July 06, 2007

HousingPANIC Stupid Question of the Day



Is the Great US Housing Crash about to go from "oh, isn't that interesting" to the biggest story in the world?

And will this housing crash now spread around the globe - America was just first up?

78 comments:

icecold1967 said...

Cool

armed said...

Duh, Me thinks Japan already had one. By the way it was not the end of the world.(I wonder if they blamed George)

K.W. - Southern Ca. said...

The housing bubble is just a part
of a much larger problem for the economy.

zoiks said...

Might be a good time to start the Hedge Fund Implode-O-Meter or HF-Implode.com.

We have a start:
2 Bear Stearns leveraged credit funds
Brookstreet (OK, not exactly a HF)
Galena Street (Braddock)
Lake Shore Asset Management
Caliber Global

All, apparently, related to the implosion of (clearly well-contained) subprime bonds.

Anonymous said...

Next countries to fall are Spain and Ireland

Anonymous said...

The United States has taken a lot of hits for the rest of the world. The Asian contagion in '97 etc. We had deep pockets and Easy Al accomodated by doing his thing to keep the world on track.

Now the U.S. is in bad shape (yo, earnings as a metric folks is a trailing indicator and if you try to drive by the rearview mirror you won't react in time for the cliff up ahead.)

Anonymous said...

Good idea about the hedge fund implode-o-meter. It will be a true metric about demand leaving the marketplace and liquidity drying up. If you'd rather trust the government stats you'll wake up one day in a world of pain.

Ben Bernanke, if you're reading this, it's time to stop playing cowboys and indians.

Anonymous said...

Just wait until the Canada dollar eclipses the U.S. in value. That will be the sign things are seriously f*cked.

Anonymous said...

But everyone believes in the dollar.... things like this don't happen.

Anonymous said...

no and no

Anonymous said...

The Candain dollar was worth more than a $US before in the 1960s and 1970s. Nothing new here. Again HP goes crazy over something that has happened many times before.

It's not different this time, it is never different this time.

Anonymous said...

Keith, looks like someone forget to close their A href tag. Everything links to moneyandsenses.

The Thinker said...

Maybe some day the housing downturn will mature into something bigger, but not anytime soon.

It seems like most of the downturn is taking place in Florida, Vegas and Arizona, where prices went sky high but salaries didn't match up.

If there is a nation wide housing down turn, you sure as shit wouldn't know it from the New York City area.

Anonymous said...

job growth beats forecast....economy booming, unemployment at 4.5 yet the tinfoil hat gang talks about depression

Anonymous said...

Anonymous said...
job growth beats forecast....economy booming, unemployment at 4.5 yet the tinfoil hat gang talks about depression

July 06, 2007 12:51 PM

Is the housing market booming? I don`t live in FL,AZ or Vegas but I can tell you that there are a crapload of unsold houses here. And yes, I`ll give you that I still see help wanted signs at the local fast food places, but try to find a decent job with health ins. for the average person in this "service" oriented economy. I`m not saying that we are heading for the crapper tomorrow or even next year, but just remember that there has never been a fiat money system that did not crash. This stuff just keeps building up. Even Rome bit the dust. Yeah, I know, it took awhile. But I don`t think it`s going to take America quite that long.

Anonymous said...

Yes anon - all that growth in the service sector. How do you ask "Would you like fries with that?" in Mandarin? Everything is great!

Anonymous said...

Thinker,

I don't know about Miami or AZ. In Las Vegas the donwturn is in sales only. Prices are holding for the most part. In my 'hood sales have slowed to 1 every 2 months as opposed to 1 every 2 weeks in the boom years. But selling prices are still at $200 per sq ft give or take which is what it was in 2005.

And here we go again with the salary talk that. Clark County's median household income is $45K. Los Angeles county's is $56K.

But median home price in LV is $320K or 7.1 times income. Median in LA is $550K or 9.8 times income.

Relatively speaking Las Vegas is in much better shape compared to L.A. as far as affordability goes. Yet LA is always held up as the one place that maybe will come out of this OK.

Makes no sense.

Unless you believe it's different in LA...

Conversekidz said...

Price are down in the bay are, but a housing crash....I haven't seen it yet. To many web 2.0 people making 6 figures, who don't know what to spend it on.

SPECTRE of Deflation said...

armed said...
Duh, Me thinks Japan already had one. By the way it was not the end of the world.(I wonder if they blamed George)

The numbers this time around make Japan's problems look tame. 485 trillion dollars in notional value in derivatives is 7 to 9 times the entire world's GDP. When the CDOs, CLOs and the rest blow up, you will wish for the easy ride Japan had.

SPECTRE of Deflation said...

The Thinker said...
Maybe some day the housing downturn will mature into something bigger, but not anytime soon.

It seems like most of the downturn is taking place in Florida, Vegas and Arizona, where prices went sky high but salaries didn't match up.

If there is a nation wide housing down turn, you sure as shit wouldn't know it from the New York City area.

ROFLMAO! You think someone will ring a bell for you? You must of had one Hell of a 4th to come up with your reasoning.

Anonymous said...

Jim Willie Said...

Many workers in the home construction industry do not typically participate in the state unemployment insurance programs. The construction firms wish to keep their labor expenses down, and payment in cash accomplishes that objective. Paying immigrant workers in the special trades also is done on a cash basis more than is recognized by those who actually trust official data compiled by compromised bureaucrats and party apparatchiks eager to follow orders or even impress via new clever deceptions. So the official job loss data collected by the US Dept of Labor does not count those cash basis jobs. That is convenient. Financial engineering. Not only do Ripple Effect job losses occur with those involved in carpets, light fixtures, faucets, landscaping, and so on, but their lower or missing paychecks act like a contagion agent back home.

Remittances are payments made by many types of immigrant workers outside the United States to other lands, simple cash disbursements like to family members via bank wires. Agriculture and construction are the two biggest sectors with such workers. The Mexican families have seen the biggest brunt of the slide, joined by those in central American locations, alongside Dominica and some South American nations. Between 2000 and 2006, almost 20 thousand Latino workers were added in cement masonry alone, with another 72k as drywall hangers, another 140k as painters, according to the US Dept of Labor Statistics. The Mexican economy has felt the impact in pockets. Even Brazil has seen a dropoff, from $330 million in remittances in February 2007 versus a monthly average of $446 million a year ago. In previous reports, it has been noted that job cuts are under-reported among home builders. Remittances are the evidence. A tiny fraction of the workers sending less money home are inside the state system of state unemployment insurance. Not only is contagion evident in the USEconomy and US mortgage banking industry (all denied loudly), but that contagion extends to Latin America south of the border.
How does MINUS 229 THOUSAND JOBS sound for April ??? Take away the indefensible nonsensical but convenient Birth-Death model addition of 317 thousand jobs for the month, all nicely hidden and never cited, and that is what you see. Look instead to the Household Survey, and no better. You see MINUS 463 THOUSAND JOBS. Flick a switch, trigger a statistical device, and poof, just weak jobs creation during the current recession. Financial engineering.

The jobs picture confirms troublesome growth signals. The official promotional piece known as the 'March Jobs Report' explained non-farm job growth rose by a mere 88 thousand jobs, far below the 125 to 150k required to keep pace with the population. It was the weakest report in three years. Worse still was the downward revision by 26k jobs in January and February. Revisions down are an accurate forward indicator generally, a signal of weakness ahead. Look to the trend, and downward revisions mean things are changing for the worse. The 0.4% drop in average hours worked is another confirming bad signal.

Here is the GIANT LULU. The Birth-Death Model actually added 317k jobs. ON WHAT BASIS??? From a housing decline and related fallout? Without that indefensible lift, the March jobs figure would have been MINUS 229 THOUSAND. The +95k B-D adjustment from leisure & hotels, and the +49k adjustment from construction seem way off, very contrived. The labor participation rate fell by 0.2%, which means fewer people even look for work. That kept down the jobless rate, which is a measure of state jobless insurance collection only. People are dropping out of the system. A huge 262k rise (5.8%) was seen in people NOT counted in the labor force who would like to have a job. Sounds like a jobless person to me!!!

The interesting U-6 all-inclusive statistic (unemployment + under-employment) rose to 8.2% from 8.0% in April. The Shadow Govt Statistics folks believe the jobless rate is closer to 12% in the United States. A final point is that immigrant construction workers are not included in the official statistics. Their numbers are 'mucho mas en realidad' (much more in reality, just using my newfound Spanish skills) than what is reported. The ripple effects are now beginning to take a bite. Related niches to home building and remodeling, related niches to home lending, these are shedding jobs in droves. Refer to carpets, faucets, lighting, furniture, appliances, landscape, plumbing, wiring. Refer to loan officers, property appraisers, title search, legal, home inspectors.

View the full article at:http://www.gold-eagle.com/editorials_05/willie051607.html

Ron said...

When Cali slides that is when we will see a serious problem, that can't be ignored.

We had a great depression and we made through it previously, so friggen what? Does that mean genius that if we get another one that the ramifications of that event in this changed world would be the same as it was in 1920's or 30's? We had that happen before....blah blah blah.

We nuked Japan previously, and blew up two of their cities...therefore if that should happen here today with modern nuclear weapons we would be ok because they were?

Please shut up with your stupefied simplifications of a larger problem that you can't or wont understand anon troll, you make us all dumber for reading your inane blathering.

Guy Daley said...

HEY THINKER!!!

Obviously your not reading my posts and your too lazy to cut and paste the links people are putting on this website. WHY? The information is sitting there but you refuse to acknowledge it, WHY? Are you a tree stump too? Your not going to think unless somebody spoon feeds you the info?

You said:

It seems like most of the downturn is taking place in Florida, Vegas and Arizona, where prices went sky high but salaries didn't match up.

If you want to measure up to your moniker start reading the information laid at your feet. Or are you too lazy to pick it up?

Go to this website, actually look at the data and lets see if you can maintain the same "OPINION".

http://tinyurl.com/35ww2w

I even chased down a tiny URL for you. Bless your little heart, maybe you'll learn something today. Oh and why am I so condescending? Because you've refused to look at the information in front of your face so far. Count yourself as one of the sheeple.

Budvar said...

Not only is Spain begining to tank, with average mortgage payments 120% of wages, Ireland and Greece are pretty much the same, http://www.financialsense.com/fsu/editorials/2007/0705.html
basically sums up the UK housing market.

The US has unfunded liabilities of $1.75million for every man woman and child, but unemployment is running at 4.5% so the world economy is booming?

My tinfoil hat's on too tight? You sunshine are a complete and utter buffoon!!

SeattleMoose said...

This story will evolve over the next several years. Since there will not be a "sudden" drop it will not be worthy news in the eyes of the MSM whose idea of a big event is OJ or Michael Jackson or....ad nauseum.

The "special report" will be as usual, mostly hindsight and will still understate the extent of the crash.

We are only at the start of the long slippery slope...

BTW...Poland and Australia have the same problem as we do...have family or in laws in both places so I get the news first hand.

Anonymous said...

Anyonymous tool believing gov't numbers. Residential employment down %4 with housing starts down 35%. Those are some generous homebuilders to keep everyone on the payroll.

Anonymous said...

LOOK! IT'S A CRASH!!!!!
I CAN'T BELIEVE HOW BAD IT IS!!!!
WHAT ARE WE GONNA DO!?
MY HOUSE WENT DOWN $1,000.00
AHHHHHHHHHH!!!!

DOPES!

Anonymous said...

Please turn to YOUR trusted leader Mr. Bush. Thanks for voting him in you fools!

The Project Manager said...

My Italian husband and I looked at buying a two-bedroom apartment in Rome -- in a funky-but-safe area. Prices seemed to consistently be about E500k-700k for 800-1000 sq ft.

The median salary in that same area is E35,000. Even assuming that parents and huge mortgages are propping up prices somewhat, I just can't see how that market is sustainable. We're sitting -- maybe the crash in Spain will scare the foreign investors into selling...

Italians are known for being financially conservative (and upwards of 80% of Italians own their homes...or some ridiculous number like that), but I'm seeing more and more "100% financing" and exotic loan option ads popping up in real estate publications and online databases. People are certainly buying who shouldn't be.

-PM

Shakster said...

Anonymous said...
job growth beats forecast....economy booming, unemployment at 4.5 yet the tinfoil hat gang talks about depression
-----------------------------------
Well then ,ANON,did you buy a house this year,this week,today?
If so,how much did pay?where is it located.............?ARM?Cash?

Anonymous said...

http://www.bls.gov/news.release/empsit.t12.htm

Table A-12

Line U-6

8.2%

RJ said...

Anon said:
"job growth beats forecast....economy booming, unemployment at 4.5 yet the tinfoil hat gang talks about depression"

-----------------------------------

The economy isn't remotely booming. In real terms, GDP is in negative territory. Furthermore, BLS employment figures overstate employment. Not only that, most of the jobs that are being created are largely low paying service sector jobs which will not stimulate economic growth.

Armed correctly pointed out that Japan economically survived their housing crash, but failed to point out that Japan had massive savings to draw upon and has been benefitting from Chinese demand for their exports. That won't last since Chinese growth is being fueled more and more by domestic demand.

Anon made the point that the Canadian dollar traded higher than the USD in the past without financial armageddon occuring. The dollar has also been at or near the current low before. The FOREX isn't the problem. The problem is that the Euro is now the preferred form of cash internationally, and that the Dollar's postition as the global reserve currency is eroding at an accelerating pace.

Back to the housing market: Why don't some of these posters understand? Even without a major crash, the current housing market spells major trouble for the economy. Our economy was artificially inflated by the massive, artificial inflation of housing prices. Equity withdrawal was about $1.5 trillion over the last 4 years. If the market stagnates, so will the economy. No growth equals recession. No growth for a long time equals depression. C'mon man, this isn't rocket science.

Jerj said...

I've got the "Hedge Fund Dead Pool" blog started. Let me know what you think. I would like to try and get many people posting on this if possible.

The bubbles are blowing up everywhere. The Euro zone speculators that blew up Spain are turning their eye to Greece now. My parents bought a house there a year ago (they are from Greece). Someone just gave them an unsolicited offer for 30% higher than their purchase price!

Anonymous said...

Renters Unite! Let's Pop This Real Estate Bubble
Jul 05, 2007 -- The facts are in. We are embroiled in the biggest real estate bubble in U.S. history. So why are buyers still paying top dollar for homes in many areas of the country? Are they crazy?

By Ben W. (bdarbs) - Renter by Choice

Homebuyers who think now is a good time to buy into the housing market are crazy. If they aren't crazy, then these poor souls have been deluded by mind bending real estate propaganda. Here's why:

Home prices are currently disconnected from the basic fundamentals that rule the real estate market. Rents have not kept pace with home prices. On average, it costs two to three times more to buy, and no matter how you stack the numbers, in almost every rent versus buy analysis, renting makes the most financial sense.

There is also an enormous problem with affordability. From coast to coast, potential homebuyers are finding that they cannot reasonably afford to buy a median priced home when they earn the median household income. This is because, like rents, salaries did not keep pace with rising home prices during the boom.

Our nation is trapped in the largest bubble in U.S. history. There is little doubt that the very circumstances that led to the bubble will inevitably pop it, driving home prices down. This is a nationwide crisis, even in the most desirable regions.

Prices can't be disconnected forever. They will come down. However, there are still buyers out there that don't care or don't know and are traveling from open house to open house ready to offer more than the asking price if need be. These misguided individuals justify the decision by saying things like 'it's a buyers market...I need to make my move now', 'renting is just throwing money away', and 'real estate is always a good investment'.

These people unfortunately are about to make the worst financial decision of their lives because they have been brainwashed by organizations such as the NAR and DataQuick (two entities the mainstream media relies on for reporting reliable housing data). These two organizations, and others like them, have a vested interest in keeping home prices roaring higher and have been deliberately misguiding the public with their sales speak and creative ways of manipulating data for years.

The real estate industry has found a way to spin everything and create a sense of urgency among buyers. The scare tactics have the public thinking they need to buy now before sellers get the upper hand, or my personal favorite, 'before interest rates go up'. That line of thinking is insane. How is buying a home with a low interest rate justified if the home's real value is on its way down? It isn't. If rates go up then housing affordability will get even worse and prices will be driven further into the ground.

The bottom line is that no matter how you look at it, now is a terrible time to buy.


Why are real estate prices being so sticky?

There are several reasons why real estate prices are being so sticky. For one, real estate takes a long time to sell compared to stocks and other securities. Other reasons:

Sellers are reluctant to take a loss. Because sellers are mere mortals, they become attached to their personal residences and often assume the house is worth more than it actually is. In other cases, sellers simply can't afford to take less because they bought when prices were extremely high. They're not looking for profit, they're looking to pay off their mortgage debt and break even.

There is also the case of the market being propped up by the smoke and mirror organizations that dominate the press. Quite frankly, the truth about the state of our housing market (such as disconnected fundamentals) isn't getting out because it is being skewed by the biased and deceiving statements released by these influential organizations.

As I write this, the market is crumbling. Yet, there are still more stories about the easy money made in real estate during the boom than there are about people who lost money. It is no wonder that consumer sentiment is so remarkably bullish.

The bottom line is that now is a great time to sell. Sellers should cash out now while they still have some equity left over from the boom and become a renter until the dust settles. This is exactly what I did. I acquired three properties during the boom years and cashed out on all of them just over a year ago. Now I rent with my wife and child in a very nice neighborhood in the San Francisco Bay Area, waiting patiently for the market to come back to reality. The fact is that I can rent a MUCH NICER home than I can afford to buy right now. Once that is no longer the case, the market will be at equilibrium and it will be safe to buy a house again.


Will a tipping point come, when home prices all over the country finally come crashing down?

I believe there will be, and as terrible as it sounds, I truly hope it will be soon; otherwise we could suffer a multi decade housing recession like Japan. If the market corrects quickly, it will be much better for our economy.

What is needed to expedite the turnaround is a change in consumer sentiment. A shift in consumer sentiment will bring about the tipping point, and inevitably, bring the market back to reality. This will most likely occur when tales of lost equity, adjusting ARMs, and subprime foreclosures become mainstream and glamorized TV shows of house flippers making easy money disappear.

And for the record, I do not think the government should step in. All I will say is this:

The proposed subprime bailouts, as well as some of the other half-cocked schemes, are a terrible idea. Innocent taxpayers should not be responsible for funding other people's greed and stupidity.


How can we burst this bubble?

Well, we certainly can't count on the NAR, DataQuick, or even the Fed to change their ways and start educating the public with the truth. If they did this, they would first need to admit that they intentionally lied to the public to serve their best interests. Not good PR by any means.

What we need to change buyer sentiment is a grass roots effort that focuses on educating the public with the truth. You can help by educating yourself and sharing what you learn with others. Start by reading eFinanceDirectory.com's daily housing bubble news

articles, Patrick.net's housing crash news, and the contributions of other housing experts like Rich Toscano, Schahrzad Berkland, and Warren Brusse. eFinanceDirectory.com has conducted great interviews with many of them here

ein

You can also share your housing crash stories with eFinanceDirectory.com and with others. If you lost a house in foreclosure, are in debt up to your eyeballs due to an adjusting mortgage rate, or just have an opinion to share about the housing market send your story to moreinformation @ efinancedirectory.com. They'll publish it and make sure it is seen by thousands.

Ron said...

job growth beats forecast....economy booming, unemployment at 4.5 yet the tinfoil hat gang talks about depression

Wait...don't forget iPhones!!!

Smiles everyone SMILES!!

Anonymous said...

I could tell you that the Northern NJ/NY area is not showing any signs of a housing bubble. Prices sky-rocketed and stayed at 2005 levels. A house priced decently (if you call it that) in a decent neighborhood sells within days. The wealth factor in Northern Jersey is absurd. I wish it would slide 20% so some of us can upgrade or enter the market but it happening here.

BN in AZ said...

Quoted from Anonymous (of course):

"The Candain dollar was worth more than a $US before in the 1960s and 1970s. Nothing new here. Again HP goes crazy over something that has happened many times before.

It's not different this time, it is never different this time."

You need to think a little before stringing together sentences so poorly. True, the Canadian dollar hit maybe 1.01 in the 1950's (not the '60s') and again in the 1970's. However, in 100 years the Canadian dollar never moved more than 10% from the value of the American dollar. Only in the last 20 years did it tank to 0.66, and then only in the last FOUR years has it SHOT UP to 0.95. That is different, now, isn't it?

Regardless, if you want to make a joke about someone saying "it's different this time" when it isn't, you need to first understand what "it" is referencing: the fundamentals. LOTS of things are different this time, lots of things are different all the time - it's the FUNDAMENTALS that do not change, and this is what you aren't grasping. No one on this site feels that the fundamentals "are different" this time - quite the contrary. The current DRAMATIC collapse of the dollar's value IS remarkable, however, and IS different than the historic norm. Ironically, YOU are the one holding that it's "different this time" by asserting that such a radical change is normal and without consequence. Again: by your own logic, you would be saying that the Great Depression was "never different".


Also, here's another quote by an even bigger (anonymous, of course) meathead:

"job growth beats forecast....economy booming, unemployment at 4.5 yet the tinfoil hat gang talks about depression"

Try looking up the unemployment rates right before the Great Depression, bub. (Here's a hint: 3.4%). So your statement makes just how much sense? Please do explain. There may or may not be a terrible depression in store for this country. However, your "argument" against it is just plain dumb. You would do well to first gain a comprehensive understanding of economics before ridiculing others that have spent the time and energy to do so.

Why is it that the most ignorant people are the ones that do the most talking?

jammers said...

"job growth beats forecast....economy booming, unemployment at 4.5 yet the tinfoil hat gang talks about "

Yes, keep believing those B(L)S statistics - they're from the federal government, and why would they lie to us?. Everyone knows inflation is under 2%, housing is booming, and there's nothing but blue sky for the Dow and S&P.

rcochran said...

job growth beats forecast....economy booming, unemployment at 4.5 yet the tinfoil hat gang talks about depression

_______

Yes, everything is fine. Go out and buy stocks and houses. Larry Kudlow's broker friends and the NAR said it's a great time to buy!

Oh, but wait? What's this?

Since July 2002, or over the last five years, here is what has happened:

DJIA stocks have appreciated 26%. "Great!" you say. Well, wait a minute.

The US Dollar has dropped 19% against the Swiss Franc since July,
2002.

The US Dollar has dropped 30% against the British Pound since July, 2002.

The US Dollar has dropped 38% against the Euro since July, 2002.

The US Dollar has dropped 105% against gold since July, 2002.

The US Dollar has dropped 152% against silver since July, 2002.

The US Dollar has dropped 372% against copper since July, 2002.

The US Dollar has dropped 505% against lead since July, 2002.

The US Dollar has dropped 1,200% against uranium since July, 2002.

Have a nice day!

Anonymous said...

Looks like seattle/king county is not special anymore

Anonymous said...

It is different this time. We have a bunch of parinoid power freaks and GOP criminals that hijacked America and ran her in the ground.

Nothing but DOOM since bush and cheney took over...

Nice, just nice. 20% gone off the top.

anon e. moose said...

Hedge funds collapse, mortgage brokers collapse, subprime is in meltdown, housing inventory is through the roof, M3 is not printed anymore, national savings rate is NEGATIVE, debt is wealth... and yet "rose-colored glasses gang" says "economy is going great"...

Anonymous said...

Gee I wonder if the government would jack the numbers on the data?

sequoia512

Anonymous said...

I'm sorry I don't believe a damn thing the government says. I look at housing starts down. GM Ford and Chrysler cutting back. Harley Davidson with to much inventory. Empty malls and overflowing car lots. HELOCS down to 2000 levels buy buy 600 billion in cash to squander. Yet GDP up and jobless claims down. Splain me Lucy because I smell a chimp

sequoia512

Anonymous said...

Well, I don't have a tinfoil hat, but here in Portland, OR, which is supposedly different, prices almost doubled while income, well, it went up a bit. So youbetcha, I expect to see a 25% drop at least. Not depression, just reality.

deepcgi said...

700 percent increase in foreclosure filings in Florida. Yeah, nothing to worry about. It's never different this time.

ouch said...

Unemployment at 4.5% and forclosures are up 90%

I guess those McDonald's and WalMart paychecks don't cover the pay option ARMs

stuckinthecity said...

Sounds just like here in the good ole USA

a new gold bug said...

Spain has been selling off their gold reserves trying to right their galleon.

It's wont help, but we can pick up some cheap(er) gold!!

Anonymous said...

The economy isn't remotely booming. In real terms, GDP is in negative territory. Furthermore, BLS employment figures overstate employment. Not only that, most of the jobs that are being created are largely low paying service sector jobs which will not stimulate economic growth.

Armed correctly pointed out that Japan economically survived their housing crash, but failed to point out that Japan had massive savings to draw upon and has been benefitting from Chinese demand for their exports. That won't last since Chinese growth is being fueled more and more by domestic demand.

Anon made the point that the Canadian dollar traded higher than the USD in the past without financial armageddon occuring. The dollar has also been at or near the current low before. The FOREX isn't the problem. The problem is that the Euro is now the preferred form of cash internationally, and that the Dollar's postition as the global reserve currency is eroding at an accelerating pace.

Back to the housing market: Why don't some of these posters understand? Even without a major crash, the current housing market spells major trouble for the economy. Our economy was artificially inflated by the massive, artificial inflation of housing prices. Equity withdrawal was about $1.5 trillion over the last 4 years. If the market stagnates, so will the economy. No growth equals recession. No growth for a long time equals depression. C'mon man, this isn't rocket science.

July 06, 2007 6:47 PM

Thank you RJ, I was going to mention that the Japanese are voracious savers. Can`t really say that about most Americans.

Budvar said...

The shit has hit the fan at an Italian bank with a derivative blow up.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/07/03/bcnitaly103.xml

Nothing to see here though folks, the world economy isn't coming unglued at the seams or anything, ipods are selling well and loads of jobs going flipping burgers.

The economy is booming and unemployment is only 4.5%!!
What a tooler!!

Anonymous said...

tinfoil hat gang is in true form today. Talk of great depressions going on while $600 phones are selling out and Toyota, Honda, Nissan are posting record sales in the US.

I sure hope you imbeciles don't vote, or reproduce.

Anonymous said...

I'm sorry I don't believe a damn thing the government says. I look at housing starts down. GM Ford and Chrysler cutting back. Harley Davidson with to much inventory. Empty malls and overflowing car lots.

================================

for the 1000th time GM and Ford and Chrysler don't sell cars because they are pieces of shit. Focus on Toyota, Honda and Nissan. All 3 had record sales this past quarter.

I wouldn't buy an American car if it were offered to me at 50% off. Can you union thugs get that through your thick skulls? Nobody wants your UAW made junk.

Anonymous said...

Would someone like to explain to me where all these new jobs are being created?
Considering all the outsourcing to who knows where!
I live in a very high-tech area, and it ain't here!

jorghis said...

"The US Dollar has dropped 105% against gold since July, 2002.

The US Dollar has dropped 152% against silver since July, 2002.

The US Dollar has dropped 372% against copper since July, 2002.

The US Dollar has dropped 505% against lead since July, 2002.

The US Dollar has dropped 1,200% against uranium since July, 2002."


So the dollar has negative value now? It may be dropping but those numbers you are quoting arent mathematically possible.

Anonymous said...

Thanks to all the fools who voted for King George! What were you possibly thinking? I'm wondering if this guy is going to leave office when the day arrives? If he does it will be party time at my house. How many days is that? Oh no!

Anonymous said...

The building boom in Asia which has 50% of thew world's population will keep commodity prices high. When inflation takes off in Asia, it will spread to the rest of the world. Indian and Chinese workers will demand higher pay in order to survive. That will push up costs in the US. The Fed will continue to say there is no inflation as the dollar continues to crash against all other currencies and commodities. At least it will attract more foreign tourists and make our exports cheaper

bickerer said...

Please turn to YOUR trusted leader Mr. Bush. Thanks for voting him in you fools!

Too bad the Dems won't put up a reasonable alternative. Hillary??? Get ready for another Rep president.

Anonymous said...

so many references to walmart and mcdonalds, guess that is where you renting fools all work.

reality of course says otherwise:

Average hourly wage nationally:

June 2007: $17.29
June 2006: $16.73

Unless Wm and McDs is paying $17 an hour, your comments make no sense. Wages increased 3% since last year. Inflation is running at 3%. Oh I know in HP / tinfoil hat land inflation is 100%, but reality again says otherwise.

Keep telling yourselves the great depression is coming if it makes you feel better.

The Thinker said...

Hey Guy Daley, I followed your link. So what, there are some parts of Brooklyn and Jamaica Queens where foreclosures are high. Those areas are real shit holes, its no surprise foreclosures are high there. You cannot say that there has been a housing collapse in the New York City area because foreclosures are high in Jamaica Queens. Have you ever BEEN to Jamaica Queens? I didn't think so.

You should THINK before you post, I do. Thats why I am the THINKER and you are just some GUY.

Anonymous said...

When money and credit are free and easy, people become free and easy with them. They begin spending more than they should…and investing recklessly. Eventually, there is a shock… a tipping point…a moment of desperate reality… Then investors, as if they shared a single mind, begin to worry not about the return ON their money; they are concerned about the return OF their money.

http://www.bitsofnews.com/
content/view/5820/43/

Anonymous said...

The real estate market may be down, but you'd never know it by cruising the cable channels.

Here is a sampling of "reality" shows about buying and selling real estate: "Bought & Sold," about real estate agents in Essex County, N.J., started this spring on HGTV. "Real Estate Pros," following the adventures of South Carolina real estate developer Richard Davis, premiered April 21 on TLC. "Flip This House," now in its third season on A&E, documents the efforts of real estate developers (including Montelongo) in three cities. And "Property Ladder," in which novice house flippers try to get rich quick, will begin a third season July 14 on TLC.

But there are others: "Flip That House," "Buy Me," "Fantasy Open House," "House Hunters," "House Hunters International," "Sell This House," "My House Is Worth What?" and, perhaps the most skin-crawling of all real estate shows, "Million Dollar Listing," which followed agents trying to sell homes in Beverly Hills and Malibu.

The show aired only one season on Bravo, but its roster of real estate agents (notice we didn't use the word "sleazy") gave the series a hyper-jive quality. It was less a reality show than an alternative reality show.

Why are these shows proliferating? What about the housing bubble? What about the slump? The National Association of Realtors projects a drop in the median price of a home in 2007 for the first time since 1968. Wouldn't that be a stumbling block to these shows?

Apparently not.

http://www.post-gazette.com/
pg/07188/799866-51.stm

Anonymous said...

Anonymous said...
"job growth beats forecast....economy booming, unemployment at 4.5 yet the tinfoil hat gang talks about depression"

Yeah duh. The BLS statistical Birth-Death adjustment was 156K jobs for which there was no evidence of existence. Better increase the ADHD dosage.

http://www.bls.gov/web/cesbd.htm

Anonymous said...

Young and stupid serves 10 years for someone else scam.

Arsonist Dustin Bomford, 19 in court said a Rapid City homeowner who was in foreclosure had asked him to help burn down his home for the insurance money.

The homeowner was not charged,
but instead Circuit Judge A.P. Fuller ordered Dustin Bomford to reimburse De Smet Insurance company $76,000.

http://ap.yankton.net/stories/
state/sd/20070707/182981780.shtml

Anonymous said...

Take a look on RedFin. All the flags are red = for sale and only 1 in one hundred are Yellow = Recently Sold.

Those Yellow flags are amaziing to me, I thought I should go knock on those peoples doors and find out why they would buy a house and ask them directly...."Are you fukin stupid or what?"

Anonymous said...

On a contrarian note, I believe that the RE market will not fold immediately but instead, will face a type of Japan-like malaise of the decade long variety.

Here's why... there's no end game for the US economy. Today, as in '07/'08, the US is no longer the world's leader in new technologies but is more the leader in marketing new decoys or brand name trends (i.e. i-phone) vs Samsung/TGs' flash memory innovations which have made the east Asian region the market maker in electronics.

With that in mind, financial games will have to continue for the US economy to persist and with that, I believe that the govt will do whatever it can to attract foreign capital whether it's an alternative energy (ala scam artist) bubble or whatever with the stipulation that the US is still a good place to park one's money (see RE, USDs/TIPs, private equity, Colorado shale futures, etc). And as capitalistic oligarchs crop up in the world whether it's in Russia, Romania, Indonesia, Zimbabwe, or wherever, the US will be a political safe haven where private property and interests will be shielded from the whims of a local general-dictator. At the same time, those investors can get green cards which also gives them the opportunity to re-locate if push comes to shove and even mainstreamers welcome millionaire legals over the border jumpers since the former brings money (and sometime jobs) w/o competing for the scraps left during a downturn.

bozonian said...

The natural resource stocks and commodities have taken off (oil, iron, metals, coal etc). If there is any sustain to this rally, it implies the U.S. dollar is losing purchasing power. It would take a competitive scenario to force this devaluation and we now have it. Until there was competition for commodities, the weak dollar was inconsequential. Now however, other countries are building out their modern infrastructures and are willing to pay for it and we have to offer more dollars because our money is worth less.

There have been several false starts on this inflation of commodity prices. This could be another one, or could be the end of the dollar. I'm long all the foreign commodity producers and doing just fine but my finger is on the trigger to sell if this rally stumbles.

I certainly believe the stock market value is going down in real value, even though its dollar value is going up but I'm still going to try and take advantage of it. Better to own something of value than saving paper dollars.

The collapse of the Mortgage Backed Securities should be the stake through the heart of the mortgage industry. Without asian and arab suckers to buy the guaranteed-to-default mortgages, who is going to lend money to losers anymore?

SPECTRE of Deflation said...

We have this little gem from Bloomberg this morning:

Why Haven't Home Construction Jobs Disappeared: John M. Berry



He just can't put his finger on it, but maybe I can help. ILLEGAL ALIENS you dumbass! I have seen more people perplexed by this question when we just had a knock down drag out fight concerning Illegals. 12 to 20 million day laborers will not show up in the Jobs Data, yet they are clueless. It boggles the mind!

And Moodys will get off scott free said...

I think the CDO CDS implosion will be the bigger story. The housing crash will just be the trigger to the larger explosion. "stable growth' "income" bond type retirement funds will be whacked. I also think munis and pensions will be stuffed with that toxic trash. Oh the humanity, home underwater and the savings are wiped out.

SPECTRE of Deflation said...

I thought Illegals did jobs Americans wouldn't do? This article from Georgia says otherwise, and refutes the stupid arguement used by proponents of Illegal Alien Amnesty. The elites are nothing but a bunch of lying pieces of shit:

"As Immigrant Workers Increased, Native Employment Declined in Georgia"

"WASHINGTON (June 20, 2007) — Some businesses in Georgia argue that they need large numbers of immigrants because there are not enough native-born Americans to fill jobs that require relatively little education. However, state employment data show that as the number of less-educated immigrant workers has grown dramatically, the share of less-educated natives holding a job in Georgia has declined significantly.

Between 2000 and 2006 the share of less-educated native-born adults (ages 18 to 64) in Georgia holding a job declined from 71 percent to 66 percent. (Less-educated is defined as having no education beyond high school.)

Had employment rates for natives been the same in 2006 as they were in 2000, then 186,000 more less-educated native-born adults and teenagers would have been working. The number of less-educated immigrants holding a job increased by 218,000.

Less-educated blacks in Georgia have seen a somewhat larger decline in employment, from 66 percent holding a job in 2000 to just 60 percent in 2006.

There are nearly 800,000 less-educated native-born adults in Georgia not working. There are likely between 250,000 and 350,000 less-educated illegal aliens holding jobs in the state.

Wages and salary for less-educated adults in Georgia have stagnated. Over the entire six-year time period of the study, real annual wages for less-educated adults grew by just 1 percent. If there was a labor shortage, wages should be rising fast.

Native-born teenagers (15 to 17 years of age) have also seen a dramatic decline in employment. Between 2000 and 2006 the share of native-born teenagers holding a job declined from 22 percent to 11 percent in the state.

There are about 300,000 native-born teenagers not working in Georgia.

Immigrants (legal and illegal) increased their share of all less-educated workers in Georgia, from 7 percent in 2000 to 19 percent by 2006. Other research indicates that at least half of this growth was from illegal immigrants."

http://www.cis.org/articles/2007/georgiarelease.html

The New York Times has a piece reporting on the surge in foreclosures in Georgia:

http://www.nytimes.com/2007/07/09/business/09auctions.html?_r=1&hp&oref=slogin


The Washington Post recently ran a long story on how foreclosure rates were hitting the immigrant community particularly hard in the DC area. Herndon VA was mentioned as having either the highest or second highest forclosure rate in the area. Herndon, a formerly sleepy little town in Fairfax County VA, has been inundateed with immigrants, many illegal, over the last few years. Herndon voters replaced a mayor and all but one town council member because these officials supported a day laborer site over the objections of many towns-people.

I suspect what has happened in GA, like VA, is roughly this:

First, there was a large increase in immigrants, again many illegal, in GA. This is pointed out in the CIS article, as is the fact that these immigrants appear to be pushing less-skilled natives out of jobs. These newly unemployed - who as we know would eventually drop off the unemployment records even if they don't find a job or if they find a job that pays much less - would find themselves less able to keep mortages current, even if they had no problems before. A couple of months out of the job market can put a low-paid worker in grave financial shape, even if he later gets another job with comparable pay.

Then, some of the newly arrived immigrants buy with sub-prime mortgages, often with little or no investigation as to their ability to pay and with little money down. The reality is that they are initially able to pay because the teaser rate is low and they increase income by combining 2 or 3 families into a single family house or by renting out rooms to single men. This is what was going on in Northern VA, much to the neighbors' dismay.

Finally, the housing boom slowed down, and these immigrants found themselves in a bind because their renters - often construction workers - were working less and often so were they. Additionally those initial low, low interest rates started to climb.

The WaPo mentioned a couple of instances where the immigrant "owners" simply walked away from their houses and returned to their own countries. I assume the lending institutions will have to sort these out.

The natives are already in their country - the US - and may well find that they have lost their homes of many years and that they can no longer afford to buy a home because housing prices, lower than a few months ago, are still too high.

It is very difficult not to think this is also the reason why hundreds of thousands of prime age American workers would suddenly drop out of the labor market.

Anonymous said...

Bwahahaha!!!

We should rename the country to Scamerica!!!

Guy Daley said...

Thinker:

You said: It seems like most of the downturn is taking place in Florida, Vegas and Arizona, where prices went sky high but salaries didn't match up.

Now I gave you a link to go to which you said you did and yet you were still too lazy to look at the data. So, I'll chew it for you and spoon feed it so you can digest. Keep in mind your original statement, Florida, Vegas and Arizona.

Top 500 Foreclosure zip codes

Arizona - 11
California 139
Colorado 24
Connecticut 3
Florida 71
Georgia 36
Illinois 24
Indiana 15
MA 3
Michigan 34
Minnesota 1
Missouri 4
North Caro 4
NJ 5
Nevada 25
New York 5
Ohio 46
PA 5
Tennessee 13
Texas 22
Virginia 4

You lose your Boy Scout badge for interpreting data "THINKER". To say that most of the downturn is in Florida, Vegas and Arizona is either:

1. A Gross exaggeration
2. TOTAL INCOMPETENCE

So take your pick, your either a sheeple or stupid. I prefer "UNTHINKING" myself.

deepcgi said...

The low unemployment figure is a two-edged sword in this argument. On the one hand it tells us that there are plenty of jobs that pay mortgages. On the other hand, it tells us the cost of doing business is remaining high in the face of inflation.

It is quite clear that median salaries don't cover median mortgages - independent of inflation. If the housing market even stalls, let alone crashes, a recession is on the way - and the unemployment figure will ensure that businesses have no wiggle room with cost of labor. Jobs won't save anyone this time, because even $50/hr won't cover the median mortgage payment in the California hotspots.

deepcgi said...

I'll wager the balance on my Citibank Visa that consumer spending continues to rise through the holidays with a proportional run-up in high-interest debt. Then, in January, the 700% increase in foreclosure filings in Florida will hit simultaneously with the Christmas time credit card bills and the denial phase will be over. We'll go straight from auld lang syne to old anxiety

reality bites said...


Without asian and arab suckers to buy the guaranteed-to-default mortgages, who is going to lend money to losers anymore?


Fannie Mae
Freddie Mac
Ginnie Mae
FHA/HUD
Pensions
401K's

ie American taxpayers

Anonymous said...

It is very difficult not to think this is also the reason why hundreds of thousands of prime age American workers would suddenly drop out of the labor market.

July 09, 2007 4:04 PM

=================================
This flooding of our nation with cheap labor is a bankers ploy. Theyre returning the US to slavery under these free trade dogmas, not only hear but all over. We are looking and acting more and more like the degenerate economy and culture of the old south every day.
We are no longer developing our labor force, and the elites dont think this is needed any longer because they shifted the US to a "post industrial economy" after they murdered President Kennedy in 1963.

The housing market isnt collapsing, the housing market is just a reflection of the collapse of the entire post Bretton Woods monetary system that was installed under President Nixon on August 15, 1971. This floating exchange rate system. It's finished, kaput.

RJ said...

Anon said:
tinfoil hat gang is in true form today. Talk of great depressions going on while $600 phones are selling out and Toyota, Honda, Nissan are posting record sales in the US.
-----------------------------------

Real GDP is negative. Real inflation is running over 10%. We're already in a recession. This doesn't mean complete economic collapse. During the Great Depression unemployment reached 25%. So millions of Americans were still working. The fact that many of us are still willing to incur serious debt does not mean the economic future is bright (it's actually quite bad). It just means delusion is alive and well in the U.S. Meanwhile, someone listed the average (mean? median?) wage as $17/hr. Using the understated FED inflation figures, the minimum wage would have to be $9.55/hr. to equal the $2.50/hr. I made in high shcool in 1975. $17/hr. average is a pretty lousy average wage. If this average is the mean and includes the robber baron incomes of our highest paid CEOs then this average is really skewed to the upside. Maybe some of you should try wearing tinfoil hats. It might help.

bozonian said...

The paper money economy can go on for quite a while longer. The Chinese are not consumers, they are savers. For the foreseeable future they will continue to sell their shiny baubles to Americans cheaply to increase their production capability since the local gentry won't be consuming them. Then those dollars they earn will buy U.S. treasury bonds, increasing the Federal Debt, i.e. the way the government "creates" money out of thin air.

However, eventually the reckoning must come. The true value of the dollar will be found. The Federal Government will be spending ALL its tax revenues on paying interest on its debt and new income will be generated by borrowing.

No politician can keep his job if he truly tries to stop this runaway train so it will happen. Hyperinflation where the dollar value goes to zero. Hopefully you will own something other than money that will hold value.

When the dollar is worthless collapse occurs, a new currency is created and the hard assets you own will be what you are worth.

Granted that's a worse case scenario but I see no other outcome possible. Americans are too spoiled to tolerate someone trying to put a lid on the consumption orgy.