Paperdinero has done a great job pulling together a few housing bubble videos for your viewing pleasure here
Make sure you watch the Lereah / Retsinas love-fest Housing: Shoring Up The Economy from 2002. Fascinating. Full transcript is here.
A classic ponzi scheme trait is to convince the masses to join in the asset party, that 'they're missing out' on a scheme that can only lead to windfall profits. And that's exactly what Retsinas, Lereah and others successfully did.
The problem, again, like all ponzi schemes, is that one day the last sucker enters, and there are no more suckers left. Then the panic and selloff begins, and that's where we are today.
Finally, it drives me crazy that the MSM rush to the likes of Lereah and Retsinas for commentary on housing.
NOTE TO MSM - THESE MEN ARE CORRUPTED, PERSONALLY BENEFITING FROM THE HOUSING FRAUD, AND BOUGHT AND PAID FOR BY THE REIC. THEY ARE FULLY DISCREDITED, BIASED SOURCES, NEVER TO BE TRUSTED AGAIN.
October 06, 2006
Looking back on how the housing bubble was built with the corrupted REIC cheerleaders Retsinas and Lereah
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The "cheerleaders" are only one part of this game. Extending the analogy, we also have:
1. The "referees" (the Fed, OCC, FDIC and other regulators) who have been looking the other way, as the "players" have been pulling every dirty trick in the book.
2. The "players" (the real estate sales clerks/order takers, the mortgage brokers/former copy machine salespeople, the appraisers, the banks, mortgage companies, Fannie, Freddie, FHLB, private MBS creators, and Wall Street.
3. Finally, and most importantly, we have the "fans" (the masses of sheeple) who are stupid and/or willfully ignorant, lazy, greedy, and willing to be led by the above-mentioned "cheerleaders". These same sheeple/fans will be crying "foul" to the refeeres as they are destroyed financially and will be demanding a "free ticket" to a bailout, all paid for by the "opposing team": the HPers.
beautiful post butch
May not need that obvious taxpayer bailout, at least DIRECTLY by the government. My relative in the banking industry tells me that the applications for fixed rate mortgages is going thru the roof by people who are underwater in their ARM's.
Apparently the "can not refi/pay off yet" time has expired, and many banks are only too happy to provide the fixed loan.
He didn't have any info as to weather the lending qualifications have been tightened, but he is in the opinion that they have not,YET.
Have the higher-ups in the freed chain put out the word to the banks ?
A BAIL OUT by any other name ???
If walks like a duck and talks like a duck.....???
I loved that one video on the links page Keith, where Shiller and that mortgage banking CEO are each giving their input on the housing market. As late as last month the realtwhores are still spouting the same timeworn drivel: prices have NEVER gone down(wrong!),never been a better time to buy(but who can afford)Priceless!
Kara Homes video !!! Founded in 1999. Builder of Homes- Builder of Dreams !!!
Getting ready for Chapter 11 Bankruptcy
BANKRUPTCY CONSIDERED: Kara Homes lays off staff; talk of filing for Chapter 11 makes local clients anxious
Housing bust
Posted by the Asbury Park Press on 10/6/06
BY DAVID P. WILLIS AND CARMEN CUSIDO
STAFF WRITERS
Kara Homes Inc., one of the biggest home builders in Monmouth and Ocean counties, might be close to seeking protection from creditors under Chapter 11 of the bankruptcy law.
Earlier this week, at least some Kara Homes employees received a letter from the company notifying them that they were being laid off and stating that Kara "anticipates filing Chapter 11." Under that provision of the bankruptcy code, creditors claims are frozen by the court while the company can continue to operate as it attempts to reorganize.
It was unknown how many employees were laid off, and the company official who signed the letter, Roberta W. Schultz, vice president of human resources and organizational development, could not be reached for comment.
Patrick W. Turner, the general counsel for Kara, told Gannett New Jersey that filing for Chapter 11 "is one of the alternatives we're considering." He said he would not comment on the letter.
Turner said Wednesday the company terminated some personnel because it is "trying to restructure" the payroll. "We had to address payroll issues, and we did."
"We are trying to become more profitable," Turner said. He did not disclose what sort of financial trouble the home builder is experiencing.
East Brunswick-based Kara has a large presence in Monmouth and Ocean counties, with at least 15 housing developments in the two counties listed on its Web site, including Crine West Estates in Marlboro and Winding Run in Lacey.
The news has left people who have houses in the pipeline with Kara Homes anxious and uncertain.
Middletown resident Gina Haspilaire and her husband, Richard, have been waiting to move into their home at Cottage Gate at Navesink in Middletown since March 2005. The home's delivery date kept being delayed, Gina Haspilaire said.
Now the couple want Kara to return their deposit, which is about $125,000, she said. The couple used money saved for their son's college education to pay for the downpayment, figuring they would replace it with money from the sale of their existing home.
"When we did this, my son had two more years to finish high school," Haspilaire said. "Now we can't sell our house, and they won't give us back the money."
They don't want the house, which is completed but without a certificate of occupancy. She said she believes the contract was voided because the home wasn't delivered on time.
Frederick Young, a resident of Ocean Pines, Md., said he had a contract for a condominium at another Kara development in Mount Arlington, Morris County. After he and his wife became ill over the summer, he wanted to cancel the contract and get his $19,000 deposit back but hasn't been able to get in touch with Kara.
"I am being faced now with huge medical bills," Young said.
In a September interview, Kara founder Zudi Karagjozi responded to rumors about the company's problems. He said the company was operational, building and selling homes.
"Everything has been moving," he said. "It's just obviously, with this slower time, like all builders things are going a little slower than usual."
He said the company had been paring down debt, laying off some workers and selling some property.
Karagjozi started Kara Homes in 1999, and it quickly got noticed because of its rapid growth. In 2002, it was named the fastest-growing home builder in the nation by Builder Magazine. Last year, the company was 239th on Inc. magazine's list of 500 fastest-growing private companies in the nation.
But recently, Kara seems to have had problems paying its bills.
Some companies have filed documents with the Monmouth County clerk's office, saying they have not been paid for their work.
For instance, Whitman Construction LLC said that Kara owes it $44,326.75 for siding and roofing work done on a project in Sea Bright, according to a Notice of Unpaid Balance and Right to File Lien.
On Sept. 12, H&D Prime Construction Inc. filed a notice that it was owed $146,323 for supplying and installing siding and stucco at Kara at the Tradewinds in Sea Bright.
After several boom years, the residential real estate market has turned sour for home builders and real estate agents selling existing homes.
Homeowners are having a difficult time selling their existing homes, which is making it harder for them to step up into a new home, said Patrick J. O'Keefe, chief executive officer of the New Jersey Builders Association.
"Every builder I know . . . is in an aggressive inventory control posture," he said. "They are not starting projects; they are deferring projects.
"Where they have continuing construction, they are not beginning new units unless they have a firm contract in hand."
Housing starts are down 10 percent to 15 percent this year through August, compared with the same period last year, O'Keefe said.
"I expect it to decline further," he said. "This is the beginning of a very difficult market for builders and resellers alike."
http://www.app.com/apps/pbcs.dll/article?AID=/20061006/NEWS/610060412
The plight of these people who signed purchase contracts with Kara Homes is one more example of the pyramid-scheme nature of our housing boom.
They gave up real cash for a promise. Kara used the cash not to build their particular home, but to fund its general operations. This is one reason why buying a new home is riskier than buying a resale from another homeowner. I am always aghast that people sign contracts for the biggest purchase of their lives without benefit of legal counsel.
Maybe in the aftermath of all this we will see a law that requires that a down payment on a new home goes into an escrow account, not into the builder's general fund. This would raise builders' costs, and they would scream about housing affordabilty and all that, but it would provide more stabilty to the market for new homes and for the homebuilding industry.
You bubble humpers are only trying to drive down home prices so you can move out of your parent's basement.
to the anon above
there aint no trying to it.
i cant wait to move out of my parents basement and buy your McMansion for half to a quarter what you paid for it.
have a nice day..
what mindless blabber! I'm glad that I'm not a PBS contributor, what trash TV.
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