The Housing Bubble

Orlando would be best for me.

Hey Ben, is this FL meetup forum meant to be conflated with today’s usual forum? I just want to know before I post something off topic.

I had thought of an east coast barnstorm thing, like we did last summer in CA. Like FL, DC area and NY or MA?

Ellen-
Thanks for the lead. A lot of our great American Tin Pan Alley musical talent came out of places like that. Gershwins, Harold Arlen (Wiz of Oz), Irving Berlin, etc… Poor as dirt, but the kids had pianos and major talent.

Driving through suburbia, I have more than once wondered if the spate of McMansions will eventually give way to zoning changes, allowing conversion to two family homes. With foreclosures, unemployment, diminished savings and 25 year old kids living at home, what would be so bad about that? Not sure how expensive such conversions would be and it would likely vary by home style, i.e., cape versus center hall colonial, etc.

I tried posting in support of Ben’s idea for an Italy meet-up, but the comment muncher has it in its clutches. Apparently.

Orlando? Disney World!

That might not be a good idea. Can you just imagine the horrific scene Olygal would make when we told her we had to leave.

Then again, we could leave her there…

Miami, there’s nothing to do in Ft. Myers. Or Ft. Lauderdale. The SW coast has the biggest drops, but the Miami condo cranes are something to see.

If i were going to a meeting in the Ukraine to discuss the effects and consequences of Chernobyl, I don’t think a visit to “ground zero” would be all the beneficial.
I think Kiev is about 75 miles away. it’s close enough to get an idea about what happened over the horizon without getting into the pit.
Aside from South Beach, Greater Miami is a sprawling ghetto.
Pass. Fort Myers is not much better.
I think that is the reason for the bubble having its greatest effects in those areas. People built houses where most people really didn’t want to live and managed to sell them to speculators.
Now that the free money has stopped, they have discovered the people really DON’T want to live there. There’s a reason.

I’ll go anywhere in FL that time permits and Orlando is my backyard. Sulferous-gassing Chinese drywall, anyone? How about subdivisions and a school built on an old Army bombing range where they continue to find unexploded ordinance? Or an abandoned (now) ‘luxury’ development built on top of an old automotive junkyard where lots were billed as starting “from the low several millions”? The lunacy ran/runs DEEP here, folks!

That’s because you are constantly engaging in personal attacks. If you are going to call people names directly or indirectly, you aren’t going to post on my blog. That goes for anyone. You’re lucky I haven’t just banned you outright.

AZ, FL and NV bad loans just pounding Wisconsins largest bank.

M&I posts wider-than-expected first-quarter loss

The bank’s loans in the Arizona market continue to be hit the worst. Although 14% of all M&I loans are in Arizona, compared with 37% in Wisconsin, 37% of the bank’s delinquent loans are in Arizona and only 14% are in Wisconsin. M&I also operates in Florida, Minnesota, Indiana, Missouri, Kansas and Nevada

http://www.jsonline.com/business/43539532.html

Does Italy even have a housing bubble? Looking at the prices of hotels & rental cars (same as ever), they don’t have recession yet, LOL.

Hi, Chip, I have to go down that way today, so I might just take a look. Thanks for the heads-up. There’s so many of these recently developed pockets, it is mind-boggling.

Wow, this is a tough one. Indeed, the west coast of Florida really got hit with the ugly stick, big time. In just this little pocket of Hillsborough County where I live, there are Toll, Lennar, KB and Centex developments (as well as others) in various states of completion/occupation. Even the view from 1-75 and 301 tells the story. I am really torn on this one, because both Northport(for the failed, ghost developments) and Miami (for the condos and cranes) are a must-see, IMO. Orlando has some tasty stuff as well. North of Tampa, in Spring Hill, there’s lots of abandoned/foreclosed/sinkhole homes. Then there’s the Gulf Coast region, which has its own unique manifestations of the bubble, like the stalled St. Joe projects. Then there’s the stretch of Palm Beach, Martin, St. Lucie counties on the East Coast, where Mike Morgan blew the whistle about defective homes.

Yes, I actually went to beddy-bye wondering about the Ken Lewis thing. I wanted to ask some of the sharper minds on the blog to parse it for me. Lot of “he said, he said” stuff I don’t quite get. Not sure what it all means.

Ken Lewis has a severe case of Spitzer lips, a condition I also noted last fall in one photo of Hank Paulson. Does anyone know whether the condition is contagious?

Pop Vox: Newsweek’s Daily Arts and Culture Blog
Posted Thursday, April 23, 2009 3:05 PM
Why Ben Bernanke Is Actually Jack Nicholson
Sarah Ball

It has come to our attention — thanks to some bored banker friends of ours — that the ongoing letter-writing campaign to the federal government from New York Attorney General Andrew Cuomo, regarding the bullying tactics of the Federal Reserve, uncannily echoes the plotline of “A Few Good Men,” which was about a letter-writing campaign to the federal government, regarding the bullying tactics of the Marine officers stationed at Guantanamo Bay.

Which is nice, because we haven’t watched the above-linked monologue in a while, and it’s one of our favorites. So here’s the skinny that justifies our whiling away hours on YouTube:

(Link to “You can’t handle the truth” scene from “A Few Good Men” goes here…)

In real life, Cuomo is blowing the whistle on some untoward demands from high up the food chain: that Ken Lewis, the CEO of Bank of America, was ordered to acquire Merrill Lynch even though it was a bunk investment that caused his shareholders to hemorrhage cash. Lewis now says he did so only because Henry Paulson threatened him — if he didn’t comply, he was outta there. And now Paulson is saying that he only threatened Lewis because Ben Bernanke told him to. (This is a developing story; some of those involved are changing their tune).

Aaron Sorkin’s plot in “AFGM,” meanwhile, is also about blowing the whistle on some untoward demands from high up the food chain: an underperforming private in the Marines named William Santiago was administered a CODE RED — an abusive, physical reprimand for poor performance, which caused him to die. Through a lot of typically Sorkin chattiness/legalese and a pee-your-pants courtroom scene, we discover that the technically illegal CODE RED was ordered by the boss man himself, the commander of Gitmo (a riveting and Oscar-nominated Jack Nicholson), who allowed it to trickle down through the ranks.

Our tweaked casting:

* The dead Santiago = Bank of America shareholders
* The CODE RED = buying Merrill Lynch
* Ken Lewis, CEO of Bank of America = James Marshall, Pfc. Louden Downey
* John Thain, CEO of Merrill Lynch = Wolfgang Bodison, Lance Cpl. Harold W. Dawson
* Hank Paulson, former Treasury Secretary = Kiefer Sutherland, Lt. Jonathan Kendrick
* Ben Bernanke, Chairman of the Federal Reserve = Jack Nicholson, Col. Nathan R. Jessep
* Andrew Cuomo, Attorney General of New York = Tom Cruise, Lt. Daniel Kaffee
* Neel Kashkari, Interim Asst. Treasury Secretary = J.T. Walsh, Lt. Col. Markinson
* Tim Geither, Treasury Secretary = Kevin Bacon, Capt. Jack Ross
* Eric Holder, U.S. Attorney General = J.A. Preston, Judge Julius Randolph
* Jim Cramer, of “Mad Money” fame = Christopher Guest, Dr. Stone

Should the Fed and/or Treasury be required to make BOA investors whole? And what about Lehman and Bear Stearns investors? Is it the right of the Treasury (especially if run by a former Goldman Sachs CEO) to take down any firm it pleases on a whim and in the aftermath of a threat?

The New York Times
The Deal Professor By Steven M. Davidoff
Was Bank of America Entrapped?
April 24, 2009, 3:53 pm

Peter J. Henning, a professor at Wayne State Law School, occasionally writes as a guest blogger for the Deal Professor. Mr. Henning specializes in issues related to white-collar crime and is a former editor of the White Collar Crime Law Prof Blog.

Bank of America’s chief executive, Kenneth D. Lewis. has been on the hot seat since mid-January when the bank reported large losses at Merrill Lynch that it apparently knew about prior to the merger of the companies. A slew of lawsuits have been filed accusing Mr. Lewis and Bank of America of committing securities fraud for not disclosing the losses before shareholders voted on the merger and then withholding the information until well after the merger closed.

Now, Attorney General Andrew M. Cuomo of New York has revealed that Mr. Lewis said the Treasury secretary at the time, Henry M. Paulson Jr., and the Federal Reserve chairman, Ben S. Bernanke, put pressure on him to complete the Merrill merger while keeping quiet about the losses until an additional government bailout. This raises serious questions whether the government caused the company to violate the federal securities laws.

The antifraud provisions of the Securities Exchange Act of 1934, Sections 10(b) and 14(a), prohibit misstatements or omissions of material facts in connection with the solicitation of proxies from shareholders and in public statements made by a company. A company has a duty to ensure that shareholders have truthful information, and if a prior disclosure is no longer correct or complete, then additional information must be disclosed to ensure the market is not operating on false data.

“I’m wondering what it takes for a Canadian to buy property in FL ”

Judging by the beachfront condo I rent, the only necessities seem to be a hairy back and a trunk load of Speedos.

Tiger - “I’m wondering what it takes for a Canadian to buy property in FL”

Answer: guts.

I wouldn’t do it unless you are confident that the dollar will gain noticeably against the loonie during the 2010-2020 timeframe, assuming you would think about selling then. IMO, we’re not at bottom yet and when we reach it we’ll stay there for a fairly long time. In the past six months rents have fallen off a cliff, which surprised even me, and that will drag selling prices farther downward.

If you want to protect the current loonie-to-dollar value for a purchase late in the bottom, there must be option vehicles that facilitate that. Others on the blog know about the details of that stuff.

Finally, don’t forget to factor in property tax and insurance. If you’re looking to be less than a full-time resident, I don’t see how you could hope to come out ahead by buying instead of renting. Maybe Canadian taxes can pay for all of your losses, including opportunity cost, but I would have guessed not.

You’re in Dubai now? How the heck is the scene on the ground there — a complete trainwreck or not?

Ceylontea - if you drive along the corniche, I think on the way from downtown toward the Burg, on the right there is a fast-food place named “Mean Gene’s.” It is unique because there are only two in the world and the other, with the same scowling face on the sign, is in a small city in West Virginia. I think I may be, to date, the only person who has ever seen both. I tracked it down and Mean Gene was a pro wrestler who started the WVA one. Turns out his tag-teammate was from the Gulf, probably the UAE, and got Gene’s permission to open the Dubai one. Trivia to the max, but it’s really startling when you see one and then run into the other.