics for the past year for incorrectly rating subprime mortgage debt.”
The Baltimore Sun. “A 2 1/2 year housing slump paired with increasingly restrictive borrowing rules and a shift to lenders handling more of their own loans? Very bad. ‘Each week it’s harder,’ said Charles J. DiPino, co-owner of Universal Trust Mortgage in Columbia, which is fighting to keep business level. ‘Mortgage brokers are facing an extreme uphill battle.’”
“Brokers, for their part, contend that they were simply following the relaxed rules set by mortgage companies. ‘Lenders threw away their underwriting guidelines,’ said Roy DeLoach, executive VP of the National Association of Mortgage Brokers.”
“Said Guy Cecala, publisher of Inside Mortgage Finance, who doesn’t think consumers would be well served if the broker industry disappeared: ‘There’s plenty of blame to go around.’”
From WAPT.com. “Experts say that every home that goes into foreclosure forces down the values of nearby homes by 1 percent. Madison officials said the city has long been a target of mortgage fraud.”
“Madison Mayor Mary Hawkins-Butler said mortgage fraud in the city first caught her attention seven years ago. Homeowners noticed houses would sell, but would never be occupied.”
“‘Madison has been targeted and it’s my duty as mayor to do something about it,’ Hawkins-Butler said. ‘Madison is not in denial about it. We are not saying it doesn’t exist. It exists all over the country.’”
“In 2006, FBI research estimated that mortgage fraud would reach $4.2 billion nationwide. Madison officials do not know how many houses were purchased through mortgage fraud schemes. ‘If you have ever seen the movie ‘Forrest Gump,’ you know there are a lot of different ways to cook shrimp. There are just about as many ways to commit mortgage fraud,’ said Madison County assistant district attorney Dow Yodder.”
The Wall Street Journal. “Efforts to stem the record tide of U.S. foreclosures are a ‘train wreck,’ hampered by a lack of resources and the continued deterioration of the real-estate market, a federal banking regulator said.”
“‘There are more loan lines and I think servicers are doing more but it’s just not keeping pace,’ Federal Deposit Insurance Corp. Chairman Sheila Bair told reporters.”
“Bair, who has been a leading voice at the federal level in addressing the housing crisis, said a recent report that suggested two-thirds of seriously delinquent borrowers aren’t in a workout plan was ‘pretty depressing.’”
“‘They’re overwhelmed, and the counselors are overwhelmed .. it’s a train wreck,’ Bair said.”
The Grand Rapids Press. “Fifth Third Bancorp.’s CEO said Tuesday the banking environment is the toughest he has seen in his nearly three-decade career. Kevin Kabat, CEO since April 2007, said the Cincinnati-based bank has been hit by sagging economies in major markets such as Michigan and Florida and the downturn in real estate markets.”
“‘I’ve been in banking for 28 years … and in all that time I’ve never seen a more challenging operating environment than what we’re seeing today,’ Kabat told donors during a speech for Junior Achievement of the Michigan Great Lakes.”
“In less than a year, more than $10 billion in shareholder value has been wiped out at Fifth Third. The declining stock price has come along with price drops at other banks across the country.”
“Kabat said the lack of merger activity is a reflection of banks waiting out the capital crunch and trying to make sure their due diligence is complete so there are no surprises once a deal is announced.”
“‘We’re probably going to see more bank failures in this next 12- to 24-month period than we’ve seen in the past 15 years,’ he said.”
The New York Post. “It turns out that not even the father of the mortgage-backed securities market is immune to the mother of all mortgage busts. Lewis Ranieri’s Franklin Bank Corp., a Houston-based savings and loan of which he is chairman, is getting hammered by bad bets on home mortgages and commercial loans.”
“Making matters worse, yesterday Franklin CEO Anthony Nocella was ousted after an internal audit uncovered accounting errors, the bank said. The Securities and Exchange Commission also is investigating the thrift.”
“Ranieri is widely seen as the man who helped package mortgages into bonds that now make up the multi-trillion dollar mortgage-backed securities market that is at the center of today’s credit crunch.”
“Franklin’s share price, which had a 52-week high of $17 in May 2007, closed yesterday at 98 cents a share on the news.”
“For Ranieri, an inductee into the 1997 National Housing Hall of Fame, righting the ship at Franklin, or finding a willing buyer, may be a tall order - and is something even Ranieri seemed to recognize more than a year ago.”
“‘This is the leading edge of the storm,’ Ranieri said in an interview with Bloomberg News in February 2007. ‘If you think this is bad, imagine what it’s going to be like in the middle of the crisis.’”
‘They’re overwhelmed, and the counselors are overwhelmed .. it’s a train wreck,’ Bair said.’
This reminded me of a post I did in 2005:
‘ Crowd Gathers To Watch Economic Train-Wreck’
‘The home price increase has caused another economist to change his opinion on the housing bubble. “In a real estate seminar in January, I stated that housing price increases reflected underlying conditions of reduced costs to finance homes. What has changed my thinking about the housing bubble is what is happening in the financing of housing.”
“Are home buyers not being smart? No. Lenders are being foolish. Some lenders believe that rising housing prices will soon justify whatever loan they offer the home buyer.”
Mr. Donald Ratajczak of Georgia State University is joining the crowd of horrified by-standers. “Pundits, economists, and, yes, Warren Buffett have been rushing to get on the record saying that real estate has maxed out. The top may not be here yet, they argue, but it’s close.”
“Paul Kasriel, chief economist at Northern Trust Corporation, “constructed a price-to-earnings ratio for housing. In 2004, that P/E ratio ‘the highest since 1952, when the time series starts.’ And we all know what happens when P/E ratios reach 50-year highs.”
“David Rosenberg, Merrill Lynch’s chief North American economist, “We get nervous when we see things move parabolically north, because no asset class at any time ever failed to mean-revert after such an upside move.”
“David Rosenberg, Merrill Lynch’s chief North American economist, “We get nervous when we see things move parabolically north, because no asset class at any time ever failed to mean-revert after such an upside move.”
Lots of smart folks saw the train wreck in progress by 2005, but all the king’s horses and all the king’s men could not stop the momentum.
Lots of smart folks saw the train wreck in progress by 2005, but all the king’s horses and all the king’s men could not stop the momentum.
The law of gravity is progressing well, what goes up must come down!
All the king’s horses and all the king’s men have failed in their efforts to repeal the economic equivalent of the law of gravity.
All the king’s horses and all the king’s men have failed in their efforts to repeal the economic equivalent of the law of gravity.
And the story ends with a THUD!
“Efforts to stem the record tide of U.S. foreclosures are a ‘train wreck,’
When the dust clears and it is safe to approach this train wreck, you will find a disaster beyond comprehension! The number of casualties including the perpetrators (mortgage brokers, realtors, bankers, Wallstreet, etc. ) from this disaster will be so large that it will take years to remove the remains from the wreckage.
For the time being I suggest we keep the elephants hidden under the living room rug and try not to talk about them.
Very funny!
Those darned elephants under the rugs are messing around and keep multipling like frigging bunnies
Elephants?? ELEPHANTS?? We don’t got no stinkin’ elephants.
Elephants…
http://www.youtube.com/watch?v=3qqE_WmagjY
Driving that train, high on loan pain
Ben Bernanke, watch your speed
Trouble ahead, trouble behind
And you know slow-motion wrecks are so very fine
Driving that train, high on loan pain
Mr. Ben Bernanke, watch your speed
Trouble ahead, (you know) trouble behind
And you know slow-motion’s, just down the line
(Adjusted for meter)
i was thinking more along the lines of
“like a steam locomotive rolling down the track…
he’s gone… he’s gone and nothing is gonna bring him back
he’s gone …..
(the fb that is who has walked away)
“Shares of Moody’s Corp fell after the rating agency said a computer snafu resulted in incorrect top ratings for complex debt.”
snafu: Situation Normal All Financials Underwater
‘Up until now I thought the rating agencies were incompetent rookies in structured products. Now I’m suspicious that they may be crooked.’”
No, Nah…Not when when all the Top levels bonuses depended on it,and all their buddies were getting huge payouts…no way could there be any untoward dealings…
RE: They’re overwhelmed, and the counselors are overwhelmed .. it’s a train wreck,’ Bair said.’
I vividly remember the purchaser’s who would call me, and proceed to yell and scream because the appraisal for the house they were buying didn’t come up to the contracted sales price.
I tell them the reporting of a short value was in their best interest to which they’d reply-we don’t give a f*ck-you’re screwing up our deal.
So, cry me a river, all you FB’ers.
Bitch on the way in-whine on the way out.
From the comments on the 2005 post:
“At 8:54 AM, Anonymous said…
you guys, it is looking pretty clear that this time it IS different.
our nation’s prosperity is unchallenged in the world, and everyone from all around the planet wants to move here. in japan they have 100 year mortgages, or even “generational” mortgages that your children are required to pay off. you can absolutely bet on it that our country will do the same before prices ever start declining. face it- real estate is simply the best investment in the history of mankind. that’s why over 60% of bank loans nationwide are invested in residential real estate. nowhere to go but up, but you morons don’t seem to understand it.”
He was no moron. He didn’t give his name.
If there were only some way to harness the power of this kind of stupidity…
Oh it’s been harnessed alright, what other kind of motive power could have brought things to this point?
Lewis Ranieri
The beast has a name. I always wondered who started the MBS game.
Didn’t mean to rhyme that…
Ranieri is one of the major characters in Michael Lewis’ book, “Liar’s Poker”, about Salomon Brothers and the beginnings of the mortgage securities market. Very enlightening.
“‘We’re probably going to see more bank failures in this next 12- to 24-month period than we’ve seen in the past 15 years,’ he said.”
What does this prediction portend for the future availability of credit to finance home purchases, and by implication, for future home price dynamics?
Wouldn’t it follow what happened during the S&L crisis only on a much larger scale?
What does this prediction portend for the future availability of credit to finance home purchases, and by implication, for future home price dynamics?
One word sums it up….KABOOM!
Can’t hear the word kaboom without flashing back…..
This is a world destruction. Your life ain’t nothing.
The human race is becoming a disgrace.
The rich get richer.
The poor are getting poorer.
Fascist, chauvinistic government fools.
Nice Buckcherry reference…
The name of the song Timebomb is analogous to the ticking of alot of those mortgages about to reset.
Yea…
KaBoom. A la 1930/1931.
Yikes!
I still think we’re heading into an 18 to 30 month deep Recession. But we might have to get very precise about the difference in definition between ‘deep recession’ and Depression.
Ah… anyone predicting a turn around.
I still predict we’ll get to panic in the fall.
Got Popcorn?
Neil
Yeah when people start to get quotes for their winter heating oil they’ll panic all right.
Got freezing in the dark?
“The disposal has been made for $15 billion representing a $7 billion loss on the nominal value of the loans.
Excuse me but is that a 32 per cent hair cut?
How many bank failures have we seen the past 15 years? 1 or 2? more?
http://www.fdic.gov/bank/individual/failed/banklist.html
Hmm… Pulaski Bank. I seem to remember one of the finance mags always listing them as having some of the best yields, etc.
Wonder what they were doing with investors’ moneyses?
76 in the 50 states plus DC since 1994.
6 since 2005..
Go back a year to 1993 and there were 126.. (50 that year)
Go back a few more years and it gets ugly. In 1989 alone there were 534 failures.
go here and create a report:
http://www4.fdic.gov/HSOB/SelectRpt.asp?EntryTyp=30
‘Moody’s is simply telling the truth slowly, and there’s more truth to be told,’
Do you swear to tell the truth, the whole truth and nothing but he truth?
“The computer did it, honest!”
“simply telling the truth slowly, and there’s more truth to be told”
Isn’t that kinda like what OJ is doing?
Future book title: If We Did It: Confessions of the Bubble-Killers
So help me computer.
VENT REACTOR? Y or N
Y E S
VENT REACTOR? Y or N
Y
“Hey Marge, I just tripled my productivity!”
i wonder if they had that teetertotter-bird thing approving all the liar loans?
funniest simpsons episode ever
homer in a moo moo
classic epsiode
The funny thing is that the UNIX operating system has a command called yes, which will answer yes to any question asked of it. It’s trivial to replace the human with the yes command.
Productivity is thus improved infinitely.
DESCRIPTION
The yes utility repeatedly outputs y, or if expletive is
given, it is output repeatedly, followed by a newline. Mul-
tiple arguments are output separated by spaces and followed
by a newline. To terminate, type an interrupt character.
yes can be used to respond programatically to programs that
require an interactive response.
the sheepie can’t handle the truth!!!!!!!!!!!
is it me or has the last few days been a real downer for the
we are at a bottom crowd?
and the 1st of the month is just around the corner
will there be many bbqs this weekend with spam?
i think i will bbq a porterhouse for me and my dog too
viva la renting
“Bair, who has been a leading voice at the federal level in addressing the housing crisis, said a recent report that suggested two-thirds of seriously delinquent borrowers aren’t in a workout plan was ‘pretty depressing.’”
How does a huge number of seriously delinquent borrowers with no workout plan play into the future rate of walkaways, short sales and foreclosures?
aka: Downward Spiral???
and did you see anyone . . .. ANYONE AT ALL, puzzled about a bad ” computer program” that was responsible for some error in PROFITS back in 2005 ?!
Hell NO! of course not. these boogeyman “computer errors” only pop up as a handy scapegoat when you need an infallible excuse to cover yer arse in a bad situation. In a GOOD situation yer a genius for having discovered a new “profit model”.
I say ” ohhh brotherrrrrr “. like the execs at Moodys are all standing around, helpless, shrugging their shoulders, hands up & outstretched, like the broke banker card in Monopoly. duhh duhh.
yeah right; tell me another one.
(gosh-darned “computers”. it’s all the “computers” fault. then we all groan in agreement over the “computer” as if its the whatcanyadoabboutit we all suffer now ‘n then. I call bullshit because, hey, guess what . . . ?
PEOPLE.
PROGRAM.
COMPUTERS.
effin fortune 500 azzholes. so predictable. just like a bowel movement.) !!!
responsible for some error in PROFITS back in 2005 ?!
There should have been a clear error message: Id 10 t
Spelled out: Idiot
Old joke:
There are 10 types of people in the world: those who understand binary and those who don’t.
clever!
Moodys: “We have complete trust in our computer system. We always did as it instructed. Whe the computer told us that dog turds were tasty high-protein treats, we would start eating dog crap. We never questioned the computer and nobody ever questioned our sh*t breath.”
LOL. Great post.
Yeah, seriously Fuzzy - that’s good writing.
Maybe when “Wall Street II - Gecko’s Revenge” is made they can use that in the dialog (storyline: Gordon spent 15 years in club Fed - 1987 to 2002, then got involved in MBS ratings at fictional “Mordys”)
Nice! I like it! Who shall we have play “Bud” the up and coming young account executive?
Gecko’s Revenge
That would be a great movie to reflect the current corruption.
At least they’re paying for their BS - A 16% drop in their stock price today.
$hit…they’re ON to us, hit the escape button Wilbur.
“I am a Moody’s 3300 super computer, all is well… nothing can go wrong.. nothing can go wrong…nothing can…”
poor weather @ the NAR
rogue trader @ SocGen
computer glich @ Moodys
whats next?
command and control failures @ Chinese Lotteries?
dogs and cats living together?
We live in a time when an entire industry has sprung up to facilitate the practice of people telling each other how awesome they are. Nonetheless, I am surprised to learn that there is such a place as the “National Housing Hall of Fame.” Is David Lereah in it? And if it isn’t located in Florida, it should be. We can put in Port St. Lucie or Ft. Myers or some other foreclosure-ville.
“National Housing Hall of Fame.”
David Lereah and the NAR are in the “National Housing Hall of Shame.”
Interestingly a nearby neighbor told me that she received a letter trying to get area homeowners to join in a class action lawsuit about shoddy building of houses in the area that are less than 10 years old. The majority of these house were marketed to people who didn’t have the income to support buying them in the first place. This is going to get interesting fast.
Class Action Lawsuits make Attorneys rich, and seldom really reimburse the folks, who are listed in the lawsuit.
Someone get Brockovich on the line…
Class Action Lawsuits =Legal Eagle Windfall.
Our neighborhood was going that direction with our builder in 2000. After doing our due diligence with a few Attorneys, we decided to go individually.
Even though the lawyers get the bulk of the windfall, the beauty of class action is that it strips every last dime from the thieving perps bank accounts. That in itself is shear joy.
True. But at least they punish the defendant, which is part of their purpose.
“In 2006, FBI research estimated that mortgage fraud would reach $4.2 billion nationwide. Madison officials do not know how many houses were purchased through mortgage fraud schemes. ‘If you have ever seen the movie ‘Forrest Gump,’ you know there are a lot of different ways to cook shrimp. There are just about as many ways to commit mortgage fraud,’ said Madison County assistant district attorney Dow Yodder.”
I have a google news search running each day. I’m trying to find ONE example of an individual FB’er who was charged with mortgage fraud for either misstating income or falsely claiming it’s a primary residence (required for some FNMA mortgages). Probably 50% of people who got sub-prime mortgages are guilty of one or the other….
“Probably 50% of people who got sub-prime mortgages are guilty of one or the other….”
————————
Subprime = can’t be trusted with prime credit; a “little extra” is needed to seal the deal.
Can’t be trusted = lies, cheats, or otherwise takes advantage of other people.
Guilty = 100%
Subprime, ol roomie, got a subprime on her owner occupied first home. During the 8 year divorce, the ex seems to have judge in back pocket, must the all the lap dancing he is paying for, and the roomie was ordered to pay for the country house, did, then judge told her she was liable, and is garnering her paycheck. House was foreclosed on.
This one, I will update you on, cause I can’t tell you all in this tiny forum. Amazing, And you will see it on Oprah. This one is a doozy. There is fraud in Cook County, and 100,000s of $s being spent on porn/lap dancing etc. Guy is still making 200k in first 3 months of yr. Wife is out on street with kid in hs.
But she wasn’t in arrears until judge went against his original order and charged her/than garnished her.
WILD.
I would say that is maybe 1% of the subprime, problems caused by divorce, health, job loss. etc.
I’m with you on this one. I want to see prosecutions and jail time for schemes to defraud banks and lenders.
I would also like to see the IRS reviewing these applications. “So………it says here you make $180,000 a year? Is that right? Your 1040 says you made $35,000 dollars!” “Here’s the tax bill for the difference. We expect payment in full, with interest for time delay on payments.” Thank you very much.
Instead, we have CONgress trying to give out $300 Billion dollars to people who are “over-extended” on their loans due to rate increases.
The entire Bush Administration has been so involved in other country’s Freedom, they have completely neglected LAW ENFORCEMENT in America. The EXECUTIVE BRANCH is in charge of law enforcement.
They were all about “free markets”, which has essentially meant lawlessness. Let’s see the guilty get punished for a change, instead of the innocent, who are being ROBBED of their savings by the FED and the CONgressional spending programs.
The sad part is that I am a registered Republican. I think my own party is full of crooks, just like the prior group that held the reigns of power. What can we do?
I would also like to see the IRS reviewing these applications. “So………it says here you make $180,000 a year? Is that right? Your 1040 says you made $35,000 dollars!” “Here’s the tax bill for the difference. We expect payment in full, with interest for time delay on payments.” Thank you very much.
I’ve proposed this many times.
Give people a choice:
Face jail time for mortgage fraud *OR* face jail time for tax evasion. Take your pick!
Certainly, banks should share mortgage applications with the IRS and the IRS should collect income tax on stated incomes. That’s a no-brainer. But neither Democrats or Republicans would go for it.
I hear ya, Rueven
heck, the well known self-admitted fraudster Casey Serin should be in fed prison by now. He admitted and BRAGGED about his many exploits. in print.
over
and over.
I dont how much more of a public confession it gets than that. served on a silver platter, complete with bumbling braggadoccio as garnish.
So, where are all the politically ambitous fed prosecuters . . . !? The field is wide open now since Spitzers downfall. where is the teeth gnashing, perp walking & talking news coverage?
My GOD, someone DO something, anything . . . . think of the CHILDRENNNNNNNNN !!!
Where IS Casey these days, anyway? hiding out w/Waldo?? witness protection program??? wait, dont tell me; he’s rehearsing for Dancing With The Stars. of course.
“It’s all good…it’s all good…it’s all good”
“I was lying to the banks…”
“Sue me…”
“Which way do YOU swing…”
I miss reading about Casey. Those were good times.
“These include buyer expectations. Many are reluctant to act in falling markets. That sentiment can contribute to market overshoot, according to Seiders, in which prices fall lower than would be their logical bottom.”
The ‘logical bottom’ implies that there are fundamentals in realestate pricing, and yet there is so little concern for those same fundamentals on the way up.
Now, let’s talk about illogical bottoms…
Is he implying that these markets have already fallen TOO far??
What a maroon.
little concern for those same fundamentals on the way up.
well, yeah.. manias do tend to have that effect..
As if the market didn’t overshoot on the way up? Sheesh.
“Ranieri is widely seen as the man who helped package mortgages into bonds that now make up the multi-trillion dollar mortgage-backed securities market that is at the center of today’s credit crunch.”
“Franklin’s share price, which had a 52-week high of $17 in May 2007, closed yesterday at 98 cents a share on the news.”
______________________________________________________________
“Creditors have better memories than debtors.”
“Half a truth is often a great lie.”
“He that is of the opinion money will do everything may well be suspected of doing everything for money.”
Ben Franklin
“Moody’s is simply telling the truth slowly, and there’s more truth to be told,” said Janet Tavakoli, a consultant and president of Tavakoli Structured Finance in Chicago.
“Up until now I thought the rating agencies were incompetent rookies in structured products,” Tavakoli said. “Now I’m suspicious that they may be crooked
Wall Street must be screaming ..”DAMNIT JANET!” ..after the crooked comment in that scene of RE Horror Picture Show
latest news
July crude closes at a record $133.17/brl, up $4.19, or 3.3%
Financial stocks lose S&P 500 throne
After seven years, tech back as largest sector in benchmark equity index
By Alistair Barr, MarketWatch
Last update: 2:37 p.m. EDT May 21, 2008
SAN FRANCISCO (MarketWatch) — The mortgage-fueled credit crunch has dethroned financial services as the largest sector in the Standard & Poor’s 500 index after seven years, investment bank Keefe, Bruyette & Woods said on Wednesday.
“These include buyer expectations. Many are reluctant to act in falling markets. That sentiment can contribute to market overshoot, according to Seiders, in which prices fall lower than would be their logical bottom.”
Better start getting used to this. While it’s true that prices may end up overshooting on the downside - we’re going to start hearing the “overshoot” phrase a lot over the next couple of years by the REIC - claiming that prices have already overshot and that’s why it’s a great time to buy.
Truly we will have overshot if prices continue their dramatic decline for about 4-5 more years. Until then - uh uh - we’re just getting back to the norm.
I wouldn’t consider it overshooting unless the X is completely shot out of the bullseye. Until then, more ammo, please.
Second derivative, baby.
What do you mean starting to hear, right now here in our pocket Bay Area, it’s a great time to buy.
Note to PPT: “Get your fat-lazy-Hampton-loving asses back to the office ASAP!!!!!”
Note to PPT: “Get your fat-lazy-Hampton-loving asses back to the office ASAP!!!!!”
“Heck No, you don’t pay me enough to get back in that hellhole…Look what it did to Paulson! He’s a quivering shell of his former self…”
WhatOnceWas,
Brother you ain’t kidding. At the height of the credit crunch ( not that were through by any means ) he looked like a total basket case! Shirt tails hanging out, 5 o’clock shadow, tie off kilter. You just KNOW those boys were burning the midnight oil. Since he was such a huge beneficiary of the subprime mania you’d think he had to have some inkling as to what was about to surface?
Grateful Debt Pushers…
“UBS, the Swiss investment bank that has so far recorded larger losses from the credit crisis than any other financial institution, has sold some of its mortgage-backed securities to BlackRock, the fund manager.”
What do you suppose they’ll do with all of the empty bank buildings, after the former occupants start failing in droves?
I saw a B of A branch once, that was converted into a swap meet.
Here in Tucson, there’s a vacant lot at the southwest corner of Speedway and Stone. Bank building used to be there, but it was torn down about a decade ago.
The most recent plan was to hatch a high-rise condo project, but the neighbor-chickens got all squawky about the lack of affordable housing. Well, the market for condos in and around downtown Tucson isn’t exactly robust. But that hasn’t stopped this condo idea from resurfacing.
Every time it does, the denizens of the Dunbar Spring neighborhood (a rapidly gentrifying area that still fancies itself as a hippie granola outpost of The Sixties) get all up in arms and place some formula for the ratio of affordable housing to the total number of units. Then the developers start bellowing that they can’t comply with such a formula, and the end result is that nothing happens.
BTW, this vacant lot is a wonderful little place to zip around on a mountain bike.
Crooked Incompetent Rookies playing double AA ball…
“‘Moody’s is simply telling the truth slowly, and there’s more truth to be told,’ said Janet Tavakoli, a consultant and president of Tavakoli Structured Finance in Chicago. ‘Up until now I thought the rating agencies were incompetent rookies in structured products. Now I’m suspicious that they may be crooked.’”
Just heard from a source, housing can be had for .35 on the dollar .Good homes too.
As I say later in posts, with all layoffs happening, who would have money or want to buy a home.
There is a National Housing Hall of Fame????? You gotta be kidding me.
I hope to god that Casey Serin has a place in there.
“It’s all good it’s all good”
“Cash Back at close…”
“I was lying to the banks…”
“That sentiment can contribute to overshoot, according to Seiders”
No kidding? Sobriety can do that to a person.
hit…they’re ON to us, hit the escape button Wilbur.
“I am a Moody’s 3300 super computer, all is well… nothing can go wrong.. nothing can go wrong…nothing can…”
Hal, open the pod bay doors Hal. Open the pod bay doors Hal.
I’m afraid I can’t do that Dave.
H A L Next letter in the alphabet
I B M
How about a National Housing Hall of Infamy? Given how disastrous and widespread the ramifications of the collapse, history is likely to be casting about for a Cast of Villains …nominations for the Top Ten likely to make the story?
“These include buyer expectations. Many are reluctant to act in falling markets. That sentiment can contribute to market overshoot, according to Seiders, in which prices fall lower than would be their logical bottom.”
Mr. Seiders, I’ll start worrying about overshooting once prices in my area actually REACH the logical bottom, which is still quite a ways off. The logical bottom is when prices are in line with rents and in line with the proper income/price ratio. Where I live (21704 zip code), a plain 1400 sq ft 3 br 2 ba rancher on 2/3 acre rents for about $1550/month, but the price, which should be around $230K, is still way too high (about $370K, down from $450K at the peak).
Mr_Dave_O,
Right, everyone keeps talking about the silent majority of responsible home owners but believe me the power is on the leveraged side. Right now leverage is pulling for a floor ( even a false floor ) under home prices. Fundamentals be damned.
At this point it’s ridiculous to even be TALKING about “overshooting”. Here’s what NAR and NAHB haven’t been able to even confront yet: People my age and older probably won’t be thinking trophy/second home for the rest of their lives. No ATM = No Sale. Given the 1st of January this year marked the 1st. boomer to submit paperwork for Soc. Sec. they managed to completely scuttle the RE market AND the economy before the first boomer eligible for retirement! Nice work fellas.
OT, but thinking about Madison…
When I lived there in around 1980, I used to have breakfast at a little vegetarian cafe run by Rastafarians. Definitely a slow food establishment, stoned dreadlocked cooks turning one potato wedge at a time on the grill, the aroma of weed mixed with that of the coffee. In E Madison maybe?
IIRC, it was owned by two big bearded flannel-shirt-wearing bachelor brothers whose main business was running a lumber yard. They just started the restaurant next to where they lived so they would have somewhere to eat good vegetarian meals, rather than hiring a cook.
In back of the restaurant they had a lion that was rescued from a zoo somewhere. They kept it on a vegetarian diet.
I’m not making this up, really. Anyone from Wisconsin able to update me on this?
It’s Madison Mississippi
I see now - it’s in Madison county. That should have been a clue.
But no one in Madison WI can let me know anything about the Rastafarian cafe / bearded brothers / lion?
Shares of Moody’s Corp fell after the rating agency said a computer snafu resulted in incorrect top ratings for complex debt.
“The dog ate our ratings research”
In 2006, FBI research estimated that mortgage fraud would reach $4.2 billion nationwide.
I’ve never seen an actual mortgage application, but I assume it has the standard language along the lines of “I declare under penalty of fraud that the above is true and complete to the best of my knowledge.” If that is the case, then offhand I would guess that there were at least a million cases of liar-loan mortgage fraud nationwide in 2006, and assuming an average mortgage size of $200k, that would put the total fraud at closer to $200 billion per year.
It seems that American Airlines has told the employees that they are laying off thousands.
So, with this and all other industries laying off, who cares if the cost of houses are becoming affordable. If you don’t have a job,
But, meanwhile, all the CEO’s mgmnt at all companies are getting HUGE bonuses. Yep, sounds fair.
pass out packs of peanuts to passengers onboard vs. being chairman of the board.. no contest.
i just started my 2nd job on the weekends
and if my 1st goes by the wayside (which it may)
i have a full time gig waiting for me
nothing like being proactive
this is really getting serious now
mgnyc99
dude, yer harshin my buzz with such prudent planning. the nihilists are always gonna win anyway. grab some bowling shoes & give ambition a day off.
the dude abides
“Once prices hit $150 or $200 like our friends at Goldman are saying, we are looking at $5 or $6 gasoline, which will really hurt demand and cause a recession,” Mueller said.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a5eIZ7qh9xII&refer=home
I think he’s a tad optimistic on the recession part.