June 26, 2008

This Dream Is Dead In California

CNN Money reports on California. “On Wednesday there was some good news for California, when a local realtor group said that sales there jumped 18% in May compared to May 2007. But the hard times are far from over: Prices took a beating, plummeting 35% during the same period, according to the California Association of Realtors. ‘While this is a welcome sign for the market, it was due in part to the large share of distressed homes for sale in many parts of the state,’ said CAR President William E. Brown.”

“The Santa Barbara County area has been particularly hard-hit by falling prices; the median home sold there in May for $400,000, 24% below April prices, and 55% below May 2007. Monterey County, down 49% since last May, and the Riverside-San Bernardino area, off 35%, also suffered steep losses.”

“Los Angeles prices fell 21% from a year ago, while San Francisco prices dropped 20%, and San Diego was down 27%.”

“The state-wide median price for a home sold during the month was $384,840, down from $594,530 last May. ‘[It's the result of] a large number of short sales and foreclosures in the market,’ said CAR Chief Economist Leslie Appleton-Young.”

The Pasadena Star News. “‘It’s a first-time homebuyers’ market,’ said Marty Rodriguez, owner of Century 21 Marty Rodriguez in Glendora.”

“Several San Gabriel Valley cities posted big year-over-year declines in their median home price. Hacienda Heights led the pack with a 37 percent decline, followed by Baldwin Park (-35.6 percent), Montebello (-31.3 percent) and Azusa (-30.8 percent).”

“Bill Mota, broker in West Covina, said homes a the low end of the price spectrum are quickly being bought up by first-time buyers and speculators. But the process, he said, can be arduous.”

“‘Getting a response from the bank’s repo department takes a while - they’re still overwhelmed,’ he said.”

“Rodriguez said sellers are often being asked to pay 3 percent of the buyer’s closing costs as well as 3 percent of their downpayment. ‘These kinds of programs have not been in play for at least 10 years because the market was so hot,’ she said.”

The Union Tribune. “Despite months of encouragement to help out distressed homeowners, consumer groups say the mortgage industry isn’t doing nearly enough to stem the rising tide of defaults and evictions.”

“A turnaround won’t help Maria Fuentes of Chula Vista, and her husband Rocky Segobia. The loan they received in late 2004 seemed like ‘a sweetheart of a deal’ until the interest rate began adjusting upward, Fuentes said. What started as a $1,600-per-month payment rose to $1,900. Efforts to renegotiate were unsuccessful.”

“After Segobia was laid off, the couple began missing payments and pawned their wedding rings to make ends meet. When they learned that Fuentes was going to be laid off from her job with the San Diego Unified School District, they gave up. They’re now selling their house on Del Mar Avenue for less than the amount owed in a short-sale agreement.”

“‘We are going to walk away from our home with zero money in our pockets,’ Fuentes said. ‘We’ve hit bottom.’”

The Press Democrat. “Sinking prices are discouraging homeowners from putting homes up for sale during a season when new listings often pour onto Sonoma County’s housing market. ‘There’s been absolutely less for sale than you normally see. Because if they don’t have to sell, they’re not,’ said Alice Curtis, Creative Property Services manager in Santa Rosa.”

“Many homeowners who might want to sell are staying out of the market rather than compete with such discount pricing.”

“‘The cards are stacked against the regular old homeowner trying to sell,’ said Mike Kelly, an agent in Santa Rosa. ‘If you tried to put your house on the market now, the competition around is just going to murder you.’”

The San Francisco Chronicle. “A subdued, and noticeably smaller, throng of West Coast building professionals gathered at Moscone Center this week for the annual Pacific Coast Builders Conference and trade show.”

“‘Why sugarcoat it?’ said John Frith, spokesman for the California Building Industry Association. ‘It’s ugly; it’s brutal’ in the housing market now. ‘People need to know that, and the policy makers need to know that.’”

“Alan Nevin, chief economist for the CBIA, said housing production in the state this year is likely to be at the lowest level since World War II. ‘We are not anticipating a return to vitality in the rest of 2008 or even in 2009,’ Nevin said. ‘Foreclosures are the proverbial pig in the snake.’”

“‘We get (potential buyers) with the mind-set: I want to pay this price because I can buy a foreclosed home up the street,’ said Bill Misura, a sales associate with Tim Lewis Communities in Roseville.”

The Mercury News. “Some of the week’s conference sessions have titles such as ‘How to Sell Homes in a Down Market,’ ‘Leadership in the Face of Adversity,’ and ‘Change or Die.’”

“Reducing costs is the primary coping mechanism for any builder now, said Ray Becker, a land developer in San Benito County who is also the president of the California Building Industry Association. Many have laid off large numbers of employees, and some are selling off land the had hoped to build on.”

“‘Everyone is cutting to the bone right now,’ Becker said. ‘There’s no other choice.’”

The Recordnet. “The CBIA’s chief economist, Alan Nevin, blamed the record number of foreclosures and short sales for depressing the market for new homes, but he also said rising high fuel prices have knocked commuters out of the inland housing market from Sacramento to Riverside/San Bernardino.”

“‘Folks are no longer willing to make that long drive, even though that house may be $100,000 less,’ Nevin said. ‘You can’t justify it when the fuel (to commute) costs $1,000 a month.’”

“The projected 38,250 building permits expected to be issued statewide for single-family homes this year represents a 75 percent drop-off from three years ago.”

‘In January, Nevin took a uniquely optimistic view among economists by predicting that housing production would actually climb this year to 128,000 units, including 80,000 single-family homes, up from 70,000 in 2007.”

“A total of 348 residential building permits were issued countywide for the first five months of this year, according to the Construction Industry Research Board. That was less than the 357 residential building permits issued only in the month of January 2006, at the beginning of the current housing slowdown.”

“Joe Anfuso, CEO of Stockton-based Florsheim Homes, said…he believed the January forecast was overly optimistic.”

“‘As the banks have started to place the foreclosures in the market at prices that are now attractive and grabbing buyers, that’s certainly made things more difficult for home builders,’ he said. ‘It’s really survival and managing cash flow until we get out the other side.’”

The Ventura County Star. “It took less than 20 minutes Wednesday for Countrywide Financial Corp. shareholders to approve a garage-sale takeover by Bank of America, putting an end to a corporate meltdown that cost them billions of dollars.”

“At a special meeting Wednesday at Countrywide’s campus headquarters in Calabasas, shareholders were bused in while guards kept the media at bay. ‘It’s a really sad day in America,’ shareholder Scott Adams said afterward outside the campus. ‘This dream is dead.’”

“Countrywide’s market capitalization value has plummeted over the past year as its stock plunged from a high of $37.52 to a low of $3.95, a nearly 90 percent tailspin.”

“He was prepared Wednesday to criticize the board of directors for poor corporate governance and inability to reel in founder and CEO Angelo Mozilo. He didn’t get a chance, though. Shareholders were not permitted to speak.”

“‘It’s been a board that’s never been able to say no to Mozilo,’ Adams said.”

“The original deal was valued at about $4 billion when it was announced Jan. 11, but the value fell to about $2.8 billion as Bank of America’s stock price dropped from $39.41 then to $26.61 Wednesday, or 32.5 percent.”

“Along with Countrywide’s more favorable assets, Bank of America also will have to take on a trove of lawsuits related to Countrywide’s lending practices, among other headaches.”

“They include two brought Wednesday in California and Illinois. Both accuse Countrywide of systematically deceiving borrowers in order to get them to take on risky loans they couldn’t really afford, and name Mozilo as a defendant.”

“The California lawsuit also names as a defendant David Sambol, the lender’s former president and chief operating officer.”

The Sacramento Bee. “California Attorney General Jerry Brown says he’s seeking something quite simple for thousands of homeowners who lost money or their houses to foreclosure after borrowing from Countrywide Financial Corp. Payback.”

“As fresh lawsuits hang over BofA’s July 1 acquisition, some say the giant bank may get more than it bargained for. ‘Bank of America is taking on a big risk,’ said Kurt Eggert, a law professor at Chapman College in Orange in Southern California.”

“Eggert said Countrywide could be liable for ‘huge sums of money and might have to return houses that have been foreclosed. Until this litigation is resolved, it strikes me that Countrywide is under a very dark financial cloud.’”

“Steve Abrams, a training manager who works for the state, has made mostly minimum payments on his Countrywide pay option ARM, adding $1,000 to his principal every month. Abrams said he has kept up payments since getting the loan in 2005. But next year, it will go up by $1,000 a month, he said.”

“He said repeated requests to Countrywide for a new kind of loan have led nowhere. ‘It’s like I’m getting deeper and deeper,’ he said.”




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183 Comments »

Comment by friar john
2008-06-26 14:42:44

“‘We are going to walk away from our home with zero money in our pockets,’ Fuentes said.

Oh, you mean you’re going to walk away from your home with the same amount of money that you initially put down on your home? Zilch? It is tragic stories like these that tug at the heart strings.

Comment by Faster Pussycat, Sell Sell
2008-06-26 14:49:03

Zing, zing, zing go my heart strings
Ding, ding, ding goes their credit
Schwing, schwing, schwing go the JT’s
Ka-ching, ching, ching go the surgeons.

Comment by SanFranciscoBayAreaGal
2008-06-26 14:55:28

Judy, Judy, Judy, “Meet me in St. Louis” :)

Comment by Faster Pussycat, Sell Sell
2008-06-26 15:24:41

Trust a San Franciscan to get the reference. :-D

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Comment by Rintoul
2008-06-26 15:09:13

I was gonna comment on the same quote. Sound like she’s leaving with exactly the same amount she had going in…

Comment by DinOR
2008-06-26 15:50:47

“We’ve hit bottom”

No….! ( That pretty much happened the day you moved to Chula Vista )

Walk away w/ nothing? They don’t call them neg. am. loans for NOTHING! I mean after all you’ve been there such a long, long time. 2004 was it? And you stopped making payments when?

Comment by dude
2008-06-26 16:02:53

“We’ve hit bottom”.

Baby, you are no where near the bottom, unless one or both of you get some smarts somewhere.

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Comment by SixString
2008-06-26 17:28:36

Check out the California RealEst Ass-oles
web site… all in the RED…
and not even close to the bottom…

C.A.R. reports sales increased 18.1 percent; median home price fell 35.3 percent in May

LOS ANGELES (June 25) – Home sales increased 18.1 percent in May in California compared with the same period a year ago, while the median price of an existing home fell 35.3 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.

“Home sales exceeded 400,000 last month for the first time since early 2007. While this is a welcome sign for the market, it was due in part to the large share of distressed homes for sale in many parts of the state,” said C.A.R. President William E. Brown. “Sales also rose above their year ago levels for the second month in a row after 30 consecutive months of year-to-year decreases. The lower prices associated with distressed sales along with favorable interest rates both contributed to higher sales levels.”

Closed escrow sales of existing, single-family detached homes in California totaled 423,700 in May at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity increased 18.1 percent from the revised 358,640 sales pace recorded in May 2007.

LOL!!!!

 
 
Comment by implosion
2008-06-26 22:38:47

“We’ve hit bottom”

Nah, not until your husband is pimping you and you’re turning tricks.

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Comment by pismoclam
2008-06-27 15:11:22

If you’re from S.F. , not til you’re pimping him. hehehehehehehe

 
 
 
Comment by Scott
2008-06-30 14:07:56

Minus her wedding rings.

 
 
Comment by ws
2008-06-26 17:56:05

don’t feel too sad for Rocky and Maria. she bought the house for $270,000 in 1998, refinanced it in 3/2004 for $450,000 and refinanced again in 11/2005 for $525,000. they got their money out of it.

i’m sure they were totally honest on their loan app. it’s no prob qualifying for a $525,000 loan, right??

Comment by BanteringBear
2008-06-26 18:48:13

“…i’m sure they were totally honest on their loan app. it’s no prob qualifying for a $525,000 loan, right??”

This is perhaps the most annoying part of the bubble. Lying became the norm. It’d be hard to find any mortgage broker who wasn’t encouraging such transactions, or at least complicit in them.

What a sad state our country has become. The future doesn’t look so bright. I’m still managing to land clients, but as this economy looks more and more like burnt toast, I sometimes wonder how I’ll hang on through a greater depression scenario. I’m whittling away at debt, but it’ll be a while before it’s gone.

 
 
 
Comment by friar john
2008-06-26 14:45:40

“‘The cards are stacked against the regular old homeowner trying to sell,’ said Mike Kelly, an agent in Santa Rosa. ‘If you tried to put your house on the market now, the competition around is just going to murder you.’”

Literally.

Comment by combotechie
2008-06-26 14:50:05

Lol.

Comment by Neil
2008-06-26 18:49:16

ROTFLMAO.

I wonder if it will be via arson to reduce the inventory? ;)

Got Popcorn?
Neil

 
 
Comment by friar john
2008-06-26 15:14:02

Again, another person with two first names. My pet peeve-o-meter is off the charts right now!

Comment by Big V
2008-06-26 16:43:20

Whatever you say, Mr. John.

Comment by friar john
2008-06-26 17:22:39

What is troubling you my child? Talk to me babe.

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Comment by Big V
2008-06-26 17:24:38

I started Nutri System today, and all I can think about is Taco Bell and that extra sweat seasoning.

 
Comment by friar john
2008-06-26 17:43:23

“and all I can think about is Taco Bell and that extra sweat seasoning.”

You and me both. Isn’t Nutri System just a glorified laxative? Listening to me enough will give anyone the shits sooner or later, and its free of charge.

 
Comment by BanteringBear
2008-06-26 18:53:38

On account of friar john and his sweat seasoning, I don’t think I’ll ever be able to stomach Taco Hell again. It’s just too revolting to think about.

 
Comment by iftheshoefits
2008-06-26 19:05:09

I don’t like to sweat seasoning either. Too salty.

 
Comment by friar john
2008-06-26 19:30:56

BanteringBean and ifthesmellyshoefits fail to appreciate that seasoning called salt. Are you saying that sea salt or kosher salt never graces the food you eat? Salt teases out the essence of food, and beans by their very nature call out (yearn?) for salt to be added. Frankly I’m a little disappointed in you two. When I was younger, I would come back from playing basketball all sweaty and guess who was there to greet me at home with open arms? My dog, and let me tell you she would lick my arms and face with a ferocity unbeknownst to man, savoring every lick of the sweaty juice emanating from my body. If it was good enough for my dog, it should be good enough for you.

 
 
Comment by Curt
2008-06-26 18:48:48

Whatever you say, Mr. John.

I thought is was Mr. Friar?

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Comment by Jas Jain
2008-06-26 15:53:59


That is why old JD try to put an end to the “ruinous competition” in the oil business more than 100 years ago. A genuine competition would bankrupt lot od businesses. That is why banks get too big to fail and kill competition via mergers.

Jas

Comment by DinOR
2008-06-26 16:05:11

Jas,

Right. And for all the criticism, AG did try to stem the tide of mergers even back in the 90’s based on the fact that FDIC was never intended to cover, oh…. 1/5th of the nations deposits in the ‘unlikely’ event of a failure!

…not entirely a putz.

 
 
 
Comment by Faster Pussycat, Sell Sell
2008-06-26 14:46:46

“It’s a really sad day in America,” shareholder Scott Adams said afterward outside the campus. “This dream is dead.”

After that, shareholder Adams was bused out by security guards with a JT firmly lodged in his sanctum sanctorum.

Grimacing and wincing from the pain replete with teary eyes and bloodied trousers, he had one last thought. “It’s a really bad day in America”, he said afterward, “This ream is not yet dead.”

Comment by friar john
2008-06-26 14:55:55

I think Elvis had a song that talked about a reaming meant to be…

Ream me tender,
Ream me sweet,
Never let me go.
You have made my life complete,
And I am reamed by you so.

Ream me tender,
Ream me true,
All my dreams fulfilled.
For my JT I love you,
And I always will.

Ream me tender,
Ream me long,
Take me to your desert.
For its there that I belong,
And we’ll never part.

Comment by ex-nnvmtgbrkr
2008-06-26 16:20:40

Touching……..me eyes are brimmin’.

Comment by Faster Pussycat, Sell Sell
2008-06-26 16:35:20

“It was but a twinkle of my idea in my head,” said the blogger going by the name of ex-nnvmtgbrkr while refusing to reveal his name, “but the ideas have spread so far and wide, I am humbled by the wit and beauty of my fellow bloggers’ comments. The range of the American public is truly immense. From Elvis to opera and opera glasses, it has been a wondrous magical journey that can only be surpassed by rivulets of red liquid oozing down the insides of the FB’s thighs.”

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Comment by ex-nnvmtgbrkr
2008-06-26 19:25:37

Has JT-ing gone viral yet?

 
 
 
 
Comment by Arizona Slim
2008-06-26 16:25:20

I see a Dilbert cartoon in here somewhere.

Comment by Femme Financiale
2008-06-27 16:34:09

“I see a Dilbert cartoon in here somewhere.”

HA! Was that a purposeful “Scott Adams” reference?

 
 
Comment by DebtInNation
2008-06-28 00:09:44

Countrywie . . . Taking the “D” out of the American Dream.

 
 
Comment by Professor Bear
2008-06-26 14:48:40

“The state-wide median price for a home sold during the month was $384,840, down from $594,530 last May. ‘[It's the result of] a large number of short sales and foreclosures in the market,’ said CAR Chief Economist Leslie Appleton-Young.”

There is a strange asymmetry between all the various New Era theories that were used to justify unsustainable price increases during the bubble era and the lame excuses used in a futile attempt to rationalize away the stark evidence of a price collapse during the post-bubble hangover.

Comment by turnoutthelights
2008-06-26 15:19:56

To re-visit that line from Independence Day:

“‘We get (potential buyers) with the mind-set: I want to pay this price because I can buy a foreclosed home up the street,’ said Bill Misura, a sales associate with Tim Lewis Communities in Roseville.”

‘Payback’s a bitch’!

 
Comment by Faster Pussycat, Sell Sell
2008-06-26 15:22:08

“As a result of the large number of short sales and foreclosures in the market,” said CAR Chief Economist Leslie Appleton-Young, “I am in grave danger in losing my credibility. My salary is not yet in danger because I make sure that all predictions are five years away.”

“However, in quiet moments, I feel a burning itching sensation in my lower rectum with trickles of red liquid oozing down my cream-colored pantyhose. Could it be a sign of an upturn in the market?”

Comment by Big V
2008-06-26 16:48:00

LAY may be in danger of losing her life, IIRC. I may include a reference to her in my next novel. Stay tuned.

Comment by Faster Pussycat, Sell Sell
2008-06-26 17:32:36

Keep me informed. I’ll buy that novel for sure!!!

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Comment by ex-nnvmtgbrkr
2008-06-26 16:26:26

I hear ya. I think we’ve hit the acceptance phase of prices are crashing. The real acceptance phase comes when the majority realize they’re not coming back. That phase is still a ways off, I’m afraid.

 
Comment by Red Baron
2008-06-26 17:45:52

The median price was $384K–when the median household income was about $55K.

California home prices have a long way to go–down. The declines are only getting started. Homes in many areas of California will drop 60% to 80% from the peak.

Keep the popcorn popping,

Red Baron

Comment by BanteringBear
2008-06-26 19:27:02

The rate at which home prices are collapsing is remarkable.

 
 
 
Comment by SanFranciscoBayAreaGal
2008-06-26 14:50:26

“The Dream is Dead in California” Mama sure had a great voice:

all the leaves are brown
and the sky is grey
I’ve been for a walk
on a winter’s day

I’d be safe and warm
if I was in L.A
California Dreamin’
on such a winter’s day

stopped into a church
I passed along the way
well, I got down on my knees
and I pretend to pray

you know the preacher likes the cold
he knows I’m gonna stay
California Dreamin’
on such a winter’s day

all the leaves are brown
and the sky is grey
I’ve been for a walk
on a winter’s day

if I didn’t tell her
I could leave today
California Dreamin’
on such a winter’s day
on such a winter’s day
on such a winter’s day

Comment by sm_landlord
2008-06-26 15:27:24

More like this:

All the eaves are brown
And the walls are beige
I’ve been for a walk
Down the flipper’s way

I am broke and poor now
Since I bought in L.A.
California reaming
On down the flipper’s way

Saw an Open House
I passed along the way
Well, I asked about the sales
And how’s the HOA?
You know the Builder, he was was cold
He knows I’m forced to stay
California screaming
On down the flipper’s way

All the eaves are brown
And the walls are beige
Ive been for a walk
Down the flipper’s way

If I had a buyer
I could leave today
California screaming
On down the flipper’s way
I got a California reaming
On down the flipper’s way
California reaming
On down the flipper’s way

Comment by SanFranciscoBayAreaGal
2008-06-26 16:31:33

I do like your take on the song sm_landlord. :)

 
Comment by Joshua Tree
2008-06-26 20:37:04

Pinkie finger at corner of mouth, petting large white cat on lap:

“Exxxcelllent!!”

 
 
Comment by Red Baron
2008-06-26 16:34:25

Perhaps today’s stock market plunge will make some more people realize that we are going into a depression and the true extent of the financial mess Alan Greenspan has caused.

Keep the popcorn popping,

Red Baron

Comment by sleepless_near_seattle
2008-06-26 21:45:40

Perhaps, but we thought so 3 stock market plunges ago. One of these plunges should eventually do the trick.

“Thank you sir may I have another?!…Thank you sir may I have another?!…Thank you s-….”

 
 
 
Comment by milkcrate
2008-06-26 14:51:39

“‘Folks are no longer willing to make that long drive, even though that house may be $100,000 less,’ Nevin said. ‘You can’t justify it when the fuel (to commute) costs $1,000 a month.’”

Watch out for those costs when the F-16s thunder over Iran with wicked payloads. $8 gas anybody? $10?

Plus the higher human cost.

They think consumer confidence is low now?

Comment by dude
2008-06-26 16:10:02

$1000/month?!!!

Where the heck are they commuting from, the surface of the moon?

My gas bill is $270/month coming to SFV from Palmdale, so this guy is either getting 9 mpg or is living 200 miles from work.

BTW, didn’t any of these people think of the commute when they moved to BFE?

Comment by ex-nnvmtgbrkr
2008-06-26 16:34:51

Dude, that moped has gotta be brutal. I hope you customized the seat a little or you’re going to end up with a hemorrhoid farm in your winker.

Comment by dude
2008-06-26 17:48:15

Jetta, 37 mpg.

I buy ‘em cheap and drive them into the ground.

I have ridden my motorcycle down a few times. It’s a hoot but my hands tingle for about an hour after I get to work.

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Comment by dude
2008-06-26 17:50:31

I was hoping someone would chime in with, “they are commuting from the surface of the moon, it’s called Victorville.”

LOL

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Comment by Wickedheart
2008-06-26 18:07:48

That goodness I’m only drinking water or the place would be a mess. :)

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Comment by wolfgirl
2008-06-26 17:38:50

I met someone who commuted from Maggie Valley to Greer, SC so he could work at BMW. I’m not sure how long a drive it is, but it has to be a killer especially in the winter.

 
 
 
Comment by sohonyc
2008-06-26 15:00:56

Apparently the “dream” is also dead on Wall Street. The Dow dropped 300 points today. The only winners were the short funds (DOG, QID, etc) and gold and silver apparently.

Can’t say we didn’t see this coming….

Comment by palmetto
2008-06-26 15:21:39

Amen, soho. Hoz predicted 11,000 Dow by New Year’s, it’s a little late, but it’s coming.

Comment by Doug in Boone, NC
2008-06-26 17:18:52

And I thought I was being overly pessimistic when I predicted a DOW of 11,500 by New Year’s. Now it’s back to the ol’ drawing board! Am I being overly optimistic by predicting 10,500?

Comment by Tempis
2008-06-26 20:20:06

You know you’re in trouble when you’re pulling up 10-year charts to find the next support.

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Comment by Red Baron
2008-06-26 16:36:22

My prediction is 800 on the S&P 500 by June 2010. At that point, it will be time to buy, as shareholders will actually get paid a decent 4% to 5% dividend yield to own stocks.

Keep the popcorn popping,

Red Baron

Comment by BanteringBear
2008-06-26 21:23:35

Interesting. My prediction was 800 as well, only I was talking the DOW. LOL.

 
 
 
Comment by sagesse
2008-06-26 15:01:54

The Orange County Register is outsourcing its copy editing / layout to India. Scandalous.

Comment by Rintoul
2008-06-26 15:10:54

Forgive me for asking, but are you also anti-union?

Comment by Faster Pussycat, Sell Sell
2008-06-26 15:25:51

ZING!!!

Comment by Rintoul
2008-06-26 15:44:17

No, I really want to know! I hear this anti-offshoring position all the time from people who are also vehemently opposed to unions. I simply don’t get it. Seems like hypocrisy to me - but maybe this person is not anti-union and that’s why I was curious…

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Comment by DinOR
2008-06-26 15:59:15

Rintoul,

I’m neither but there should be a level playing field. If people in the private sector can lose their jobs to off-shoring why is everyone in the public sector assured of theirs?

Payroll, Admin. etc. at ALL levels of government. It’s not so much that those folks are making all that much money but for every public employee there’s a huge ben. package that usually goes along with that. Just to play the devil’s advocate, if public employees were subject to same threat “I” believe ( the outcry would be a LOT louder )

 
Comment by Big V
2008-06-26 16:53:06

Yes, we could outsource our Senators even. Why not?

FYI, In San Jose, there is actually a porn shop called “Why Not?”.

 
Comment by Suspicious 2
2008-06-26 17:04:02

Absolutely clueless!

What if everybody would have got mad when benefit costs were going through the roof and eliminated instead of trying to drag down everyone else!
Why do public employeees have benefits and retirement packages…THEY BELONG TO UNIONS!
It used to be public service had to offer those benefit packages to get workers. The private sector sucked up most of the good ones with higher pay and a decent benefit packages. Now that the benefits in the private sector are almost gone, seems like some are mad at the public employees.
You should get mad at the cooporations who took them away! Go on strike, protest, and organize. That’s how we got the benefits in the first palce. Not becuase the private sector is benevelant.

 
Comment by rms
2008-06-26 17:33:35

“FYI, In San Jose, there is actually a porn shop called “Why Not?”.”

Reminds me of a Noe Valley repo with the license plate: WE DV8

 
Comment by Faster Pussycat, Sell Sell
2008-06-26 18:00:31

Noe Valley is gonna get JT-ed the big time. It’s the smug capital of SF, and boy, am I gonna be really happy when the blood spurts begin!

 
Comment by SanFranciscoBayAreaGal
2008-06-26 18:11:45

Million dollar homes in that valley, FPSS. Some great looking homes, I just wouldn’t pay millions for them.

 
Comment by Faster Pussycat, Sell Sell
2008-06-26 18:19:48

My friend rents one. I’ve stay there often enough. I even have the key (as I speak.)

Yet, it’s gonna get JT-ed the big time.

 
Comment by sleepless_near_seattle
2008-06-26 21:52:46

Weren’t those houses like $300K in 1998? Seems like that area was on an upswing at that time when I visited.

 
 
 
Comment by sagesse
2008-06-26 19:03:55

Apparently, the OCR belongs to McClatchy and they are outsourcing the copy editing for the Miami Herald and other papers as well.
There is an aspect of outsourcing a nation’s language that feels really eerie, like a real sell out. As it is, there are too many adults who have difficulties writing / spelling, but I am not convinced that they can’t find some willing and able college students, at least.
If the paper thinks that would be too inconvenient, well, then it means making a contribution to their community is inconvenient for them, and that irks me.
(I have not thought of the union question when I commented, nor meant to stir up this outsourcing debate in general, which often leads to general bitching about India).
Why is the OCR not swamped with cancellations of subscriptions? Some other community action? One by one, these developments are happening, and do we just stand by?

Comment by catspit1
2008-06-26 19:51:18

bec. it is such a right wing sputum outlet most thinking people already cancelled their subscription years ago. then had to call multiple times to make them stop leaving the dreadful thing in their yard anyway.

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Comment by Larry
2008-06-26 20:45:47

The Orange County Register just switched to a narrower newsprint size, about 11 inches wide, instead of 12.

The narrow paper matches their narrow viewpoints. So I hope the whole company goes to India, and stays there.

 
 
Comment by Suzanne's Ex
2008-06-26 20:14:50

The main reason they aren’t swamped with cancellations is that nobody knows about it.

I live in the County and I wouldn’t know if I didn’t read this blog and a number of others. The masses are still ignorant of this issue and the housing bubble in general. Most still get their information from the MSM that we all know is at least 12 months behind and only reports the spin. The regular contributers to this and a few other blogs, and the regular lurkers, are much better informed than the average Joe Six Pack, and even his better educated cousin Michael Martini. The regulars here need to keep one thing in mind, you are different this time.

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Comment by Joshua Tree
2008-06-26 20:50:38

But, but, what’s wrong with Spell Cheque?

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Comment by catspit1
2008-06-26 21:23:51

I don’t know if the cartoon “Mallard Fillmore” is still around, but they ran it on the editorial page when i cancelled. Enuff said.

 
Comment by Dani W
2008-06-27 07:46:10

It’s not even funny. I’ve tried imagining myself in a Republican’s shoes and reading it it and I just can’t see the humor.

 
 
 
 
 
Comment by sohonyc
2008-06-26 15:02:10

Taxpayers Could Be On the Hook
By ROSS GOLDBERG, Special to the Sun
June 26, 2008

New York City officials are bracing for increased pressure on the budget as the city’s pension funds are reeling from the credit crisis and posting billions of dollars in losses.

In the nine months leading up to March 31, the city’s five pension funds lost a total of nearly $5 billion, or 4.4%, according to data from the city comptroller’s office. This is a far cry from projections published as recently as last month, when budget planners assumed the pension system would post no losses.

If those losses are not recovered by the end of the fiscal year, which ends Monday, the city will have to pay out several billion dollars through 2015, with the first payment of $190 million set for 2010.

The government will have to make up the shortfall from the poor performance of the pension funds at a time when it is already suffering from tax revenue losses due to a souring economy.

“In itself, it’s manageable,” the research director for the Citizens Budget Commission, Charles Brecher, said of the pension fund losses. “The fact that it’s going to be combined with revenue shortfalls means that we’ve got serious problems.”

The Teachers’ Retirement System of the City of New York, which has lost 5.06% of its value in the nine months ending March 31, has been the worst performer so far this year. The New York City Employees’ Retirement System, which lost 3.98% in the same period, performed the best. Other pension funds include the New York City Police Pension Fund, the New York City Fire Department Pension Fund, and the Board of Education Retirement System of the City of New York. Numbers for the state pension system are not yet available, a spokesman for the state comptroller said.

The city’s funds’ performance so far this fiscal year “adds significantly to the amount of money the city has to contribute,” a spokesman for the Independent Budget Office, Doug Turetsky, said. “The city is going to be facing bigger increases than perhaps previously anticipated.”

New York City’s pension funds did worse during the nine months ending March 31 than other public pension funds worth more than $1 billion, which posted an average loss of 3.3% during that period, according to an index from consulting group Wilshire Associates.

New York’s pension funds may have suffered more than their peers because of heavy investments in stocks. “They have such a high exposure to stocks that if the stock market isn’t doing well, it’s going to be more visible for them,” the editor of the newsletter Pensions & Investments, Nancy Webman, said. “But in a year when the market is doing well, they’re going to be fabulous.”

Comment by adge
2008-06-26 15:35:54

This sounds bad at $4.4 billion lost.

Then it sounds even worse when you consider the Dow was at 12,300 then (March 31). Now it’s at 11,300. They are probably down $6.0 billion in those pension funds.

 
Comment by Big V
2008-06-26 16:57:42

I don’t understand the implication that it is some unexpected tragedy of errors that pension funds should be losing money right at the same time that the economy is also bad. I mean DUH, what else would cause a pension fund to go down?

Comment by Faster Pussycat, Sell Sell
2008-06-26 18:17:46

Stock markets return 9% p.a.

This is a law of nature that can never be repealed. Everyone should be buying stocks for their retirement.

What are you, a commie?

 
 
 
Comment by aqius
2008-06-26 15:04:34

the smoke haze is really thick today in Sacramento. I was inspired to ask the food cashier :

” is today Soylent Red day . . . ? “

Comment by Digger
2008-06-26 15:39:15

That is too funny. I dont know if I’m the only person who got that, but what a great line!!!!!!!!

I’m waiting for the time when I can effectively use the line
“Get your hands off me you damned dirty ape!”

Comment by Big V
2008-06-26 16:58:46

If only I had a nickel for every time I’ve used that line.

Comment by Mo Money
2008-06-26 17:30:09

Hey ! I represent that !

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Comment by SanFranciscoBayAreaGal
2008-06-26 16:33:10

aquis,

Did you get an answer? :)

Comment by aqius
2008-06-26 17:48:18

just a polite smile . . . most people dont grok my bizarre soh !

 
 
Comment by Steve W
2008-06-26 18:38:22

One line not to use from that movie…

Never refer to your girlfriend as “the furniture”.

 
 
Comment by Jas Jain
2008-06-26 15:07:37


The dream is dead and nightmare is waiting to be born. Sadly, there is a price to be paid for mass stupidity.

Jas

Comment by aNYCdj
2008-06-26 15:32:02

Jas:

After 68 years they see the handwriting on the wall:

http://www.nelsons-christmas.com/

 
 
Comment by scdave
2008-06-26 15:29:03

Countrywide Financial Corp. shareholders to approve a garage-sale takeover by Bank of America ??

Yeah and B of A$$ imeadiatly anounced 7500 job cuts for the good guys…

Comment by spike66
2008-06-26 15:49:14

And the shareholders were not allowed to speak…this kills me. The shareholders are the freaking owners!!

Comment by catspit1
2008-06-26 15:51:09

yes and we Citizens run the govt. too! (snorfle, stifled giggle…)

 
 
 
Comment by turnoutthelights
2008-06-26 15:30:51

Years ago on this blog, we often engaged in banter about how ‘bad’ it was gonna get. Reading Ben’s latest, I get the distinct feeling that during the last month or so we slipped over the crappy line and are entering a far worst place. Prepare for an augering in, with JT’s free for the asking.

Comment by Faster Pussycat, Sell Sell
2008-06-26 15:58:34

We are barely in the fourth inning, and it’s gonna be a double header.

Buckle up, Buckaroo Banzai; it’s gonna be a bumpy ride!

 
Comment by Professor Bear
2008-06-26 16:31:53

I have to admit that it is worse now than even I expected.

Comment by Faster Pussycat, Sell Sell
2008-06-26 16:37:58

Really?!?

The unemployment rate hasn’t even ticked up yet. Wait for the 2009 fireworks, baby!

Comment by Professor Bear
2008-06-26 16:55:54

fireworks fire sales?

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Comment by Big V
2008-06-26 17:04:25

I remember when PB first discovered the strike-through feature. It became a contagion, worming its way into every MSM article with any hint of irony. Now here it is again, infecting even HBBer posts. The contagion is spreading.

 
Comment by Professor Bear
2008-06-26 17:27:46

The contagion is contained.

 
Comment by SanFranciscoBayAreaGal
2008-06-26 17:54:52

PB,

Too funny. :0

 
 
Comment by Doug in Boone, NC
2008-06-26 18:54:18

It won’t be the Shrub’s problem anymore; he’ll be living off his nice taxpayer retirement check on his ranch in Texas!

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Comment by sleepless_near_seattle
2008-06-26 22:05:29

Texas? I thought it was Paraguay or some such…

 
 
 
 
 
Comment by Pen
2008-06-26 16:00:59

“Along with Countrywide’s more favorable assets, Bank of America also will have to take on a trove of lawsuits related to Countrywide’s lending practices, among other headaches.”

So then, the dream isn’t dead…

at least not our dreams of CountryWide and BOA getting sued left and right…

CITI - dead
GM - dead
GE - dead
C - dead
BS - dead
HD- dead

CFC/BOA - dying
and the list goes on and on..

How the “F” do these CEOs/Chairmen stay in place?

Comment by catspit1
2008-06-26 16:09:42

Volume volume volume!

Comment by Faster Pussycat, Sell Sell
2008-06-26 17:43:10

Fine.

BWAHAHAHHAHAHAHHHHHHHHHHHHHHHHHH!!!

 
 
Comment by dude
2008-06-26 16:14:24

Add WM to your list.

 
Comment by hoz
2008-06-26 16:39:06

Don’t forget Downey and Corus and Merrill and Tripoint and another 75+ others, then smack the commercial regional banks. .

Throw a dart at a bank corp listing sheet and short whatever the dart hits, 75% of the hits will be profitable.

CEOs stay in place because the BOD is rigged and the rules concerning BOD replacement excludes a lot of market raiders. Ideal situation for incompetence.

Comment by dude
2008-06-26 17:54:56

Hey hoz, thanks for your input yesterday.

I’m waiting to do additional shorts based on txchick’s midsummer rally. If it doesn’t come along I’ll just have to settle for the gains I’ve made thus far.

I’m still short WM and JPM.

Comment by txchick57
2008-06-26 19:09:11

I just sat through a 2.5 hour webinar from Hamzei about how we’re looking here. They’re looking for a break under the two prior bottoms in January and March before a rebound. Volume hasn’t been high enough to put in a big panic bottom yet. Oh well. I’m about 50% in index calls but I can wait to buy the rest. I remain convinced there will have to be a rally to distribute stock before the election.

They really got off into some weird territory on this charting session, talking about social unrest over the next 5 years, etc.

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Comment by sleepless_near_seattle
2008-06-26 22:10:39

“…talking about social unrest over the next 5 years, etc…”

Oh, THANKS for the cliffhanger. :-)

 
 
Comment by txchick57
2008-06-26 19:16:00

I’ve already exceeded last year’s take. I should just rest now until September or August. After I punt these calls, probably will.

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Comment by dude
2008-06-26 19:59:52

Don’t kid yourself tx.

Traders trade.

 
Comment by hoz
2008-06-26 21:03:15

LOL

Not all many put on positions and wait patiently for the moneys to roll in.

“Put all your eggs in one basket and watch it like a hawk.”

 
 
 
 
Comment by Red Baron
2008-06-26 16:41:20

Add Fifth Third, KeyCorp, and National City to your list–the holders of these companies’ common stocks will get little or nothing for their shares. These banks will get bought or fail.

The CEOs stay in place because most of them get to pick their friends as directors. The CEOs are paid so well because most of the directors are current or former CEOs.

The dirty little secret of corporate America is that companies are run mostly for the benefit of the top managers who run them, not their shareholders.

Keep the popcorn popping,

Red Baron

Comment by Suspicious 2
2008-06-26 17:14:11

This is not a secret if you look! But it is obfuscated fiercsly in the main stream media (MSM). According to the MSM it’s everybody’s fault housing is going bust, economy if faultering, people losing benefits, etc., BUT the CEO”s!

 
Comment by sagesse
2008-06-26 18:34:28

Very true especially for American Skiing Company. They are about to receive 100 million for the sale of their last resort, consist of a CEO, CFO and probably a handful of their friends, and already told the remaining shareholders to not expect a single penny. My brain computer just does not get this, and especially, that there is no protest.

 
 
Comment by Doug in Boone, NC
2008-06-26 18:56:47

Be sure to add F to your “F” list!

 
Comment by JRinAZ
2008-06-26 21:51:42

Can’t forget the airlines…LCC- Dead. UAUA- Dying.

 
 
Comment by txchick57
Comment by Lip
2008-06-26 16:33:56

IMO, asking a bunch of snakes to anwer a simple question is pure folly. Dodd says “No” and we’ve seen proof that he has. I bet less than 10% can honestly say they didn’t get special terms.

Comment by catspit1
2008-06-26 17:26:06

Gee, do you mean to tell me senators are getting deals on goods and services and rock stars and movie stars are getting all the hot chicks and good tables? O this is the last straw…

Maybe it’s time to focus on the big crimes that stick up. Like bj’s from interns for instance. Or outing undercover CIA agents?

 
 
 
Comment by Big V
2008-06-26 16:16:22

Santa Barbara down 55%? Does that mean it’s time to buy there? I’m going to do more reasearch and write back in a few.

Comment by catspit1
2008-06-26 16:25:34

not to worry, my friend Jimbo paid 350k 10 years ago for a really nice place there (everybody told them not to do it as internet stocks were the way to go). Was worth $1.8 mil couple years ago, he said, but still worth 1.2!!

actually it really is different there. Jobs shmobs. Who needs one?

Comment by Professor Bear
2008-06-26 16:30:51

As long as you have a car, who needs a house?

Comment by arizonadude
2008-06-26 16:41:15

That would be a bummer to be that down and out. I have slept in my truck a couple times to save money on a motel room and let me tell you it is not something I could do for a long period of time.

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Comment by Doug in Boone, NC
2008-06-26 19:35:26

A truck’s bed isn’t too bad, as long as it is a long-bed and has a camper top. The backseat of my ‘66 Mustang is a different story altogether!

 
 
Comment by Professor Bear
2008-06-26 16:48:09

Reading stories like that one depresses me. Why can’t these gloomy journalists find some happier subjects and stop depressing our economy.

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Comment by Big V
2008-06-26 16:31:08

According to one of my favoritest websites (onboard neighborhood navigator), The median price of a Santa Barbara County house in Q12008 was $1,041,096, but the median household income was only $63,413. That should only support a median house price of $253,652. This is ridiculously out of whack.

According to DataQuick, the median price for SFRs in Santa Barbara County is down 53% from last year, at only $346 k, but the median condo actually sold for more, at $354 k.

The difference could be in the quarterly vs. monthly calculation, but that would be a humungous 1-month drop. I wonder if DQ (and, by extension, CAR) didn’t make a mistake. I’m actually more inclined to believe The Navigator. What do people here think? Is SB really down by over 50%?

Comment by OCDan
2008-06-26 17:21:02

Come on, Big V. If a strawberry picker can get 700K, than making $53,413 a year should get you about $3-5 million. You are such a party-pooper.

Let the good times roll!

As for PB not thinking it would get this bad, what did Neil and I say? 20-30% down payments and FICOs in the 700s and a very stable job.

And that is just for home loans.

The rest of the economy, well the “D” wod has been used from time to time here.

Comment by dude
2008-06-26 18:01:00

Let’s see here, we are approaching 50% declines in most all areas of Socal. What’s half of a half?

25% of peak sounds about right when we factor in overshoot and $5 gas. That will take us back to pre-bubble pricing for the most part.

What a fool I was last year for thinking we would only decline 50%.

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Comment by hoz
2008-06-26 20:33:49

Faster Pussycat sell etc. and I have discussed the bottom before. I think prices will be around 1994 levels, however some great bubble traders think the bottom will be around 1983 prices. FPSS is of the 1983 variety.

There are sound economic reasons for both projections (1994 or 1983), the only question is the start date of the bubble. I would not look until 1994 prices.

I expect an 80% downturn in California.

 
 
 
Comment by rms
2008-06-26 17:47:27

“The median price of a Santa Barbara County house in Q12008 was $1,041,096, but the median household income was only $63,413. That should only support a median house price of $253,652. This is ridiculously out of whack.”

I’d never buy a $254k home if I made $63k; no way!

Comment by HARM
2008-06-26 18:23:32

Exactly. 3:1, not 4:1, is the old-school ratio. So, $190k is more like it.

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Comment by jbunniii
2008-06-26 21:15:15

Well, $254k is 3.2:1 if you assume a 20% downpayment. Too rich for my blood but not entirely out of line.

 
Comment by James
2008-06-26 22:25:02

4.3 times income figures in a 20% downpayment

 
 
 
Comment by Tim
2008-06-26 18:11:26

They are using median rather than CS again. Goes to that whole crappy house issue you put so clearly yesterday.

So. . . if only crap is selling . . .

I actually heard Santa Barbara and Carmel Valley were nice. Maybe if prices continue to fall like this it I will consider it for retirement. Looking for a lower cost of living, and CA may be it in a few years.

 
Comment by Steve W
2008-06-26 18:42:08

Big V–thanks for that site. Really appeals to the inner stat geek in me.

 
Comment by Barry
2008-06-28 17:47:01

Santa Barbara County is large and pretty diverse. The big house price declines to date have been around Santa Maria and other inland locations, where the major employment is ag and service. (Commutes to Santa Barbara are pretty brutal.)

Coastal SB city has not seen those dramatic declines, as many people buying into the market don’t depend on earning a living here. Exclusive areas such as Montecito and Summerland still command jaw-dropping prices. But there are signs of weakening along the coast too.

 
 
Comment by sfbubblebuyer
2008-06-26 16:36:24

I suspect not.

 
 
Comment by SMF
2008-06-26 16:30:03

“Steve Abrams, a training manager who works for the state, has made mostly minimum payments on his Countrywide pay option ARM, adding $1,000 to his principal every month. Abrams said he has kept up payments since getting the loan in 2005. But next year, it will go up by $1,000 a month, he said.”

Making minimum payments is never called ‘keeping up with the payments’.

Why should CW deal with someone who obviously can’t deal financially with a payment increase? Was is that going to do?

As I have stated before, a lot of people signed their own ‘death warrants’ as soon as they finalized their purchase paperwork.

 
Comment by aladinsane
2008-06-26 17:28:04

“‘The cards are stacked against the regular old homeowner trying to sell,’ said Mike Kelly, an agent in Santa Rosa. ‘If you tried to put your house on the market now, the competition around is just going to murder you.’”
________________________________________________________________

In a hot real estate bubble, competition is largely unheard of, as everything is selling, but turn the tables and it’s a race to the bottom, highly competitive.

 
Comment by Professor Bear
2008-06-26 17:37:48

Thursday, June 26, 2008
Sellers won’t budge in down market

Home sellers who managed to avoid foreclosure are now posting some pretty steep asking prices, which could draw out the housing crisis even longer. Ashley Milne-Tyte reports.

[A reduced price sign sits in front of a house in Glendale, Calif. (David McNew/Getty Images)]

Bob Moon: It didn’t help that numbers out today from the National Association of Realtors show that the housing market is still extremely unstable. The wave of foreclosures shows no sign of slowing and homeowners across the nation are struggling to cope with rising interest rates on their adjustable rate mortgages.

There was one ray of hope that the standoff between buyers and sellers could be ending: Sales of previously owned homes rose in May.

Still, while some prices are falling, many sellers are hanging tough and Ashley Milne-Tyte reports we could be in for a long, slow slump in the housing market.

Ashley Milne-Tyte: It’s not just that some sellers are convinced their home is worth more than it is. Christopher Thornberg is principal of Beacon Economics. He says many home owners have borrowed so much against their home, they’d swallow huge losses if they accepted a lower offer.

Christopher Thornberg: They’re hoping beyond hope that there’s gonna be a recovery. They’re hoping beyond hope they can find that one buyer who’s willing to pay this price. Unfortunately, I think a lot of them are being unrealistic and of course, the longer they wait, the worse the situation’s gonna be.

Comment by mrincomestream
2008-06-26 18:21:33

A lot of people drank the kool-aid hook, line and sinker…they really bought into the hype…after all the data that has come out in the past 6 months I actually had someone tell me that there area was different and actually going up in price the day the L.A. Times had pronounced that California was down 25% across the board…you will not convince these people…forclosure is the only option for them…

Comment by Professor Bear
2008-06-26 18:39:31

That is why GFs who buy now get to catch themselves falling knives, as many latent foreclosures are going to precipitate over the next few years.

Comment by James
2008-06-26 22:28:10

Especially since so many premium properties were sold with pay option arms.

I guess the I/O people will be trying to figure out what to do and when but the option arms… all dead.

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Comment by measton
2008-06-26 21:38:29

This is my landlord
He purchased at the peak, he’s loosing 16-1800 a month when rented and he can’t rent the upper unit. Now he’s put the house on the market for 40% more than he paid for it. He has another property he can’t sell or rent as well. He readily admits he’s 2 years or less from being bankrupt. He’d rather go bankrupt than admit that the market’s turned against him.

 
 
Comment by aladinsane
2008-06-26 17:38:59

I’ve had the opportunity to watch many bubbles over the course of my life ranging from Silver, Rare Coins, Tin, Baseball Cards, Beanie Babies and more…

They all have one thing in common:

During the heat of the bubble, people couldn’t get enough.

After the bubble bursts, people couldn’t be less interested.

A bunch of the stories in this thread are all about lack of liquidity, meaning it’s REALLY hard to sell a house right now. Imagine how hard it will be in 6 months, or a year?

Comment by rms
2008-06-26 17:59:06

“I’ve had the opportunity to watch many bubbles over the course of my life ranging from Silver, Rare Coins, Tin, Baseball Cards, Beanie Babies and more…”

I remember seeing some of the ladies from our office, lined up like sneetches at the star-belly machine, waiting to buy those TY Beanie Babies. If you have to line up to buy something, you’re getting screwed!

Comment by wolfgirl
2008-06-26 18:35:10

We did well selling our comic book collection. Of course we bought the books at news stands as they came out. And we had all of the early Spiderman, Iron Manm Hulk, etc.

 
Comment by combotechie
2008-06-26 19:21:21

The Beanie Baby mania was one of the best marketing ploys of all time, as was the Cabbage Patch dolls.

The basic strategy is:

1. Create a demand via children’s TV show.

2. Restrict the supply by warehousing the dolls instead of offering them for sale at toy outlets.

The few mothers who are lucky enough to latch onto a doll automatically have bragging rights over the vast number of mothers whose children must go without on Christmas morning. (The subtle message is: You must not love your child if you are willing to deprive her of a doll. Other mothers care enough to provide for their children; how come you don’t?)

Thus is created a frenzy of crazed mothers will PAY ANY PRICE to get a doll for their darling offsprings.

3. Just befor Christmas unload the warehoused dolls onto the shelves of the toy outlets and quickly step back as the frenzy of panic stricken mothers is unleashed.

4. Quietly lay back ad count the money that comes rolling into your coffers.

 
 
Comment by edgewaterjohn
2008-06-26 18:37:29

The annual summer distraction buys some time. Society will reengage after Labor Day…a heck of a lot of events seem to be converging on 4Q 08.

The ants worked all through the summer, what did the grasshopper do?

 
Comment by Neil
2008-06-26 18:41:00

After the bubble bursts, people couldn’t be less interested.

That is the key phrase. Totally true about real estate from 1926 through about 1935. We’re still at the “oh… its going to turn up soon.” One of the brightest scientists I’ve ever met told me that buying in 2010 should be “about right, just before it goes up about 10%.”

I told him I plan to buy in fully knowing I’ll lose $100k. He had just described how one of his friend’s has a home that’s lost the 25% down payment. I didn’t have the heart to tell him that area is actually down 33% right now.

This mania isn’t close to over. But… the show is really getting interesting.

Did I mention I loved sci-fi horror movies as a teen ager? (I was the one in the back of the theater singing happy birthday with Sergoney Weaver (sp?) walked into the pit of alien eggs in “Aliens.”)

Liquidity is dead. Its now a down payment plus a full doc loan that is really limited in the extent. I expect June sales, per some realtor blogs, to be off 10% to 25% from May. Then I expect it to get interesting. Remember, May through August are the *big* sales months. June or August should be the peak month of the year (usually June, but its ok for August to sneak in there with a late ‘back to school sale.’)

Watch out when the sellers realize all the schools have started back up this fall.

Got Popcorn?
Neil

Comment by vozworth
2008-06-26 19:18:41

you cant lose a 100k if you buy for 140k and put 40k down.

fact read prospectus….unless my house is worth ZERO.

Comment by James
2008-06-26 22:32:03

See Detroit, Flint, and Pontiac Michigan. Value near zero.

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Comment by vozworth
2008-06-26 19:21:48

i was the one in the front row, puking my guts out.

escorted out at the midnight movies, thrown in the shrubs in front of the theatre….woke up in an attic, with a bucket of piss. bicycle still at the theatre.

never drink beer and spirits to excess kids…bad form.

 
Comment by arroyogrande
2008-06-26 21:26:33

“Its now a down payment”

Except if you get a loan backed by the FHA…then it’s 3%, and even then you can get Down Payment Assistance (DPA) to do it with no money down. The FHA will probably put us taxpayers in the hole with this program, but they hope to make it up on volume…

 
 
 
Comment by aladinsane
2008-06-26 17:43:47

Can a public company disallow free speech?

Countrywide Can…

“At a special meeting Wednesday at Countrywide’s campus headquarters in Calabasas, shareholders were bused in while guards kept the media at bay. ‘It’s a really sad day in America,’ shareholder Scott Adams said afterward outside the campus. ‘This dream is dead.’”

Comment by Faster Pussycat, Sell Sell
2008-06-26 18:24:38

Yes, actually.

Free speech doesn’t apply to private audiences, which is what this is.

Comment by vozworth
2008-06-26 19:01:55

which is why you should never say the 7 dirty words.

crap, coitus, cock, pussyies, balls, mother-f-cker, and piss….and some more I can neer remember.

Comment by Max
2008-06-26 23:25:55

Dingleberry, corn-holing,…

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Comment by Tim
2008-06-26 19:03:25

True. It is the government that cant prevent free speech.

Comment by vozworth
2008-06-26 19:12:44

Im gonna call you, mr. squeaky clean muni securitization lawdog.

for short.

 
Comment by vozworth
2008-06-26 19:17:09

“It is the government that ‘cant’ ”

that would be a personal liberty. self-evident.

makes me start wondering about all that lockbox, IOU a check retirement bullshit that lowers incomes of low incomes. HOPE NOW?

 
 
Comment by vozworth
2008-06-26 19:10:32

its not a run on a bank, its angry media pounding down doors of shareholders meetings all with riot police in full gear..

more bear market….more higher oil… more layoffs….more outrage…..more f-cking pissed off mother-fu-ckers banging on the mans door to let US in….

Victory garden is in….having my first brocolli from my own garden tomorrow, with peas, rice, and chicken…….the urban chicken is not a myth….I even have a sitter; aint a cock in the yard but mine.

yours in solitude,
fresh-backwater bidness homegrown style. Russell2k aint dead yet.

Comment by vozworth
2008-06-26 19:42:07

cant wait for the smooth sailing at the conventions. And the glorious Double-Aught-Eight-lympics in the seat of liberty and freedom of Bejing. A sight to behold.

Tim and lad,
what the f-ck is money?

Comment by hoz
2008-06-26 20:40:59

Why can’t you grow something good - like chocolate? My old doctor wanted me to eat broccoli - he died. Although I still like stuffed cabbage, oh well. Time for a lienies

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Comment by sleepless_near_seattle
2008-06-26 22:36:50

LOL. Rage, rage against the dying of the light!

 
 
 
 
 
Comment by ZiggyStardust
2008-06-26 18:46:01

“Every down cycle is the beginning of the next up cycle,” said John Burns, president of John Burns Real Estate Consulting.

Does this mean every up cycle is the beginning of the next down cycle? How come we never heard this from Realtors two years ago.

 
Comment by charliegator
2008-06-26 20:01:55

Last comment of the day? Is it just me, or is today’s stock market results the capitulation we’ve been predicting for the past 18 months.

Charlie

Comment by hoz
2008-06-26 20:59:30

There was no market capitulation.
There were no interested buyers.
There were no bargains.

Relative to markets world wide and growth prospects world wide, the only buyers in the US markets are naive Americans.

What reasonable investor is going to buy a stock in a US company that is growing at 0- 5% per yr and is losing 10% per year in currency transactions?

The S&P 500 is not going to earn enough money this year to pay their dividends.

I want fear in the pits. Not calls from firms asking me if I have an interest in a block a couple pts below last nights close. Screw that. It took me months to get into my positions, I am not getting out over an 18% drop.

 
 
Comment by need 2 leave ca
2008-06-26 20:09:47

http://cosmos.bcst.yahoo.com/up/player/popup/?rn=3906861&cl=8537837&ch=4226713&src=news

Now this is funny. The hellhole known as Needles wants to succeed from California over to AZ or NV because they don’t get to get Arnold’s ear.

 
Comment by Sharron
2008-06-26 20:20:53

The California dream has turned into a California nightmare.
The dream no longer exists. California’s quality of life has hit rock bottom with all it’s immigration and housing problems. Salaries are not high enough for anyone to buy a house and prices need to go way down and even then, many buyers are moving out of state.
The state is a mess and there’s just too many future problems and you don’t see house values even going up again so falsely with the boom. Way too many people bought houses that they could never have ever afforded and now they’re all foreclosure and the ride if over. House prices are dropping, but sellers need to be realistic and lower them much much more before there is a nibble. Until that happens, the house prices will continue to go steadily down.
There is no sight of the housing boom bottoming.

Comment by OCMetro
2008-06-27 06:32:40

Sharron,

You are absolutely right, I was a lifelong Californian, born in Orange County, never really wanted to leave. However, being locked out by smug and foolish buyers who drove prices to insane levels, perpetually falling school quality, unchecked immigration (mostly very poor), taxes out of control (income, sales, yes even CRV), made me and my family leave CA. We moved to CO and have a MUCH higher quality of life with a mortage payment in Highlands Ranch in a 2200sqft NEW home that is LESS than I was paying on a two bedroom apt in OC (factor in taxes and it is even better). I’ll tell you once you have a family, your priorities really do change.

 
 
Comment by need 2 leave ca
2008-06-26 20:54:26

So bad in California that even Needles (HELL) wants to succeed from the Golden State.

http://cosmos.bcst.yahoo.com/up/player/popup/?rn=3906861&cl=8537837&ch=4226713&src=news

 
Comment by need 2 leave ca
2008-06-26 20:59:14

Hey, I got a independant contractor assignment evaluating Taco Bell and KFC (HELL) and their food quality monthly. Kind of funny. I am typing this message from a Taco Bell owned computer. I get to make fun of Taco Bell, as an official evaluator of their food quality. And Taco Bell Jeff also.

Comment by Max
2008-06-26 23:32:03

I forgot the name of a popular Taco chain in Utah, it was Taco John, or something like that. A few of them along the I-80 corridor, and in SLC.

 
 
Comment by Chucky
2008-06-26 21:27:23

Sharron

Great post. I have lived all of my 61 years here in cali and couldn’t say it better.
It is truly sad what has happened to our wonderful state.

 
Comment by Mike in Carlsbad
2008-06-27 22:23:30

Thank Prop 21.

 
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