Pretending To Fly In California
The Press Democrat reports from California. “The collapse of the housing bubble continues to reverberate through Sonoma County, according to a report issued Tuesday. Just over half of the homes sold in August were dumped by desperate owners trying to avoid foreclosure or by banks that seized them from borrowers who fell behind on their mortgages. The wave of transactions involving discounted properties drove the median price to its lowest level in six years.”
“The median fell to $382,500, a decline of 30.5 percent from a year ago, according to The Press Democrat monthly real estate report. The market peaked three years ago when the median hit a record $619,000. Sonoma County home prices have now fallen for 26 consecutive months in year-over-year comparisons, returning the median price to levels not seen since 2002.”
“On Friday, lender GMAC accepted a $303,000 offer for a northwest Santa Rosa home that sold for $517,000 in January 2006.”
“Sales of homes priced above $500,000 have fallen nearly 50 percent over the past year, and the number of homes for sale in that range has dropped more than 30 percent over the same time period.”
“‘What’s there is sitting there,’ said Rick Laws, Santa Rosa manager for Coldwell Banker.”
The Hollister Free Lance. “There were another 249 San Benito County homes entering some stage of the foreclosure process last month, a 207 percent jump over the same period in 2007, according to RealtyTrac. That astounding number also represents a 62 percent increase over the previous month.”
“The figures show there are 1,053 local homeowners whose properties have been sent a letter of default, put up for auction by a lender or passed outright into bank ownership.”
“Nearly half of the county properties now in foreclosure - 473 - are owned by the banks, said Hollister Code Enforcement Officer Mike Chambless. ‘I wish I had magic words to make this better, but I don’t,’ said Hollister Mayor Doug Emerson. ‘We are just going to have to tough it out.’”
“According to RealtyTrac, the rate that homes make that foreclosure list has accelerated dramatically statewide, with increases over last year’s August numbers ranging from 13 percent in Sacramento County to an increase of 2,340 percent in Lake County.”
The Signal. “More than half the people who work in the valley can’t afford to live here. That’s the challenge facing local civic leaders who want to keep Santa Clarita Valley’s economy stable. ‘Over 50 percent of the 40,000 employees employed in the Valencia Industrial Center don’t live in Santa Clarita,’ said Julie Weith, Valley Industrial Association chairwoman.”
“Regardless of state guidelines and requirements for affordable housing, Holly Schroeder, president and chief executive officer of the Building Industry Association, said the cost of housing is still market driven.”
“Schroeder said the demand is currently outpacing the supply of homes at an affordable price. ‘Even in the current downturn, there is a fundamental under supply in our region,’ she said.”
The North County Times. “The real estate market crash has prompted a developer to abandon plans for 160 condominiums next to Lowe’s Home Improvement in favor of leasing the empty acreage on Mission Avenue to a national chain of used car dealers.”
“‘The developer decided that a residential project would take too long for them to get a return on their investment,’ said Mayor Lori Holt Pfeiler. ‘It must mean that the housing market is even worse off than the car market.’”
NBC San Diego. “Some mortgage brokers say rates on 30-year loans have climbed since last week. Other say they’ve fallen and even changed from day to day. ‘Last week you could get a 30 year conforming loan for almost 5.5 percent. This week it’s back up to 6 percent’ said Victoria Johnson of Luxury Loans in La Jolla.”
“‘One lender is only offering loans with interest rates of 10% because there’s no market to sell the mortgage afterwards’ said Johnson.”
“But some lenders say rates remain low for all types of loans. But the difficulty is qualifying. ‘It’s gone back to the 80’s. To get good rates you need to have 20 percent down, 700+ Fico score, tax returns, proof of income and assets,’ said Debbie Morrell of Mike Dunn and Associates.”
“Morrell says even with all that documentation, some home purchase transactions are difficult because property appraisals need to match the purchase price. And establishing a price for a home can be very difficult since prices have fallen so quickly in certain neighborhoods in the county.”
The Press Enterprise. “While some homeowners agonize over plunging home values, Corona city officials hope to turn what has been a crisis for some into an opportunity for others. If the City Council agrees tonight, the Redevelopment Agency will launch a program offering $1.5 million in interest-free loans to moderate-income Corona families who want to buy their first home.”
“The 30-year loans will go toward the down payment, helping buyers qualify for better mortgages than they could otherwise afford. The program is not exactly new, but its funding is from a new source — redevelopment dollars — and it is aimed at getting people into some of the hundreds of Corona homes that sit vacant because of foreclosures, said Jesus Morales, the city’s housing manager.”
“‘Doing some research, we found there were quite a few homes in the plus or minus $300,000 range,’ Morales said. ‘Because the prices have come down it’s really an opportunity for them to get into this city with a reasonably priced home.’”
“Corona won’t be able to help everyone. Morales said the money requested would provide 20 families with the maximum down payment aid of $75,000.”
“The number of Corona homes listed at less than $350,000 went from fewer than 20 in 2004 to more than 500 this year, according to city data.”
“To qualify, buyers must meet income guidelines, be able to pay 3 percent of the home’s value, and live in the home at least seven years or pay the city a share of any profits if they sell.”
“‘That really gives the person time to become part of the community,’ Morales said.”
The Associated Press. “A research firm says the median Southern California home price fell 34 percent in August from last year. MDA DataQuick says in its report Wednesday that the median price for new and resale homes and condos dropped to $330,000 last month in a six-county region.”
“That’s down from the market peak of $500,000 in August 2007 and down 5.2 percent from $348,000 in July.”
“Foreclosures accounted for almost 46 percent of all resold properties last month, up from 10 percent in August 2007 and almost 44 percent in July.”
The San Francisco Chronicle. “The troubles on Wall Street have been evident for more than a year. So far, the bursting of the housing bubble has toppled three of Wall Street’s five big investment banks and quasi-private mortgage giants Fannie Mae and Freddie Mac and has threatened a huge insurer, AIG. The result will be a further credit tightening that squeezes the economy.”
“While many economists blame the Bush administration for lax oversight and overconfidence in market self-correction, Democrats had a hand in the mess too. The chairs of the Senate Banking Committee, Chris Dodd, and House Financial Services Committee, Barney Frank, have been among the staunchest defenders of Fannie Mae and Freddie Mac, said UC Davis economist Steven Sheffrin.”
“‘Everyone was in this game,’ he said. ‘The Bush administration was very pleased when the home ownership rate went up, and the Democrats in Congress were pushing for more home ownership. This really was a bipartisan thing.’”
“‘The trick is to impose regulations without destroying the innovation,’ said UC Berkeley economist Alan Auerbach. ‘There are some benefits to having made the mortgage market more flexible. The problem is, it went too far. We obviously don’t want to go back to a world of very heavily regulated banks, where no one is making mortgages. On the other hand, we don’t want people who put no money down and have no assets or income being able to buy a house.’”
“At the moment, the approach to the crisis is very much ad hoc, said Barry Eichengreen, a UC Berkeley economist and expert on financial crises. ‘We have emergency meetings every weekend, but we don’t have a system’ yet for cleaning up the bad debt now permeating the financial system.”
The Modesto Bee. “Only hours after California lawmakers broke a 78-day impasse to approve a budget that closes a $15.2 billion deficit by borrowing, Legislative Analyst Elizabeth Hill found herself in Modesto telling the Rotary Club what it all means.”
“The Modesto native, a veteran of 32 state budgets, said the state may be in for even bigger trouble next year because the depressed housing market, high energy prices and volatility on Wall Street make the economy a big wild card.”
“No one had a solution for the cash crunch that is plaguing government and businesses, but club President Marian Martino summed up her thoughts on the heady topic by quoting something she recently heard on television.”
“As Martino put it: ‘You can jump off an 80-(floor) building and pretend you’re flying for the first 79 floors.’”
The Fresno Bee. “State officials have officially revoked the real estate licenses of Tom O’Meara and Scott Webb, the developers of the failed Running Horse golf club project in southwest Fresno. They ran out of money after only two holes were built.”
“O’Meara, who is living in Palm Desert, said Tuesday that he didn’t have the money to fight the accusations, but plans to apply to have his license reinstated. ‘This has been a nightmare,’ he said, when contacted on his cell phone.”
“The state Department of Real Estate in July accused the men of defrauding 10 investors of about $6 million by allegedly selling the same lots to multiple buyers, telling investors they were buying parcels within the 780-lot development when they actually were outside, and misleading people into thinking their investments were secured by property within the project.”
“O’Meara said the project failed because financing that he was promised never came through. He denied intentions to defraud. He said he is not afraid of an FBI investigation, which at least one investor said is under way. ‘Be my guest,’ O’Meara said. ‘There is nothing to hide. The facts are what they are, and there was no misrepresentation.’”
“That’s not what Harlan Kelly said. Kelly said O’Meara in March 2006 offered to sell him three lots valued at $200,000 each for a total of $385,000. But O’Meara and Webb did not receive permission from the Department of Real Estate to sell the lots, according to the department’s complaint.”
“Nonetheless, an investor agreement was prepared and the property was lost when O’Meara filed for bankruptcy, according to the state accusation. Today, the property is back in the hands of the original lenders, and sits idle.”
“‘All we got now are weeds, a pile of dirt and an open pond,’ Kelly said.”
Didn’t Jesus get sold out for just 30 pieces of silver, er loan?
=============================================================
“The 30-year loans will go toward the down payment, helping buyers qualify for better mortgages than they could otherwise afford. The program is not exactly new, but its funding is from a new source — redevelopment dollars — and it is aimed at getting people into some of the hundreds of Corona homes that sit vacant because of foreclosures, said Jesus Morales, the city’s housing manager.”
Ladies and gents,
Here we are. After all the predictions we have made, most of which has come true- some late but better than never. The bloodbath continues. Here comes more gimmicks to stop the necessary bloodletting. Don’t be fooled by these gimmicks. Nothing can stop this monstrous train wreck, with the exception of common sense. Until that’s restored, all the hope talk is just more bs. Jesus would have told you: an honest man can never be fooled.
‘It must mean that the housing market is even worse off than the car market.’”
I have to go back into the story and find the rest of the
Bon Mots, the wonderful little one line morsels.
“As Martino put it: ‘You can jump off an 80-(floor) building and pretend you’re flying for the first 79 floors.’”
oh my gosh, I think there is at least 2 more goodies in the story…
How many 401k accounts will be down 25% this year, after today? Do the Masters of the World really think those people will be running out to have a huge Christmas? I think Christmas will look more like our 1976 version of Christmas. I got this really cool plastic Planet of the Apes set from Sears. It had those gorillas on horseback and the little plastic trees that could be hooked together by little foot bridges. I think I also got a Nerf airplane. I was in heaven. And these little monsters today are disappointed if they don’t get an iPod, iPhone, iTouch or iVibrator. Aye carumba!
Back to the basics. It will be good for all of us. I’m going to go hug our cats.
I am already making handmade hot pads for everyone.. you guys want one too?
Or do you want something ‘bedazzled’?
No thanks. I am getting the wife one of those iVibrators. I have to keep up with financial news. Ho ho ho.
Why can’t we have bedazzled hot pads?
Meanie.
I’m making cute eyeglass holder necklaces for all my friends over 40.
I’m making rectal bandage kits for my friends over 40. They seemed to be the demographic least likely to listen to reality.
Silly NYC, everyone knows you can’t bandage a rectum. The best you can do is pack that bad boy with silly-puddy while you wait for your mail order butt plug to arrive.
“I’m making rectal bandage kits for my friends over 40. They seemed to be the demographic least likely to listen to reality.”
Two weeks ago, I emailed a buddy and told him to expect a big, sustained drop in the market. Told him to sell everything, then buy some SRS and TWM to make a little profit. He didn’t listen. He lost 52K on Wednesday and 42K today. Yikes.
I’d go for bedazzled myself. I like shiny things.
But -I’m a bit worried about the melting properties of plastic vs wickedly hot casserole dishes.
But! I could put it on the fridge! Then I can look at it instead!
“Silly NYC, everyone knows you can’t bandage a rectum”
Especially after a JT treatment.
DOC
Two weeks ago, I emailed a buddy and told him to expect a big, sustained drop in the market. Told him to sell everything, then buy some SRS and TWM to make a little profit. He didn’t listen. He lost 52K on Wednesday and 42K today. Yikes.
Xenu H Cthulu! I thought _I_ had it bad when my bike broke down in Montana on the way home from the other coast last week.. All I know is my SKF has come around a bit, at least until they change the rules again…
Hey Desert: How about bedazzled Ivibrators! Nuf said. I’m goofballing (up & down at the same time). Giddy to have finally been proven right, but somewhat afraid of how this society will handle what is to come. Seems people have been beyond denial - just refusing to acknowledge the truth. I’m afraid too many will simply snap from having to face what’s happened on top of having to learn to live within their means. Add to that rising prices and, at best, stagnant wages and you’ve set the scene for a munch of miserable folks.
Wait…there’s an iVibrator?
Bad Chile
Remember, only 98 more shopping days until Christmas:
[not safe for work!]
http://www.lovehoney.co.uk/product.cfm?p=5294
You know what this reminds me of? Wolves.
My violin has a wolf in it. That’s when you play a certain note, or range of notes, and it just sounds bad. Like a squawking sound. The solution to wolves is a wolf eliminator. You screw it on your string to alter the course of wave perpetuation, thereby causing the wolf to happen at a different range of notes. You have to keep moving it around until you’ve got the wolf isolated to some spot on the spectrum that never gets played, but you never really get rid of the damn thing. It’s always there.
That’s what market risk is like.
I’m against domestic violins.
Dude, your wolf can blow me!
October 2008 = October 1929 redux
This is a make or break winter for California…
The water situation continues to deteriorate and if we get another iffy snowpack, the drought will hit suburbia quite hard.
This all coming on top of everything else, of course~
Now is the winter of our discontent, made glorious summer by this sun of York.
I hate when we go right from summer to winter. I just hate it.
And financial winter at that.
Er…speaking of financial -
WaMu is looking for a partner.
Dang, and it’s not even Friday.
Leigh
Wamu and Golem Sachs. That would remind me of the movie where I saw a donkey and a hyena getting it on. What? Is it wrong to watch such a movie? You only have one 16th birthday and my mom wanted to make sure it was special.
LOL - just stop!
Leigh
Fed takes over F & F market tanks
Fed doesn’t take over Lehman , market tanks
Fed takes over AIG Market tanks
Bernanke is quoted as saying “Its out of control”. Well no shit, It has been out of control since the first CDO was written.
It is ’bout time that 25 years of bubble based economy crashed.
It was a good bottom-less cup of coffee while it lasted…
“Bernanke is quoted as saying “Its out of control”.”
Bernanke is the last person I want to hear this from.
I remember Hoz teaching us what CDOs were. It scared me then, so I’m not surprised by what’s happening now. It is, however, amazing to watch his predictions realized.
Greenspan should be the very last person you want to hear from.
…better than nuclear winter.
It’s 3 mile Island and China Syndrome all in one.
Duck and cover
PB, you have a few more lines that go with that.
I saved it for you, if you didn’t.
Do you remember the rest?
You wrote it when you were GS.
Just borrowing from Willie the Shake (King Richard III’s soliloquy):
Now is the winter of our discontent
Made glorious summer by this sun of York;
And all the clouds that lour’d upon our house
In the deep bosom of the ocean buried.
Now are our brows bound with victorious wreaths;
Our bruised arms hung up for monuments;
Our stern alarums changed to merry meetings,
Our dreadful marches to delightful measures.
Grim-visaged war hath smooth’d his wrinkled front;
And now, instead of mounting barded steeds
To fright the souls of fearful adversaries,
He capers nimbly in a lady’s chamber
To the lascivious pleasing of a lute.
But I, that am not shaped for sportive tricks,
Nor made to court an amorous looking-glass;
I, that am rudely stamp’d, and want love’s majesty
To strut before a wanton ambling nymph;
I, that am curtail’d of this fair proportion,
Cheated of feature by dissembling nature,
Deformed, unfinish’d, sent before my time
Into this breathing world, scarce half made up,
And that so lamely and unfashionable
That dogs bark at me as I halt by them;
Why, I, in this weak piping time of peace,
Have no delight to pass away the time,
Unless to spy my shadow in the sun
And descant on mine own deformity:
And therefore, since I cannot prove a lover,
To entertain these fair well-spoken days,
I am determined to prove a villain
And hate the idle pleasures of these days.
This winter will be interesting indeed. Despite the bloodletting, the fact is that anywhere remotely close to job centers and places that are deemed desireable are still heavily overpriced in the BA. I live in Alameda and homes that were 600k last year are now 550-575k. Big whopp-di-doo. Still as insanely overpriced as ever. A home just down the street from me sold at asking for 600k. WTF are people thinking? I couldn’t believe that.
So my big curiosity will be if houses in the juicy parts of the BA will finally start to fall signifigantly this year. Again- it is STILL extremely overpriced here and I’m not sure why the prices are so sticky.
I’ll tell you why.
Stocks : going down
CDs/savings : piddly interest, plus risk of bank going under
Money Market : could break the buck
Oil : going down
Gold : down
Commodities : down
Foreign currencies : down
Compared to all of the above a house in a decent location looks like a safe haven for that one or two mill. Unless one is actively shorting the market, as far as a “normal” investment goes a solid house may be as good as anything right now.
Because folks in the Bay Area’s good towns make a lot of money!
Of course, the snow pack and the water supply won’t really matter if no one lives there anymore.
NBC San Diego. “Some mortgage brokers say rates on 30-year loans have climbed since last week. Other say they’ve fallen and even changed from day to day. ‘Last week you could get a 30 year conforming loan for almost 5.5 percent. This week it’s back up to 6 percent’ said Victoria Johnson of Luxury Loans in La Jolla.”
“‘One lender is only offering loans with interest rates of 10% because there’s no market to sell the mortgage afterwards’ said Johnson.”
++++++++++++++++++++++++++++++++++++++++++++++
I know Victoria Johnson, not in the biblical sense, but I know her type. Luxury Loans of La Jolla isn’t actually in La Jolla, they are in adjacent UTC. Why do mortgage brokers leech off the good name of La Jolla to build themselves up? Victoria needs to realize she is closer to that plastic toilet bowl called Mira Mesa than she is to the porcelain potty those in the know lovingly refer to as La Jolla.
You’re among friends. Did you bang her? You can tell us.
Is it not obvious that mortgage rates are going to have to soar just to keep us afloat? Who is going to keep sending money over here to subsidize our lifestyle? Who is even going to have the ability to send that money over? We are toast and interest rates will skyrocket. Game over for the Age of Debt.
NYCityBoy,
What is the pulse on the street in Manhattan? Do you smell fear or is it the usual urine on the sidewalk?
It’s a mixture of fear and urine, often from the same people. It is amazing. I work closely with financial people. It has been fear for months. Now it is much worse. I wish we were still in our old apartment. We lived about 3 blocks from the Lehman building and the AIG building. I would have been down there heckling people if I still lived down here.
I keep writing friends and family back home that I believe they see this differently because they are not in New York. It is very real here. I have been amazed at the things I’ve heard lately. Even Johnny Lunch Pail seems to have a grasp of what’s going on.
But even now I still hear that Manhattan real estate is bulletproof. That is B.S. I am now hearing rumblings questioning he validity of Brooklyn’s high-end housing prices. The whole thing is ready to collapse. There is still some delusion but fear is definitely the emotion of the day. I spoke to a co-worker today. I thought she was going to cry. Those that deny reality are really freaked out when they finally can deny it no more. Those of us here knew this was coming and have said, “I knew this was going to happen. Pass the salt, please.”
When you go check out open houses in Brooklyn with all those beautiful brownstones, do you excuse yourself and leave a brownstone in ceramic celine? Realtors there knew this was coming and have said, “I knew this was going to happen. Pass the toilet paper to NYCityBoy, please.”
Careful you don’t get yourself shot, nycb. And salt is bad for the blood pressure.
If they shoot me in the liver I will be fine. That thing is like steel, by now.
Son, don’t worry the scar tissue stopped the bullet.
NYCityBoy said:
“It’s a mixture of fear and urine, often from the same people.
LOL - maybe you need Big V’s ‘wolf eliminator’ for that problem
NYC’s business model is in the midst of a fundamental change. The investment banks are toast.
Do friers do that kind of thing? Just wondering, not of that faith…
Friars love to put the Devil back into Hell. The Devil is a cunning bastard and Hell is just the place it needs to be put. And this isn’t just a once a day thing too, some friars do this morning, noon, and night for their devoutness is strong and their will is good.
LOL, you must be of the Tuck lineage, though probably slimmer, as you’re a pretty busy fellow.
friar john, every street in UTC is named La Jolla Something or other, therefore residents feel very much a part of grand ole La Jolla. BTW You crack me up
Its been a long time, but I always associated University Town Center with La Jolla. Sure, it isn’t really in La Jolla, but it is close to UCSD. I guess back in my UCSD days (early 80’s) Mira Mesa was far away by I-15.
Already posted to the bits bucket, but it fits in here…
County’s median home price at lowest level in 5½ years
By Roger Showley
UNION-TRIBUNE STAFF WRITER
11:29 a.m. September 17, 2008
San Diego County’s median home prices dropped to $350,000 last month, the lowest level in 5½ years, AMD DataQuick reported Wednesday.
The median price was 26.3 percent lower than August 2007’s $475,000 and 3.9 percent lower than in July.
Ohh the humanity.. have you looked at the stock markets in the last hour?
Indeed I did. The stock market has AIG on its face.
1929 headline Variety Magazine:
Wall Street Lays an Egg
repeat tomorrow?
Wall Street Lays an AIG
touche’
Former Fed Governor Wayne Angell was just on CNBC. He looks to be 150 years old. He said the The Fed has an unlimited balance sheet and Ben Bernanke is doing a great job. I hope this guy breaks a hip tonight. I am sick of these f-cking liars in high places.
Wayne Angell will have a stroke and die before the end of the week. All the stress of his warped perception of FED omnipotence getting pounded is literally killing him.
That’s the best news I’ve heard all week. “Cheers.”
Actually, the Fed does not have an unlimited balance sheet, and they know it.
They are not as stupid as they are forced to be in public.
At the end of the day, they know that a “run on the dollar” will mean a “reboot” of the system, and they are as anxious as you or I to avoid that. It would mean the end of their power, and if there’s one thing you should know about power, it’s that at the end of the day, it is more interested in preserving its own power than anything else in the world.
The financial and political occupation of America is the only thing keeping the middle east situation alive.
“But some lenders say rates remain low for all types of loans. But the difficulty is qualifying. ‘It’s gone back to the 80’s. To get good rates you need to have 20 percent down, 700+ Fico score, tax returns, proof of income and assets,’ said Debbie Morrell of Mike Dunn and Associates.”
The good news: Low interest loans are still available.
The bad news: A vanishingly small share of prospective buyers qualify at anywhere near recent price levels, and current buyers face the risk of catching a knife that is falling at a 34 pct annual rate or more.
But even more stunning, assume a market bottom ( well, at some point there will/may be), assume potential buyers who can no longer qualify for a loan - be it FICO, downpayment, whatever - banks did a complete aboutface. Then assume hundreds of thousands of vacant homes………….all waiting for an owner.
I wonder what will give first.
Two d*uche bags on CNBC just agreed with each other that house prices will start going up again within 6 months to a year. I want to puke. Diana Olick was on shortly before them. She is really pimping herself out. She can count herself on the list of people whose credibility (and looks) are disappearing. What I see around me is:
- Rising unemployment
- Cratering stock market
- Soaring oil and metal prices that indicate a lack of confidence in the system
- Housing prices that are still priced for a now non-existent lending infrastructure
- Delusion still reining supreme in NYC
I know this isn’t the Bits Buckets but it seems like this day might have enough going on that I can be forgiven for interrupting the daily Cali thread.
I just posted a similar topic but it hasn’t shown up yet (not sure if it will.) But you’re right on here. To think housing is going to rebound is about as crazy as thinking it would continue to run up forever as it did in the bubble years. There is a whole lot going on that needs to be worked out.
You’re forgiven, NYCityBoy.
“Two d*uche bags on CNBC just agreed with each other that house prices will start going up again within 6 months to a year”.
That’s all those clowns are programed to say, it’s well worn out it’s welcome, I think even the dim-witted can see that now.
Two d*uche bags on CNBC just agreed with each other that house prices will start going up again within 6 months to a year.
CNBC has re-runs?
The CNBC folks have been putting in the overtime this week.
What’s been going on in the financial services sector for the past 12 to 18 months seems reminiscent of what was happening with the stock market in the year or so leading up to the crash in October 1929. In 1928/29, there were increasingly extraordinary efforts to prop up the market until it finally collapsed. We’ve been seeing the same thing this time, except with the entire financial services sector. How many weekends in a row have officials been meeting on some type of bailout effort? It’s not working.
The Age of Debt is indeed over. It’s been on life support for at least a year, not that the sheeple seem to have noticed. It would appear the speed of the unwinding is about to increase markedly. This should bring down everything supported by this debt including housing. For those on this blog that have long been predicting the largest and most broad-based declines in housing prices in 2009, that prediction looks quite sound.
High wishing prices are still out there for the more desirable parts of CA. Asking rent prices for downtown San Diego condos only support sale prices of about half of current asking prices, for example. Those holding the debt on these new properties can’t hold out indefinitely.
I would offer you shiny jelly beans, but they are passe.
Here, have a white flying pony instead.
Leigh
WOOOOOOOOOOOOOOOOOOO!!!
That’s for me, right?
Keep your dirty hands off of my pony.
Leigh,
Shining jelly beans are never passe to me. Mmmmmmmm jelly beans, love to take tiny bites when I eat my favorite flavors.
Hi Everone - LOOOOONG time reader, first time poster (although I’ve been away for a few months). I have read many of your posts, most closely I follow ‘dude’ as he lives in the Palmdale area.
I remember for the last year (or longer) many on this blog have been pushing going to gold. I remember arguments that you are either long on the dollar or long on gold. Considering the situation in the markets as of late, the explosive move by GLD today, what is the recommendation now?
I am not yet running for the doors, as I know we suffered a similar drop before the late 90s bull run (10/98 Nazdaq). Fear levels are extremely high in the markets and no bottom seems to be in site.
What are you doing to protect your financial future?
(I understand this is a CA housing thread, but as I am from CA this is the most active thread that i can participate in during this time of day)
My advice: Don’t panic. People who say go out and buy ALL gold are screwy. The fact is that over the last 100 years, stocks on avg perform well 7 out of 10 years, the return is on avg 7-10%, and yes- your investments should be for the long term, as in 20-30-40 years depending on your age. It doesn’t hurt to have some cash, have some mutual funds and CDs, have some large cap, small cap, mid-sized, international funds, a few bonds, and a maxed-out 401k. Maybe, just maybbbbeee a bit of gold- but definitely not a majority stake in it since its value fluctuates wildly.
In other words, diversify, and unless you’re simply an investment genius, pay an adviser to manage your stuff. No rocket science here. So some research. Subscribe to Kipplingers. Learn the basics.
I’m with you. We saw this before, in the ’70s. We’ll live through it, and for those of us who plan to retire in 15 years or so (like me, I hope) the timing might be pretty good.
My retirement time horizon is shorter, like five years. Early in 2007, when the Dow was about 13000, I switched my retirement to cash/savings from stocks. I’ve been smiling ever since, except for that short period in Aug 2007 when stocks rose to 140000. Would never have thought of doing that without this blog.
Good job!
Hey JB:
If you can avoid the down markets, then you will end up with twice as much money by the time you retire. Now is not a good time to be in stocks. If you subscribe to Kipplingers, then you are not learning the basics — you are reading a spiel. Stocks still have a long way to fall. The S&P should not be above 1100, and will likely go lower. It will be apparent when things clear out.
Ditto Big V.
401K etc. can be tough sometimes to control. I don’t have any good choices in mine.
The money you can control needs to be cared for, and not by some financial planner that spouts out “DCA!” every 5 seconds.
As Ben says, fortunes are to be won and lost in this downturn. I plan and work toward winning one for my family.
Gold and silver are a hedge, not an investment. I only buy physical long term. After today’s action they account for about 15% of my net worth.
I’m comfortable with that amount because it equals about a year’s expenses and barring worst case scenarios I’m pretty sure I’ll be able to continue to provide for my family.
I think those who look for a Dow/Gold correlation around 4-6000 may very well be right. If we get that I’ll happily trade my shiny bits in for industrials.
JBoy, that’s the same stuff they teach in econ 101. Don’t believe it. The smart move would be to get the hell out, earn something, anything, in a savings account (even a shoebox!)and then get back in when/if a bottom ever reveals itself. Why would you watch your money lose value the whole run down to the bottom? All that buy and hold stuff is what Wall Street wants avg. suckers to believe.
I’d be careful with gold, commodities in general, the stock market, housing, etc. This isn’t the time to be speculating. It is the time to preserve your capital and keep it for when the really good deals arrive.
This is only assuming you’re going to be “long only”. Now I realize that without understanding how things work, you should’nt start going out and shorting stuff but I’m going to dissent from this opinion.
As a general rule, good short-sellers are the most fundamentally-driven (as in can read “balance sheets”) and disciplined of investors.
That having been said, I do agree that you should wait for the deals. We’re far from there yet.
Faster Pussycat,
What makes it even more uphill is that ( typically ) we are an ever expanding economy. Now mind you not necessarily expanding in the ‘right’ direction but… expanding. So generally if you are ‘long’ over time you’ll have the wind at your back. Short sellers have to be oh so much more selective!
Have a made some shorting these banks? Sure, but it’s nothing to brag about. It was just a trade and as it turns out, it was lucrative. Could I make a ‘living’ at it? I doubt that.
Nothing has “expanded” in the economy since 1983 expect debt, and that’s because the “cost of debt” has gone down from 18% to 1% so debt is rolled into more debt.
There has only been a “slow” expansion because business practices do get more efficient over time, and the US is actually more productive than other nations (although they’re catching up.)
Anyway, we’re saying the same thing.
I’m neutral about these things. I don’t care if I’m long or short. I’m interested in the facts and results. Bit cold-blooded but that’s who I am.
“This isn’t the time to be speculating.”
Exactly right! Your middle-class survival is the issue now as housing will continue its slide through 2011. Lean years will ensue during the boomer’s retirement years too as your taxed money will go toward adult diapers, mobility scooters, hospice care, etc., not wanton consumer spending. Great opportunities will exist for the next generation.
I was speculating when I sold my house in 12/04 near the top.
I’ve made 28,43,and 58% in each of the last 3 years on my speculative account speculating that builders and banks were going down hard.
This is exactly the time to be speculating! The ultra conservative like my mother who leaves her account with a broker because “he’s so nice” are about to be run over by a steamroller while trying to pick up dimes in front of it.
Thanks to the HBB and to the posters here, I’ve done quite well buying puts on the homebuilders and the banks.Got started with WaMu and GS in early ‘07 before the first Black Swan hit. DSL was another winner. Didn’t have the guts to go after Lehman or FR and FME. Only problem is that it’s ordinary income. Cry cry.
Slush, first education on two important questions:
What is money?
a. medium of exchange b. store of value c. unit of measure
What is a dollar?
A silver coin with 371.25 grains of fine silver.
What is a Fed Reserve Note?
Something that can be exchanged for dollars, not the dollar itself.
Nearly all investment books written before 1990 emphasize the need to keep 5% or 10% of one’s portfolio in gold/silver as insurance against just the type of situation we are seeing today. That’s investment basic. After 1990, for some reason, advisors stopped recommending gold and silver completely.
The bedrock of one’s portfolio should be gold and silver.
Thanks for the replies.
My stance since early June (end of last market run) has been preserving capital. I am fairly young, but I have spent years studying the markets. Most of the time my approach has been to invest when the market is in a bull, and preserve capital when it is not.
I am ‘preserving my capital,’ but I do realize that I am essentially long on the dollar - which is something I’m not exactly sure of. I would not consider buying gold stocks/etf’s until I thought it was technically strong (today sure was booming wasn’t it?!).
As I sit here, finally deciding to come out of hole and contribute here - I’m wondering, is there anything to be done or is conservation of capital the only move we really have?
Thanks again for your input.
Gold’s main advantage is that it stands alone, a financial loner independent of every other financial instrument, all of which are tied together in a one-size-fails-all fashion.
The bare basics of investing are as follows:
When everyone says ” Buy tech stocks! Buy tech stocks!” - Don’t buy tech stocks.
When everyone says” Buy houses! Buy Houses!”- Don’t buy houses.
When everyone says ” Buy gold! Buy Gold!”… Don’t buy gold.
Whenever the majority of the populace seems to have figured out the market and claims they know how to make lots of money, then that’s your red flag to back away.
This is what I like to hear!
I first new for-sure that the housing market was in a bubble was early Spring 2005 - when my wife and I were on the beach in OC and heard two guys talking about how they should buy more houses. They explained, every house in OC will soon be worth $1M! I’m long out of college now, and still renting - largely thanks to this forum for confirming that I wasn’t nuts.
I may be alone on this, but I’m actually looking for a bottom in the market. I really have no idea when it’s going to come, it certainly hasn’t happened yet.
I am the only person in my office that has actively bought gold or silver in the past 2 years. Yep, it really is a mad rush in to metals. If you want to get at my co-workers’ stashes of gold you would have to knock out their teeth. With a few of them, I would help you do it.
I just want to see the Youtube video.
Here’s my problem with gold being purchased in panicky times. For one, everyone is buying it right this second. Additionally, if everyone is buying it because they think hell is coming in a handbasket, then they’re setting themselves up to repeat what happened in the 30’s. Back then, everyone had raw diamonds in the family bank for emergencies, or to use as a hedge against currency. Guess what happened? The market was flooded with diamonds, their value plummeted, and diamonds were basically so common that they were essentially valueless until Debeers came up with the whole “Diamonds are forever” campaign, which made them seemingly precious again.
Some of you are saying that we should pull all our investments out, save it in a shoebox, and invest it when the market is high. Perhaps investing in good and bad over the long term seems old-fashioned. But the fact remains: If you invest, leave it for the long term, you’ll likely be well off when you retire. That is unless you fidget and move it around too much. Those of you pulling out now are only losing what you’ve already lost. Sorry.
Some would argue that gold is the only way to preserve your capital, since it goes up when the dollar goes down. Of course, the flip side is that it goes down when the dollar goes up. Because our government is currently interfering with market fundamentals, you have no way of knowing which way the dollar will go. Aladinsane was confident in inflation because he read Bernanke’s book and had him pegged as an inflationist. But who would have pegged Paulson that way? And what is Bush doing right now? And why are the Democrats being such followers?
I don’t know about you, but I feel right now that anything you do will be no better than a bet. Since I get paid in dollars, that’s what I have. At the very least, the dollar is somewhat safe because we can always go back to trading amongst ourselves instead of trading with foreign countries. In such a scenario, the dollar is much more easily controllable.
“What are you doing to protect your financial future?”
Some amount of gold is necessary to hedge against a total collapse of the financial system. You don’t buy it as an ‘investment’ but so you’ll have something to spend if/when the system blows up completely. May sound far fetched but this is getting uglier by the day and our currency is getting down to toilet paper level quickly.
Keep some physical cash on hand and gold/silver. Just sayin’..
D.
That’s what I have said to everybody. “This is NOT an investment.” People buy life insurance, car insurance, pet insurance, health insurance but they laugh at metals.
That tool Dennis Kneale is on CNBC right now. Suddenly I have to go take a dump.
This was one thing on my mind. Where can one buy gold in person (as in not online)?
There are coin shops all over. My best experience for bare bones prices has been at the jewelry district in downtown LA. Get two or more dealers for the same item and bid one against the other to get the best price.
Its always nice to have something in case your bank closes. That was my father’s experience.
What about silver? When silver was trading at $10.50 a few days ago, the silver dealers were selling silver at $4 over spot. That’s unheard of. They were all saying they were all out of silver. Call up your local metals dealer and ask him how much silver he has for sale.
Some businesses rely on silver for their manufacturing. Because of the shorting of one or two banks, they tried to collapse the price of silver, opposite of what the hunt brothers tried to do in Dallas.
The cost to get silver out of the ground recently with inflation is $16, or so they say. The silver ETF is SLV. Not a bad bet since there is no physical silver around.
PAAS is a silver miner which is another way to invest in Silver
Also CDE and HL. I cycle traded them for years but have gone away from them until the equities calm down.
Remember, any business that uses debt is in immediate danger of insolvency these days.
Also in regards to silver, I prefer canadian maples. Same purity as eagles, but face value is $5 canadian. Resource rich Canada may avoid a debasing of its currency so maples have a floor price that eagles don’t.
Does that make you my stalker?
BTW, if you have specific areas of interest I can try to pay them extra attention. I’ve got numbers for practically everything.
Stalker? haha- not quite. Sometimes when time is short I’ll open a thread and search by city name - you’ve come up a lot!
I believe you’re most interested in 93550, I’m guessing the lake area or the country club based on what you’ve said before. I am focused on 93551 and parts of 93536. I have quite a bit of data for the high desert that the CAR released (2+ years I think), but I now wish I had held onto the DQ zip numbers.
I’m not sure if you’ll get this after this late, perhaps I’ll catch you tomorrow if I have time.
I’ll probably buy my properties in 93551 when the time comes.
I do look at 93550, but only for that narrow section by the lake. I consider 93552 to be the median zip, so I take my longer trends from that.
I like the CC, but I probably won’t buy here. I’m looking for a much larger lot, possibly QH.
So glad to hear Corona’s gonna be giving out no-interest loans for a down payment.
Has ANYONE learned ANYTHING?
I am only tempted because Corona does have a Mad Greek.
“tempted because Corona does have a Mad Greek”
So does Baker, but that doesn’t mean I want to buy a house there.
Speaking of Baker…
In Trona, CA, you can now find houses listed for around $18,000. The only problem? They are in Trona, CA.
I could see Trona going’ all Mad Max on us, yes indeedy~
It’s the back of beyond help
Yeah, Trona’s not quite “Candy-Land”, is it?
Drove through there once coming back from Death Valley on the way back to LAX. Wow.
Even more Mad Max for us, though, was Salton City. We were lucky enough to be there during a dust storm. Doors opening and slamming from the wind, lots of weird noises, and lots of glares from the locals. I did eat a nice patty melt at the diner, though.
California has so many more crazy, creepy, interesting little towns than poor old Illinois.
Had to live in Ridgecrest for a year between LA and Alaska. We would take visitors out to trona because it was so shocking to us from LA. We were always amazed that people lived there like it was a normal place. It’s like as long as you didn’t have to breath, it would look like a pretty normal tiny town.
Last time i was at the Baker MG ingesting a gyro, Pamela Anderson wobbled in about midnight with her new husband whatshisface, (who i think has since been returned to the reject pile). She stretched, posed and preened, then looked horrified to note that the girl i was with was younger, better-looking, bigger-boobed and all natural. Good times!
Dang, you could have filmed a Russ Meyers film on the spot.
What was the phrase Jesus Morales used…something like
“‘That really gives the person time to become part of the community,’ Morales said.”
okeydokey, didn’t that work out well for those leaving in droves from something they had no money into?
Just sayin..
Digging a pit and burying them alive would make them part of the community too, and would do just about as much to solve the glut of vacant houses.
test
You passed with flying colors.
“But some lenders say rates remain low for all types of loans. But the difficulty is qualifying. ‘It’s gone back to the 80’s. To get good rates you need to have 20 percent down, 700+ Fico score, tax returns, proof of income and assets,’ said Debbie Morrell of Mike Dunn and Associates.”
It’s about frikin time! All of this pain could have been avoided if lenders had just stuck to these formulas.
“To get good rates you need to have 20 percent down, 700+ Fico score, tax returns, proof of income and assets”
Wow, I have all of those. I’m still not yet buying, though. It’s a big down payment, and it’s not like I’m just going to give it away…
Question for Southern Californians, specifically San Diegans.. There seems to a pretty resolutely agreed upon idea going around here that WAMU will be in the tank soon. If YOU had under the FDIC insured amount in that bank (and boy did I make sure of that!!) what would you do? Would you leave it, knowing that the FDIC is straining or soon will be? Would you move it? If so where? Any bank in the north county area you would recommend? Or would you put in the mattress?
Forgiveness please if I am a little vague and wandery…I am a tad bit under the weather and am bundled up on the sofa fading in and out of consciousness, waking occasionally, and noting with great interest, the continuing fall of the stack market.
Groggily yours,
Stars AEnd
I’m very seriously considering pulling my money out of Citibank before the week ends. If I had accounts at WaMu, I would leave work right now and close them. The FDIC has about $45 billion to work with, against about $1 trillion in insured accounts nationwide. Even if you get “lucky” and your bank fails early enough that your deposits are covered, as far as I know there’s no guarantee that you will have uninterrupted access to your funds. Why take the chance?
Depends on whether you use the bank as a “clearing agent” or a source of “investments” (even if they are FDIC-insured.)
If the latter, I’d spread them around. If the former, I’m figuring you’d be fine but I’d have a backup just in case. I’m considering two backups myself.
it’s a good question, but if you do withdraw then where do you put the money? Maybe Chase? I’m in the same boat, and although I’ve taken some out, I haven’t closed it yet. Real dumb reasons–busy at work and at home, too easy to just let it sit there, all my bills are on autopay over there, etc.
The amount of money in deposits there is so high that I have to think that either someone will take it over or the gov’t will help someone take it over. Probably naive based on events over last week, but if wamu goes bust and gov’t says fdic can’t cover (or delays payments), then we are all royally screwed, even the ones who don’t have money there. Total Anarchy in the US.
Are credit unions a safer place? Or are those going to get eaten as well?
I do not believe that a failure at WaMu (or anywhere else) will result in total anarchy in the United States. I believe that the bailouts will damage our economy far more than all those failures would have. Because of the bailouts, we are not able to replace the bad eggs with good ones. At the end of the day, we will be left with a basket of spoiled eggs.
Don’t worry. The USSR (United States of Soviet Republicans) won’t let WaMu fail. Afterall, the Shrub has to keep the economy propped up until he is out of office. Then it’s the next administration’s problem.
I don’t know…once you start talking about a person’s cash that’s supposed to be covered with fdic, and you don’t cover it–that’s panic time.
Bailing out WaMu is not the same animal as making good on FDIC insurance to WaMu depositors. The latter is clean, the former is snot.
Panic time comes after they run out of money and you are still at the end of the line.
Stars End,
Haven’t seen you post in quite a while. Hope you are doing well.
Gal~
Thanks for your concern! Usually I just lurk and learn, not being as in the know as so many others here. I am getting edumcated! (’Bout time too!)
Stars End
“in the know”
I just make my stuff up on the fly. Surely you can do that?
Leave it there. If the FDIC falls short of dollars, treasury will print more for them. TPTB understand that if FDIC insurance fails, it’s game over. Under the limit will be fine.
Why take the risk of FDIC paying up promptly after the take under? What if there are the proverbial long lines, forms, etc to fill out and it takes days, weeks to get your money.
I had a brokerage/clearing house basically go under earlier this year. The SEC had concerns of shady use of customer funds, which prompted an investigation… it took about 3 weeks to get a rather nice chunk of money to finally come back to me. They found a new clearing house to take it over which was faster than invoking the SIPC (FDIC equivalent for brokerages). Luckily I finally got all my money and didn’t need it right away, but it was a tense 3 weeks of calling and checking in every day. Your mileage would vary, but at this point why gamble if you are pretty certain that WM is toast?
Hi stars we are neighbors.
I’ll leave my funds in WM unless WB goes under first. FIFO.
If the bank musical chairs makes you nervous, don’t keep all your cash in one place.
My friend went the bank TODAY to cash out her WAMU account. She just didn’t want to sweat the whole IndyMac drama.
It’s a trip down Memory Lane: the stock market is back to 2005 levels, and DataQuick says SoCal median house prices are now back where they were in 2003. I expect further improvement on both fronts!
“So far, the bursting of the housing bubble has toppled three of Wall Street’s five big investment banks”
I have been rather busy here in the land of the rising sun. I still remember this time last year every news article posted here, talk of there being no bubble.
When did the bubble have a coming out party, that it could freely be talked about in the MSM?
Four coming up.
Read all about it here.
TIMBERRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRR!!!
BWAHAHAHAHAHAHAHAHAHAHHHHHHHHHHHHHHHHHHHHHHH!!!
Dealmaking is a pleasant euphemism for liquidation sales.
No kiddin’!!!
I happen to know Morgan’s balance sheet in all its gory detail. It’s better than the rest but it ain’t pretty. And their staffing is gonna get the big axe because they have an inordinate number of “prestige positions”.
Morgan spends $1B annually on technology. That’s more than the GDP of a third of African countries. And it could easily be slashed by 75%.
New York taxes, you’re in a h*ck of a world of pain!!!
BTW, for all our intellectual skirmishes, PB, I think we’d get along magnificently. Especially after a bottle of wine or three.
Look me up if you’re ever in NYC.
“No one had a solution for the cash crunch that is plaguing government and businesses”
How about spending less?!?
Oh, but that’s much too simple. For us, at least.
Actuallly, they believe spending more will fix the problem because the spending adds to the GDP.
First we need to convince congress that a 5% cut from a 12% increase is not actually a cut!
Intresting article on Irish banks. Why does the phrase
“Were doomed all doomed” keep running through my head.
The first myth to dispense with is the idea that Ireland is in some way different. When house prices were going through the roof, practically every economist in Ireland bought (at least publicly) into the canard that Ireland was different. Yarns were spun wholesale, such as we had better population growth, less debt, more immigrants, less houses.
We now know that Ireland is not different. We are the same as every other country. In recent days I have heard commentators suggest that Ireland does not have a subprime crisis and, therefore, have less severe financial problems. This is clearly nonsense.
If you believe lending people money to buy starter homes valued at 14 times the average income is not inviting a financial calamity, then you should stop reading now. If, on the other hand, you believe that we are facing a real crisis, then we must map out what form that crisis will take and how it can be minimised?
http://www.independent.ie/opinion/columnists/david-mcwilliams/banks-need-to-grow-up-and-stop-playing-chicken-1476850.html
Heck, maybe Ireland is where I’ll be looking to buy when the bottom approaches, should I live so long.
What is it ..blarney?
All of the True Believers can kiss my blarney stones.
Erin go broke
LOL
Frankie:
Do you have any numbers on how much employment in Ireland is actually at the pleasure of US companies?
-Big V
“abandon plans for 160 condominiums next to Lowe’s Home Improvement”
Well that sounds like a good idea in ‘any’ economic environment! So, instead of getting more condoze don’t nobody want at least the City of Escondido is providing employment for auto detailers and used car salesman! ( Hey, it’s a step in the right direction..? )
I can just see it now. The condos get built and the condo-dwellers complain about all of those beep-beep-beep sounds from the delivery trucks backing in to the Lowe’s delivery area.
It just shows the level of insanity to have approved a project like this in the first place. What were they thinking? I can see maybe living in apt. right by a big box, but “ownership”? If ever there was a project that had “re-partment” written all over it, this was it.
Why not? What’s so great about mortgages? As far as I can tell, all they do is raise the price of houses to where no one can afford to buy one with their own money — That and the raise the actual cost of attainment by over 100%. Who needs ‘em?
What a bunch of BS…..”where no one is making mortgages”….I remember very well when banks were “heavily regulated” and there was plenty of mortgage money for:
- responsible people
- with verifiable steady jobs
- with downpayments
- with savings
- with verifiable assets
…and home prices didn’t rise 25% per year, and people weren’t forced to use EZ-Financing to buy a home, and people didn’t try and fund their retirement through home price appreciation….
….folks, it wasn’t all that long ago really……
Commie!
Yesterday’s capitalist is today’s commie….we live in an upside down world…..
They only morph into communists when they are losing money, in which situation it is in America’s collective interest to bail them out, or else face a meltdown of the global financial system.
Apparently, these two outcomes are not mutually exclusive.
What’s so great about mortgages? As far as I can tell, all they do is raise the price of houses to where no one can afford to buy one with their own money — That and the raise the actual cost of attainment by over 100%. Who needs ‘em?
————————–
Hear, hear!
Personally, I hate debt that is not self-liquidating (like borrowing to start a business that will pay off the loan ++).
We need to get away from this idea that debt is a good thing. It is not good.
I’m from Sonoma County and some houses have lost over half their value.
Example:
http://www.redfin.com/CA/Santa-Rosa/4540-Earhart-Ave-95407/home/2641433
(Look at the sale history.) It went from $510K to $250K. The even scarier thing is that a same model comp (a few hundred feet away) sold for $560K in late 2005. So we’ve seen a 55% drop if we use these numbers. A $310K loss on a now valued $250K house. Wow.
This is the extreme story. Other same model comps have sold at $317K, but the latest is selling at $299K (listed for over 180 days).
The RE market is obviously dire here, but at the same time, the retail market doesn’t skip a beat. The stores and restaurants are still filled with customers. I visited a Honda dealership about 4 months ago, and all the sales people were busy with clients and closing deals.
I live in SR. I disagree that this is unusual. I track local properties closely and have seen numerous 50% declines (from 2005/2006), even in nice, safe SR neighborhoods.
The ghetto neighborhoods (i.e. Roseland adjacent) are seeing declines of up to 66%. If you want some laughs, look at the number of listings on Taylor View Dr. I see one house went $355 => 135k in 2.5 years! I think the banks will lose 100s of millions in just this one small city.
Americans chickens have come home to roost!
That’s what happens when you have free range, no regulation chickens, sometimes they come home to roost and lay a clutch of big rotten eggs.
Sonoma county is still very over priced relative to income and RE prices based on late 90’s comps.. One could have purchased a decent home in Sonoma late 90’s for 170K then prices went up 400 to 500% . While some have gone down most along the 101 Santa Rosa low life district but most are still out of sight around the county. One area of extreme bubble is the town of Sonoma which is basically a cute tourist trap for the wine industry but the only people that can afford to buy is folks that have sold in Palo Alto or Los Altos and didn’t take out all the equity, and that group is very small so the sales volume is tiny. Time is not of the side of sellers holding out for 05 pricing but they sit waiting for that one in a million buyer who will fall in love with their place and save them.
Fore!close
“State officials have officially revoked the real estate licenses of Tom O’Meara and Scott Webb, the developers of the failed Running Horse golf club project in southwest Fresno. They ran out of money after only two holes were built.”
Yeah, LOL! I was too busy ducking and hiding to catch it. Sure, I’ll bet it IS a nightmare Mr. Developer ( from his cell in PS )! Oh but he’s confident he can get their licenses re-instated.
Two holes built? What is this? Miniature golf?
The one thing missing from our financial institution is integrity. What is so interesting about these folks is many of them were educated at the finest institutions. It is pretty obvious that a majority of them were not taught business ethics. I guess a Harvard edumacation is not all that great after-all.
They were taught that rules were for other people and a good lawyer and money will get you out of damn near anything so go out there and rape the economy for all you can.
Yup. How many of these guys do you think have actually raped someone in real life, but the girl has never come out because she knew she couldn’t win? I would not be surprised.
They’re taught to run these math equations with input data from these government agencies. After which, you get the result which tells you what to do and not do. When the math breaks, they’re lost and look to uncle Sam for help.
Basically the same as learning to push a button on a computer screen, and when it doesn’t work… Call IT.
“To qualify, buyers must meet income guidelines, be able to pay 3 percent of the home’s value, and live in the home at least seven years or pay the city a share of any profits if they sell.”
Profits ? Does it go both ways and the city gets a share of the losses as the housing market continues to tank ? Oh yeah, they already will have pissed away $1.5mil trying to prop the market up when the trend is clearly down for housing prices in bumblefark Corona. Starter houses at $300K, what a farking joke.
One more bad thing about the recession:
My boss has always gotten on my case about coming in late. My excuse has always been traffic. Now that unemployment is increasing and traffic is (supposedly) getting lighter, I’m losing my only excuse. Argh.
I have yet to see lighter traffic during rush hour in San Jose, waiting for a 9:00am departure saves ME time and GAS and since wages are stagnant the boss can pay me more or shaddap.
I know. I’m trying to convince my boss of that, but she doesn’t care. I am slowly becoming accustomed to work in the nonacademic/nonstartup world. Big companies make no sense, but they are less likely to cut you, so here I am.
The bigger the better. I think I’m getting paid by the government not to work this week. This may mean that they have precise confidence in the exact level of my contribution
It cracks me up when I see the rating agencies announce that they will have to downgrade Lehman’s debt, for example. These are the same rating agencies that gave the triple A ratings on the bonds, CMO’s, CDO’s, etc that are causing the problem. Are we supposed to have confidence in these criminals? Why aren’t the lenders, not to mention stock holders, screaming about the role the ratings agencies played in this meltdown? What am I missing?
They had one of those criminal apologists from a rating agency on CNBC today and my word was he edgy, defensive, arrogant and snotty-nosed!
‘You can jump off an 80-(floor) building and pretend you’re flying for the first 79 floors.’”
Reminds me of some realtors I know. Except after they hit the ground, they groggily get up, dust themselves off and say “Now is a great time to buy!”
LOL!
I’m wondering about this AIG bailout. What is the intended effect supposed to be?
If you give this debt junkie 80B; what will they do? I think they have to pay all those derivative contracts. Then what? They are broke again or nearly so. Plus they are on the hook for a high interest loan to the Fed. How are they supposed to be competative with other insurance companies while paying the loan.
So, the effect here is the money will go to the parties that were on the winning end of the derivative contracts. Of course since we took another big step tword hyperinflation the money may not mean anything.
What is the Fed/treasury going to do after this? AIG will just go under again. Then will they give AIG another loan?
Seems like their will be a somewhat orderly withdrawl but with lots of bad debt stuck to the tax payer.
I’m still betting deflation but holding some amount in gold as insurance. Moved most of my dollars into savings yielding jack but I can move/invest the money quickly if needed.
Good luck all.
AIG is the flip side of the Fannie/Freddie debacle.
By taking over these “zero-sum” bets, the government gets to just cancel them (just like JPM and Bear Stearns.)
This is not a bailout. It’s an orderly execution (= liquidation.)
They won’t be around in late 2009.
The 85 billion isn’t for AIG to survive, it is to pay off the counter-parties of the swaps and derivatives on their books. If AIG simply defaulted, then the other banks would have to line up and collect pennies on the dollar, further causing new losses. AIG is toast, they are insolvent so selling off assets won’t pay back the money + interest. There is no intention of running this business by the fed, or realistically recovering the money, it is just a handout to the surviving banks and FNM/FRE swap cancellation. Where is the money coming from? FED just asked the Treasury (taxpayer) for money and they will float more debt.
I don’t see how this is legal, but I also don’t see anyone stopping them. It seems a direct usurping of power to spend 85 billion without congressional authority, but I am no lawyer. This certainly sounds unprecedented, someone needs to sue!
I don’t think there is a well-thought-out intention here. If the Fed or the Treasury or Congress had any type of clue, then they would have intervened a long time ago when this bubble was forming. I think they’re just panicking now.
Interesting development…
Logged into my Charles Schwab account this afternoon. The standard “Schwab Investors Checking” (FDIC Insured) went from paying 2.00APR to 3.00APR.
Methinks Schwab is hurting for money.
I haven’t posted for a while - just sitting back watching things unfold pretty much as predicted on this site for the last 3 or 4 years.
I’d been preparing financially like so many on the site, but I’m still struck by the fear that the whole world economy can come tumbling down in a matter of months, days, a day. This is some pretty frightening stuff, and I’ve been waiting for the past five or six years for these current events to happen.
Yet, I’m struck by the fact that most people I talk to aren’t real concerned about where the country is today, and where it’s headed. Yeah, they complain about gas prices, and food prices, but they are truly oblivious to the potential severity of this meltdown.
I’m actually contemplating a gun purchase to protect myself ever so slightly when the riots get going. I know I probably won’t “pull the trigger” on that purchase, but I’m getting a real bad feeling for what’s yet to come.
too much news , take a break. If you have been expecting this and are set-up as well as you are able then what else can you do?
If mass sheeple panic unfolds then yea maybe a gun will be a good idea but you must be willing to use it , a shotgun is very intimidating.
I hope it doesn’t come to that and expect it won’t
One piece of advice. Before you decide to use a gun for protection, make certain you are willing to use it. Otherwise it will do more harm than good.
Anybody hear what Cheney’s take is on all the economic bad news?
Why do you care what “deficits don’t matter” Cheney has to say? President Bush is the one with the Harvard MBA.
“I believe the foundations of this economy are strong.”
Bush, July 31
Does anybody heard from Mr. Buffet who made his money running this insurance companies? Does he also need taxpayers money to make a living now?
Berkshire Hathaway is one of the few insurance companies whose AAA rating is probably still deserved and not based on bullsh*t balance sheet tricks.
Methinks Mr. Buffett will be doing some bargain-hunting in the next few years with his cash hoard.
My neighbor sold his house can’t beleive it as it was over priced
Will wait for the final selling price to show up on Zillow