I was up in Scotland - got to play at St. Andrews (Eden course) - great town, insane real estate prices there and in Edinburgh, but what else can you expect in the property-ponzi-obsessed UK?
I read in the papers on the way home that buy-to-let (i.e. rent) mortgages have reached an all-time high in the UK, and that investors are snapping up properties regardless of the yields, cash flow or fundamentals. Why? The promise of future price appreciation.
When oh when will this big house of cards finally collapse?
I saw that the market rallied thinking the Fed was done and peace & prosperity will break out again. Wrong. Psyche. Head & shoulders. August 22nd. Consumer strike.
I also read that Dubai is home of 17% of the world's cranes. No, not birds, cranes of the big metallic kind.
Finally, I saw that London bankers made a record £17 billion in bonuses the past year, which has inflated home prices here a bit more, as that loot goes toward Ferrari's, Russian girls and Chelsea flats. And yes, all regardless of the fundamentals!
My question is, what happens when the bonus money runs dry, as it always does with these cycles, and there's no new sucker (bonus winner) there to buy the Ferrari, Russian girl or Chelsea flat at a higher price? Anyone remember the sea of used (and repossessed) Porsche's in Silicone Valley in 2001?
Cheers
42 comments:
Discounted Russian Girls? Can't wait!
Dow +6% YTD
Up 617 points for the year
Keith - you are running out of time for your Dow prediction of 8500 by the end of the year.
Sacramento down 5% YOY!!
October is still so far away, and you know we love crashing and panic in Octobers
are scottsdale girls just like russian girls?
The DOW may never drop. I wouldn't be surprised if the PPT is making it hover. Doesn't mean the economy is doing good though.
The servitude of every home in our Island, in the Great Satan's Empire, and indeed throughout the developed world, except in the abodes of the Asian and thrifty, goes out to the British and American airheads and bubblemen who, undaunted by odds, unwearied in their innumeracy and fiscal danger, are turning the tide of the World War by their incompetence and by their delusionary devotion.
Never in the field of financial conflict was so much owed by so many to so few.
Actually the problem is not with the feds but the state and local governments.
The size of federal workforce has not increased very much---but over decades the state and localities' have exploded.
In my experience, federal institutions have smarter and harder and more honest working people than state or local ones.
Why then is there so much rant against federal government?
I think its cryptoracism.
YES - I bought a Corvette from a consignment lot in Silicon Valley 2001. . .great buy - 15K miles - Torch Red, 6 speed. . .lots of extra's. . .I had my choice of 3 Vettes on one lot, lots of foreign cars, boats, etc.
Now we are watching condo prices drop in SD - check this site for daily specials:
http://sandiegomarketmonitor.blogspot.com/
I love bubbles. . .Thanks Big Al, Abby Cohen, David Lereah and all the other people who make bubbles to be broken. . .BTW - Abby Cohen crawled out of the woodwork yesterday to say that she thinks the market will be up 9% from here till the end of the year. . .now we KNOW a crash is coming.
No, the real enemy is the phony banker's cabal and crony capitalists who think running this oliarchy is great. They rule the government, the banks, the financial systems everything.
Listen, NOBODY really knows when the current cycle will end, but when it does, the recession PROBABLY will be quite deep. We blew alot of our fuel to get back 'somewhat' close(but not all the way and some dot.com "job boom" groups like college graduates unemployment rate is at 6.0% compared to 4.0% during the dot.com mania) to 1999. But with full capacity reached and overcapacity a cometh, the next recession will not have much fuel. See the 1945-73 boom and the 74-83 bust that followed. 1984-2008 boom, 2009-2020 bust to follow? Also the Presidential "phase" of 2 term presidents usually means a recession(Eisenhower,Kennedy/Johnson,Reagan,Clinton all had Recessions starting right when they left, right before they left, Reagan's was bizarre as the economy sputtering out horrible growth rates to finally contracted in 1989-90).
After the black wednesday (87?)crash, porche 944s were littering used car showrooms like confetti!!
cryptoracism?
House of cards collapsed years ago. . .and people just don't know it.
Keith - I have come to the conclusion that we should "Never Bet Against the American Consumer" (Paul Volker). . .they will find some way to consume. . .but here is the rub - each year more people go into more debt and don't own anything. Savings rate is zero, and 30 million are working at minimum wage . . .about 40% don't have health care (or minimum care), and most people will not be able to retire completely at 65 (can we say Walmart Greaters?). Money is flowing to the top 10% away from the 90%. Warren Buffet had it right when he said, "we are becomming a nation of serfs." The stock market can maintain, because if 10% own 90% (or something like that) then the 10% are the ones who move the market - do we really think most "Joe/Jose sixpacks" have any significant stock investments?. . .so. . . .people will work 3 jobs, send the kids out to work at McDonalds, put grandma to work, double and tripple up in housing, and still buy crap at Walmart. . .yes, some people will loose their homes, but banks will not take huge losses, but instead give people 50 year loans and turn a liability into an asset. . .my 2 cents.
"...Ferrari's, Russian girls and Chelsea flats"
Are you sure you are talking about London & not NYC?
When you say Russian girls, you don't mean Americans or Brits of Slavic descent.
:you don't mean Americans or Brits of Slavic descent
No, he means real babes, not fat slobs with a pussywhipped dude (or bloke in British speak).
homebuilders had a real nice rally. Wow Keith, you really are a bad bad trader. You have become such a great indicator for me to use. You panic at bottoms (often), and sometimes get all bulled up at tops. It's great. I use this blog to get that info, plus listen to all your bitter, liberal, anti WalMart Dem losers whine all day about how they have grown up to become nothing. "cheers" you phony douchebag.
"homebuilders had a real nice rally. Wow Keith, you really are a bad bad trader"
Uh, last I checked homebuilders were down 50% from their bubble highs
Laughable.
Good figure here showing extent of price cuts. Sorry if this is a repeat post.
http://bigpicture.typepad.com/.shared/image.html?/photos/uncategorized/housing_inventory_1.png
Well look it here. There monkey is thinking and speaking.
Anonymous said...
"homebuilders had a real nice rally. Wow Keith, you really are a bad bad trader"
Uh, last I checked homebuilders were down 50% from their bubble highs
Laughable.
Ummm Kieth did not tell us to short homebuilders at the high. In fact it looks more and more like he told us to short at the bottom.
He did say buy gold before it crashes
Homebuilders will get socked again in 1-2 months during the beginning of the "slow season" when I think the downturn begins to pick up speed. That will lead YrY depreciation, job losses and less wealth in a fairly short time in the once hottest markets. It won't be pretty.
There is a reason one of the biggest homebuilders told the SL FED: This is the fastest and deepest downturn we have every had. They are bleeding money, now they must correct their losses.
Yes, the home builders are having a nice bounce this week. My housing bubble puts account was up 100k last week and down 65K this week.
Big money is buying housing based on the assumed halt at the Fed and an expected housing recovery or "not getting much worse" in the fall.
"Someone" even bought 10,000 out of the money Sept Pulte call contracts yesterday before Pulte was upgraded today. Seems like a risky trade unless you knew about the upgrade. However, the housing bounce may be over--we'll see what happens when these folks need to worry about every new piece of inflation data. Also, next week's July sales data for new and existing homes could be interesting.
I won't take the opposite trade for Sept, but I am putting a lot of money into the Nov 06 to March 07 expiration home builder puts. I'm doing very well this year and see "smart money" buying housing stocks as a good chance to keep making money on the housing bubble. (Warning: sometimes I am too early buying and too slow to take profits).
Bill
"The real enemy is the US government: through is ruinous money printing/easy credit, punitive taxation, and runaway social spending... That the average federal employee now enjoys a total compensation double that of the average private sector employee...."
"Actually the problem is not with the feds but the state and local governments."
I am in 100% agreement w/ both you. Don't forget this highly compensated beauracracy has almost complete job security. I have a couple LAFD buddies and their work/compensation structure is ridiculous. Retire w/ full benis @ 90% salary at age 55. Don't even get me started on teachers, "You work 9mos of the year tops!" and you have complete job security in a job that most of you are failing at in California. (*I do know of some great teachers, but 80% are just going through the motions) At least these two groups do something visable, unlike your random state agency beauracrat.
Sorry about all of that, but I have to vent occassionally.
"Hunter" said...
"Actually the problem is not with the feds but the state and local governments."
I am in 100% agreement w/ both you. Don't forget this highly compensated beauracracy has almost complete job security.....Don't even get me started on teachers, "You work 9mos of the year tops!" and you have complete job security.....
You are soooooo right! It is the state and local politicians government employees that are killing us, not the fed. My brother in law busts his ass as a janitor in his elementary school. Why, because the highest wage he ever makes will become the starting basis for his pension when he retires, regardless of when that is. That’s at 100%, thank you, and yearly cost of living increases to boot. And he doesn't contribute a blessed dime!
Teachers and superintendents have it so good here it’s enough to make you puke! And of course, always with the greedy, whining hands out wanting more, more, more, while saying: "Well, you want good education don't you?" Any questioning of the school board’s outrageous property taxes and spending, and you are dismissed as anti-education (i.e. anti-children.)
The parasites in the state house voted themselves unbelievable raises this year, and then
voted to rescind their raises after voter uproar. What most voters don’t know is that the bastards will get those raises anyway, as undeserved pension increases when they retire or are voted out. Remember, the most you make is what you start your pension with, even if you gain and lost a $100,000 a year RAISE in just one DAY, it was still a $100,000 salary increase. No win for the taxpayers, EVER!
what's that smell?
"Whats wrong with Russian girl's?"
Other than shrew criminal instincts and a higher than average rate of AIDS infection, they're still better than an American woman who has been raised to be a man and compete in the market place.
"they're still better than an American woman who has been raised to be a man and compete in the market place"
Hate to say it but if a Russian lady gets US PR status, she'll be worse than a regular American woman, even of Slavic descent, a lot faster than an American woman who might have a few decent years before her 30th birthday.
But afterwards, all bets are off. Any American woman, who's not happily married and settled after 30, is a 'Sex and the City' spoilt bitch with no potential for love or intimacy.
Homebuilders cut jobs as slowdown deepens
http://www.gazette.net/stories/081806/businew175025_31942.shtml
U.S. Housing Market Flirting with Deflation
http://usmarket.seekingalpha.com/article/15595
Investors grab calls on U.S. home builders' stocks
http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20060816:MTFH02064_2006-08-16_23-16-17_N16203895&type=comktNews&rpc=44
Inventory Tracker
http://www.benengebreth.org/housingtracker/
The NASDAQ 100 has been crashing since May 8th, but has anybody noticed? Since the NDX topped at 1,721 on May 8th, three days before our last Hindenburg Omen, the NASDAQ 100 has crashed 15.94 percent. It is down nearly 18 percent since its January 11th top, and is down 12 percent for the year. Worse, this crash is not over.
I remember the car lots were full of Porshes, Beemers, Mercedes and Rolls in Silicon Valley of 2001. I sold my house then and there, and am kicking myself that I didn't buy a few in Southern California for the short term... I thought the market was kaput by then. 172 percent later I'm dead wrong. So what if the bubble pops and they go down 20-30 percent.
SittinPattSanDiego - Woodward or Bernstein predicted all of this in the 80's in their book - America, what went wrong. As far as I can recall, it is all coming true.
gradually depreciate the mortgage principal.
What does this mean for the individual homeowner fiscally?
Sittinpat. . .
Agree- I am no big fan of Unions, but they were/are a necesary evil, when Fat Cat corporate types take all the money for themselves (God, and I am a Republican). . .I am all for free market, but even
Teddy Rosevelt (the Trust Buster) knew there were limits. We should be very glad we have the military in SD to keep some middle class here, and SAIC. . .at least they are still "employee owned.". . .
Anonymous said...
Inventory Tracker
http://www.benengebreth.org/housingtracker/
Friday, August 18, 2006 6:32:28 AM
ORLANDO, FLORIDA
WTF MATES???
Date Inventory
08/14/2006 17,306
08/07/2006 24,573
08/01/2006 24,376
Housing deadcat bounce
Why is everybody still a Republican when they can see perfectly well the result of Republican economic policies: sell out US power and prosperity to overseas tycoons, and the priviledged and well-connected top 0.1% in the US?
It's like a freaking battered wife who keeps on defending her thug husband---the one who tells her that she's worthless without him and all the other men out there are terrible.
Government workers just happen to have the benefits that most workers used to have. I agree there is plenty of BS and stupidity there.
When the only middle class jobs left are government jobs---as it is fast becoming---that's a prime characteristic of a 3rd world banana republic.
WTF MATES???
Date Inventory
08/14/2006 17,306
08/07/2006 24,573
08/01/2006 24,376
Inventory in Orlando went DOWN this week.
Sales Activity Up 91762. Who the F** is buying?
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