Tiptoeing Through The Manure And Pretty Colored Balloons
Time to clear off the desk and start the weekend. “Allow me to offer a new twist on an old gag. Question: ‘How can you tell when a home-selling industry insider is lying?’ Answer: ‘His lips are moving.’”
“Now, now. I’m not talking about specific agents here (although if you want to hear the one about the agent who tried to sell us a townhouse with a collapsing foundation for a mere half million bucks, let me know).”
“No, I’m talking about the housing industry as a whole. You know all those Sunny Jims who refused to see a single cloud in the sky. How about all those mortgage-industry mouthpieces who helped drive up home prices over the past few years to the constant drumbeat of ‘Get your foot in the door before it’s too late! No need to run the math on that loan to see what happens if interest rates go up! By then your equity increase will take care of it!’”
“Yeah, we had to tiptoe through this widespread load of manure, even as, all around us, the real story was evident. I’d like to give a round of applause to Toll Brothers CEO Robert Toll, for his unvarnished and very interesting remarks on the current state of the housing market. The speculators are moving out, and prices are falling as supply increases. Doesn’t that sound like exactly the thing all those people said wasn’t happening?”
Mr. Tolls’ master plan. “Toll’s general tone was that the housing market and the company’s sales would be okay in the end. ‘The next real estate story will be pent-up demand,’ Bob Toll said.”
“After a five year growth spurt in which it says it wrote $2 billion in home loans, Kirkland-based Merit Financial terminated most of its 300 or so employees Thursday. ‘The thought process was the refinance market would always be there,’ CFO Ryan Kidd said. ‘It was a very lucrative market.’”
“Nationwide, approximately $400 billion of first-lien (first mortgage) ARMs are scheduled to reset at some point in 2006,’ (economist) Frank Nothaft said. In fact, the ARMs with scheduled payment increases during the coming year work out to about 5 percent of all the single-family debt outstanding in the country now, he said.”
The Denver Post. “Several years ago, the average first-time homebuyer was 30 years old,’ said broker/owner Justin Juarez. ‘Nowadays, there are people who are 18 or 19 years old.’”
“Generation Y buyers are more technically savvy than the Gen-X buyers who preceded them. Generally, they’ve done their homework online before physically inspecting the house. ‘They already have their minds made up before they get in the car,’ Juarez said.”
And the Washington Post Q&A was a hoot. “Dupont Circle, D.C.: Thanks for the chat, Maryann! I bought a studio condo in Dupont in 2002. I’m happy that when I move to New York this year I will rent again. I’m selling this weekend. Any tips on further spreading news of the sale?”
“Maryann Haggerty: And as far as selling this weekend: I assume you mean putting the place on the market this weekend, right? You have bought your ad in the Post already, right? After that, I gather pretty-colored balloons out front help!”
Another great week of bubble consensus. My thanks to those who support this blog. Check back this weekend for news, your market observations and topics!
The Haggerty Q&A increasingly is grounded in fact–both the “Q’s” as well as the “A’s”. In the last few weeks it has become a worthwhile read.
i think her comments are generally insipid and kind of lame. she adds no value in general.
They used to have Daniella Deane who owned a lot of investment properties and was a little more interesting. But she disappeared last Fall. She had grown a little bearish at the end. Maryann doesn’t seem to really know the market or support her answers with any regional facts. I submitted a comment about 40% reductions in Ashburn and renting being cheaper than buying, but it didn’t get answered.
She doesn’t answer most questions posted. They “retain editorial control” which means that until prices drop more and people start to panic they aren’t going to spook people with the grim reality.
Some of the questions were pretty funny. F-ed borrowers and people who bought condos and think they will go up 20% a year again next year after a quick breather.
Maryann Haggerty is quite realistic about the market, as is clear by her answers both to that writer and to another (very naive) flipper. In the latter case, her answer was a polite version of: You’re toast.
In the course of an hour’s onlikne chat, several hundred questions are posted–there is no conceivable way to answer all, or even a majority of the questions. So reporters necessarily scan the questions like a diner menu, taking one from here, one from there, as quickly as possible. There is not time to be particularly devious.
More to the point, reporters generally see a stressed market now, although opinions vary from apocalyptic (my view) to the soft landing school. We are captives to a point in time, and at this point, only a fool would claim to know absolutely where it ends where it ends up.
And, yeah, I’m a reporter at the Post and so take this for what it’s worth.
Thanks
Michael, thanks for being upfront about being a reporter. I guess what puzzles me most has been an apparent suspension of common sense when it comes to reporting on risky loans, fruadulent appraisals, and flipping. I would have thought that some hungry member of the Fourth Estate would have grasped that there was a story in warning the sheeple not to take out those “sophisticated” loans (Interest only, Neg Am, 100%) to buy condos at the market peak. The story is “why does the American home buyer not know they are being led to slaughter right now?” Of course that presupposes that there is a bubble and it is bursting or at least starting to leak. Which from where I stand is exactly what it looks like.
I know a lot of the readers here like Stephen Roach, who has a new peice out. It’s a macro-economic story that ties into housing. “With the housing market now rolling over, downside risk to equity extraction and wealth-dependent consumption can hardly be minimized.” You can read it Here
-X
BubbleTrack.blogspot.com
From Steven Roach transcript —> ” last year, the US accounted for about 70% of all the current account deficits in the world.” Then he speaks of the “new paradigm” I’ve discussed here.
The new paradigm tripe babbled from the mouths of our currently elected leaders (majority party) and their shills and carnival barkers on Fox News and the illustrious Lying Larry Kudlow just doesn’t seem to fly anymore. Yet the Loony apologists shit all over themselves defending our wonderful leaders.
I guess it is the new paradigm. Repeat lies enough, they become truth in the simple minds of the everyday shills.
LOL. The new paradigm is that 1984 wasn’t written to be a warning, but to be used as a playbook.
I didn’t hear you talking about “the next real-estate story” last year when it would have mentioned a 30% drop in your sales. But now that the bad news is upon us you are eager to look into the future.
He misspoke . What he meant to say is, “The next real estate story will be pent-up supply.”
ah, yes, good observation! I think we need to get Orwell back in the school curriculum,
or would that open up too many classrooms to the o’reilly brigades calling for an end to unpatriotic activities?!
There are teachers who are reading this blog…and we learn..and, hey, we teach.
“1984″ should be required, annual reading for every voting adult. I re-read it earlier this year for the first time since high school English, and was floored by how insightful and prescient it remains.
Larry is a cheerleader but not a lying one–he is a true believer.
It’s amazing what recovering drug addicts believe isn’t it?
I wasn’t aware that Lying Larry was a druggie. Makes sense though.
Somebody could mention the new squid exibit at the Long Beach Aquarium and The Lingus would somehow spin that into some partisan political tirade that would make Hannity & Colmes blush. Dude — STFU!!
You have a good point since it is no use being partisan. Both sides suck.
There’s a new squid exhibit and I’m only learning about this NOW! WTF!
Seriously, someone needs to start an art, antiquities, and science exibit blog.
lmao.
It must be Friday…Everbody is dumping their bucket…
You should have been out of housing last summer(except perhaps your residence) and into PUTs on the HBs, or CALLs on the metals.
Lingus- Would appreciate your taking the time to hear me out. During the 1960’s, I was prime cannon fodder for the Vietnam War. Like you, I was then ticked off by the Great Society spending programs and the war. Was feeling pretty angry and felt I was being lied to. All of this was under Democratic leadership. To see how frustrated and deceived I felt, suggest you rent and watch “The Fog of War”. It is a documentary and discussion with then SEC. of Defense Robert McNamara. The movie was made about 2 years ago. I also feel frustrated about current issues and am a Republican. Oh how I wish they had watched another excellent old movie called The Battle of Algiers. It is the story of the the French battling rebels in Algiers. Anyway, hope you find some of this stuff interesting and help you with some perspective.
Didya know that Roach came out as a little less bearish on the stock market this week? Talk about bear capitulation! I’m so furry now my husband has threatened to call the Forest Service.
Forest Service? You meant Dept. of Wildlife.
Still, a nice compound metaphor.
So sue me, I’m a pedant.
Or the Game Commission, depending on one’s view of bears.
Need a Mach 3?
Yesterday was an anniversiary for me….my first year since discovering this great blog. A year ago it seemed that the RE bulls couldn’t even admit to a bubble much less contemplate reductions (gasp!) in prices and sales volume. A lot happened in one year…makes you wonder what we’ll be posting in one year from now.
That is very interesting to contemplate. Could make for a good weekend thread.
The bubble will be over when this blog comes full circle and becomes a discussion board for true real estate bargains–I would guess in about five years.
Oh I hope you are right! IMHO 10 -15 years.
forgive me if someone else has made this observation and already posted it, but the cnn.fortune website (money.cnn.com) has ran the same lead story for two days now! they normally change it at least twice a day. the headline has gone from bad to worse..same story different headline which now reads “living in a real estate dead zone.” any guesses as to who pissed someone at cnn/fortune off?
I noticed this too. Two days! Never seen that before. Yesterday it was called “Real Estate Survival Guide” which is the name of the whole feature (I say feature because there are actually pages of new bubble content, including numerous article, graphs, a pictoral slideshow, etc., which can be accessed from any one of the pages under this new bundle of content) — today’s title, “living in a real estate dead zone” is the title of the first article in the feature. Two days as a top story on CNN-Money should help marinate the sheople’s brains with a dose of reality.
i love it. one more nail in the coffin of “the spring bounce”
Marinated Minds ….MMMMMmmmm. Doh!
Perhaps the editor’s I/O reverse amortization ARM mortgage just reached 110% & was recast from 3.2% to 8%. That sure would make me pretty grumpy.
“about 45% of the business dried up in the past 9 months, which really caught company leaders by surprise”.
This blows my mind. How can they be “caught by surprise” over a 9 month period?
Just shows the head in the sand mentality of this whole bubble.
45% of business in 9 days or I’ll even give them 9 weeks, now that would be a shock, a “surprise”. But 9 MONTHS of falling business and THEN the “surprise”???!
I have a friend whose family memeber work(ed ) for Merit. Just a few months ago I tried totell her that RE was going down in Seattle. Her reply? ” Oh, no, that’s not true! X works for Merit and he says business is booming!!! Never been better!!!”
People have been telling themselves that RE never goes down for so long now that even when the facts are staring them in the face, they choose to ignore.
That is what’s going to hurt a lot of people- the fact that they willfully ignored the evidence.
I think that is because their emotions are in this. They foolishly do not look at RE as pure $$$ and SENSE.
I am curious, any of you in ARMs? Or do you own outright or are you in fixed mortgages? I think I know the answer, but I am curious….!
I own outright - no liens. Total debt (unsecured) ~$50,000. Total revolving debt $0.
For many it will be more than tiptoeing. They will need the hipwaders that come to their shoulders. And noseplugs. It will be getting mighty ripe. Also, I will be loving to hear about California morons that will have to sell their primary residence to pay off their flipper “investments” that lead to their belly-up status. Get the guards on the Golden Gate and Bay bridges ready to look for potential jumpers. Don’t remember where they might go in LA (St. Thomas Bridge?), or just a freeway overpass.
The Californians won’t be able to sell their primary residence to pay off their “investments” because they have already extracted most their equity to purchase the “investments” Many will be underwater on their primary residence as well if values fall more than 10%
Are you sure about this? Is there any data to back this up?
I’m not sure that every flipper out there has done this, but the ones that I know personally as well as the ones that I know from signing their loan docs have. I see them pulling equity out of thier own homes, only to return a few weeks or a month later to sign more docs on their new purchase. The down payments are funded by their equity, if any remodelling is done it’s funded by their HELOC. THen when they have sold a property, they roll the profits into a 1031 exchange to avoid paying taxes. Then if any rehab is done, pull more money out of the HELOC. There are very few “seasoned” real estate investors that are still in the game buying California. The only ones that I know of that are still playing the game are newer “investors” that got into it in the last few years. At least from my experience.
Aha. I never understood how homeowners ended up with 1031 exchange money before. Is this right?
1) Get a HELOC
2) put that money into an investment property
3) rent the property (is this necessary?)
4) sell property and gain is now subject to 1031 tax law
5) use gain to buy another property, and so on
?????
If you go to the FDIC website there are some excellent research papers. These excerpts are from recent reports.
FDIC Outlook
The Demographics of Housing Demand
Traditionally, anticipating the demand for owner-occupied housing involves the analysis of several underlying factors, including interest rates, local economic conditions, rent levels, population growth, and affordability. However, market analysts also place emphasis on the demographic characteristics of population growth when assessing trends and preferences for housing, as shifts in age and family composition affect demand. What key demographic trends are currently influencing the demand for housing in the United States, and how will these trends continue to affect the market?
Two distinct demographic groups, baby boomers and immigrants, dominate all other groups by sheer size (see Chart 1) and, for boomers, their wealth. Both already have shaped housing markets and contributed to rising levels of homeownership. Retiring boomers influence demand for housing as they downsize, trade up, and invest in second homes. Immigrants, typically characterized by larger and younger households, will strengthen demand for owner-occupied housing as they age and live longer in this country.
Chart 1
dlink chart 1
The extent of how strongly demographics influences the housing market is a hotly debated issue among industry analysts. For example, a study by Mankiw and Weil in 1989 forecasted a dramatic decline in home prices over the next 20 years.1 This forecast assumed that as baby boomers age, demand for single-family homes could not be sustained by the much smaller “baby bust” generation. With the benefit of hindsight, however, we see that the housing market has boomed in many areas during the past 13 years, while the average price of homes continues to appreciate. In fact, the close of fourth quarter 2005 marked the sixth consecutive quarter of year over year double-digit home price growth nationwide.
More recently, economist Dean Baker of the Center for Economic and Policy Research has cautioned that population growth is not driving the recent appreciation in home prices and will do little to sustain current price levels.2 Rather he predicts the housing market, which he believes is sustained by borrowing against inflated home values, will suffer the same fate as one of its precipitating factors-the stock market boom of the late 1990s. This perspective contrasts with the opinion of other industry experts who predict only a moderate slowdown in prices in certain regions of the country as the market is bolstered by increased demand for housing in retirement communities and continued high levels of immigration.3 This article examines the impact of baby boomers and immigrants on the nation’s housing sector and provides insights on how these groups may influence and sustain demand for years to come.
and
it is estimated that anywhere from $444 billion to $600 billion was liquidated from housing wealth during 2005.3 Whichever estimate one uses, the total almost surely eclipses the $375 billion gain in after-tax income for the year.
Scenario for recession (MArch 2006) - On housing alone suggests a 10% recession - Fed speak for 10% of homeowners will lose their house. http://tinyurl.com/qm5rq
Demographics of Housing Demand - Shows the lack of demand for housing. http://tinyurl.com/lva48
Yes
FDIC : Scenario for the Recession
http://tinyurl.com/qm5rq
“Don’t remember where they might go in LA (St. Thomas Bridge?), or just a freeway overpass.”
No; they will simply walk the streets after dark.
Aren’t there still those il fields off La Cienega below Rodeo??? I seem to recall Mrs. Sees down there…
Yes they are still there along with Mrs. See’s
I love the ‘pent-up demand’ dreams. What pent-up demand will that be? The pent-up demand of all the buyers on the sidelines waiting for the collapse? Because here already there explanations for the lack of buying as people waiting for all that hot new construction to be finished!
Right, we are at record inventory levels and growing. We are at record ownership rates and 40 year high rental vacancy rates. The industry has both cannibalized future sales and overbuilt.
Ben;…We are at record ownership…
That is the key phrase pal…At these price levels & interest rates in relationship to income in a given area, there is no buyers left…. Something’s gotta give…
It’s the pent-up demand to buy at 50% off sales.
There are always people in a position to buy or sell. But how many times have we heard ‘I only plan to keep the house for two years’ or the like. Many of these folks are closet speculators, who probably wouldn’t own a house otherwise. Think of it as pent-up supply.
Pent-up demand? Just about everyone that could buy has in the last 5 years. Not only that, but many bought a second or twentieth house as well.
Before, first-time homebuyer was 30 years old…..“Generation Y buyers are more technically savvy…‘Nowadays, there are people who are 18 or 19 years old.’”…
Give me a break….This group barely knows how to wipe their butt….
I dunno. Most of the Gen Y’ers I know bought houses at around age 20 and are retired now. Heck, one of our neighbors is 29 — bought a house in Anaheim in 2000 for $215k (while he was still a college student), sold it in early 2005 for $700k, somewhere in there bought a small condo in Anaheim Hills on an equity loan and now has sold that too for a killing, he retired, and now he’s a volunteer youth minister. I have a total of five friends under age 30, and all of them are retired now. Every one of my Gen X friends is still grinding away in a day job.
I’d like to know how he plans to live in Southern California for another 50 years minimum on 500-600K, probably less after taxes were paid.
I’m with you on that, I know he didn’t buy any income producing real estate cause these days 500-600k goesn’t give you much cash flow.
They’ll be looking for work after running out of money in several years, without any recent experience or current job skills, in a likely less-favorable economic environment than exists today. Yikes.
Yep, my thoughts exactly.
Just enough rope to hang themselves with no current skills.
I wonder what kind of world these kids are going to have to live in. Does money really grow on trees, daddy? No son, it’s printed in the government printing office.
29 year olds are in generation X. I hesitate to make this observation given the typo in the text (who knows where there source for demographics is), but if you look at the definition of generations at the bottom of the Denver Post article, notice the average people per year in each generation. Baby Boomers=4.6M/yr, X=4.56M/yr, Y=4.35M/yr. Looks like we might already have too many houses, given the youngest gen Y are only 12.
He better not get ill or all of his “retirement” money will go poof.
This is a generation that has never had any adversity in their lives. The i-pod generation. They’ve been pampered and coddled by parents that have never had any adversity in their lives either. They’re big risk takers because they think they have nothing to lose. Let’s see what happens when the shit hits.
I was raised on a ranch in nowhere New Mexico. I quickly learned that if you didn’t produce something you didn’t eat. Kids these days believe they’re entitled to, and deserve everything they want without having to do anything to earn it. To think an 18 or 19 year old can buy a house at the peak of an overheated real estate market is ridiculous.
Do I sound bitter? Yes, I fired one of those Gen-y’ers today. I was sick and tired of hearing how hard they had to work for so little pay.
those Gen X’ers certainly must have endured some adversity during 9-11 and many currently fighting in Iraq and Afghanistan. every generation is supposedly coddled and weak.
Do I sound bitter?
Nope, you sound like an old geezer. 2 points:
1. You forgot to begin your rant with “Back in my day…”
2. Every generation goes thru a cycle of thinking they had it much harder “in their day.” Then ,they notice that their parents were much worse off. Many people end up with the conclusion that it’s all about the same at the end of the day.
There’s nothing new under the sun.
Well, my dad’s generation went through the great depression, 25% unemployment, World War II which had, what 10M men in uniform? More? 250K killed?
That was a little more traumatic than seeing 9/11 on TV. There are 100K in Iraq and 2000 killed but there’s no draft and most there are from non-bubble south and mid-west and lower middle class.
Even Vietnam had 50K killed and a draft. When I was a kid we had the 1970s recession and then the 1980s recession (worst since the depression). I can remember parents worrying about how they were going to pull through. Everyone did.
So, yes, by today’s standards, kids have it very easy.
Put it this way, I grew up in an upper middle class town..yet I and all other kids tried hard to get after school job for money…landscaping etc. Today those jobs are done by illegals. The kids just don’t need the money, I guess.
Yea, it’s a lot different now. I just had my kid (3rd grader) ask my wife for a cellphone. Her mom considered it untill I piped in with ” Over my dead body”
I could have written your comment. This week I sat in on a focus group for my company. We had a 25-35 group. I have never seen such CYNICAL and self-absorbed people! THey just do not have the “old school” ethic. It is true that not all are this way and some will not lose their homes. I will wager that mom and dad will need to be doing some heavy bailing in the next few years.
A true “what goes around, comes around” moment.
My bro is Gen Y here in SF bay area (complete with stay-at-home software programming job & requisite pale-computer-monitor complexion). When I (Gen X) first started talking real estate 14 mos ago, he was very quick to comment that he & his roomates (all well-paid renters) believed that the bay area economy was supported by nothing more than people selling over-priced houses to each other. As more time goes by, I’m increasingly impressed by this conversation.
Ya’ll seen this? Another very funny video
http://alternet.org/blogs/peek/35669/
The transcript indicates he went way out of bounds. Seriously uncool suggestions. Let’s stick to housing. I don’t even wish that on David Liereah.
The only thing I got out of that is that Colbert knows how to make his trained seals bark and clap. It just wasn’t that funny.
And I like Colbert (Phil Ken Sebben anyone?) and don’t like Bush.
Same here, Bush and the current round of Republicrats really piss me off sometimes, but Colbert just wasn’t all that funny. They should have had ‘Triumph, the insult comic dog’ instead. Now THAT would have been FUNNY.
http://tinyurl.com/9ynu9
Colbert bombed hard — some impressive moments of dead silence from the audience.
But isn’t this a real estate blog?
Turn on 20/20 now..
What did they say? It’s not on until 10:00pm in Cali..
This was posted over on the Mish site on his latest thread about flippers. Unbelieveable.
“I have been hearing so much about this housing boom bubble and how it will burst. I will tell you one thing that I have sure noticed. A lot of people are getting thier real estate licenses. Our website The Real Estate License Professor helps future realtors realize thier career goals and I tell you we have helped a lot of these people lately. I am not sure if this will affect supply or demand having so many “middle men” selling but it sure is a sign that real estate is hot. I hope it stays that way.”
Tom Chambers | Homepage | 05.05.06 - 8:24 pm | #
——————————————————————————–
RIght, if it’s so hot and you’ve helped so many and are so busy, then why the hell come on that blog and advertise??
Whatever Tom Chambers.
RE bulls are pinning their future livelihoods on hopes.
There are 200+ homes on San Diego’s ziprealty inventory showing a listing date of 5/5/06 — the most new listings I have seen in a single day for all of 2006. 288 homes to go to hit the 20K mark (first time ever?). Feliz Cinco de Mayo!
“There is no real estate bubble. Everything is just fine. I see many buyers coming into the market to buy homes within the next few weeks. Prices will be going up shortly. So this message is for everyone in America who is currently renting, “buy, buy, buy, before interest rates go up and home prices go up.” Buy a piece of the American dream. A house is a long term investment. It will go up 20% this year alone. By the way, does anyone know where the weapons of mass destructions are in Iraq” George W Bush, CEO of USofA, and the Ultimate Decider
OT, Saturday’s LA Times, Condos, LA, and The Donald:
http://tinyurl.com/zchrx
Condo Potential Pushes Bids for Parcel Sky-High
“It doesn’t take an apprentice to tell you that Donald Trump has expensive tastes.
The publicity-unshy developer is in a bidding war for a choice parcel of real estate on the edge of Beverly Hills that could lead to one of the highest prices paid for land in the Los Angeles area.
It’s the latest evidence that developers think well-heeled buyers will continue to pay astronomical prices — as much as $4 million apiece — for high-rise condominiums on the Westside…”
Saturday’s LA TImes - LA, Condos, high priced parcels, and The Donald:
http://tinyurl.com/zchrx
Condo Potential Pushes Bids for Parcel Sky-High
“It doesn’t take an apprentice to tell you that Donald Trump has expensive tastes.
The publicity-unshy developer is in a bidding war for a choice parcel of real estate on the edge of Beverly Hills that could lead to one of the highest prices paid for land in the Los Angeles area.
It’s the latest evidence that developers think well-heeled buyers will continue to pay astronomical prices — as much as $4 million apiece — for high-rise condominiums on the Westside…”
And while I’m at it, an update on Ameriquest, via LA Times:
http://tinyurl.com/hyaew
Ameriquest Loan Volume Plunges
“The 46% first-quarter drop set the stage for deep job cuts announced by the lender this week…”
“Ameriquest” and “anti-Christ” sound alike, don’t they?
OK, one last late night update from the LA Times, but an interesting one…
Pay special attention to the “But unexpected job losses among retailers” part. Is this the first sign of consumers pulling back from the housing ATM?
http://tinyurl.com/jhcz8
LA Times
Job Growth, Wages Send Mixed Signals
“A broad swath of the economy — including the financial, manufacturing and healthcare sectors — added jobs last month, the Labor Department said Friday. But unexpected job losses among retailers limited the overall gain to well below the number of jobs created in March…Analysts said it was unclear whether the slowdown was a statistical fluke…”
Gen Yers in 20 years…
Im sick of you young kids complaining…Back in my day I had to walk from two blocks from one of my flipped condos to another…I had to wait by the fax machine for my closing paperwork.
please take out the first from…Im getting old??
SECOND YORKSHIREMAN:
We were evicted from our ‘ole in the ground; we ‘ad to go and live in a lake.
THIRD YORKSHIREMAN:
You were lucky to have a lake! There were a hundred and fifty of us living in t’ shoebox in t’ middle o’ road.
FIRST YORKSHIREMAN:
Cardboard box?
THIRD YORKSHIREMAN:
Aye.
Hey, did anyone see this WaPo article?
http://tinyurl.com/zwyup
It says builders are holding peopel to their contracts! That can only be because the builders know it will only sell for less thatn pre-constructin prices…that is indicative of what the builders really know and won’t say publically. IMO that is a major statement that seems to have been left unexplored. Agree, or should we not make too much of that fact?
WAPO has a shopping music article> buy or rent
sell-buy-buy
it’s all good
maybe people should get angry about gov waste
That makes more sense than FBs “suing” developers for their lost deposit money. A deposit doesn’t mean “option” as in “I can walk away” (or maybe in some states it does, but in general I don’t think so).
It means “I WILL BUY” at agreed price.
The FB GET SUED! And they will lose. A deal is a deal. Pony up the 500K for your 1000sq ft condo. What did the builders do wrong? Take the FB at their word? And now the FB walk away losing their small “deposit” and the builder is bankrupt? And the bank? Put the screws to them. That will teach a generation of reckless speculators.
And on the macro front (the stuff that floats *my* boat
- Bill Bonner provides an excellent counterpoint to Steve Roach this week. Check out Bill’s comments at:
http://tinyurl.com/jtrfg
Choice quotes from Bill’s article:
“It’s a chunky number: $750,000 per household. That’s what you get when you take the total commitments of the feds – $49 trillion – and divide them by the number of (American) families.”
And here I am feeling good about -my- family being debt-free! No problem, the Federal Government has fixed that little piece of irresponsibility as noted above. Our family’s share of national debt and future commitments is apparently 750K. And that’s if they can make every family pay out the same $ - yup, good chance of that I’m sure.
“The Financial Times goes on to note that it took 204 years for the U.S. government to accumulate its first $1 trillion in debt. Now, it adds that much every 18 months.”
“George W. Bush has added more debt than any president who ever lived. In fact, he’s added more debt than all the presidents who ever lived…combined.”
So here in a nutshell is the problem with the “we’ve been through it all, we’ll survive this” argument. Through “it all”, over the last few decades, our national debt has been rising non-linearly relative to GDP. Our economy is nowhere near a stable system. The only relevant question is, when does this system fall apart.
Speaking of balloons. The newly-appointed RE agent for the house across the street just put up a white balloon and a new sign on the front yard. Why white? White for “I give up”? “Don’t shoot”?