The Housing Bubble

It’s late in coming in that it should have come years ago. But it’s early in that we have a long ways yet to go.

We’ve had the dead cat bounce phase, now we endure the slow bleed phase.

We are mid-way, denial abounds repos are still rising, folks can’t ATM their houses anymore and foreclosures are stacking up. All the while the clueless and the ‘it’s not fair’ crowd look to the cesspool to bail them out.

Barry’s partying, Plugs is watching soccer, Ram is at super soaked parties and Barry’s chief speech writer is playing beer pong, not to mention what con-gress is up to.

So all in all I’d say we are in good hands.

“Trick was to get some brochures in my mail from Senior 55+ housing (she ‘glances’ at my delivery).

Lol. Plus 1 to you.

Reminds me of a letter “somebody” send to a friend of mine with a return address on it that stated in large bold type: “HERPES TEST RESULTS: PRIVATE AND CONFIDENTIAL”.

Good for you.

I had to move as the corporate landlord didsn’t understand that the market rental value of a unit can go down even if your tennant could afford the increases. Perhaps the thousands of new units within a mile or two of the building should have clued them in.

Oh, and hi, everyone. I was travelling for work last week and ended up without internet access. It will be happening a lot over the next few months. Bureaucratic gabage keeps me from getting the equipment I would need for easy internet access. Hotels who don’t have hard wired connections in the rooms (or whose hard wired systems don’t mesh with our security protocols) take care of the harder internet access. But the travel is very necessary. Trying to figure out how to get the bad guys. I haven’t been this constantly fascinated by what I was doing for a very long time.

yeah last year he lowered my rent 200.00 when I told him I was slobbering over a foreclosure across the street.

We went to dinner last Saturday with a fellow HBBer and his wife. Also accompanying us was a former co-worker and her boyfriend that works for Moody’s. That was fun. I don’t razz him any more. It isn’t worth it. But our fellow HBBer sure was having fun with him. You would have been proud.

He still maintains:
1) Nobody did anything illegal during the housing mania
2) It wasn’t Moody’s fault because they were given bad information by the banks

Gee, I thought they were supposed to be professionals. When you start seeing these Masters of the Universe you get to see how sociopathic and pathetic they really are. It is disgusting.

Yup. 53% of my net worth is in equities. 12% precious metals, and 33% government securities. 2% remaining are fractions allocated among those three asset classes.

If gold goes up to $10,000 per ounce within five years as some pundits are saying, the stocks will lose perhaps 80% of its value and I will still be ahead of the game.

Note in late 2008 how gold diverged from the broad indices. They moved together for a month or so, then they diverged through at least March 2009.

Most hedge funds are no longer “hedged” funds. As a matter of fact, many of them are leveraged so that they are more exposed to the underlying investment assumptions that the mangers are using, rather than less. Anyone who doesn’t realize that has no right to put pen to paper (or digit to keyboard) and expect not to be mocked like crazy.

I mock you, Mr. Mallaby. Mock. Mock, mock.

While it’s GOOD to be the Banksta, it’s even better to be the hedge fund manager!

No income tax. Just capital gains… at 15%.

SCHWEET!

Well, first, you have to have some funds TO hedge.

I took at bike ride the other day along a stretch of 2 million dollar homes. In one block about a half mile stretch about 6 of 10 were for sale. In the next half mile it was more like 20%. I noticed a lot of people out and all were 60 plus. These people likely have seen the returns from their conserviative investments slashed. The high property tax is killing them. I expect to see even more for sales signs over the next year. At some point I expect to see these subdivided.

“We’re all schizophrenic,” said David Wyss, chief economist for Standard & Poor’s. “People remain nervous about borrowing money and about spending money, and they darn well ought to.”

Smart man.

WTF are you talking about wmbz? Paul Krugman told me you could and he’s got one of them Nobel Prize thingies around his neck.

I love feeling good about the things that I do but we have really gone too far in our do-gooderism. Living here in Fantasyland I see it all the time. The consequences of one silly, expensive program after another. I think this is probably the stupidest place in the world. Nobody gets the nature of our true situation.

A few months ago St. Vincent’s closed. That was tragic, of course. There are signs hanging on the walls of the old hospital that implore the government to reopen it. I want to go up and write, “and who’s going to pay for it?” I doubt anybody would understand that concept. After all we have to pay huge public union salaries and benefits, welfare for all, EBT (food stamps) for anybody that can fill out the forms, rent subsidies for any whiner that comes along and we have to make sure that illegals of all nations are well provided as they plop out anchor babies by the scores. This really has become a nation of morons. And if you question any of this $hit you must be a junior Adolf Hitler. Common sense is about as common as an honest politician or the Easter bunny.

I keep eyeing the exits of this anti-capitalist paradise on the Hudson. I’m sick of it all.

Home of Howard Dean and Bernie Sanders. And you’re surprised the state is messed up because…..

I have an idiot question. Is Obama mailing checks(?!), or is he mailing the money in the form of gift certificates to Wal-Mart pharmacy, or some receipt system? I don’t like handing out raw money; you should always hand out STUFF to keep the cash-money out of the black market. They learned it long ago with food stamps, they still haven’t learned it with ag subsidies , and I guess they won’t figure it out with senior meds either.

“Can you imagine going into a shoe store and offering $110 on a pair of shoes priced at $79?”

Suppose someone offered to loan you $110 to buy the shoes, and the decision of whether or not to repay the loan was all up to you…

Last night I had dinner with a group of colleagues. One of them’s boyfriend used to work for the defunct company formerly known as Countrywide. Seems they walked away from an underwater home they jointly owned (as an unmarried couple) in San Diego. She had no problem with the whole thing — her boyfriend knew they could get away with it, and they even got a legal opinion for extra reassurance.

I just smiled while she told the story, but I was feeling slightly unkind inside…shortly thereafter I began telling my colleagues about how the next leg down in housing prices is right around the corner.

Well prices in Phoenix have hit the 2000 levels in some places already. While getting my dental checkup in February there I listened to one of the girls talking about their house she and her husband had for ten years - they sold it for the same amount they bought it. And they put sweat equity into it over the years. She talked about their backyard landscaping.

“Now I notice that Lips, the drag queen bar, is also closed.”

Lips is sealed?

Loose Lips sinks ships. Don’t need no mo’ Lip.

Lol. Gotta love New York.

“A confused mind is filled with confused thoughts.”

A concentrated mind is also filled with many thoughts.

There are a growing number of empty storefronts in the small towns too. More to come, with all the for sale signs on shops, restaurants and bars. I do believe that more old buildings got demolished on the main drag this year than new businesses opened. Yet that 105 luxury condo project on the grimy old coal barge slip next to the noisy salt packaging plant is still on the go.

Living at the red-neck yacht club these days and there are no longer urgent applications for any empty slip. About a third of them lie empty. Many more of the regulars whisper about the time to “retire” from the lifestlye. Hell, retire to what? About the only cheaper way to live is in the basement of the kid’s house.

Is it just me, or does it feel like the second inning is about over?

well I guess its time to change my moniker.

“Now I notice that Lips, the drag queen bar, is also closed. There are so many empty storefronts around here.”

Sheesh…when the drag queens go down, you know that the NYC business economy really sucks.

Now add a few Gulf hurricanes to the mix…

Based on current listings (meaning wishing prices) for houses in their neighborhood, our friends near Daytona Beach have seen the house they bought there in 2006 lose at least half its “value.” And that’s on the Atlantic side of the state, not the Gulf side.

I’m going to sue Ben and all the rest of you bloggers for making my property value go down by not going along with the Recovery. You bastards are going to pay!

The slight chance of getting $5k from a settlement of such a case is nothing in comparison to the $50k or more price drop such constant news publicity would cause by scaring away new buyers (e.g., you cant argue all over the news that the value of your house has dropped significantly and not drop your price significantly). The only real winners are the lawyers.

Now, mind you, we haven’t seen any oil or tar balls in this area just yet (so they say), but already the homes have lost value.

I sure saw a lot of greaseballs on my last trip to Tampa.

palmetto,

Thought you might be interest in this. Guess who is the biggest stock holder in BP?

Will JP Morgan’s CEO Dimon Lobby Obama to Bail Out BP?

I’ve been wondering why the Obama White House would agree to have the President of the United States meet with a group of BP executives. Making sure BP’s senior execs understand US expectations and their responsibilities is one thing, but this company is facing potential criminal investigations, so getting to meet with the POTUS doesn’t feel right.

On a completely unrelated note, it turns out that the largest BP shareholders are Wall Streets mega corps, like TBTF JP Morgan Chase, BlackRock, etc, all BFFs at the White House.

From the website AllGov:

In the wake of the Gulf of Mexico oil spill, BP’s stock value has plummeted, prompting news stories identifying the company’s largest investors. Oddly enough, some media outlets have failed to identify the largest BP shareholder: the U.S. investment firm JPMorgan Chase, one of TBTF banksters who received bailout billions.

According to the European financial database Amadeus, JPMorgan Chase is the No. 1 holder of stock in BP. That distinction also has earned the Wall Street bank the title of “Global Ultimate Owner” of the oil giant, as it owns 28.34% of BP. Next, at 7.99%, is Legal and General Group, a British-based financial services company with assets of more than $350 billion. Another U.S. investment firm, BlackRock Inc., owns 7.1% of BP. Other owners include the governments of Kuwait, Norway, Singapore and China.

Anyone curious about whether Jamie Dimon has made any calls to the White House recently, after reading his BFF wants to cancel BP’s dividends?

http://seminal.firedoglake.com/diary/54343

Lot of links here Rancher…Which one are you suggesting ??

Thank you! I sent the link to this video out to several people. Very strong words from Mr. Wynn! And very true! Stability in politics is very important to the survival of free enterprise. If economic policies are changed too often, business cannot make plans and cannot operate.

Businesses should leave the US in protest until government gets out of economics.

Good news out of China and US consumer sentiment are the triggers, but the markets are controlled by emotion. The mood has been dire the last few weeks which puts money on the sidelines and increases short positions, as soon as there is any good news the masses get scared they missed the bottom or need to cover shorts. Let’s hope this leads to a momentum rally. If we can go up 15% from here by January, I may pull out and go into the housing market (which would give me an estimated 70% ROR over the last two years). I wouldn’t go all cash right now.

http://www.timesonline.co.uk/tol/news/world/middle_east/article7148555.ece

And meanwhile, black swans are orbiting over the global financial system like so much space debris.

Does not your decision to buy/sell depend partly on the open? I traded 6 oz of gold for a truck. Was it a good deal? Depends on when you bought the gold, and how much for the truck.

I was happy, so was the seller. Sounds like a perfect market, both win.

I haven’t signed it either. The holders of the inventory have a fiduciary responsibility to protect the value of the assets in the portfolio.

As a nation we are in the midst of a big mess with respect to residential real estate, and it’s not going to get fixed overnight.

There are fundamental differences between houses and publicly traded shares of stock. Shares of stock are indistinguishable with an issue- my 100 shares of Microsoft are worth the same as Warren Buffet’s 100 shares of Microsoft, and they are priced by the stock market.

If an investor had a large position in a particular stock and wanted to sell the stock, would you demand that the investor place a single sell order for 1 million shares? If you’re a buyer you would because that single mega sell order would depress the stock price. In practice, the investor would gradually exit the position over time.

Like I said, the holders of the properties in the foreclosure chain are in the middle of cleaning up a big mess. This is going to take years to work out. That means selling properties at a pace that the market can absorb.

Sometimes fiduciary responsibilities require a measure of patience, and this is one of those times.

So you must have agreed with the two $800 billion TARP bailouts? I did not realize you were a FDR fan!

I thought you had a lot of cash from your sale of that house a few years ago - a $150k gain or something. So why should you worry if we let nature take its course?

I want government completely out of the way. Let the banks go under, bulldoze the millions of empty bank-owned houses. Reality is the best medicine. Instead of pretending and masking the symptoms.

Look what happened in Asian in 1998. They did not get rescued and they came back pretty fast. PRASX lost 50% in 1998 and gained 99% in 1999.

Yeah, I feel much the same way. If all the inventory were forced on the market at once, the real estate market would crash, which would cause the banking system to fail, which would cause the FDIC to either fail or have to get some huge emergency loan from the gov. We’d have bank runs again and god knows what else. The effects on the world economy would be literally unimaginable. It would make the previous crash look like a minor blip.

Unlike some here, I don’t cheer for a big crash. I don’t care how you’re invested, it’s hard to ride a tiger. Civilization with civil liberties is not the default state of humanity, it’s a long, hard, and difficult attainment. I’d prefer not to have to be buying canned peaches and sniper rifles, and determining the best lines of fire around my house, if at all possible.

I believe the crash is coming anyway. I think we’ve postponed it rather than avoided it only now our gov is even lower on any ammunition that might have softened the worst of blows.

I think any foreign govs that might have been amenable to working together with us are now starting to realize just how much they themselves have been set up for a fall. Perhaps when we’re down on our knees a couple will decide there’s no harm in adding a little kick for good measure.

I don’t think that poll will have any impact at all. I think the agenda is etched in stone. But I suppose a small part of me clings to the knowledge that if I don’t try the results are somewhat my fault. I don’t want homes rotting in my town. I’d like careful and thoughtful people to be the power base of my town, not people living on the edge while Uncle Sugar keeps their lifestyle intact. That means prices have to revert to affordability. Most importantly, I’d like to get to the rebuilding part instead of watching this slow spiralling bottom that leaves me sucking on antacids most of my days. I don’t really care about saving the fools. They’ll adjust when they have to or perish as human nature dictates. Most likely my very favorite fools will be moving in with me. So be it. I’m ready.

Hi Natalie,

Fraud is fraud. Wholesale and widespread government sponsored fraud does not help consumers. It punishes consumers.

Banks now own real estate and primary and secondary mortgages and other loans backed by real estate. Banks are now allowed to value their real estate and loans to fantasy values, meaning banks are being allowed to ignore the consequences of profit and loss. Now when banks can ignore profit or loss without repercussion, they will speculate to the nth degree and expect WE the taxpayers to absorb their LOSSES. THEY the banks will pocket any GAINS.

The result is, no reasonable person would conclude that any bank REO is properly priced, or that banks themselves are properly valued as a going concerns.

In short, Natalie, government sponsored fraud is still just fraud when it comes to holding shadow inventory or attempting to prop up prices of any kind. IT WILL NOT WORK, IT ENCOURAGES WHOLESALE FRAUD, AND IT SUBVERTS CONSUMER CONFIDENCE. THE GOVERNMENT SHOULD REVERSE THIS POLICY AS SOON AS POSSIBLE.

That is why I signed the petition.

Thanks for raising the question in this forum!

Good luck to you Natalie in all your investing or RE activities.

To sign or not to sign, I did. To pay your bills or not to pay your bills, I do. But every once in a while I see something that makes it all seem pretty trivial.

Dying of cancer, TV anchor Kristin Hoke wrote letters to baby Bella for future birthdays

By Liz Balmaseda Palm Beach Post Staff Writer
Posted: 1:24 p.m. Friday, June 11, 2010

The young woman in the chemotherapy room scribbled into a reporter’s notebook, as if on assignment.

Liz DeWoody, a cancer patient on chemo at the time, in early 2005, remembers her well: a beautiful woman with hazel eyes and honey complexion.

On her way to the restroom, Liz glanced at the woman’s notebook and noticed the words, “QUESTIONS FOR DOCTOR.” Liz remembers thinking, “God, I hope she’s here for her grandmother.”

But the beautiful woman wasn’t there for anyone else. Her name was Kristin Hoke. She was an anchorwoman at WPBF-Channel 25 and she, too, was a breast cancer patient.

Diagnosed at roughly the same time and age, Liz and Kristin became close friends, bonding first as cancer patients and later as mothers, after Kristin gave birth to baby Bella.

Just days before Kristin died at home in North Palm Beach early Wednesday, Liz watched her friend as she wrote diligently, not into a reporter’s notebook, but into a series of birthday cards for her daughter.

Weary and racing time, she wrote birthday messages to Bella, enough to cover the girl’s entire childhood, says her good friend. Bella turned 3 on April 27.

“There was so much she wanted to share with Bella. She wanted to write to her. This was so important to her,” says Liz, a stay-at-home mom from West Palm Beach.

So with the help of her dearest childhood friend, visiting from Atlanta, Kristin wrote her heart out.

“She sat there and wrote. And you would never know she was in pain,” says Liz.

As she shared this story with me on the heartbreaking day of Kristin’s death at age 42, I was transported to the day I first met the anchorwoman. I had gone to her home to interview her for a profile I was assigned to write on her.

It was September 2007, less than two months after Kristin received the grim news that her cancer, in remission for 17 months, had metastasized. She had given birth five months earlier to baby Bella. But there she was, fresh from maternity leave, back on the nightly news - and battling cancer once again.

And yet, despite the daunting struggle before her, Kristin talked about her blessings: The baby squirming atop a foamy pink blanket, the loyal black Lab nestled at her feet, the network of caring friends who helped with cooking and baby-sitting, the radical promise of the cancer drugs, the approach of fall and what would be the baby’s first Halloween, then Thanksgiving, then Christmas.

Cancer may have taken her life 5 1/2 years into the fight, but that day, in her peaceful, light-filled home, Kristin clearly had the upper hand. She was going to win. She was going to live.

She was going to travel the brave path blazed by her mother, Margaret, who faced cancer head-on and survived for 17 years, raising five children while working as a schoolteacher.

“Somehow, she pushed through it all. I look back now, and I marvel at her strength and courage,” Kristin told me that morning. “We all face adversity in life. It’s what you do with those challenges that’s important. They say diamonds are forged under pressure.”

In Kristin’s words, I recognized my own mother’s story. Like Kristin’s mother, who died in 1999, my mother had battled breast cancer on and off for 17 years.

The day I visited Kristin was just two days before the first anniversary of my mom’s death. I was still a little numb, still in mourning, trying to hold it all together as she talked about her chemo protocol, the carboplatin and Abraxane drug cocktail that seemed to be working.

It was all so familiar to me - the chemo, the scans, the lexicon of cancer. I had watched my sister endure breast cancer - and survive . More dramatically, I had watched my mother fight again and again, as the cancer spread from breast to lung to brain (as would Kristin’s cancer in the final years).

I shared my family story with Kristin in hopes that she would find inspiration in my sister’s success story and in the fact that my mother had survived for many years. She did. We talked, we laughed and we shed a few tears and, that day, we became friends.

As journalists, we meet fascinating people in our mission to tell compelling stories. But Kristin was more than simply fascinating - she was kind, grounded, wise beyond her years. During the next two years and nine months, we shared e-mails, phone calls, photographs, visits and dreams. She dreamed of writing a book, of growing as a role model for young cancer survivors. She dreamed of achieving that “boring” pace of normalcy, of days spent idling at home with Bella and her husband, Eric Cecere, days when she didn’t have to even think cancer.

But most of all, she dreamed of watching Bella grow.

Liz tells me Kristin pored over old childhood photographs of herself just days before she passed away. She wondered aloud what her daughter will look like at 8, at 12, at 15. What will she be like?

It’s a devastating question. But I venture to say Bella will be guided by the loving words of her mother, by her example of courage and faith. She will know she comes from a line of brave women. She will know how deeply she was loved. And like any girl who has lost a mother to breast cancer, she will believe fiercely in angels.

As I have come to know, Bella, too, will know she never walks alone.

Linkey
http://www.idahostatesman.com/2010/06/12/1227908/prices-for-new-valley-homes-may.html

There’s one amazing comment posted for that article. There’s a pumped-up subdivision in Meridian ID called “Tuscany” which welcomes people to the neighborhood with large waterfalls at the roadway entrances. The developer charged about 30%-40% more than similar homes in my development just down the road.

We live in Tuscany and at the recent HOA meeting, developer basically told the current homeowners he has 18 months and if the market doesn’t pick up, community goes bankrupt. HOA association is owed $30-50K by the developer, because renters, flippers, and soon to be foreclosures don’t pay the annual dues. Our house is on the market and in the last 6-9 months, 85% of the sales in community have been bank owned properties…at severe discount prices. Homebuyer credit is gone, more foreclosures coming, yet I still see building in the market? Not sure I understand that one, with all the existing inventory. Gonna be decades until this market rebounds and if you can hold on and enjoy your home, take care of it, etc., that’s the best attitude to have.”

Click here to be impressed with “Tuscany”.

http://www.tuscany-meridian.com/

Or the clowns on Wall St.