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January 01, 2007
BUBBLETALK: Open thread to talk about the housing ponzi scheme
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«Oldest ‹Older 201 – 308 of 308Foreclosures in 2006 reached levels not seen since the real-estate crash of the late 1980s, and it doesn’t look like they’re coming down anytime soon.
“There is no reason for the foreclosures to actually drop significantly,” said George Roddy, president of Foreclosure Listing Service, which tracks foreclosure postings.
About 1,000 properties in Tarrant County were scheduled for auction every month this year, with about 40 percent to 50 percent of them actually sold on the courthouse steps, according to Roddy’s company. Many avoided foreclosure by selling their houses beforehand, reaching agreements with their lenders or filing for bankruptcy protection.
Roddy and others say the fundamentals that drove up the foreclosure rate are still in place.
Dozens of new loans were created in recent years to make home buying more affordable, and many have proved to be risky.
It was a surprise when 1,064 homes were posted for foreclosure at the December 2005 auction, because it was the first time that year that the monthly total reached 1,000. In 2006, foreclosures topped 1,000 five times.
The 1,000-home mark may be hit even more often next year.
http://www.dfw.com/mld/dfw/
business/16339197.htm
Since 1990 the population has increased by 50 million or 20%. Foreclosures will need to be at 120% of late 80s levels to make a viable comparison.
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Foreclosures in 2006 reached levels not seen since the real-estate crash of the late 1980s, and it doesn’t look like they’re coming down anytime soon.
"If this doesn't sell post haste, I'm going to bite the bullet and pull it off the market."
Antioch, Calif. - Donald Anthony has slashed the price on his four-bedroom, two-bathroom house by almost $80,000 - and added $40,000 worth of improvements, including a new kitchen and landscaping in the leafy yard.
He's used three different agents. He's listed the 1,800-square-foot home - an immaculate ranch on a quiet cul-de-sac - on for-sale-by-owner sites, in newspapers, on cable television and the Internet site, Craigslist. He or his agents have spent at least 50 idle afternoons hosting open-house events.
But the 74-year-old retired physicist cannot unload the house, now listed at $489,950 - well below the price of comparable homes in the fast-growing region between San Francisco and Sacramento.
http://www.jsonline.com/
story/index.aspx?id=547008
Ages: Tania, 39. Carl, 38.
Biographical info: Married with two children, Myles and Sydney, and living in a suburb of Maryland. She is a professional school counselor. He is a systems consultant.
Financial situation: Together they earn about $137,000. They don't have any emergency savings. She has two small retirement accounts. He just started saving for retirement. They owe $14,400 on four credit cards, although they had thought it was $12,000.
The Chandlers aren't wildly overspending. However, they do have some hefty expenses: Their mortgage and day-care take up about 74 percent of their net monthly pay. The bills get paid but just barely. And when they can't cover everything, Tania would use credit or borrow from her retirement plan.
www.washingtonpost.com
/wp-dyn/content/article/
2006/12/30/
AR2006123000054.html?
nav=rss_business/
personalfinance
I got it!! Government "free" day care. That'll solve it. Then government "free" health care will cut some of their expenses too.
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The Chandlers aren't wildly overspending. However, they do have some hefty expenses: Their mortgage and day-care take up about 74 percent of their net monthly pay. The bills get paid but just barely. And when they can't cover everything, Tania would use credit or borrow from her retirement plan.
Lenders begin to tighten loan standards
Delinquencies often linked to second mortgages
As more homeowners skip out or fall behind on their mortgage payments, some lenders have started tightening their underwriting standards.
That might not be enough to save them from losses. Mortgage lenders, such as Countrywide Financial Corp., Downey Financial Corp. and FirstFed Financial Corp., try to avoid risky "subprime" borrowers and have become more cautious about whom they lend to in general. Also, they're setting aside more reserves for potential defaults. But the increasing popularity of second mortgages could end up undermining their efforts.
New data in a research report from securities firm UBS show a high percentage of borrowers with delinquent, defaulted and foreclosed loans have second mortgages, which they've usually taken out at the same time as their first loans to buy a house. The UBS data suggest these borrowers are so stretched financially by the added debt that they can't make payments on their first loans on time.
Of the $308.1 billion in mortgages originated in 2006, $103.6 billion, or 34 percent, were second mortgages, according to the UBS data.
"Mortgages that have a second mortgage behind them run a far higher risk of default,"
If interest rates rise, he adds, second mortgages could be "a bigger cause of delinquency than anything else." In some cases, the original lender may not know that a second mortgage exists.
The bad news for mortgage stocks is that investor sentiment for lenders and their securitized loans could worsen as delinquencies and defaults accelerate. Investors recently sold off shares of subprime mortgage companies after Ownit Mortgage Solutions Inc., another California lender, shut down abruptly after a high percentage of loan defaults in its portfolio caused a cash crunch.
Second mortgages underwritten by the same bank that originated the first loan are termed "silent seconds" because the loan-to-value ratio lenders report includes only the first mortgage. They can enable a home buyer to borrow more, often to buy a property he or she couldn't otherwise afford.
These second mortgages, sometimes called piggyback loans, started to take off along with other "nontraditional" mortgages, such as interest-only mortgages and payment-option ARMs, as housing prices appreciated in recent years and meeting traditional mortgage requirements became more difficult. The UBS report didn't include home-equity lines of credit, typically taken out against homes already owned.
The lack of knowledge among lenders about silent seconds held elsewhere presents a problem as the lenders try to determine how much to set aside for potential losses. Lenders using the loan-to-value ratio of just the first loan could end up under-provisioning for potential defaults. That could lead to big charges against earnings later.
http://www.statesman.com/
business/content/business/
stories/statesmanhomes/
12/31/31lenders.html
In 2000, there were around 110,000,000 housing units in the USA with an average value of $119600 USD. In 2006, there are around 126,000,000 housing units with an average value of around $220000 USD. (About 27.7 trillion USD in total value)
Let's say we have a soft landing in real estate, say maybe 10% loss on current prices. That's a loss of around $22000 USD per house, or around $2.77 trillion USD in losses on property values. A 40 - 60% loss in prices would be around $11 trillion to $16 trillion USD in losses.
The NAR says we have prices down about 3% from their peak in 2005. If you beleive that, then you're still looking at a possible $800 - 900 billion USD loss on property in the USA, quite a bit more than the S & L scandals in 1987.
I'm sure the flippers are happy now. The only thing I fear more than the housing market falling apart is the political nastiness likely to result from said housing market coming apart (which, given the current political and economic conditions, is not an impossibility).
X-State
TAMPA - Frank Gregoire, a St. Petersburg property appraiser, couldn't help but chuckle when an appraisal request came through his fax machine this month.
It was sent by a California loan originator, and the message was clear: "Please call if unable to attain this value BEFORE INSPECTION."
Law enforcement and mortgage investigators say mortgage fraud that involves obtaining an inflated loan so someone can illegally pocket tens of thousands of dollars is a growing epidemic.
It can leave investor homebuyers and their lenders on the hook for loans worth more than the property. Prices of nearby homes can be artificially driven up and neighbors can end up paying higher taxes because of the inflated values.
This type of fraud requires a string of real estate professionals willing to go along. A key to the scheme is having an appraiser willing to overvalue a property.
Historically, such unscrupulous appraisers have not been caught, or were let off relatively easy, experts say.
That may be changing.
"Without an appraiser coming in at the magic number, the fraud is stopped in its tracks," said Tampa police Detective Jim Bartoszak, who's working on several loan fraud investigations.
Tampa police said this month that they arrested two men who they said were trying to inflate the sales price of a home in Apollo Beach from $690,000 to $910,000.
At closing, $210,000 was to go to one of the men's Nevada companies. Police say the men planned to default on the loan and leave with the cash.
http://www.tbo.com/news/
metro/MGBQ3F0MBWE.html
Barrons and Abelson on Housing
He explains a bit about why these stocks are holding up and not plummeting.
Basically he stated that many of these HB's have 15% of their shares short and the average float on these shares is 15%.
Basically no shares to trade and until the institutions start selling we have a stand off.
The article also stated that cancelations normally run around 15% and it showed all the HB cancelation rates and KBH was at 53%.
He also stated that they all clearly understate their inventories, so as us shorts have witnessed we continue to be battling a fraudulent industry with bogus numbers.
I likied his closing comment " Obviously, just as a house is not necessarily a home, an order for a house is not necessarily a sale".
To me this is the biggest issue as all of the HB's are recording new sales based upon a deposit that in many cases is a miniscule $1000 and then 1/2 of these so called sales get canceled which means the numbers are absolutely god awful.
messages.finance.yahoo.com/
Stocks_%28A_to_Z%29/
Stocks_K/threadview?
m=tm&bn=10155&tid=27492&mid
=27492&tof=5&frt=2
wow and nobody else on Wall St knows this
he Federal Emergency Management Agency chose to ignore the issue of need in awarding funds to coastal states for more-permanent disaster housing. Instead, FEMA turned the process into an unannounced contest, awarding funds on the basis of which state supposedly had the best housing solutions. FEMA officials were the judges.
As a result of this strange approach to meeting the needs of hurricane victims, Mississippi will get $281.3 million for its projects, while Louisiana will get $75.4 million. The problem with this picture is that Mississippi suffered 32 percent of the hurricane-related housing damage, while Louisiana suffered 64.4 percent.
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In Louisiana, 205,000 homes were destroyed, compared to about 61,000 in Mississippi.
Naturally, Louisiana officials are outraged. U.S. Rep. Richard Baker, R-Baton Rouge, who sat on the House and Senate conference committee that authorized the $400 million for the housing program, was profoundly disappointed. Michael DiResto, a spokesman for Baker, told the media that the disparity between the size of the need and the size of the award "shocks the senses" He added that "this looks like more than just a disappointment for the people of Louisiana, but real unfairness."
If one state has the best plan for dealing with the need for more-permanent disaster housing, it would be sensible for FEMA to recommend that plan to other states. To administer the funds without regard to need, however, is absurd. The greatest amount should go where the need is greatest. The need in Louisiana is three times greater than that in Mississippi.
We want Mississippi and other coastal states affected by the 2005 storms to receive the federal funding necessary to deal with their problems. For FEMA to say to Louisiana or any other state, "you need more money than Mississippi but you're not going to get it because Mississippi submitted a better proposal" is ridiculous.
It becomes more ridiculous when you consider that this is the second time Louisiana has been shortchanged in the awarding of hurricane recovery funding. In the first supplemental spending bill, Louisiana got $6.2 million and Mississippi got $5.3 billion. Then, as now, the disparity was obvious when need was considered. Louisiana lost 10 times more businesses than Mississippi, and more than five times as many jobs. Katrina and Rita destroyed five times as many of our hospitals, and more than twice as many of our schools. Our death toll was five times that of Mississippi. As in the present situation, Louisiana's needs far exceeded those of Mississippi.
Louisiana's housing program features manufactured homes - permanent dwellings able to withstand hurricane-force winds. Storm victims will be able to lease to own. Each homeowner will contribute some of the work. The program is a practical one. FEMA should give Louisiana an opportunity to defend it before making the absurd allocations currently planned.
By Rick Forgione
Niagara Gazette
Despite growing opposition, the Town Houses at Shawnee Landing continues to move forward.
Developers confirmed Friday that a recent attempt by Town Supervisor Tim Demler to have federal funding withheld from the $9.2 million project won’t shut down construction work at the site.
“Funding for this development is in place already,” said Mike Riegel vice president of Belmont Shelter Corp. “We will continue developing the project in accordance to our public approvals.”
Those approvals, obtained at the local and state levels, call for the construction of a new church and a 64-unit housing community for low-income senior citizens and families on property near Shawnee and Klemer roads. Neighbors opposed to the development have formed a group called Wheatfield Residents Action Committee and are trying to shutdown construction because they feel the housing units will have a negative effect on the value of their homes.
While Demler originally said the developers were within their rights to build, and the town had no power to stop it, the supervisor has since changed his stance after receiving a swarm of criticism and concerns about the project. The town clerk’s office collected almost 160 letters against the project that were forwarded to the state’s Housing of Urban Development as part of a community input process needed before a portion of the funding is released.
Demler, with the backing of the town board, wrote his own letter to HUD, requesting the funding be delayed until all of the concerns are addressed. However, Riegel pointed out the comment period was linked to specific parts of an environmental review process and only represents $47,000 worth of the funding for the project.
“It’s possible the release of this particular funding may be delayed,” Riegel said, adding it could take months for state officials to go through all of the letters submitted during the comment period.
At least one resident in favor of the project believes she wasn’t given the chance to add her comments before the Dec. 26 deadline. Kim Wrona said she tried contacting town officials about submitting a letter on behalf of Shawnee Landing, but was never called back. While she has no strong feelings either way about the project, she said she’s appalled by some of the actions made in protest, including public comments that the low-income housing complex would bring in the wrong “type” of people.
“It was just really offensive,” said Wrona, who moved to Wheatfield in August. “I just don’t like the tactics people are using.”
She also believes Demler’s change in stance is an example of him trying to save votes in his next election for supervisor.
“He caved in to popular opinion,” she said.
In addition to writing against the project, Demler used his powers as supervisor to order the closing of Klemer Road, eliminating the access leading to the construction site, due to what he called safety concerns because too many construction vehicles were going back and forth.
On Friday, Town Attorney Robert O’Toole defended Demler’s legal right to close the road.
“This is something that has been done several other times in the past,” O’Toole said.
The access blockage hasn’t slowed down work at the site for the time being, Riegel said, but could do so in the upcoming weeks if the matter isn’t resolved. One possible solution is creating an entry road at the other side of the property off of Shawnee Road. Both O’Toole and Riegel agreed that may be considered an alternative, however it would cause a time delay at the site.
Meanwhile, Riegel said he’s still determined to meet with residents opposed to the project and try to come up with a compromise to end the arguing. However, he’s not too optimistic that’s a possibility.
“They seem to be focused on killing the project altogether,” he said.
KOTA KINABALU, Dec 30 (Bernama) -- The Sabah Housing and Real Estate Developers Association (Shareda) today expressed its concern over the hike in cement price announced recently and feels that the state government should intervene and request a review of the building material price.
Shareda president Kong Kwok Wah said its members were not faced with an increase in the price of cement alone but also the prices of other building materials as well as fuel prices in the past two years.
Kong said: "We cannot keep on passing the cost to the consumers as we have to absorb some of the increase as well. The property price is market-driven. The unreasonable and hefty increase may hurt the industry as a whole."
Minister of Domestic Trade and Consumer Affairs Datuk Mohd Shafie Apdal said yesterday the upward revision of the cement price by five per cent, which came into force on Dec 1, had no effect on house prices and that the cement price hike could not be avoided because it had not been raised for the past 20 years.
Kong also said that the government did not seem to be doing enough or much to monitor the situation and left it entirely to the ministry which believed that the hike, which was less than 10 per cent, would not affect property prices.
He said: "But what about Sabah? The increase is between 20 per cent and 30 per cent. It is a sad story for Sabah. The industry will have to face the non-stop increase in prices of almost all the building materials. We urge the government to look into the problems of the industry and to adopt measures to lessen the impact."
The increase of cement price in Sabah for a 50 kg bag is between RM2.95 and RM3.25, which is a hike of between 20 per cent and 30 per cent, while in Peninsular Malaysia it is less than 10 per cent.
Record housing sales
Saturday, December 30, 2006
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By Jason M. Reynolds
Staff Writer
Local home sales from January through late December have surpassed all of 2005's totals, bucking the national real estate slump and giving the Tennessee Valley another record year, records show.
"A stable economy, low unemployment and competitive interest rates will make a recipe for a strong 2007," said Jason Farmer, incoming president of the Chattanooga Association of Realtors and owner of ReMax Renaissance Realtors. "I think the public will see a strong year for home sales."
Chattanooga-area Realtors through mid-December 2006 reported selling 8,072 houses, a 1.5-percent gain over 2005's total of 7,955 houses sold.
Across the country, existing-house sales are projected to reach 6.47 million, the third best year in history but an 8.6 percent decline from 2005, according to the National Association of Realtors. Sales of new homes nationally this year are expected to drop 17.7 percent to 1.06 million.
Baby boomers buying smaller homes and people moving to the Chattanooga area from other states helped account for strong local sales, Realtors say. Nationally, buyer confidence has been low but should return and create strong sales for the first quarter of 2007, according to the National Association of Realtors. Home prices in markets such as California and Florida have grown at unsustainable double-digit rates for several years, experts said.
Mr. Farmer said Chattanooga is a conservative housing market with a growth rate between 3 percent and 7 percent, and so it will have stable growth in sales and prices.
Thirty-year, fixed-rate mortgages earlier this month averaged 6.13 percent, according to mortgage holder Freddie Mac, down slightly from 6.26 percent a year ago. Interest rates were in the double digits in the 1970s, so rates today are historic lows, according to Realtors.
Locally, new-home sales have slowed "some," but not significantly, said Thom Carmichael, 2007 president of the Home Builders Association of Southern Tennessee.
The Chattanooga area has competitive home prices, said Carolyn Eslinger with Realty Executives of Chattanooga.
"I feel our prices have remained relatively stable, while you see home prices escalating in other areas," Ms. Eslinger said. "Our affordability left the market open for opportunities."
ATTRACTING BUYERS
The median Chattanooga-area home price to date in 2006 is $136,000, a 3.4 percent gain from $131,500 last year, local Realtors report. The national median sales price in October, the latest data available, was $221,000, a 3.5 percent drop from a year ago. The median is the price at which half the houses sold for more and half sold for less.
Brian Kelly, president of Prudential RealtyCenter, said another reason the Tennessee Valley is outperforming the national market is the area's moderate weather drawing retirees from the North and from Florida. And the region has served as a refuge for hurricane-weary coastal residents, some of whom have chosen to stay here, he said. Chattanooga also is a popular place for people to buy second homes for vacations.
"People choose to live here because it's a wonderful place to live with a high quality of life," Mr. Kelly said.
Ernie Landry said he and his wife Kathy moved to Trojan Run in Soddy-Daisy after Hurricane Katrina slammed into Louisiana on Aug. 29, 2005.
Mr. Landry said his wife arrived in Chattanooga to stay with a cousin two days after the storm hit, while he stayed a month longer to repair their St. Tammany Parish home.
"My wife liked the Chattanooga area, so we decided to move up here," Mr. Landry said.
The Landrys chose to live in the Trojan Run subdivision because of its mountain views, an amenity Louisiana lacked, he said.
Russ Davis said he and his wife Martha are splitting their time between their old home on the Florida Gulf Coast and a lakeside house they bought in October in Graysville, Tenn. Mr. Davis said he was familiar with the area because his mother is from Tennessee.
"I don't like Florida near as much as I do here, and I'm not sure I won't sell my Florida house and stay here year-round," Mr. Davis said.
Do niggers smell funny or is it just me?
It's just you , you wigger!
re: MLN - Mortgage Lender's Network
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Who's got the story on this one? heard the rumor, but havent seen it hit the news yet.
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++++++++++++++++++++++++++++++++++
Here is the text of the letter that was faxed by MLN to it´s brokers.
December 29, 2006
Re: Mortgage Lenders Network USA, Inc. Notification Letter
VIA EMAIL/FACSIMILE
To Whom It May Concern:
Please be advised that this communication is submitted to your attention in order to alert you to the fact that effective immediately Mortgage Lenders Network USA, Inc. (“MLN”) will regrettably no longer fund residential mortgage loans. This course of action has been necessitated as a result of a lack of available warehouse funds.
MLN will immediately take all steps necessary to attempt to place the loan transactions that were scheduled to fund with MLN as lender, with another properly licensed lender. Additionally, MLN will (a) ensure that all remaining loans in its pipeline that are scheduled to close will be transferred to another properly licensed lender to minimize any potential inconvenience to the Borrowers and (b) not take further loan origination applications at this time.
In order to provide its customers with the level of service expected from MLN, MLN will focus its efforts towards its residential mortgage servicing platform.
While we regret submitting this notification to you, we feel it is in the best interests of the customers and MLN to focus on the servicing platform at this time.
Mortgage Lenders Network USA, Inc.
++++++++++++++++++++++++++++++++++
Official announcement after the Holidays - Tuesday.
-sk
appraise this! majority slaves!in and on the land, this land is your land, of the free! they been robbed and are out looking for a bigger fool, god, bless the masses
or hold cash, loosing spending power, and value? in re, the medicinal powers of gold, in a socialist medicine scheme?
will that be paper or plastic?
lose:
to come to be without (something in one's possession or care), through accident, theft, etc., so that there is little or no prospect of recovery: I'm sure I've merely misplaced my hat, not lost it.
loose:
free or released from fastening or attachment: a loose end.
Please use accordingly you fucking illiterates.
http://www.housingtracker.net/
old_housingtracker/location/Nevada/LasVegas/
Median price steady at $329,000 since 11/14. Before that the median was falling every 1-2 weeks.
Inventory is down 2000 from 23,700 to 21,700 an 8.4% drop since 11/1. Before that it was flat or increasing every week from January on.
I know, I know YOY. Still when every week prices are falling for a year, 8 weeks of flatline is significant.
If median stays at $329+ through January the worst is over.
Your pennies and nickels are now worth more melted down for their metal content than their face value. This has the government worried about more than just the most obvious, publicly stated reason.
On December 13, United States Mint officials said they were making it illegal to melt pennies and nickels and to take large amounts of the coins outside the country. Under the new law, anyone convicted of melting the coins or leaving the country with more than $5 in pennies and nickels or shipping more than $100 worth could be punished with five years in prison and/or a fine of up to $10,000.
Why the drastic steps? “We are taking this action because the nation needs its coinage for commerce,” stated Mint Director Edmund Moy. “We don’t want to see our pennies and nickels melted down so a few individuals can take advantage of the American taxpayer.”
Because of current zinc, copper and nickel prices, pennies and nickels cost the Mint far more than the coins are worth.
For example, as of the December 13 announcement, pennies (which are 97.5 percent zinc and 2.5 percent copper) were worth approximately 1.12 cents. Similarly, nickels, which are 75 percent copper and 25 percent nickel, were worth 6.99 cents—a whopping 39.8 percent above the nickel’s currency value.
For obvious reasons, when the metal value of a coin exceeds its face value, it makes people wonder if they could make money by selling the coin as scrap metal.
Although melting down U.S. coinage to sell the metal seems unpatriotic and opportunistic to say the least, it is a bit ironic that the Mint is worrying about people taking advantage of the taxpayer—especially since the Mint is now costing taxpayers millions by manufacturing pennies and nickels at a cost far above the value of the coins themselves.
According to the Associated Press, when all production costs are taken into account, the U.S. Mint now spends 1.73 cents to produce each penny and 8.34 cents to produce each nickel.
Therefore, since the Mint produced approximately 7.86 billion pennies and 1.42 billion nickels between January and November, the U.S. Mint itself, by making pennies and nickels that were worth less than their face value, actually cost taxpayers roughly $105 million just in the last 11 months.
Tellingly, there are alternatives the Mint could have employed that would have mitigated these costs and inhibited the exchange of paper money for coinage at banks for the purpose of melting. Instead, they first chose to make new laws.
One alternative would be to stop producing pennies and nickels altogether, thereby stopping any potential coin melting and saving the Mint tens of millions of dollars in production costs. Many other countries have done just that; instead of using small coinage they just round up or down any transactions.
A second option many other countries have effectively employed is changing the metal content of the coins by replacing the costly copper, nickel and zinc with steel, tin or some other less expensive alloy.
Both of these options would completely stop the coin melting trade, because there would either be no coins in circulation to melt, or it would be unprofitable to melt them.
So why would the Mint go to all the trouble of minting pennies and nickels that cost taxpayers millions of dollars (and cost businesses millions of man hours by forcing them to count, package, roll and transport the coins), and then spend the time and effort to draft laws prohibiting people from melting and transporting them, when there are other efficient solutions that would do away with the possibility of people choosing to break the law by melting coins anyway?
The foremost reason is that when nations choose to eliminate their smaller coinage or degrade the metal content in their coins, it is commonly a tell-tale sign of the currency’s devaluation. To discontinue production or shift metal content would be a blatant admission of the loss of purchasing power of the dollar, and it is beneficial to hide this so as not to damage the dollar’s reputation, even if it means losing millions in minting costs.
Currently, the dollar’s position as the world’s reserve currency is very precarious. Several central banks around the world, including Russia’s, Sweden’s and Qatar’s, have announced they are reducing dollar holdings. Most recently, even China has indicated that it will reduce its dollar holdings.
The fact that pennies and nickels are now worth more for their metal content than their 1-cent and 5-cent face value is undisputable proof of how much value the dollar has lost since its founding. This is not good news for the U.S. dollar, whose reserve currency status is largely built upon confidence that it will remain a stable store of wealth.
If the dollar continues to fall, so will international confidence in the dollar.
The loss of the dollar’s reserve currency status would be a disaster for the U.S., and the fact that the government is hiding how much value the dollar has lost shows the seriousness of this threat.
Didn't they get rid of the 50 cent coin? The world didn't end.
Does the county's median price get effected by a house that is foreclosured by a bank (REO) price or is the county's median price only effected by actual sell transaction?
http://www.foreclosure.com/
search/CA_085.html
Will the American dollar last? The past of paper currencies is a list of failures: Every fiat currency in history has ended essentially worthless.
History is littered with the wrecks of paper money adventures. In hundreds of cases, in all lands, at all times, the story has been the same: loss of confidence in and eroding value of fiat currencies. Paper money does not work; the temptation of the printing press is too great. Emperors, kings, presidents, prime ministers and central bankers have not been able to resist the temptation: When faced with economic problems or overspending, they have all chosen to create the money needed to pay bills or fight wars.
The world’s first known experiment with fiat money (paper money not backed by tangible assets like silver or gold) was in 10th-century China. At first successful, it was abandoned a few hundred years later because it, like all the paper currencies that followed, was found to be too susceptible to inflation. But, to the Chinese’s credit, a few hundred years is actually pretty successful as far as paper money goes.
By 1200, the Chinese had forgotten this earlier failure and launched another paper money scheme, this time under Kublai Khan. Marco Polo was so impressed, he reported that Kublai Khan “had the secret of alchemy in perfection” and that he “causes each year to be made such a vast quantity of money that it must equal in quantity all the treasure of the world.” But Marco Polo visited Kahn’s empire during a time that American historian Alexander Del Mar called “the most brilliant period in the history of China”—which, it turns out, was just before its collapse. “Kublai Khan entered upon a series of internal improvements and civil reforms, which raised the country he had conquered to the highest rank of civilization, power and progress. … Population and trade had greatly increased, but the emissions of paper notes outran both, and the inevitable consequence was depreciation. … Excessive and too rapid augmentation of the currency resulted in the entire subversion of the old order of society. The best families in the empire were ruined” (Bullion Vault, October 27; emphasis ours).
Fiat currency adventures in Europe also have a history of painful failures. For hundreds of years, the Roman Empire reigned, increasing in power and influence. Even when Nero decided to start debasing the currency by taking the silver out of the coins, Rome prospered for a while. However, as Rome decayed, successive emperors continued to remove the silver content of the denarius to pay the bills. At the beginning of the first century, the denarius was essentially pure silver. By the time of Nero, in a.d. 54, the silver content of the denarius had slipped to 94 percent; by a.d. 68, it had fallen to 81 percent; by a.d. 218, only 43 percent was silver. Philip in a.d. 244 had the silver content reduced to 0.5 percent. At the time of Rome’s fall, silver content of the denarius was 0.02 percent and pretty much everyone was refusing to accept it as payment for anything (LewRockwell.com, November 4).
But central banks and governments are poor students of history.
During the 1700s, France stands out as a paper-currency basket case. John Law first established a paper currency in France in 1716. Backed by King Louis xv, who declared all taxes had to be paid with paper dollars, it gained wide acceptance—more so than coinage, in fact. But as with all paper currencies, excessive printing, additional moneymaking schemes (the Mississippi bubble), and fraud eventually blew up the system, wiping out many people’s investments and savings.
During the late 18th century, a new French government again adopted fiat currency, which was called the “assignats.” But again, money-creating destroyed it: By 1795 inflation had reached 13,000 percent. Napoleon replaced the assignat with the gold franc, inflation subsided, and a century of relative economic stability resulted. In the 1930s, the French again adopted a paper franc. In 12 years, its currency lost 99 percent of its value.
Weimar Germany is another example of a failed currency. At the end of World War i, Germany decided to print the money needed to pay the debts it owed foreign nations. By the time the government was done printing money, the currency had been so debased that postage stamps cost millions of Deutsche marks.
In 1932, before adopting a paper currency, Argentina was the eighth-largest economy in the world. Since abolishing their precious metal-backed currency, Argentineans have been plagued with continual currency inflation—even hyperinflation reminiscent of Weimar Germany. The latest bout was in 2001, when the peso lost 75 percent of its value in one year.
Each couple of years it seems like another nation’s fiat currency falls apart. In 1992, Finland, Italy, Norway and other European countries suffered when their currencies devalued. In 1994, it was the Mexican peso “tequila hangover” crisis, which spread through several Latin American nations, including Brazil, Venezuela and Argentina. 1997 was the year of the “Asian flu” contagion, which started with the Thai baht and then within days spread to Malaysia, the Philippines, Indonesia, Hong Kong and South Korea. The currency collapses associated with “bahtulism” were still destabilizing currencies in 1999. 1998 saw the Russian ruble fall apart and experience massive devaluations. February 2001, the Turkish lira lost 40 percent of its value in one day.
To attempt to chronicle the massive currency devaluations that are endemic to many African nations would require stacks of paper, but Zimbabwe is too clear cut of an example to pass up. Formerly known as Rhodesia, Zimbabwe was one of the wealthiest countries in Africa. In fact, at the time of its independence in 1980, the Zimbabwe dollar was worth more than the U.S. dollar. Then along came President Robert Mugabe, who decided to seize virtually all property owned by white people to give to black people. The upheaval within society caused an economic collapse. With a non-functioning economy and falling tax revenues, Mugabe decided to just print up the money needed to pay the bills, destroying Zimbabwe’s currency and any of his people’s savings in the process. As of May 2006, it cost $416 Zimbabwe dollars to purchase a single two-ply square of toilet paper, while a whole roll cost $145,750.
Why should we think America is somehow special and immune to currency crisis? In fact, go back and study history: In addition to the fact that the U.S. dollar has lost 92 percent of its purchasing power since 1913, and 41 percent in the 1934 revaluation, there have been times when the dollar lost even more value. Maybe you have heard the expression “not worth a Continental.” That expression developed in regards to America’s paper money during the Revolutionary War era (not Ford’s Lincoln Continental luxury vehicle). The U.S. government again tried a paper currency experiment during the Civil War. The Legal Tender Act of 1862 allowed the Lincoln administration to issue paper money, backed by nothing but the government’s decree that it be accepted for trade. The paper money lost value so quickly that the practice of fiat currency in America fell out of favor until the Federal Reserve System was put in place in 1913. Paper money in the South by the end of the Civil War was worth even less.
The sad part is that when governments resort to mass currency creation, it is the common person’s savings that get destroyed. The interest earned in savings accounts never keeps up with mass-printing induced inflation.
For the U.S. dollar, its final link to a hard, tangible asset was severed 35 years ago. Today, the majority of dollars are little more than bits of electronic information zooming between banks and corporations that people don’t even see, and that they need computers with super calculators to keep track of. How much confidence is left in the inflated U.S. dollar—a dollar whose value remains high not for any tangible reason, but only because so far America’s trade partners are still willing to accept it?
In Weimar Germany, when the mark was inflated into practical worthlessness, at least the German people were left with tinder. When the dollar collapses and no one wants it, most of it will probably just be deleted.
Shitnut,
Please explain how buying gold in dollars is different than buying S&P500 in dollars adjusted for the dollar's nearly 8% drop this year.
----------------------------------
People who bought gold a year ago are up 10% in real terms.
Speaking of real terms, the S&P was only up about 5% this year adjusted for the dollar's nearly 8% drop this year.
fucknut,
Did I say for the year? What is the obession with you wingnuts with YOY and YTD. I bought in mid-summer you dumb cunt. Since then I'm up 40%.
Is there some rule that you have to hold an investment for a year? You moron.
What about transaction costs doofus? How much do you pay to buy and sell gold huh?
Dickhead.
------------------------------------
You're an idiot. All you've proven is that you can make money buying and selling anything, if you get lucky with the timing.
Let's try this.
How are you doing on those home builders for the year?
I think too much obsession with the house bubble and not enough on the demise of the dollar and the decline of America and its effects on our wealth and standard of living.
It won't matter if our economy is destroyed. The future is in Europe and China. They will be the new super powers and America will become a third world country.
Europe will me Saudi Arabia without the oil in 20 years. I'm not too afraid of them.
will me = will be
gangsta:
I know you said "since summer". But you don't get to set the bounds of this discussion, nor what an intelligent investment strategy is. And "ha ha you didn't buy when X was lowest and sell when it was highest" is about the most brain-dead naive amateurish comment one can make regarding investment (or for that matter, speculation).
My point was that if one simply sets another point in time for the "buys" in question (the year), the market, or any housing-related index looks a lot worse than gold.
I can't for the life of me fathom why exactly even your pea-brain can't grasp that gold returned better than the S&P for the year, adjusting for the dollar's drop. Gold nominal was around 23%, S&P nominal was around 14%. Dollar drop was about 8%. Can you handle the math?
PREDICTIONS FOR 2007
``The ECB will continue to be more aggressive in raising interest rates than the Fed and the BOJ next year,'' said Samarjit Shankar, director of global strategy for the foreign exchange group in Boston at Mellon Financial Corp. ``Growth outlook in the euro zone is positive. It supports the euro.''
ECB Rate
The ECB will raise rates three times next year to 4.25 percent, the Fed will lift once to 5.5 percent and the BOJ twice to 0.75 percent, Shankar said.
http://www.bloomberg.com/
apps/news?pid=
20601101&sid=
aabcm9pOfrKo&refer=japan
The euro rose 4.9 percent this quarter to 157.13 yen, and touched a record 157.18 yen yesterday. The European currency also advanced this quarter against the dollar, by 4.1 percent to $1.3199.
Question: What's the interest on 9 trillion dollars (federal debt)?
My wife and went rental hunting in Encinitas, CA yesterday. We found a very nice upgraded detached home of 1300+ sq. ft.. in a nice neighborhood, however, there was too much noise coming from the street for us to want to live there. The owner was a gentlemen and had priced the rent very fairly. What amazed me was the hope he had that the market was going to “turn around” and grant him the $150K profit he was looking for. Apparently he had bought the home for $420 in 2002 and was trying to sell it for $575. He had no offers, no visitors and some sketchy rental applicants.
It was then my wife realized after two years of arguing that these people are screwed.
As we left my wife said, “ If you can’t sell the place it means your price is way to high.”
I then told her that these people have all their dreams of retirement, paying of their debts, etc, on this house bubble. She replied, “It’s sad to see so many people think you can get something for nothing.”
foxwoodlief said...
A very Astute comment and expresses complex things in a compact way. (:
It is why HP, a House bubble Blog is seemingly all over the place, I reckon.
iw
Hi FMW.
Happy New Year, Mammoth.
You are up early.
Like my pic?
-AZ
debtiswealth,
YOY and YTD are just as arbitrary as "since summer".
My 2007 Predictions:
1. In some areas, houses will increase in price.
2. In some areas, houses will decrease in price.
3. Some stock values will go up.
4. Some stock values will go down.
5. Some people will be fired from their jobs.
6. Some people will get promotions.
7. Some people will die.
8. Some people will be born.
9. The US will be at war with someone.
10. Muslims will kill lots of non-muslims.
10a. Idiot American lberals will blame the events of 10 on the USA.
11. The price of gas will go up and down throughout the year.
11a. When the price goes up 5 cents, HPers will point to that as evidence of hyperinflation.
11b. When the price falls 5 cents, HPers will point to it as evidence of the upcoming GD2012 and deflation.
12. Bernake will give a lot of speeches.
12a. HPers will be convinced every speech has secret codes regarding the NAU and Amero
13. On Dec 31, 2007 HPers will be spinning away the fact that they were wrong yet again as the dollar did not collapse, housing did not crash 60% and the world more or less did not change since Dec 31, 2006.
HAPPY NEW YEAR EVERYONE!!
December 29, 2006
Real Estate and the Post-Crash Economy
by John Mauldin
http://www.safehaven.com/article-6603.htm
Looking back on 2006
Gold up 23%
Silver up 46%
The US Dollar lost value measured against foreign currencies as predicted.
The housing crash continues as predicted.
Most Americans: still stupid.
"bozonian said...
Question: What's the interest on 9 trillion dollars (federal debt)?"
A: Nothing compared to $370 trillion+ in derivatives!
Has anyone taken notice that this site is dominated by only a few? Same bunch whinning and moaning! Most of them don't know their ass's from applebutter!
Just a very few add to or know what their talking about...i.e. fmw
....and paul e math and mammoth!
My 2007 predictions:
1. Housing will fall anywhere from 20% (very desirable and/or wealthy areas such as NYC) all the way up to 90% (Flipper Towns), probably in shots of 5% to 20% depending on the property in question.
2. Democrats will likely not be able to do anything about the increasing economic problems within the USA as the federal debt surpasses the 10 trillion USD mark, perhaps sometime in October. Republicans, already a basket case for the most part, will fall out of favor quickly as the conditions in the USA become worse.
3. We could see a dollar crisis, maybe as soon as January as the dollar is in freefall now. The result could be a lockdown on bank accounts and further control on who opens them (you may have recieved news of this in any recent banking statements you have received)
4. The Iraqi civil war will continue as political squabbling back in Washington prevents any meaningful escape from the unrest for the troops. At this point, a pro-Kurdistan independence movement could take hold of that section of the country, and it's possible we could see a new country by the end of 2007.
5. I believe that Americans, increasingly short on money and credit, could downsize much of their lifestyle and we'll see more SUVs, expensive clothes, jewelry, and other items up for sale or even pawned to support basic necessities.
6. With Washington increasingly unable to deal with domestic and foreign problems, even secession movements within the USA could become stronger after being dormant for quite a while.
Anything is possible now!
90% in flipper towns?
So Las Vegas's median price will be down to $32,000?
WOW!!
Well good. I need a new SUV, maybe there'll be some good deals to have. Any my wife is always yapping about buying her more diamonds, again some good deals to have
------------------------------
5. I believe that Americans, increasingly short on money and credit, could downsize much of their lifestyle and we'll see more SUVs, expensive clothes, jewelry, and other items up for sale or even pawned to support basic necessities.
Is Miami a flipper town too? At 90% off I could buy a condon on the beach for $35K. This is fantastic!!
So according to HPland predictions I'll have a condo on Miami Beach for $35K, a home in Las Vegas for $32K and what the hell I'll buy a home in Phoenix for $30K too.
SAWEET!!!
I just bookd my flights to MIA, LAS and PHX for next week. I have $100K in cash ready to go. Boy oh boy, can't wait.
Did you hear movies cost $10 now. They used to be $5 in the 1990s. Movies double but median income only increased 50%.
Say bye bye Hollywood!!
Check this out. I went to a car dealer and a new car is like $30K. Unrear!!
In the 50s a new car was $2K. At 3% a year increase a new car today should be about $9,000.
No way I'm buying a new car until prices fall back to those levels man.
Money and Inflation 1930's
To provide an estimate of inflation we have given a guide to the value of $100 US Dollars for the first year in the decade to the equivalent in todays money
If you have $100 Converted from 1930 to 2005 it would be equivalent to $1204.42 today
In 1930 average new house cost $7,145.00 and by 1939 was $3,800.00
In 1930 the average income per year was $1,970.00 and by 1939 was $1,730.00
In 1930 a gallon of gas was 10 cents and by 1939 was 10 cents
In 1930 the average cost of new car was $640.00 and by 1939 was $700.00
Here is some data I found to chew on. Notice some things went up, incomes went down, some things stayed the same, but home prices were cut in half. Took 9 years for home prices to be cut.
Difference was they were going through deflation, the dollar still had a lot of value so not sure comparing the thirties with today is comparing apples to apples but something to think about.
Money and Inflation 1930's
To provide an estimate of inflation we have given a guide to the value of $100 US Dollars for the first year in the decade to the equivalent in todays money
If you have $100 Converted from 1930 to 2005 it would be equivalent to $1204.42 today
In 1930 average new house cost $7,145.00 and by 1939 was $3,800.00
In 1930 the average income per year was $1,970.00 and by 1939 was $1,730.00
In 1930 a gallon of gas was 10 cents and by 1939 was 10 cents
In 1930 the average cost of new car was $640.00 and by 1939 was $700.00
Here is some data I found to chew on. Notice some things went up, incomes went down, some things stayed the same, but home prices were cut in half. Took 9 years for home prices to be cut.
Difference was they were going through deflation, the dollar still had a lot of value so not sure comparing the thirties with today is comparing apples to apples but something to think about. Note that home prices in 1930 were about 4 times income and fell to about 2 1/2 times income.
Source www.thepeoplehistory.com from 1900 to today for each year and decade on home prices, cars, comsumer goods, food, incomes. Interesting.
Can't compare US today with US in the 1930s. It is now a completely different country economically, demographically and politically than what it was 70 years ago. Making comparisons is about as useful as comparing 2006 US with Slovakia.
- FDIC did not exist
- Welfare did not exist
- SEC did not exist
- Social Security did not exist
- practically no labor laws
- 1/5 of the country was not
electrified
- 95% of the country white
- Segregation still present in South
which was agrarian
- people did not expect the
government to take care of them
from cradle to the grave as they
do now
- California a distant far off
place, center of the country was
NY
I bought a Yaris a couple months ago. 11,000. That's cheap.
From my readings of monetary history, we are fast on the path of prior paper money disasters.
The slippery slope works like this: Once the government successfully pays its debts with paper money, and no one complains, it continues to solve its debt problems, including interest on the old debt with the same paper. The need gets greater and greater and the amount of paper money increases parabolically until you wake up one day and no one will take your money. Each day the problem goes on it gets geometrically harder to reverse. If it's difficult to take the hard measures now, it will be even worse later.
Honestly people, it seems there is no one who is being held accountable for destroying our currency. Everyone is just looking out for themselves, especially the bankers and politicians, the ones who have the duty to make sure this doesn't happen.
The only benefit I see to the falling dollar is that outsourcing will no longer be profitable. This is especially important in my field, computer programming. Maybe I'll have to move to Mumbai to get a good paying job.
Frankly, I'd welcome a new currency once the dollar washes away. If that happens all the white collar criminals who have dollars they can't account for stashed away will have to forfeit them. And really, the people we will be defaulting on are just rich foreigners anyway. Screw those bastards.
Yaris...oh god how proud you must be...the ladies will love it I'm sure
From my readings of monetary history, we are fast on the path of prior paper money disasters.
-----------------
I got this from an HPer a few months ago, on this note a good read.
http://london.sonoma.edu/Writings/IronHeel/
Yaris, cool. great mpg. Only shallow ladies will care. (:
"Perhaps most importantly for the world, voters in the United States gave a vote of no confidence to President George W Bush, who will now be held in check by a Democratic Congress.
When Bush assumed the presidency in 2001, many hoped that he would govern competently from the centre. More pessimistic critics consoled themselves by questioning how much harm a president can do in a few years. We now know the answer: a great deal.
Never has America's standing in the world's eyes been lower. Basic values that Americans regard as central to their identity have been subverted. The unthinkable has occurred: an American president defending the use of torture, using technicalities in interpreting the Geneva Conventions and ignoring the Convention on Torture, which forbids it under any circumstances. Likewise, whereas Bush was hailed as the first "MBA president," corruption and incompetence have reigned under his administration, from the botched response to Hurricane Katrina to its conduct of the wars in Afghanistan and Iraq.
In fact, we should be careful not to read too much into the 2006 vote: Americans do not like being on the losing side of any war. It was this failure, and the quagmire into which America had once again so confidently stepped, that led voters to reject Bush. But the Middle East chaos wrought by the Bush years also represents a central risk to the global economy. Since the Iraq war began in the 2003, oil output from the Middle East, the world's lowest-cost producer, has not grown as expected to meet rising world demand. Although most forecasts suggest that oil prices will remain at or slightly below their current level, this is largely due to a perceived moderation of growth in demand, led by a slowing US economy.
Of course, a slowing US economy constitutes another major global risk. At the root of America's economic problem are measures adopted early in Bush's first term. In particular, the administration pushed through a tax cut that largely failed to stimulate the economy, because it was designed to benefit mainly the wealthiest taxpayers. The burden of stimulation was placed on the Federal Reserve Board, which lowered interest rates to unprecedented levels. While cheap money had little impact on business investment, it fuelled a real estate bubble, which is now bursting, jeopardising households that borrowed against rising home values to sustain consumption.
This economic strategy was not sustainable. Household savings became negative for the first time since the Great Depression, with the country borrowing $3 billion a day from foreigners. But households could continue to take money out of their houses only as long as prices continued to rise and interest rates remained low. Thus, higher interest rates and falling house prices does not bode well for the American economy. Indeed, according to some estimates, roughly 80% of the increase in employment and almost two-thirds of the increase in GDP in recent years stemmed directly or indirectly from real estate.
Making matters worse, unrestrained government spending further buoyed the economy during the Bush years, with fiscal deficits reaching new heights, making it difficult for the government to step in now to shore up economic growth as households curtail consumption. Indeed, many Democrats, having campaigned on a promise to return to fiscal sanity, are likely to demand a reduction in the deficit, which would further dampen growth.
Meanwhile, persistent global imbalances will continue to produce anxiety, especially for those whose lives depend on exchange rates. Though Bush has long sought to blame others, it is clear that America's unbridled consumption and inability to live within its means is the major cause of these imbalances. Unless that changes, global imbalances will continue to be a source of global instability, regardless of what China or Europe do.
In light of all of these uncertainties, the mystery is how risk premiums can remain as low as they are. Especially with the dramatic reduction in the growth of global liquidity as central banks have successively raised interest rates, the prospect of risk premiums returning to more normal levels is itself one of the major risks the world faces today."
If derivatives are so stable, then why not eliminate taxes on everything and bury the debt under the living room rug (ie put the risk into derivatives)? A used car salesmen would say it's a great idea cause it would make a few more sales. But there's a reason as to why this hasn't happened, and it's the same reason why derivative coverage hasn't broken through to the MSM. $370+ trillion and counting. When will the bill come due? 2007? 2008? ...
If you paid 11k for a yaris, then cars are getting very expensive. hehe.
Oh, so now you are speaking for all Americans?
Personally I think the Geneva Convention should only apply if the other side follows it also.
I also believe we should pardon one American soldier committing an atrocity for every atrocity the enemy commits.
This "playing by the rules" shit is getting us nowhere.
If I'd been president I would have just nuked Kabul the day after 9/11 and said, "Anyone else want some?"
anon 6:42....YUP.
I remember my parents bought my sister a new Chevy Cavalier when she went off to college. This was in 1984 and it cost $9,000. I would hazzard to guess an '07 Yaris is a better car than an '84 Cavalier. Yet the price is only $2000 more, 13 years later. This works out to a 1.5% increase a year.
Now you all were talking about hyperinflation....
1991 7 br 4 ba $125,000.00 lake view
2001 3 br 2 ba %101,000.00 golf view
2006 1 br 1 ba $152,000.00 city view
All in the same zip. I bought them all.
% is $
where do you live where you can buy all these cool views for nuthin
In a city in Floriduh.
every notice how every fucked up new story comes from FLA these days? If there is a little girl killed/raped, a teacher fucking her student or any other kind of tabloid like story chances are it's from florida
But fuck whatever, beaches, good weather, good golf, no income tax...worth it for me.
That is becuase of all the losers from other places move to FL and FK it up.
ehhh there's plenty of home grown trash too, can't blame the yankees for all of it
Did I say Northerners? No, just other places.
The Red Necks and crackers are not that bad.
oh excuse me did I offend you Mr. Nu Yawkeh
If you do research in the Florida investment real estate market you'll hear about many good opportunities in the market. In addition to these good opportunities’ there are some rumors of a mysterious real estate bubble crash. At the present time investment real estate opportunities are selling faster then ever before. In contrast, a few people believe that US real estate market will all of the sudden lose all its value. In turn, all of the world's real estate investors, particularly those investing in Florida, will go broke due to over developments in the world. While it is true that at some point real estate investing opportunities in Florida will cool down, it is highly unlikely it will bust and actually go down in value. Where and how do these rumors start? I'll go over a reasons I feel contribute to these growing rumors.
People can not believe it
This is probably the largest factor when people talk about the Florida (i.e. Orlando, Miami, and Ft. Lauderdale) investment real estate bubble popping. People just can not believe it is going so well. It is natural for people to think negatively when something is doing well. Although, the Florida investment market has many large corporations spending a lot of money estimating how long this market will continue to grow. There are many factors to look at when you are guessing how long a market has for growth. The current standing is the experts are predicting at least another five to seven years of steady growth in Florida. From these estimates I can assure you the market is booming and not going to taper off over night.
The profound expert factor
These people take every opportunity to say the exact opposite of the status quo. Trying to make themselves out as intellectuals that think outside box, these people consider themselves experts. These ‘experts’ are not just in the investment real estate industry, they are everywhere. As long as there is a sure thing that is common knowledge there will always be someone saying the opposite in hopes to make a name for themselves. Do not follow every negative you hear. As with every investment, there is risk associated with them; do not let these ‘experts’ delay your opportunity.
The truth is. in every industry you have people that are going to say the exact opposite of what's happening. These individuals call themselves gurus in the process; this is just another part of life.
It is not the investors talking
You ever notice that most of the people that give real estate advice do not actually invest in real estate themselves? I always chuckle when someone with no real estate investing experience explains the future of my industry to me. It is always very dramatic with huge twists and unexpected turns. I've been in the real estate investing industry for more then a decade and I have seen very few unexpected turns. Truth is that most of the investors know when to buy and when to sell. On the other hand, it is these weekend warriors that get slammed with the truth months later; when they read about it in the local paper.
In the Florida investment real estate industry the changes are usually slow and avoidable as long as you are with the right brokerage that stays current with the market.
Agents eliminating the competition
If your job is selling investment real estate opportunities to investors are you going to encourage competition into your market? This may result in you getting fewer clients. Real estate agents are very aware that the more agents there are in the business, the less sales they can achieve. Unless you are working for in a firm do not expect accurate real estate advice from these agents.
Look at it this way; if you are "friends" with a real estate agent he already looks to you as a lead. This is how a real estate agent makes his living. If you get into the real estate industry you (and your friends) are no longer leads, they are actually competition. If you become an agent in the real estate, friends in the same market are no longer friends; but rather they are competition. This is a very competitive market and is only successful to those who can put in the hard work needed.
Investors eliminating the competition
Now imagine you're a real estate investor buying preconstruction real estate opportunities in Florida. It is becoming harder and harder because of all the new investors entering the market. Do you really want to start telling other people that Florida investment real estate properties are very profitable right now? The answer is no; almost every serious investor I have met keeps their investment opportunities to themselves, unless they profit from it. Since a high rate of competition exists in this market the only way to get ahead is to keep to yourself.
Investors are business people first and foremost. If you're not paying them for their advice chances are it is not solid advice. I remember investors that were very willing to give out super secret stock tips as long as by you investing in the stock made their shares go up. I am quite the opposite, I want you to invest with me but I can not hold you back from taking your decision elsewhere. If you need advice do not hesitate to call or email me with your questions.
Remember, the most profitable advice is always the free advice. Research your investment first, this is the best advice I can give you.
http://www.yaerd.org/florida_vegas_opprotunity.htm
oh excuse me did I offend you Mr. Nu Yawkeh
_____________no
House prices will come down in most martkets that increased above 5% a year over the last 5 years. Expect prices to be back to pre 2003 prices. So that means expect prices to drop for the next 3-5 years.
Not so sure they will. That tag I posted about home prices from 1900 to 2005 showed a couple period where homes doubled in value in ten years, the 40s was one example and even though prices slowed for a few years in the 50s they marched right back upwards. All part of the cycle. Some houses and markets will show some corrections and give some gains back..like stocks...but in the end inflation will force them to keep going up unless we have a global economic meltdown Argentina style.
I just traveled to several countries in Asia, and I saw a lot of smiling faces. The economy was booming. The people were friendly and the service was great. But the dollar was dropping every day!
Then I came back to California, and I saw few smiling faces. The L.A. airport was the most "jacked up" of all of them. What's up with this place? Everyone was complaining! Service was horrible, and everyone had serious "attitude". Made me want to get back on the plane!
Fox,
Since WW2 there has never been a decline in national median prices of more than 5 from peak to trough%.
And also since WW2 there has not been a decline lasting more than 3 years nationally.
60% of the population is Mexican. That's what up with this place.
-------------------------------------
"The L.A. airport was the most "jacked up" of all of them. What's up with this place?
Quantum Finance – the science of making money appear out of nowhere – is too complex for all but the very brightest young guns to grasp. Yet it underpins the entire financial universe today. The very fabric of money, mortgages and markets has come to rely on concepts and con-tricks not even the sales desks can follow. And Quantum Finance in its higher forms remains unregulated of course, which is just as it should be. For by the time the SEC and FSA get round to hiring the PhDs they need to make sense of the mess, the smart money will have already moved on, selling out as their Lear Jets get cleared for take-off.
But perhaps the AAA-rated bond market will implode first. Bill Gross, head of Pimco, says we've reached a peak in making money from nowhere. Leverage on complex bond trades simply cannot get any higher, he believes, citing "a new derivative credit product retailed to institutional buyers under the sticker known as a CPDO or 'constant proportion debt obligation'."
"These multibillion-dollar instruments lever investment grade indices up to 15 times the amount invested," says Gross, "and offer or have offered a spread of 200 basis points over LIBOR with a AAA rating. Hard to pass up I suppose...
"But this AAA rating is subject to numerous (more numerous than usual) subjective assumptions," he goes on. "Increasing multiples of leverage beyond 15x near current yield spreads cannot maintain either a AAA rating and/or the 200 basis points in yield spread that have made this derivative so attractive...The increasing use of leverage, in other words, at least as applied to this particular area, appears to have run out of its magical ability to increase returns."
The money's got to go somewhere, remember. Professional investors abhor cash. But "there are not enough quality assets to go round, so people are buying up the rubbish, closing their eyes to the risk and hoping that nothing will go wrong," as Anthony Hilton put it in the London Evening Standard, also on Dec.7 for some reason.
"This is the case whether they are buying 20-year bonds issued by the current Iraqi government, sub-prime mortgages on slum property in Baltimore or a parcel of 130% mortgages issued to unemployed people in Wigan," Hilton went on. "The world's financial markets have forgotten the meaning of risk."
You mean like 'La Guillatine' for a full frontal lobotomy?
Oh wait, the modern equivalent is the derivative market...
Devestment,
(1) There is something like that, Prosper,
over at itulip. You can lend those u
choose money at a rate you and they set.
Sheckitout.
(2) 6AM EST: DOLLAR COLLAPSE NOW??!!!
Porker just fell big. AUD and EUR up
1% in just a few hours. I'm calling
81+ by days end, and $GOLD at 650.
-mc
Tue, 02 Jan 2007 12:08:35 GMT
by Chris Wilkinson
FX Solutions
European Forex Recap
Happy New Year
Date: Tuesday, January 02, 2007 2.00am until 7.00am EST
Market Recap:
In earlier news
* Australian manufacturing PMI for December 52.4 from 54.4 the previous month.
* Selling of dollars across the board heralded the start of the New Year in a still somewhat thin market due to holidays in Japan, Singapore, China and New Zealand.
* Opening levels:-GBP/USD 1.9642/47 EUR/USD 1.3234/37 USD/JPY 118.67/71 USD/CHF 1.2147/51 USD/CAD 1.1635/40 AUD/USD 0.7937/41 NZD/USD (2.00am EST)
* The dollar weakness still continuing in early European trading with the market testing the upside in Euro-dollar at 1.3255 and in cable at 1.9698 (2.30am EST)
MLN: It´s oficial
"Mortgage Lenders Network, USA is not currently funding loans or accepting new applications through the Prime and Non-Prime Operating units. We are currently exploring strategic alternatives for the Wholesale Business Lines.
If you have questions regarding loans that were in the pipeline, please contact your Regional Production Office or your Business Development Manager."
http://www.mlnusa.com/brokers/non.htm
Just Sayin........
Hal Turner Show .com
Sunday, December 31, 2006
My web site has been turned off
I regret to announce that my web site has been turned off. The attacks against my server proved to be "disruptive" to the entire Class 1 data center in which it was housed.
I am, as of now, DEFEATED.
Off the Internet except for this (highly-content-restricted) blog, off the air, dead in the water - with remaining invoices for thousands of dollars in bandwidth (intentionally used by the attackers,) on their way for me to pay.
I have been completely and totally destroyed by attacks emanating from a criminal conspiracy of people at 4chan.org, 7 chan.org, ebaumsworld.com, nexisonline.com and others.
These criminals attacked my server relentlessly for ten days. This was criminal and civil Tort under 18 USC 1030, the Computer Fraud and Abuse Act.
They publicly and repeatedly told me they would not stop unless I agreed to shut down my web site and shut off my radio show. This was blackmail; criminal felony Extortion. I would not give in.
They called my house hundreds of times a day with crank phone calls. This was unlawful telephone harassment in violation of state and federal laws.
They placed phony orders for hundreds of dollars in Pizza from Papa Johns, and two other local Pizza shops, DEFRAUDING those companies who delivered those unwanted pizzas to my house. The orders were placed by internet and by telephone meaning the perpetrators committed 3 counts of WIRE FRAUD.
Today (Sun. Dec. 31) alone, three separate Chinese restaurants were defrauded by these same fake orders for food to be delivered to my house. The fraud was perpetrated by telephone, making it 3 more counts of WIRE FRAUD.
They placed fraudulent orders worth tens of thousands of dollars for supplies of shipping boxes, envelopes, labels and packing slips to be delivered to my house from DHL and Ebay. These companies shipped these supplies thinking I had applied to be a new agent of theirs, only to find out when the shipments arrived that the whole order - placed via internet - was faked.
These four for five separate fake orders for shipping supplies came in via internet, making the perpetrators guilty of four or five more counts of WIRE FRAUD.
Since the EBAY supplies arrived via U.S. Mail, the entire fake order constitutes MAIL FRAUD.
The criminal actions of these people have destroyed my web site, my radio show and my web site hosting company. The owners of the web sites 4chan.org, 7chan.org, ebaumsworld.com and nexisonline.com were all told these acts were taking place.
Despite being told these activities were ongoing and being organzied via their web sites they did NOTHING to stop it. I even went so far as to contact their web hosting companies who did NOTHING to stop any of this.
In my personal OPINION, I believe their lack of action makes the owners of those sites accessories to the crimes listed above -- but that is just my opinion.
Lest you think that this is some isolated case of immature people doing stupid things, consider this:
4Chan.org is the web site from which the "NFL STADIUM THREAT" emanated. That threat - a few months ago - to detonate truck bombs at several Football Stadiums., came from one of the sickos at these web sites!
THAT is the level of criminality going on at those sites! THAT is the level of criminality being ALLOWED at those sites!
The "Abuse" departments at many of the ISP's from which the attacks were being waged against my server, took days to respond and even longer to act. In the end, most did little or nothing.
The criminals operating out of 4chan.org, 7chan.org, ebaumsworld.com and nexisonline.com have also publicly announced their intentions to do the EXACT SAME THING to:
I am not certain where to go from here but I have a good idea of where I'm headed.
All the radio stations on AM and FM that already carry my show will continue to carry it. It is delivered via satellite uplink which cannot be interfered with.
My show WILL air this coming Wednesday on AM & FM radio. The internet may not hear a show this week or for a few weeks but the situation is fluid right now.
I will make other arrangements to stream radio shows for customers of Turner Radio Network.
I will make other arrangements for web hosting for my site, with mirror sites and a redundant "fail over" system
As the federal lawsuit I filed proceeds, I will release all the public record court documents in the case.
My entire existence on the internet has been utterly wrecked, by people I never met from places I've never been. What a way to end this year. -- December 31, 2006 7:00 PM EST
Hal Turner
1906 Paterson Plank Road
North Bergen, NJ 07047-1900
USA
secret 12@optonline.net
posted by HalTurnerShow.com @ 5:10 PM
40 Comments:
http://halturnershow.blogspot.com/2006/12/
my-web-site-has-been-turned-off.html
re: anon - MLN - Mortgage Lenders Network closing down.
There is a blog "Mortgage Lender Implode-O-Meter whose mission is to log these shutdowns:
http://br.endernet.org/~akrowne/ml-implode.html
I have nothing to do with that blog.
-K
oh booo hooo a nazi's web site is down....boooo hooo hooo!!!
What will I do with my days now?
Has HP stalled again? Few posts and fewer bits of wisdom and information on trends, just the usual rants and raves, hate, ignoring other people's posts and waiting for the end! Are people getting tired of the subject like they did of flippers last year?
Dear foxwoodlief,
Why do you have a bee in your bonnett about Keiths blog?
HP rocks as long as we ignore the REIC trolls, imo.
GTG to work.
ltr
I like HP. I like to keep tabs on what the extremists are thinking/doing. If blogs were around back then, who knows, the OKC bombing may have been prevented.
All I can hope for is that the FBI is watching, taking notes and recording IP addresses.
ALL MY NIGGAZ PUT YO HANDS IN DA AIR
AND WAVE EM ALL AROUND LIKE YOU JUST DONT CARE
flyingmonkey, I think HP is a good forum, probably the better one to toss out ideas and see what the pulse of America is but I get disappointed because too often it degenerates into Honica Jewinski's hate or people just ignore the subject or never answer those posters that make valid arguments or just preach the end of the world like a bunch of fundamentalists.
I like Ben's boring blog because at least he links a lot of news articles that give trends without hype though I recognize that he is selective and only posts those articles that conform to his viewpoint as well as edits everyone who trys to post on his site so I never read the blog portion as it is too biased. I'd rather filter through some of the extreme posts here and prefer uncensored to censored but just wish people will put the facts on the table and discuss the MANY markets out there and not just the over valued ones like California for example.
Also individuals will post something and no one will respond to it then Keith grabs the subject and makes it a main thread and then people will...to a limited degree post about the trend. Why don't people here want to have meaningful discussions?
So watching the trends here I wonder if the subject of house values is a dead horse? Seems like these days no one wants an honest discussion either way.
Yep. You could easily see 90%+ death collapses in flipper towns as far as prices go. Even in parts of NYC and LA we could see those drops. Why? If the majority of the people in the USA have little or no savings, tons of debt, and the credit is tapped out, who's buying?
Oh, and I'd say that you could see even economically stronger areas of the country like Manhattan see 70%+ drops too as most of the economy is nothing but selling pieces of paper to each other, or real estate. The real estate bubble was formed as a result of the stock market collapse which lost around $3 - 5 trillion USD. Housing is also what drives inflation right now. Currently, inflation runs at about 15% nationwide and even higher in some locales.
So, if housing stops, how can we hyperinflate the economy without making it so obvious to even mainstream America? I honestly think that we have already had hyperinflation over the past six years in the form of higher housing prices. Otherwise, we'd see that additional $15 - 20 trillion USD flow into other markets. Imagine if housing stalled at 2000 prices and gasoline went to $25 - 35/gal and groceries went from say, $100 per month to $1600 per month in place of the "housing bubble".
If I wanted a house today, I'd bid between 5% and 15% of the asking price if you are in Flippertown. Otherwise, double those numbers. If the seller gives you BS, think to yourself "I'm the buyer, they should be kissing my butt, not harping at me. I'm a customer!"
Oh, and you could get some good deals on bling too. That gold chain Mr. Flipper paid $400 for can be yours for maybe, $40? And Ms. 20-somthing Yuppie will be coughing up the Gucci bag for $5 as opposed to $300.
I can see I got a lot of folks excited over the fact you could buy condos and McMansions with a cash advance from your modest credit card account or any funds in your checking account! Probably a lot of cranky sellers though.
X-State
The mortgage backed securities are now showing signs of distress, as indeed they should - and that will show up in High Yield bond funds which will show up in.. you get the drift.
From today's mortgageservicenews.com
1.
"Homestar MBS Classes Downgraded
Two classes of Homestar Mortgage Acceptance Corp. asset-backed pass-through certificates, series 2004-2, have been downgraded by Moody's Investors Service, and one class from series 2004-3 has been placed on watch for possible downgrade. Class M-4 of series 2004-2 was downgraded from Baa1 to Baa3, and class M-5 was downgraded from Baa2 to B1."
...
2.
"Aegis ABS Classes Downgraded
Three classes from two Aegis Asset Backed Securities Trust securitizations have been downgraded by Fitch Ratings. The downgrades were as follows: series 2003-1, class M2, from A to BBB-plus, and class B1, from BB to CC (and assigned a Distressed Recovery rating of DR3); and series 2003-2, class B, from BBB to BB-plus...."
3.
Merrill MBS Classes Downgraded
Seven classes from five Merrill Lynch Mortgage Investors Inc. subprime securitizations have been downgraded by Fitch Ratings...
-K
I want to touch on a subject that gets little to no attention on this blog, but is the 2nd biggest reason why I won't buy a house - which is that houses these days are coming with increasingly stringest, bullying power-hungry HOAs. Basically you are paying monthly dues for the privilege of some nazi to tell you what you can't do with your property.
For a while I considered HOAs a minor annoynace until my last one tried to bully me about my satellite dish. It took me to start going to all their stupid meetings to get them to stop. But I got off lightly. In growing areas like Vegas, Phoenix, and Austin they are becoming increasingly emboldened, backed by emerging "management companies" run by lawyer sharks who look for any little violation so they can fine, lien, and expedite forclosure on your home.
I don't know about anyone else but crashing prices aside, I can't see how I'd want to pour my entire net worth into an asset that can be taken from me over "unauthorized tulips in my yard".
A 90% drop in flipper cities like Las Vegas means a home for $25,000 in some parts of the city.
The last time a home cost $25,000 was in the 1960s.
You are insane.
Sure it does. In your world, is the sky pink or yellow?
-------------------------------------
Currently, inflation runs at about 15% nationwide and even higher in some locales.
Read an alternative insider's view on Real Estate. When was the last time a Realtor told you NOT to BUY?
http://blog.Franklyrealty.com
Thanks!
Frank- Broker/Realtor Washington DC area
Featured in BusinessWeek, NYTimes, WJS, CNBC etc.
Comment on my blog.
http://blog.Franklyrealty.com
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