The Housing Bubble

Remember the quaint old times in the HBB, oh around mid 06 or early 07, when it was common to hear posters complaint that watching the bubble bursting was “like watching paint dry?”
Or my all time favorite story, the guy that bought 100K+ of units in a virtual world on the Internet hoping to resell it later at a profit. He was that widower with a kid.

It’s Official:

We have NO leaders in America…They spend all this money to make banks solvent, and then have no solvent customers.

Another upbeat guy heard from:

Deluge of Financial Calamities Looming by Mid-March
By Patrick A. Heller, Market Update
February 10, 2009

As horrible as the financial news for currencies and paper assets has been since mid-2007, it looks like the worst is yet to come - perhaps as early as next month.

Over the weekend the Managing Director of the International Monetary Fund (IMF), Dominique Strauss-Kahn, told a gathering of Southeast Asian central bankers that the world’s advanced economies are already in a depression and that the financial crisis may deepen unless the banking system is fixed.

On Febr. 4, Paul Wolfowitz, the former president of the World Bank, said the IMF and similar institutions are incapable of coping with the global financial crisis because they do not have enough resources.

The market appears to have turned on U.S. Treasury debt. Analyst Adrian Douglas issued a report on Sunday titled “Bond Market Collapse Unfolding.” He used his proprietary Market Force Analysis on the price of the 10-year U.S. Treasury Note. Last September and October, as the value of Treasury debt was falling, it looked almost certain that the U.S. Treasury entered the market to purchase its own debt! This had the effect of boosting the price of Treasury bonds.

However, the futures market for 10-year Treasury debt shows that there have been far more sellers than buyers for more than the past six months, a strong sign that bond prices are destined to decline in the near term. For the past eight weeks, Treasury bond prices have indeed been generally declining (i.e. interest rates have been rising). The U.S. government is almost certain to intervene again, as the Treasury debt is the most important in the world, and whose collapse could wreak havoc across the global financial system.

The problem is that the U.S. government is going to have to float massive additional amounts of new Treasury debt in order to immediately finance the second $350 billion of the bank bailouts and the nearly trillion dollars for the new so-called “economic stimulus” program. If almost everyone else is selling and the U.S. Treasury is the primary buyer of its own outstanding bonds, who is going to buy the newly issued debt?

Non-precious metals prices may have also passed their bottom. The price of copper recently jumped as much as 10 percent in a single day, for example.

Hey, I think I asked my question too late last night in Bits:

If I wanted to buy some oil as insurance against a drop in the US dollar, how best to go about that, short of trading oil futures? I’m looking at USO and OIL leaps.

Is there some systemic risk in trading USO or USO options, or am I just being paranoid?

More Marketwatch.com fun.

Foreclosures up 18% in Jan09.

http://tinyurl.com/aqc7dg

Stock up on ”Forever’ First class stamps before May.They’ll be jumping 2 cents then.That’s maybe the best small investment for now.In a year or two letters may cost a buck to send by snail-mail.

I see the 15% tax credit for home buyers was eliminated from the new boondoggle relief attempt. Gonna be some pissed off NARs, they were hanging big hopes on it.

“You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is about the end of any nation. You cannot multiply wealth by dividing it.”

Dr Adrian Rogers (1931-2005)

Its about time. Lots of these people needed to be thrown out on their azz.

Lenders drop mortgage brokers

http://money.cnn.com/2009/02/12/real_estate/lenders_drop_mortgage_brokers/index.htm?source=yahoo_quote

I nearly choked on my toast this morning when I read Judy Shelton’s opinion piece in the Wall Street Journal. Imagine! In this day and age someone suggests an honest money standard!!

“Now is the time to challenge the exclusive monopoly of Federal Reserve notes as currency. Buyers and sellers, by mutual consent, should have access to an alternate means for settling accounts; they should be able to do business using a monetary unit of account defined in terms of gold. The existence of parallel currencies operating side-by-side on an equal legal footing would make it clear whether people had more confidence in fiat money or money redeemable in gold. If the gold-based system is preferred, it means that people fully understand that the purpose of money is to facilitate commerce, not to camouflage fiscal mismanagement.”

Get used to this subject. You’ll hear more of it as the U.S. Congress and the Federal Reserve grind the fiat dollar to shreds.

“Let’s not mince words…this looks an awful lot like the beginning of the second Great Depression,” says Nobel-prize winning economist Paul Krugman.

(Gulp!) Are liberal economists using the dreaded “D” word already? Besides, isn’t Congress saving the day with that big “stimulus” package? And isn’t there a big difference between recessions and depressions?

“The real difference is this: a recession is a pause in an otherwise healthy economy,” explains newsletter editor Bill Bonner. “A depression, on the other hand, is when the economy drops dead.”

Gotta be quick…

I saw the Obama story about stim helping CAT… well, just drove by Ritchie Bros. Auctioneers on I-4 outside Orlando. Their entire field is full. AGAIN. You have to see it to believe it. Hundreds of cranes and bulldozers waiting to be auctioned.

And we want to borrow money to get CAT back on line?

Bubble Economy 2.0: Or, The Financial Recovery Plan from Hell

by Michael Hudson
Global Research, February 11, 2009

Martin Wolf started off his Financial Times column today (February 11) with the bold question: “Has Barack Obama’s presidency already failed?” The stock market had a similar opinion, plunging 382 points. Having promised “change,” Mr. Obama is giving us more Clinton-Bush via Robert Rubin’s protégé, Tim Geithner. Tuesday’s $2.5 trillion Financial Stabilization Plan to re-inflate the Bubble Economy is basically an extension of the Bush-Paulson giveaway – yet more Rubinomics for financial insiders in the emerging Wall Street trusts. The financial system is to be concentrated into a cartel of just a few giant conglomerates to act as the economy’s central planners and resource allocators. This makes banks the big winners in the game of “chicken” they’ve been playing with Washington, a shakedown holding the economy hostage. “Give us what we want or we’ll plunge the economy into financial crisis.” Washington has given them $9 trillion so far, with promises now of another $2 trillion– and still counting.

link:http://tinyurl.com/agwrgf

Hey Slim - got any more details on this one? Story mentions Cardinal and Valencia but doesn’t say where exactly this happened. Sounds like the far SW side.
Scary…

A Tucson, Arizona homeowner alerted of an impending home invasion by his security cameras, armed himself and took matters into his hands when four armed suspects attempted to break into his home last week.

—

“The victim was able to get back inside his house, close his door, semi barricade it, reach for a weapon that was easily accessible,“ said Pima County Sheriff’s Deputy Earl Gieron.

The homeowner shot at the suspects.

—

The four men retreated and took off.

Saw the story here .

Adam Smith gets the last laugh
By P.J. O’Rourke
Published: February 10 2009 19:22 | Last updated: February 10 2009 19:22

The free market is dead. It was killed by the Bolshevik Revolution, fascist dirigisme, Keynesianism, the Great Depression, the second world war economic controls, the Labour party victory of 1945, Keynesianism again, the Arab oil embargo, Anthony Giddens’s “third way” and the current financial crisis. The free market has died at least 10 times in the past century. And whenever the market expires people want to know what Adam Smith would say. It is a moment of, “Hello, God, how’s my atheism going?”
Adam Smith would be laughing too hard to say anything. Smith spotted the precise cause of our economic calamity not just before it happened but 232 years before – probably a record for going short.
“A dwelling-house, as such, contributes nothing to the revenue of its inhabitant,” Smith said in The Wealth of Nations. “If it is lett [sic] to a tenant for rent, as the house itself can produce nothing, the tenant must always pay the rent out of some other revenue.” Therefore Smith concluded that, although a house can make money for its owner if it is rented, “the revenue of the whole body of the people can never be in the smallest degree increased by it”. [281]*
Smith was familiar with rampant speculation, or “overtrading” as he politely called it.
The Mississippi Scheme and the South Sea Bubble had both collapsed in 1720, three years before his birth. In 1772, while Smith was writing The Wealth of Nations, a bank run occurred in Scotland. Only three of Edinburgh’s 30 private banks survived. The reaction to the ensuing credit freeze from the Scottish overtraders sounds familiar, “The banks, they seem to have thought,” Smith said, “were in honour bound to supply the deficiency, and to provide them with all the capital which they wanted to trade with.” [308]
The phenomenon of speculative excess has less to do with free markets than with high profits. “When the profits of trade happen to be greater than ordinary,” Smith said, “overtrading becomes a general error.” [438] And rate of profit, Smith claimed, “is always highest in the countries that are going fastest to ruin”. [266]
The South Sea Bubble was the result of ruinous machinations by Britain’s lord treasurer, Robert Harley, Earl of Oxford, who was looking to fund the national debt. The Mississippi Scheme was started by the French regent Philippe duc d’Orléans when he gave control of the royal bank to the Scottish financier John Law, the Bernard Madoff of his day.
Law’s fellow Scots – who were more inclined to market freedoms than the English, let alone the French – had already heard Law’s plan for “establishing a bank … which he seems to have imagined might issue paper to the amount of the whole value of all the lands in the country”. The parliament of Scotland, Smith noted, “did not think proper to adopt it”. [317]
One simple idea allows an over-trading folly to turn into a speculative disaster – whether it involves ocean commerce, land in Louisiana, stocks, bonds, tulip bulbs or home mortgages. The idea is that unlimited prosperity can be created by the unlimited expansion of credit.
Such wild flights of borrowing can be effected only with what Smith called “the Daedalian wings of paper money”. [321] To produce enough of this paper requires either a government or something the size of a government, which modern merchant banks have become. As Smith pointed out: “The government of an exclusive company of merchants, is, perhaps, the worst of all governments.” [570]
The idea that The Wealth of Nations puts forth for creating prosperity is more complex. It involves all the baffling intricacies of human liberty. Smith proposed that everyone be free – free of bondage and of political, economic and regulatory oppression (Smith’s principle of “self-interest”), free in choice of employment (Smith’s principle of “division of labour”), and free to own and exchange the products of that labour (Smith’s principle of “free trade”). “Little else is requisite to carry a state to the highest degree of opulence,” Smith told a learned society in Edinburgh (with what degree of sarcasm we can imagine), “but peace, easy taxes and a tolerable administration of justice.”
How then would Adam Smith fix the present mess? Sorry, but it is fixed already. The answer to a decline in the value of speculative assets is to pay less for them. Job done.
We could pump the banks full of our national treasure. But Smith said: “To attempt to increase the wealth of any country, either by introducing or by detaining in it an unnecessary quantity of gold and silver, is as absurd as it would be to attempt to increase the good cheer of private families, by obliging them to keep an unnecessary number of kitchen utensils.” [440]
We could send in the experts to manage our bail-out. But Smith said: “I have never known much good done by those who affect to trade for the public good.” [456]
And we could nationalise our economies. But Smith said: “The state cannot be very great of which the sovereign has leisure to carry on the trade of a wine merchant or apothecary”. [818] Or chairman of General Motors.
* Bracketed numbers in the text refer to pages in ‘The Wealth of Nations’, Glasgow Edition of the Works of Adam Smith, Oxford University Press, 1976

We are beginning to see some changes in the “Engineering Sector”. It seems like the State of Texas is starting to reassess the Qualifications Based Selection (QBS) process for procurring engineering services. This process has been the bulwork for protecting larger engineering firms from undercutting by smaller firms that could possibly do the work for less money.

It is too early to tell, but changes to a price driven economy in the engineering sector may cause some fundamental changes in the way that our infrastructure is managed in the future.

All part of the fallout from the burst of the housing bubble.

Soaring credit card fees hit most

By SUSAN SALISBURY

Palm Beach Post Staff Writer

Wednesday, February 11, 2009

Credit-card issuers are doubling interest rates, hiking minimum monthly payments and reducing credit limits even for those with good-as-gold credit. JP Morgan Chase especially has raised the ire of consumers by imposing a $10 monthly service fee. Late fees, minimum finance charges, late payment fees, over-the-credit-line fees: All are increasing. Adding insult to injury, angry card holders who cancel their cards may adversely impact their credit rating.

“In the past we would see these blanket changes, normally, just for folks that had poor credit,” said Liz Pulliam Weston, a personal finance columnist and author of Easy Money.

“Starting last year, credit card companies started making these blanket changes to people with good credit,” she said. “The idea was to see if people would accept it.”

In December, the Federal Reserve passed stricter rules on when and how credit card companies can change the terms of agreements with customers - but those rules don’t take effect until July 1, 2010.

Today, the Senate Committee on Banking, Housing and Urban Affairs is hearing testimony on credit card practices. Sen. Chris Dodd, D-Conn., who chairs the committee, Wednesday introduced the Credit Card Accountability, Responsibility and Disclosure Act, which would clamp down on “anytime, anywhere” interest rate hikes and limit fees and penalties.

However, Greg McBride, senior financial analyst for Bankrate.com in North Palm Beach, says that the card changes reflect a business cycle. “When the economy is bad, card issuers go on the defense and look to limit their exposure to losses as unemployment and defaults both climb.”

Adds Peter Garuccio, a spokesman for the American Bankers Association, “I have heard people say, ‘I have not done anything to change my risk profile. Why am I having my credit card limit reduced?’ It may not be anything you are doing or not doing. The reality is, we are in a recession. Issuers are reacting to the broader economic forces at work here and taking steps to minimize their risks.”

Britain is facing its worst financial crisis for more than a century, surpassing even the Great Depression of the 1930s, one of Gordon Brown’s most senior ministers and confidants has admitted.

The minister stunned his audience at a Labour conference in Yorkshire by forecasting that times could be tougher than in the depression of the 1930s, when male unemployment in some cities reached 70 per cent.

Rick Santelli this morning on CNBC:

“What’s new Rick?”

“The brand new credit card that the government is going to get, or as some people like to call it – the Stimulus Plan.”

LMAO.

“…Luo Ping, a director-general at the China Banking Regulatory Commission, said after a speech in New York yesterday that China would continue to buy Treasuries in spite of its misgivings about US finances.

“Except for US Treasuries, what can you hold?” he asked. “Gold? You don’t hold Japanese government bonds or UK bonds. US Treasuries are the safe haven. For everyone, including China, it is the only option.”

Mr Luo, whose English tends towards the colloquial, added: “We hate you guys. Once you start issuing $1 trillion-$2 trillion [$1,000bn-$2,000bn] . . .we know the dollar is going to depreciate, so we hate you guys but there is nothing much we can do.”….

http://www.ft.com/cms/s/0/a403d716-f8a6-11dd-aae8-000077b07658.html

I wish I could do a Puddy Tat “Bwahahahahhaha” but I always miss letters. The entire article is a good read.

I need to vent to people who can understand my recent foray into knife-catching.

Short version of a long story: I received a great offer on my house (FSBO); and I had planned on selling and renting. I found out that rents for comparable homes exceeded my carrying costs for my current home. Meanwhile, my wife and I fell in love with a pricey big house. But I nixed it, not only because of its price but because of the economy and uncertainty in my business this year. With no place to rent reasonably, I also nixed the sale of our home, and here we are, (one step closer to divorce). I really loved the big house, but I gotta sleep at night. Feel very bad, but know I made the right decision. Thanks for listening.

England to join countries devaluing currency

Bank of England in money supply vow

By Chris Giles in London

Published: February 12 2009 02:00 | Last updated: February 12 2009 02:00

The Bank of England became the latest leading central bank to pledge it will start to use its power to create money to buy assets in the economy because traditional monetary policy has run its course.

Presenting an extremely downbeat quarterly forecast, Mervyn King, the Bank governor, said the projections “imply that further easing on monetary policy may well be required”….

http://www.ft.com/cms/s/0/90f996a6-f8a6-11dd-aae8-000077b07658.html

Devaluation wars heating up.

The brand new Inflationary Depression.
Brought to you by years of stinky deals.

Heaven help America’s banking system

By John Gapper
“…His  plan has good points, if they can be implemented. Mr Paulson’s original plan to buy bad assets from banks was flawed by its reliance on the government being able to set a different price from the market for toxic securities. Mr Geithner has conceded that weakness and, instead, wants private investors with whom he hopes to co-invest to bid freely for the assets.

This is fine in theory, but he has to come up with an actual plan first, which was lacking on Tuesday. The market was right to worry because, despite the talk of an “aggregator bank” or a good bank/bad bank, nobody has yet devised a way to make such a scheme work.

If he could go away and think about it, I would not be so concerned. He hashed things up by over-promising and under-delivering, but his ideas are sound and he has at least (belatedly) lowered expectations. After more work with the Federal Reserve and Federal Deposit Insurance Corporation, he might surprise on the upside.

Unfortunately, he lacks this luxury. Mr Paulson angered Congress by getting it to authorise funding and then doing something else with the money than he had originally talked about. Mr Geithner had to calm down the Senate banking committee by promising to discuss with each member his or her pet ideas.

Mr Geithner is a good conciliator. He comes across as a cool technocrat on camera but his years at the Fed have taught him how to stroke politicians. After two hours of him telling senators “that is an excellent question” and “I think that you have identified the problem exactly right”, they were mostly purring….”

http://www.ft.com/cms/s/0/9bddecbc-f85a-11dd-aae8-000077b07658.html

Mr. Geithner has years of experience at the NY Fed where he learned the art of the lie. Perfect for this economy.

I got into an argument with a guy from Sweden recently. He was saying how great it was to be a socialist. I found this:

“Swedes aged between 16 and 64 claimed they could not work due to ill health for an average of 39.9 days in 2006, according to figures from the Swedish Social Insurance Administration (Försäkringskassan), which controls state payments to the sick.”

AND:

Legally mandated vacation days
Sweden 32

As the USA becomes more like Sweden, how will we adjust to the average worker taking 8 weeks of sick leave and 6 weeks of vacation a year? Surely Americans aren’t going to continue to work as hard, only to support the welfare state.

Independence Federal Plans Merger With ColomboBank

By Anita Huslin
Washington Post Staff Writer
Thursday, February 12, 2009; Page D01

Independence Federal Savings Bank yesterday announced plans to merge with ColomboBank of Rockville, a deal that would create a $300 million thrift controlled by Washington businessman Morton A. Bender.

Bender, who has been majority shareholder in both banks since he took over the historically black Independence two years ago, had proposed the merger several years ago. He was blocked in 2004 by the Office of Thrift Supervision because of questions about Colombo’s weak money-laundering controls and failure to comply with consumer protection regulations….”

WaPo

A lot of history in this merger.

hllwnz wanted to look at investing in the US stock market and I was trying to think what could get me to invest as a ‘long term investor’ in this market.

These are things I would look for:
I would not invest in any company that had large layoffs. Layoffs mean the company management does not know what it is doing. They could not manage the company well during the upturn, they certainly cannot manage during a downturn.

I would look for companies that are hiring. About 52% of all US companies are planning on hiring.

I would look for a low debt structure that did not roll over for a few more years.

And finally before I bought a single share, I would wait until the stock price was 5% over the 200 day simple moving average.

Chicken housing bubble

link

A chicken housing crisis has cropped up in the U.S., and it’s producing some of the same bleak results as the human one — foreclosures, lawsuits and devastated homeowners.

A typical farmer with four large chicken houses can gross between $125,000 and $150,000 a year. Expenses often amount to more than 30% of their income.

Do the math.

Talk me down. Things have changed dramatically compared to last year when I last surveyed the local housing market.

Last night, I saw a 1994 2300 sqft ranch on 1.2 acres for 239K, one lot away from the St. Johns river near World Golf Village (WGV). It’s too high, I know. Last sold for 189K in July, 03. Fictitious value at the peak was 360K according to Z. If these puppies start dropping to 1999 values (152K according to Z), it is going to be extremely difficult to not buy.

That said, some of the neighborhoods immediately around WGV are diving. I saw several ~2000 sqft homes going for 140K. Fictitious peak values were near 300K. Condos at Palencia, another uppity project targeted at out-of-towners, are under 100K.

On his blog, Brad DeLong has a series of short, insightful notes on the new financial rescue plan. “1. Called the Geithner Plan, not the Obama Plan–distancing of the president from the proposal. 2. Reinforced by Axelrod leaks to Labaton and Andrews painting Geithner as the Wall Street loving holdover–and this the person to take the blame if things go south. 3. This is not new money–this is only the second half of the TARP from last fall: $350B. 4. It is an attempt to leverage the TARP money–via the Fed and the private sector–as much as possible. 5. As the Fed takes on tail risk and buys up risky assets, the supply of assets the private sector must hold declines and their prices will rise. 6.As public and private money flows into the banks, their risk tolerance will grow and they will bid up risky asset prices as well. 7. The net effect might be that fears that banks are insolvent or will become illiquid will ebb. 8. And the financial crisis and the Bush depression will come to an end. 9. But Geithner said this is not the end–that if the TARP money is expended and if banks still fail their stress tests, then what… 10. This plan does not foreclose a resort to the Swedish model, it is instead an attempt to use the TARP money to escape the necessity for adopting the Swedish model.”

WSJ

More on the Geithner plan here.
http://www.treas.gov/press/releases/tg21.htm

Is Germany going to join the PIGs?

February 12 2009
A German sovereign bond auction failed yesterday amid growing danger signs for governments as they attempt to raise record amounts of debt to pay for fiscal stimulus packages and bank bail-outs, writes David Oakley .

It was the second successive failure this year of a 10-year Bund auction - usually one of the most sought-after - as demand fell 20 per cent short of the €6bn (£5.4bn)the German government wanted.

Gary Jenkins, head of fixed income at Evolution, said: “The failure of a German bond auction is a sign of the difficulties governments are going to face in raising debt at these historically low yields.”…
http://www.ft.com/cms/s/0/8121d176-f8a6-11dd-aae8-000077b07658.html?nclick_check=1

Just Imagine Pandit Questioning Barney Frank: Caroline Baum

http://www.bloomberg.com/apps/news?pid=20601039&refer=home&sid=a5UrNNsvQepQ

In many areas in the northeast, I’ve observed an new trend in some of the REO listings of various websites (fannie, freddie, emailforclosure). What is it? $40,000 houses in areas where the cheapest shacks were $120k minumum. Not exactly stuff I’d be inclined to throw money at but a dose of reality nonetheless. These were non-existent just a few months ago and a flippers dreamdate during the bubble years. And the fact that these houses are still sitting after 2-3 weeks on the web tells me that either mortgage availability is non-existent or the speculative element has dried up.

Vanity Fair had an interesting article on Wall Street bonuses

http://www.vanityfair.com/politics/features/2009/03/wall-street-bonuses200903

There was a chart with the article (unfortunately, not in the on-line edition) showing how the bonuses paid out exceeded or equaled the amount of bailout money received for about a dozen different firms!

My thinking, of course, is that they shouldn’t have gotten the money in the first place, and that would mean the Government wouldn’t have to have an opinion on what people should be paid…. But it’s too late for that logic.

(Also read the article on the making of the original Godfather movie!)

http://us.rd.yahoo.com/finance/external/tsmfe/SIG=135vp5rhe/*http://www.thestreet.com/_yahoo/story/10463635/1/geithner-bailout-plan-may-speed-bank-failures.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

Geithner Bailout May Speed Bank Failures

I’ve been thinking about this stress testing a bit. I think we all acknowledge that GS has “most favored bank” status in Washington, and it would seem JPM isn’t far behind. Of the other really big domestic banks which one do you think will be left out in the cold this year.

My pick is WFC, they may have been the most responsible of the big boys which in my mind means they have the most flesh to be picked from the carcass. Additonally, you can’t get much farther from Washington than Frisco. I think WFC common goes to zero this year.

Our economy is bad, but it could be worse.

http://www.nytimes.com/2009/02/12/world/middleeast/12dubai.html?em

“With Dubai’s economy in free fall, newspapers have reported that more than 3,000 cars sit abandoned in the parking lot at the Dubai Airport, left by fleeing, debt-ridden foreigners (who could in fact be imprisoned if they failed to pay their bills). Some are said to have maxed-out credit cards inside and notes of apology taped to the windshield.”

“No one knows how bad things have become, though it is clear that tens of thousands have left, real estate prices have crashed and scores of Dubai’s major construction projects have been suspended or canceled. But with the government unwilling to provide data, rumors are bound to flourish, damaging confidence and further undermining the economy.”

‘57 Horizon Pointe lots listed in foreclosure
Total amount owed is more than $5 million; auction set’

http://tinyurl.com/bv236v

More than 50 single-family lots at Horizon Pointe, a large Lacey subdivision, are in foreclosure, according to Thurston County Auditor’s Office data.

The slower housing market has been tough on builders, Building Industry Association of Washington spokeswoman Erin Shannon said Wednesday.
Not only have sales slowed, but stricter lending standards have made it difficult for builders to get financing for new construction or even lines of credit, she said.

Some builders have ceased work on their projects. D.R. Horton of Texas sold a large undeveloped subdivision off Mud Bay Road in Olympia last year for $7.1 million.

—————————————————-

HAHAHAHAHAHAHA! HAHAHAHAHAHAHA! HAHAHAHAHAHAH! *gasp gasp wheeze * HAHAHAHAHAHAH….
Oh, I could go on ‘Hahahaing’ ALL day LONG! I mean, there’s just so much schadenfreude and too much stuff to relate involving that wretched project. Where to start? First of all, the heinous transgression of the ‘Pointe’ with an ‘e’. Then the illegal cutting down of trees in buffers, the land grab, the pandering on the part of the city of Lacey, the lawsuits over having to comply with regulations, on and on…
Gosh, what a glorious wonderful headline.

Oh, and that 7.1 million sale of the Mud Bay acres? I am soooooo eagerly awaiting further exciting news on that little project…

“But she disappeared weeks ago! Have you checked all the broom closets? No? Then do it. Hillary may have locked herself in while putting hers away.”

“Gross sold government debt, sending the fund’s holdings to minus two percent, after adding to his holdings in December for the first time in a year. The fund held negative positions in Treasuries and debt issued by government-backed agencies such as Fannie Mae, Freddie Mac and the Federal Home Loan Bank system.”
Bloomberg

Mr. Gross talks his book? No. Mr. Gross invests on reality that is why he is the most successful bond investor of all time. Mr. Gross opines what should be done and when the government does not act in the rational manner opined, he invests against the government.

1000000000000 Lb gorilla in the room.

2 years ago I begged and pleaded with my wife to sell our house. She did finally let me list, but she got mad when I argued with the Realtor on price (I wanted it lower) and when I wanted to lower the price. When it was clear she was not going to be rational, we took it off the market.

All the while I was trying to get her to sell and rent for a few years, her mom was saying how wrong I was.

Guess what.

Last night mom says that they are going to sell and rent for awhile.

All I say is “too late”.

So, my wife gets angry that I’m being so smug.

She gets MAD at me for NOT saying “told you so”, because she knows I’m thinking it.

ARGGGGGGGGG!!!!!!!!!!!!!!!!!!!

Local fella passed along this email of a CNBC program coming on tonite:

See how the American Dream became a nightmare

Tonight 8p ET

How worried was Wall Street about a lack clarity in Treasury Secretary Tim Geithner’s plan to save the banking system through the purchase of toxic debt? So worried that Goldman Sachs called a meeting to figure out how to fix the problem.

Here are some of the upshots from that meeting:

1. While it is better to wait for a good plan as opposed to quick and dirty bad one, time is important. What the group concluded was that the longer the plan takes to produce, the more diffucult the situation becomes. That’s because reviving the securitization market is key toward reviving the economy and it’s a viscious cycle - the longer it takes to revive securiziation, the worse the economy becomes and securized product held by the banks lose more value.

2. Ken Griffen, the founder of Citadel, stressed the need not merely to fix the prices of the securitized bonds, but also that any plan must stabilize the root cause of the problem - the mortgages themselves. And he came up with several ideas to spur homeownership that could revive the housing market.

3. Also some worry over speculation that Paul Volker doesn’t have a more formal role in the process of coming up with a bailout plan.

4. Some actually had met with officials at the New York Federal Reserve after Geithners speech and were told the plan is still weeks away. That wasn’t received well

http://finance.yahoo.com/news/Geithners-Bank-Plan-Led-To-cnbc-14341805.html

Speechless!!!!!

where is professor bear ?

Anybody buying? Looks like we are diving in to the close. 804.30 was recent SPX low. 7449.38 was dow’s low in Nov. We already broke more recent lows.

The DOW is up 2% in the 30 minutes since the govt announced it would directly subsidize mortgages of poor people.

Can someone tell me if there is a federal income tax credit or the like to offset the expense of installing solar panels on your home? I know that the City of Austin gives a rebate, but I think there is a tax incentive as well.

I own the house outright (bought post bust in 92) and will pay cash for the solar panels.

It has been nice having some much needed home improvements done the last 16 months or so. Before that, I couldn’t even get bids on work - just, “now that would cost you some money.” Meaning: “Get with the program. Your house is a teardown. If you’re not going to build a McMansion, get out of the way and let someone else do it.”

The latest Atlantic Monthly has a featured piece, HOW THE CRASH WILL RESHAPE AMERICA, by Richard Florida. Can’t wait to read it tonight!

GSFixer, did you see my response to you about the direct deposit thing? Not the in the bits bucket, but the other one you left.

Looks like there really may have been some type of breach or information loss, just FYI.

http://www.reuters.com/article/newsOne/idUSTRE51B6B620090212

Getting my pitchfork….

“Housing policymakers weighed but have for now shelved one plan that would have seen the government stand behind low-cost mortgages of between 4 and 4.5 percent, sources said.

Lockhart said that policymakers are eager to prevent a large drop in home values from their current, deflated levels.”

Absolutely mind blowing! Talk about screwing the first time buyer!
Gov. propping up housing prices when people are being laid off or companies are cutting salaries by 10%! (Which they are in Silicon Valley!)

Way to go, Gov. This downturn is now never ending.

OBAMA BURNED: GREGG WITHDRAWS AFTER POLICIES TOO MUCH TO STOMACH
Thu Feb 12 2009 16:18:14 ET

For Immediate Release:
Thursday, February 12, 2009

Senator Gregg Statement on His Withdrawal for Consideration of U.S. Commerce Secretary

Sen. Gregg stated, “I want to thank the President for nominating me to serve in his Cabinet as Secretary of Commerce. This was a great honor, and I had felt that I could bring some views and ideas that would assist him in governing during this difficult time. I especially admire his willingness to reach across the aisle.

“However, it has become apparent during this process that this will not work for me as I have found that on issues such as the stimulus package and the Census there are irresolvable conflicts for me. Prior to accepting this post, we had discussed these and other potential differences, but unfortunately we did not adequately focus on these concerns. We are functioning from a different set of views on many critical items of policy.

“Obviously the President requires a team that is fully supportive of all his initiatives

Trying out a new name here.

Back from Orlando again :barf:

I was there over a month ago, there was a shopping cart tipped on it’s side, used as a makeshift chair at a bus stop. Surrounding it was a pile of burgers wrappers and cups.

Today: same cart, same location, more garbage.

New bubblology lexicon: Realturd=Paint Chip Eater.

Another casualty of the stimulus package became apparent while we were waiting for the final language of the reconciled bill to appear online. It appears that Caterpillar won’t be hiring back any of those 22,000 laid-off workers because of the President’s $789 (Ed: sic) stimulus package, despite the fact that President Obama alluded to words by the company’s executive just earlier today touting the measure.

But oops. After the president left, Mr. Owens not only did a turnabout on rehiring; he also suggested there may be even more layoffs. Although he said he continued to support the stimulus package, it wouldn’t result in a reversal of layoffs for anyone: “I think realistically no. The truth is we’re going to have more layoffs before we start hiring again.”

LOL

The Candy-Crappin’ Unicorn™ just don’t be gettin’ no respect.

BWAHAHHHAHAHAHHAHAHHAHAHAHHAHAHAHHAHHHHHHHHHHH!!!

So, I just watched CNBC’s “House of Cards”. Pretty bland stuff there. Nothing any of us would find informative.

But I did find Greenscam’s comments interesting.

Stuff like:

We trusted business to self-regulate. They knew what thery were doing andall were sure they could get out on time.

We could have stopped it, but not without causing 10% unemployment and aprettybad economy.

and

At some time in the future, we’ll be having this conversation again. It is just human nature.

1) How could ALL get out? Every fool was going to find a greator fool?

2) And, 20% unemployment is better?

3) WHICH IS WHY Voulker said it was his job to take away the punchbowl just when the party got started. THAT WAS YOUR JOB TOO, you crazy old man!

To awaiting wipeout.

My husband has cardiomyopathy. Got diagnosed after surviving a cardiac arrest in 1997. He is doing better now than when he was diagnosed. Quit smoking, started walking, lost weight, got his BP under control. Ejection fraction improved from 25% to 50%.

Not necessarily a death sentence. He may outlive me - his younger, smarter, genetically superior wife.

I want to built it, but I aint got no money….

full bust, production is done….if your on the third floor…..jump..prey you dont live.

couple of guys working upstairs “aint worth tits on gravy”.

Im actually happy that my tinfoil comment from last night about “technology destruction” was never posted….

Hard to believe Hoz’s last post….last night.

So my husband and I and the little bubba are looking to buy a house, primarily because said bubba and his accessories are making this two bedroom apartment very cramped. Hubby works for a company with NO debt and huge cash reserves in a position that is both rare and very necessary, and his promotion path is entirely in the same city. And rents for houses around here are laughable, especially with the threat of foreclosure hanging over LLs.*

We’re looking in a price range where PITI is roughly comparable to our current rent. That actually gets close to 2000 square feet, 4/2.

Foreclosures, of course. Nothing else is priced correctly.

Anyway, we found a place we rather liked. It needed a lot of cosmetic work (peach and brown stripes, honestly) and a couple of other things, but we’re very hands-on people. We offered $7K below list plus bank pays closing and $1K in Section 1 repairs.

Didn’t get it. But the couple that did get it chose something else, so it went back on the market. So we resubmitted the bid…