The Housing Bubble

First to post.

This is killing me.

TOKYO -(Dow Jones)- Japan should intervene to curb the yen’s strength, even if solo intervention wouldn’t be very effective in turning the market trend around, ruling party presidential candidate Ichiro Ozawa said Thursday.
A strong yen over the long term isn’t “a bad thing” for Japan, but the currency’s sharp rise in the near term could hurt vulnerable parts of the export-dependent economy, he said.
“I think the recent rapid pace of the yen’s rise means that we probably have to act with due determination,” Ozawa said in a televised debate with Prime Minister Naoto Kan. The government “should definitely stem the sharp yen appreciation,” Ozawa added.
Ozawa, one of the most powerful politicians in the Democratic Party of Japan, has entered the party’s leadership race. The winner, which will be decided Sept. 14, will likely become Japan’s next prime minister.
Kan, in the debate, didn’t mention the possibility of his administration intervening in the foreign exchange market.
It is extremely unusual for a candidate in a ruling party leadership race in Japan to touch on currency issues in public, much less foreign exchange market intervention. His comments highlight how the yen’s rise has become a hot-button issue in a country whose economic recovery is in danger of faltering under the weight of the strong yen.
The yen’s appreciation has put many Japanese exporters at a disadvantage against foreign rivals, particularly electronics makers and shipbuilders in South Korea, whose government has intervened heavily in recent months to depress the won. Japanese authorities, in contrast, haven’t entered the foreign exchange market in more than six years, even as the yen has climbed relentlessly higher.
Japanese industry is worried. A government survey last week showed that 40% of Japanese manufacturers polled would shift some production overseas should the dollar remain at Y85.
The government succeeded Monday in coaxing the Bank of Japan to loosen its already-super easy monetary policy a little more in the hope of relieving some upward pressure on the Japanese currency. The effect was limited. Even after the BOJ increased the size of a special loan facility, the dollar has remained around 15-year lows near Y84.
Ozawa, in the Thursday debate, seemed to indicate he wouldn’t lean heavily on the central bank to fight the yen’s rise should he eventually become prime minister. He said the BOJ’s monetary policy alone wouldn’t be that effective in curbing yen strength.
Ozawa emphasized that the government should aim to create an economy that is strong enough domestically to run on its own, not dependent on exports for growth. The remarks suggest he may take steps to boost domestic demand if he becomes prime minister. He was light on detail, but he said he wanted big Japanese companies to direct more of the financial resources to hiring and increasing wages.
To overcome the country’s economic problems, “we should change the economy so that we won’t rely on external demand,” Ozawa said.
Ozawa has pledged to implement over the coming years a series of costly consumption-lifting measures promised by the DPJ in 2009’s Lower House election.
Some observers are concerned that an Ozawa administration could worsen Japan’s already-enormous fiscal problems. But Ozawa has said it would be possible to finance more expenditure by reducing waste elsewhere.

Governments, community groups to get first crack at foreclosed homes

By Kimberly Miller Palm Beach Post Staff Writer
Posted: 5:48 p.m. Wednesday, Sept. 1, 2010

Cash investors hunting for abandoned and foreclosed properties will take a back seat to buyers using federal housing money under an “unprecedented” agreement with the nation’s largest private lenders.

The “First Look” program, announced Wednesday, gives local governments and community groups using Neighborhood Stabilization money the first crack at buying bank-owned homes in areas hit hard by the real estate crash.

While plans to spend stabilization money differ among organizations, the general intent of the nearly $6 billion awarded nationwide is to refurbish and eventually sell or rent the homes to low- to middle-income families.

Palm Beach County has received about $77.7 million in stabilization money over two rounds of funding. The City of West Palm Beach, Boynton Beach, and Lake Worth’s Community Redevelopment Agency have also received funding.

But spending the money isn’t always easy. Competition with speculators looking to rent or flip for a profit has made finding viable homes a challenge.

The program, which a U.S. Housing and Urban Development statement called “unprecedented,” also includes a new web-based mapping tool to help groups easily identify bank-owned homes.

“The properties are few and far between right now,” said Michael McManaman, who oversees the neighborhood stabilization money for the Lake Worth CRA.

The CRA received $23.2 million in a second round of funding announced in January. Since then, it has been able to purchase 17 properties in a small area west of Dixie Highway.

But McManaman said he relies partly on code enforcement officers to tip him off when a property might be in foreclosure, as well as real estate agents and combing through bank-owned listings.

Then there’s the investors.

Assistant Palm Beach County Administrator Shannon LaRocque said officials had to work hard to meet a Sept. 4 deadline to match $12.8 million in stabilization money with homes. Part of the county’s program offers loans to eligible buyers, but the buyers have to find foreclosed houses first.

“We knew there was going to be a foreclosure wave and we started to see more properties but they would be gone immediately,” LaRocque said.

Under the “First Look” program, groups will have up to 48 hours to express interest in a property and then another 12 days to do inspections.

Participating banks include Bank of America, Chase, Citi, Deutsche Bank, GMAC, Nationstar Mortgage, Wells Fargo and the West Palm Beach-based Ocwen Financial.

“This is a way for us to assist in the larger housing crisis by providing options for state and local governments to find solutions for homeowners,” said Ocwen Senior Vice President Steven Nesmith.

Some institutions, including Bank of America and FHA, had already started programs similar to “first look,” but not always on a nationwide scale.

Another $1 billion in neighborhood stabilization money is expected to be announced soon.

The additional money will likely be welcomed as banks move swiftly this year to take back properties.

In July alone, more than 10,000 Florida homes were repossessed by banks, a 60 percent increase compared to the same time last year

Are Housing Prices Being “Cooked”?

I have a very disturbing email that came in this evening.

It alleges out-and-out fraudulent reporting of home sales in one of the regional MLS systems.

That is, prices paid that are in fact much lower than the “sold” prices reported in the MLS.

The person in question claims to have seen over 100 of these in his area. I have copies of two, and it appears, from the evidence that I have, that at least for those two the claim is accurate.

One in particular I was able to pull the auction data on. It “sold” under reserve, is listed as sold in the MLS at ~25% higher than the “sold” bid, and the premium is disclosed as 5%. This property also has a 90-day “anti-flip” provision on it, implying that the paper may be held by one of the GSEs. (It’s a nice-looking place, incidentally.)

Here’s the problem, obviously - Case-Schiller and other “home statistics” numbers related to price paid are all computed off these numbers provided by the local Realty boards (via NAR.) If the data in the MLS is bogus then so is the so-called “median sales price” and so are Case-Schiller’s numbers!

These are not small discrepancies either - in both cases the “over-reporting” is by approximately 25%!

Both subject properties sent to me were auctions.

I am going to dig into this - if this can be verified and is happening nationally the claims of recent price stabilization are utter crap, and the first obvious question that arises is “how far back does this go?”

It also raises a key question when it comes to BPOs, not only from a standpoint of bank valuations (e.g. “drive-bys”) but additionally if you’re buying a house and your agent is showing you comparable sales predicated on faulty MLS data you are going to be induced to RADICALLY overpay.

For the time being I would verify any claimed “sold” prices with the county recorder before believing any alleged “sold” prices you’re being fed as comparables.

This might be an anomaly, an “isolated incident”, or it may not be what it appears to be, but with a 25% disparity we’re not talking small potatoes if this is accurate.

I’ll post follow-up Tickers on this as I learn more..

(From K. Denninger’s Market Ticker)

2010 MSN Real Estate Most Livable Bargain Markets:

Tucson, AZ is #9 in the US

Realtors are losers that give Lee press-on nails a bad name.

Realtors cannot be trusted.

Would this affect the price of the house?

————————-

Calif. Doctor Gets Stuck in Boyfriend’s Chimney, Dies
AOL | 1 Sep 2010 | Anon

BAKERSFIELD, Calif. (Aug. 31) — A doctor involved in an “on-again, off-again” relationship apparently tried to force her way into her boyfriend’s home by sliding down the chimney, police said Tuesday. Her decomposing body was found there three days later.

Dr. Jacquelyn Kotarac, 49, first tried to get into the house with a shovel, then climbed a ladder to the roof last Wednesday night, removed the chimney cap and slid feet first down the flue, Bakersfield police Sgt. Mary DeGeare said.

While she was trying to break in, the man she was pursuing escaped unnoticed from another exit “to avoid a confrontation,” authorities said.

DeGeare said the two were in an “on-again, off-again” relationship.

The man’s identity was not revealed by police, but the man who resides in the home is William Moodie, 58.

“She made an unbelievable error in judgment and nobody understands why, and unfortunately she’s passed away,” Moodie told The Associated Press. “She had her issues - she had her demons - but I never lost my respect for her.”

It’s the end of the selling season in “my kid needs that school” USA. I was looking at the inventory of unsold homes left on the market. Many have been on the market on and off for the last 2 years. Some have been on since the beginning of summer. What they have in common is that there haven’t been price reductions in months, for some a year. We do have an inventory problem for buyers in this particular area. Several price niches have very little to chose from so seller’s reasoning isn’t w/o some basis but after two years you have to wonder what some of these people are waiting for. (shadow inventory?)

In 2008 sellers seemed more motivated to get out from under their properties. Perhaps the recent crops of sellers are retirees ambivalent about leaving a long term home vs recent pink slip recipients. In one case I know the younger couple purchased their move up home w/a certain number they need to get out of their present home to get the deal done. Guess they’re true believers in the V recovery being that tight yet buying blind. Several homes are pre corporate buy-out stage. They know at some point they’ll get at least something for it. In any case this market seems frozen in yet another buyer/seller stand-off.

Oil Should Be Around $10 a Barrel: Analyst
CNBC | Robin Knight

The price of a barrel of oil would be closer to $10 if the commodity wasn’t traded as an investment instrument, given the record-high levels of U.S. oil inventories, Peter Beutel, president of Cameron Hanover, told CNBC Monday.

“I honestly think that if there were no investors using oil as an asset that the price of oil right now would be $10 or $15 or $18, but it wouldn’t be anywhere near where it is,” Beutel said.

“We have so much oil right now, more than we’ve had in 27 years. Why is it 27 years? Because that’s how far our records go back. It’s probably the most in 50 or 100 years,” he added.

From a historical perspective, Beutel pointed out that the current level of inventories is even higher than when the price of oil was below $20 a barrel.

“We’ve got 50 million barrels of crude more than we had two years ago. We have 176 million of distillate,” Beutel said. “When I started in the business back in 1980 we used to think to ourselves: “Gee, we would love it if we had 140 million barrels of distillates to start the winter.”

Not all market watchers agree that the price of oil should or will go lower. Jonathan Barratt, managing director at Commodity Broking Services, told CNBC that he thinks oil will rise to between $82 and $85 a barrel.

I’ve got a teaser in an e-mail that Fannie Mae is telling its loan servicers not to get in its way of dumping its foreclosed properties. I can’t access the site w/o a subscription but I thought other HBBers might have a line on the story. BIg dump coming?

“this house is tying me down” There has to be a song there.

Feeling the pressure from a life ‘underwater’

Even homeowners who avoid foreclosure can feel the stress

By Jane Hodges
msnbc.com contributor
updated 9/1/2010 3:43:18 PM ET

“When I bought I was young and naïve and I had listened to my peers. They said ‘It’s good to have a mortgage,’” Choi says. “In one sense I have regrets, which is that this house is tying me down.”

http://www.msnbc.msn.com/id/38938861/ns/business-real_estate/ -

It`s getting close.

Renting gets a new lease on life

Millions of Americans going through foreclosure will become renters by necessity. Many others will rent by choice. Should the government keep subsidizing owners?

The dust is settling from the nation’s housing disaster, and the verdict is in: Renting is the new green.

“We’re going to take 5 million to 6 million homeowners and turn them into renters because they’re going to lose their house to the bank,” says housing analyst John Burns, the CEO of John Burns Real Estate Consulting.

Homeowners, he predicts, soon will make up just 62% of the population, putting the own-vs.-rent balance back where it was in 1960, as the “ownership society” was ramping up. Homeowners are at 66.9% right now but falling fast.

The federal government has been pushing homeownership since before World War II. By 2004, almost 70% of Americans owned homes. Experts can’t put a finger on exactly where we crossed the line from supporting homeowners into outright craziness.

http://articles.moneycentral.msn.com/Banking/HomebuyingGuide/renting-gets-a-new-lease-on-life.aspx - 75k

http://www.washingtonpost.com/wp-dyn/content/article/2010/09/01/AR2010090106148_pf.html

A clueless member of Obama’s clueless economic team packs it in and heads back to academia.

Economist Christina Romer serves up dismal news at her farewell luncheon

By Dana Milbank

Washington Post Staff Writer

Wednesday, September 1, 2010; 10:40 PM
Lunch at the National Press Club on Wednesday caused some serious indigestion.

It wasn’t the food; it was the entertainment. Christina Romer, chairman of President Obama’s Council of Economic Advisers, was giving what was billed as her “valedictory” before she returns to teach at Berkeley, and she used the swan song to establish four points, each more unnerving than the last:

She had no idea how bad the economic collapse would be. She still doesn’t understand exactly why it was so bad. The response to the collapse was inadequate. And she doesn’t have much of an idea about how to fix things.

What she did have was a binder full of scary descriptions and warnings, offered with a perma-smile and singsong delivery: “Terrible recession. . . . Incredibly searing. . . . Dramatically below trend. . . . Suffering terribly. . . . Risk of making high unemployment permanent. . . . Economic nightmare.”
Anybody want dessert?

well this is weird- I feel like the omega man

I saw the title of this article - “Bernanke Meets Buffett in Role Conceived to Protect Markets” - and thought, Hallelujah, some more massive market distortions in the making.

“Protect Markets” really means, “Protect plutocrat profits.”

Instead of the PPT, it should be the PPPT - the Plutocrat Profit Protection Team

It’s alive.

President Barack Obama said Republican proposals to have people invest Social Security benefits in private accounts would increase the U.S. budget deficit and put retirement money at risk to “the whims of Wall Street traders.”

In his weekly address on the radio and Internet, Obama marked the 75th anniversary of President Franklin Roosevelt’s signing of the Social Security Act, and said he would fight if Republicans try to convert the entitlement program to private investment accounts.

“I’d have thought, after being reminded how quickly the stock market can tumble, after seeing the wealth people worked a lifetime to earn wiped out in a matter of days, that no one would want to place bets with Social Security on Wall Street — that everyone would understand why we need to be prudent about investing the retirement money of tens of millions of Americans,” he said.

The president said Republican lawmakers want to make Social Security “a key part of their legislative agenda” if they gain a majority in Congress after November’s elections.

“I’ll fight with everything I’ve got to stop those who would gamble your Social Security on Wall Street,” Obama said. “Because you shouldn’t be worried that a sudden downturn in the stock market will put all you’ve worked so hard for — all you’ve earned — at risk.”

What, everybody evacuate because of the hurricane?

Wow, the site’s back up! I’ve been checking all day.

Couldn’t get access to the site all day, I was worried the government had taken Ben out!

The shakes should stop now, phew!

http://www.shtfplan.com/headline-news/out-and-out-fraudulent-reporting-of-home-sales_09022010

Out and out fraudulent reporting of home sales.

Well all we have to do to solve the problem of illegal aliens is to wreck our economy.

http://pewhispanic.org/reports/report.php?ReportID=126

The annual inflow of unauthorized immigrants to the United States was nearly two-thirds smaller in the March 2007 to March 2009 period than it had been from March 2000 to March 2005, according to new estimates by the Pew Hispanic Center.

This sharp decline has contributed to an overall reduction of 8% in the number of unauthorized immigrants currently living in the U.S.-to 11.1 million in March 2009 from a peak of 12 million in March 2007, according to the estimates. The decrease represents the first significant reversal in the growth of this population over the past two decades.

What next a Housing Bubble Blog……..????????

DOJ Going After America’s Toughest Sheriff?

PHOENIX – The U.S. Justice Department sued Sheriff Joe Arpaio on Thursday, saying the Arizona lawman refused for more than a year to turn over records in an investigation into allegations his department discriminates against Hispanics.

The lawsuit calls Arpaio and his office’s defiance “unprecedented,” and said the federal government has been trying since March 2009 to get officials to comply with its probe of alleged discrimination, unconstitutional searches and seizures, and having English-only policies in his jails that discriminate against people with limited English skills.

Arpaio had been given until Aug. 17 to hand over documents it first asked for 15 months ago. Arpaio’s attorney, Robert Driscoll, declined immediate comment on the lawsuit, saying he had just received it and hadn’t yet conferred with his client.

Arpaio’s office had said it has fully cooperated in the jail inquiry but won’t hand over additional documents into the examination of the alleged unconstitutional searches because federal authorities haven’t said exactly what they were investigating.

It’s the latest action against Arizona by the federal government, which earlier sued the state to stop its strict new immigration law that requires police officers to question people about their immigration status.

“The actions of the sheriff’s office are unprecedented,” said Thomas Perez, assistant attorney general for the department’s civil rights division. “It is unfortunate that the department was forced to resort to litigation to gain access to public documents and facilities.”

The lawsuit was filed in U.S. District Court in Phoenix and names Arpaio, the Maricopa County Sheriff’s Office and the county.

Arizona’s new law — most of which a federal judge has put on hold — mirrors many of the policies Arpaio has put into place in the greater Phoenix area, where he set up a hot line for the public to report immigration violations, conducts crime and immigration sweeps in heavily Latino neighborhoods and frequently raids workplaces for people in the U.S. illegally.

Arpaio believes the inquiry is focused on his immigration sweeps, patrols where deputies flood an area of a city — in some cases heavily Latino areas — to seek out traffic violators and arrest other offenders.

Critics say his deputies pull people over for minor traffic infractions because of the color of their skin so they can ask them for their proof of citizenship.

Arpaio denies allegations of racial profiling, saying people are stopped if deputies have probable cause to believe they’ve committed crimes and that it’s only afterward that deputies find many of them are illegal immigrants.

The sheriff’s office has said half of the 1,032 people arrested in the sweeps have been illegal immigrants.

Last year, the federal government stripped Arpaio of his special power to enforce federal immigration law. The sheriff continued his sweeps through the enforcement of state immigration laws.

Last year, the nearly $113 million that the county received from the federal government accounted for about 5 percent of the county’s $2 billion budget. Arpaio’s office said it receives $3 million to $4 million each year in federal funds.

In a separate investigation, a federal grand jury in Phoenix is examining allegations that Arpaio has abused his powers with actions such as intimidating county workers by showing up at their homes at nights and on weekends.__

Good one Ben! Since prices are at 2004 levels, it’s roll-back-the-clock day on HBB to 2004 (or was it 2003 when this started?).

30-some posts in a day!

Missed all y’all.

Whew!