The carma here is amazing - a bubble blogger reporting from the home of the mother of all bubbles - the Dutch tulip craze of 1636 - 1637. I walked around today admiring the tulips for sale - pretty darn cheap. And I could feel the spirits of people caught up in a financial mania of untold proportions four hundred years ago.
"What were they thinking" any sane person would ask. As that sane person takes out an option-ARM, no-down, no-doc, teaser rate mortgage to buy a $1.2 million apartment.
Get it?
Looks like I missed more of the total meltdown in the subprime sector today. Good god it's gotten Depression-era ugly for that sector hasta pronto. I'm short LEND and CFC via my July puts so very nice. Maybe I'll go buy some tulips.
Moderation will be a bit slow next 48 hours. I'm back in bubble-central London Sunday.
8 comments:
motley fool's seth jayson (an HPér) gives us a hat-tip without doing it by name...
come on seth, you know where you get your best stuff!
Quick Take: More Pops From the Housing Bubble
By Seth Jayson
February 9, 2007
So, HSBC (NYSE: HBC) has to fess up to unpredictable big spending on loans gone bad, then New Century Financial (NYSE: NEW) drops nearly 30% on a bit of a warning about loan production, as well as word of a do-over on 2006 results.
Will we see the same from peers like Pacific Premier Bancorp (Nasdaq: PPBI), Countrywide Financial (NYSE: CFC), or any of the lenders out there who most certainly, I'm sure, do not engage in that type of lending popularly known as "liar loans"? Does it even matter? Stocks like Novastar Financial (NYSE: NFI) and Accredited Home Lenders (Nasdaq: LEND) have already been whacked with the mugly stick.
The real scandal: No one told any of us this might happen.
Wazza?
Oh wait, legions of people did tell us. It's just that folks wearing rose-tinted lenses somehow end up hard of hearing as well.
My only regret here: forgetting to re-up my NEW and LEND shorts in Motley Fool CAPS, our community-based investment service.
We are all doomed, doomed I tell you, a gold bug housing bubble blog has told us that the American banks are all going to fail, and the dollar will be toast,and ony those that have gave gold coins will survive.
I think you need to chill out Keith, stop looking at tulips, and visit the canal area of Amsterdam - smoke a few joints, fuck some of the local girls, or if you cannot do that, get laid with a hooker.
The fed will never allow weakness in the sub prime area of the mortgage market to infect the normal market - interest rates will be cut, tax laws will be changed, big banks will be 'persuaded' to buy sub prime lenders.
Those in power will do whatever is necessary to ensure the housing market stays healthy, and people will want them to act, since for most of them, the house, is their major financial asset.
Keith, you might want to be careful about those puts. NEW will go down at most 15 and will bounce from there. The play on LEND is over and you might want to consider going long. I shorted LEND from the 40s and covered. Looking to go long due to the short squeeze that will come. Good luck with your trading. Shorting NEW and LEND is too obvious now.
Lemonade-Making In Action...
The Wall Street Journal reports:
Mark Zilbert, founder of the online swap meet for preconstruction condo contracts is "rebranding" his Web site, which was a symbol of the condo boom times. "It just didn't make sense in a marketplace where all you have are sellers," says Mr. Zilbert, a downtown Miami residential real-estate broker.
His new Web site name: Condosupercenter.com. "Super Center" is, of course, a term often associated with discount retail stores. "We clearly have a lot of sellers and very few buyers," but there is still demand for buildings as they convert from being holes in the ground to being actually built, he says.
The new Web site is meant to help those early speculators -- 80% of the market, Mr. Zilbert estimates -- to sell their condos to folks actually interested in living in them. "We clearly don't have one buyer for every apartment being built." Still, he's optimistic enough that he's opening a sales center in downtown Miami.
I have no sympathy for the people and institutions who lost money in the mortgage meltdown.
If you didn't see this coming years ago, you shouldn't be managing anyone's money, including your own.
Mortgage lenders plunge amid missed payments, depreciating home loans
Posted 2/8/2007 3:34 PM ET
NEW YORK (AP) — The mortgage industry plunged deeper into distress this week as two lenders said sagging home prices and higher interest rates are pushing many borrowers into delinquency.
HSBC Holdings (HBC), Europe's biggest bank and a major player in the U.S. mortgage industry, said the market for "subprime" mortgages, or home loans to people with blemished or limited credit histories, is in trouble.
CONGRESS INVOLVED: Predatory mortgages lending labeled 'crisis'
Analysts' estimate for how much HSBC needs to sock away for problem loans is shy by a fifth, HSBC said. The London-based bank estimates it needs to set aside almost $10.6 billion to cover loans it won't be able to collect.
Shares of mortgage providers fell across the board on Thursday, but none were hit as hard as New Century Financial (NEW), a subprime mortgage lender based in Irvine, Calif. The company said late Wednesday accounting errors caused it to lose track of how drastically some of its mortgage loans are losing value.
Three Wall Street analysts downgraded New Century, and the company's stock plummeted $9.58, or 32%, to $20.58 in afternoon trading, crashing through its previous 52-week low of $29.07, set last month.
During the housing boom, many mortgage banks devised crafty loans allowing people to borrow money with no down payment and pay low interest rates for the first few years on adjustable mortgages. Now, as interest rates reset higher, more borrowers are missing payments and many lenders are going out of business or putting themselves up for sale.
Subprime loans were once very attractive to some banks because of their higher interest rates.
But HSBC said the weak housing market exacerbates credit problems in the subprime mortgage space. Until a little more than a year ago, stretched borrowers who needed to raise cash could take out a second mortgage on their houses and use that money to pay off loans. With housing prices stagnant — and in some markets falling — consumers' best source of financing has shriveled.
The problem for these types of lenders may not go away quickly.
http://www.usatoday.com/money/industries/banking/2007-02-08-subprime-lenders_x.htm
Was thinking, if Honica Jewinski could get laid, he'll feel better and wont hurt himself, so now the question becomes how do we achieve this.
the challenge is that little boys are illegal and Honica wont get aroused any other way.
fellow HPers.. what to do?
Condosupercenter? Oh gag!
let's call it
The Site Formerly Known as CondoFlip.com
tag line "Bubbles are for Bathtubs!"
With the infamous
Green
Yellow
Red (PANIC) buttons
to Flip Your Condo Fast!
New name, same dumb idea. Dead.
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