August 03, 2007

And then the Great Housing Ponzi Scheme ended for all to see, and the blood ran in the streets

Remember "Discredit" from Manias, Panics and Crashes. Then go pick up a Wall Street Journal, and it will all become clear my friends. It hath been foretold.

Credit Woes Hit Stocks Again

A host of housing and mortgage-related stocks have seen punishing selloffs in recent sessions as investors moved to flee at the first whiff of trouble.

Countrywide, Accredited Home Lenders and Beazer Homes are among those who have endured precipitous drops, regardless of whether the problem was more imagined than real.

Bear Stearns was getting crushed after Standard & Poor's cut its rating outlook for the broker to negative from stable. Earlier this week, the company said it is facing losses in a third mortgage-related fund. Bear Stearns, which has lost 19% over the last month, was down another 7.5% to $106.90.

56 comments:

Batman said...

OK, what's up with the dollar today. Lookin rough there. Did I miss a rate cut announcement?

Anonymous said...

you ain't seen nothin' yet.

Anonymous said...

And so, Indymac is toast...your shorts are now paying off.

Mark in San Diego said...

I had dinner with a REALTOR (tm) last night! (ok - BOO HISS). . .he is going to the big foreclosure auction this weekend at the convention center. . .hmmmm - he thought there woud be some bargains. . .I said, "wait until 4th quarter when the banks slash-and-burn to get these off the books.". . .he did agree that it will be 2 to 3 years before the housing market "comes back." . . .perhaps a sign of some reality seeping into the REALTOR (tm) world. . .also, another REALTOR (tm) said that "40 percent of sales are falling out of escrow here in SD.". . .

Anonymous said...

It's been a long time coming. But this snowball is gathering both mass and speed. Look out below !!

Anonymous said...

all this and yet a 1000 sq ft home is still $800K in SF. Some crash.

keith said...

And don't forget, after discredit is the rush to sell assets at greater and greater loss, in a great rush for cash.

It hath been foretold.

There should be no surprises for HP'ers.

Muttley said...

I live in Tampa and all of the media outlets around the state insist that the market has hit bottom here and the market will turn around in the first quarter of 2008. Consequently, no one is lowering prices here even though sales are down 35%. I don't get why the state of Florida thinks it is so disconnected from what is happening in the rest of the country and the mortgage industry.

In 2002 the median price of a single family in FL was 142,400, last month it was 243,200. If the market is supposed to be reverting back to pre-bubble, why isn't the median below 200,000 and when will this state wake up and realize the housing scheme is over?

Mark in Floriduh said...

The worst part about American Home Mortgage going down is apparently the bulk of their business was not in subprimes, it was in prime mortgages. That's bad. It is finally spreading outside the parasitic subprime market and into more legitimate markets. It's a fungus.

westwest888 said...

It's interesting to consider how the stock market lags the construction cranes. Here's what I mean:

"This means that within the next 19 months there will a total of 16,070 new condo units that will come onto the market in the neighborhoods of Brickell, Brickell Key, Downtown Miami, Park West and the Performing Arts District."

It might take until 2010 for the full mess to hit Wall Street from the construction happening on the ground today, August 3, 2007.

Anonymous said...

"Consequently, no one is lowering prices here even though sales are down 35%. I don't get why the state of Florida thinks it is so disconnected"

You can try to sell a stick of gum for a million dollars. But nobodies going to buy it. Similarly you can list a 900sqft house for 800k. But nobodies going to buy it.

What we're seeing right now is finance companies giving the deer in headlights look. People aren't paying their mortgage. But if you kick them out the mortgage owners can't sell the property for anything near what they paid for it.

Anonymous said...

you can post sounding like an idiot by typing nobodies instead of nobody's and nobody will take you seriously

Anonymous said...

IMB below 19! yea baby!

k.w. - southern ca. said...

There are always "pockets" of wealth around the country that won't see much of a decline in housing prices, but those areas have nothing to do with the overall loss that will be seen across the majority of the country.

Anonymous said...
all this and yet a 1000 sq ft home is still $800K in SF. Some crash.

Anonymous said...

"I had dinner with a REALTOR (tm) last night!"

Did he have the chicken flavored ramen or pork?

bitterrenter4life said...

Jumbo loan rates head for 8% according to Diana Olick. Buy now or be priced out forever!DOPES?

Educated said...

To anonymous 6:28 pm,

Practice what you preach my friend. Your post reads:

"you can post sounding like an idiot by typing nobodies instead of nobody's and nobody will take you seriously"

It should read:

"You can post, sounding like an idiot, by typing nobodies instead of nobody's and nobody will take you seriously."

Please note the capitalization, commas, and period. Punctuation is your friend.

fish said...

...he did agree that it will be 2 to 3 years before the housing market "comes back." . . .

But but but...I thought it was a good time to buy...oh yeah, or sell a house!

buy_high_sell_low said...

CFC below 25!

IMB testing 18 at 18.06


oh yea!

Anonymous said...

Muttley, I also live in Tampa and have been frustrated by the slow rate of price decreases - I've been waiting for this to happen for years now. I just had to resign myself to the fact that it takes longer here for the truth to sink in. You do have a point about MSM's hype in the Tampa area - they are prolonging the inflated prices by touting Tampa's job market, desirability, etc. People read it and think, "If I can just hang on..." I think it will ultimately make the Tampa area's correction much worse than it would have been. Fear of missing to opportunity to get an affordable house again in Tampa makes those voices in your head very loud (for me, too). Just hang in there - it WILL happen. It just might take a while. We must be patient, and in the meantime, keep saving. In 2003, when the prices in Tampa exploded, I decided to pay off my current mortgage instead of buying an asset that I was convinced would depreciate during the inevitable correction. I paid off my house in December, and now it is just a waiting game. I think that Tampa will be in better shape (for you and me) next year - I don't see it sliding another 15-20% by the end of this year, which would put homes back in the range of acceptability. Just hang in there.

Anonymous said...

Wow,

so much for IMB at 18. and 17....

IMB at 16.80...

Anonymous said...

Anonymous said...
"all this and yet a 1000 sq ft home is still $800K in SF."

Only $800k?!? I'LL BID $875K! I MEAN $945K!!!

Anonymous said...

I have a friend that was Absolutely convinced that he had better 'Buy Now' before prices rise again!

And, and he was told that the market has hit bottom!

I told him to calm down, and asked him, 'who told him all this'?

His answer, his daughter, who just recieved her real estate license!!

His own daughter!

No shame!

Anonymous said...

cramer just said
7,000,000 americans will lose there homes 12:49 mst on cnbc

Anonymous said...

But the Dow still sits around 13,325....That's 5,325 points higher then your Dow 8,000 call 2 years ago......

Anonymous said...

Germany rescues subprime lender

(FT) US mortgage turmoil hit investor confidence on the other side of the Atlantic on Wednesday as details emerged of a German government rescue of a domestic lender that suffered heavy losses on subprime investments.

The rescue of IKB, a specialist lender based in D├╝sseldorf, began on Sunday when Peer Steinbr├╝ck, German finance minister, called top banking executives to discuss a bail-out. According to people who took part in the conference call, Jochen Sanio, head of Germany’s financial regulator, is said to have warned of the worst banking crisis since 1931.

borkafatty said...

1927-1933 Chart of Pompous Prognosticators

http://www.gold-eagle.com/
editorials_01/seymour062001.html

----------
Amazing the similarity's..remember the Depression did not kick into full gear until the... well read it if if you like...great article tons of similarity's to todays problems

http://drhousingbubble.blogspot.com/2007/08/
personal-story-by-lawyer-from-
previous.html?ref=patrick.net

borkafatty said...

The worst part about American Home Mortgage going down is apparently the bulk of their business was not in subprimes, it was in prime mortgages. That's bad. It is finally spreading outside the parasitic subprime market and into more legitimate markets. It's a fungus

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

No its all the ARMS!! And the greater fools who signed on the dotted line..I am sick and tired of hearing Sub Prime this Alt"A" that...it is the Loan itself that is self destructing and the ability to afford the costly rate increases.

6.4% initial Rate (teaser)plus 5% or more L.I.B.O.R with a 3% cap who wrote this shit..it was and ill yell it out for you..IT WAS ORIGINATED TO FAIL!!!!..But Wall Street Loved it.

Anonymous said...

Keith why no mention of this?

Or do you like the idea of Dems voting to give illegals rental assistance?


WASHINGTON, D.C. – The leadership of House Democrats made history the night of Aug. 2, 2007 when they determined that votes no longer matter to them.

“House Democratic leadership completely ignored an official vote in the House to achieve their desired result,” said U.S. Rep. Pete Hoekstra, R-Holland. “It was truly an outrageous series of events that will be remembered as a disgrace to our democratic system of government.”

The vote was to send the agricultural appropriations bill back to committee to prohibit providing taxpayer funds under agricultural programs for employment or rental assistance to illegal immigrants.

U.S. Rep. Michael McNulty, D-NY, who was presiding over the proceedings, gaveled the vote closed when it had passed by 215 to 213, but reported that it had failed 214 to 214. The Democratic House leadership then continued allowing members to cast votes after the vote had been officially closed until they claimed that it failed by 212 to 216.

The Democratic House leadership wanted so desperately to provide taxpayer funds for employment or rental assistance to illegal immigrants that they disregarded the expressed will of the House.

They did not hold the vote open. They changed the results of a vote after it had legally ended. As of the morning of Friday, Aug. 3, 2007, no record of the official 215 to 213 vote exists on the Web site of the U.S. House of Representatives.

Today on the House floor Democratic leadership clearly admitted that mistakes were made.

“The leadership of House Democrats will be remembered as rewriting history the night of Aug. 2, 2007 to advance their agenda,” Hoekstra said. “They should be embarrassed and ashamed of themselves for their Orwellian manipulation of the U.S. House of Representatives.”

Anonymous said...

Credit getting tight, I thought rates would have to go up to effect things but it not the rates it is that the loaning of money is becoming harder. Someone making $50,000 is finding it hard to get loans when last year you could lie and have a million in mortgage debt on 50,000 salary. Everyone is clueless as to the worth of a house. It's simple a house is worth only a little more then what you can rent it for, thats it. If you can't rent it for mortgage expense etc it not worth it. It like when people were saying the dot.com is worth this because of future possibities. I not going to buy something that already has future priced in. It's over, the number don't lie. For everyone who has adfustables or builders selling at 10x salary for the area it's over. People cant afford the price and wages suck for the majority and costs health insur, travel, food are up. Maybe not this year but there will be massive foreclosures, spec homes walked away from etc. It happened in LA socal where i lived in the late 80's and it will happen again. At some point the bank will need to get rid of the homes gaining on their books. When that will be i don't know but at some point as they have more and more home they will have to discount.

Anonymous said...

Some crash DOPES

Anonymous said...

Dow down 280 today.

Some crash dopes!

Uhh Errr. Wait a minute?!?

RUN FOR THE HILLS!!!

keith said...

Wow.

Mark in San Diego said...

JIM CRAMER is our HERO!. . .he told it like it is - the END. . .Bernake is asleep!! Greenspan caused all of this!!!

Late but better than never.

Anonymous said...

08/03/07 Dow tumbles over 200 points

More troubling news from Bear Stearns and larger financial sector weakness sends stocks tumbling.

Dopes?

keith said...

Here's Jim Cramer video predicting that major homebuilders will be ceasing to exist.

Wow.

http://tinyurl.com/yv2tat

He names Beazer, KBHome and SPF

keith said...

Someone post me a link of video of Cramer melting down on CNBC

Snowden said...

It is all unwinding, but there are many wealthy powerful people who have their wealth and power based on these imaginary numbers that flow across the ticker of TV news.

They will bring forces to bear on this disaster that will stave off the final debacle, at least long enough to swap American paper for euros and catch the last flight out of town.

This is not a sand-castle being swamped by a sudden wave, it is an entire nation, and a people, being sold to cover a margin call.

-Snow

Anonymous said...

I don't get this supposed credit cruch. The ten year is down to 4.7%. How's a credit cruch happening when rates are falling? Shouldn't the reverse be happening?

cramer_blowup said...

Heres that cramer blowup link.

http://tinyurl.com/2gvtae

Mark in San Diego said...

Credit Crunch Question: Interest rates are of no concern in a credit-crunch - zero or 15% doesn't make any difference - if no one will LOAN the money. . .If you came to me and told me you would pay me 20% a week for $1000, it would be a good deal, but if I felt you wouldn't pay it back, I would say NO. . .that is a credit crunch!!!

hunchedoldmanwith2teeth said...

You know who's responsible for this don't you?

Bubble Bloggers.

You came into a peaceful, affluent, benevolent society and you ruined it for everyone with your questions and your doubts and your "analysis".

Shame on you!!!

Anonymous said...

Bear Stearns' CEO is a bigger DOPE than you all! DOPES!

Anonymous said...

At lunch today I saw a guy order not one but TWO sodas. Everything is fine.

Anonymous said...

WOW! A share of AHM now costs less than a rubber in a filling station vending machine. Sure glad I didn't buy when a share cost as much as a Happy Meal. How soon before we see spare shares in a bowl by the cash register at the convenience store, along with the pennies?

Anonymous said...

"You can post, sounding like an idiot, by typing nobodies instead of nobody's and nobody will take you seriously."

Please note the capitalization, commas, and period. Punctuation is your friend.

August 03, 2007 7:12 PM

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

Wrong. Try again.

Anonymous said...

'WOW! A share of AHM now costs less than a rubber in a filling station vending machine'


A rubber?

A filling station?

Someone tell this guy it's 2007, not 1957.

james said...

"Punctuation is your friend."

Generally, yes. Except for that bastard the apostrophe.

james said...

"Bear Stearns' CEO is a bigger DOPE than you all! DOPES!"

Is that you Jim Cramer?

spieler vs schpeeler said...

Please stick your head out of the basement/man den and spell something for your mother. Please knock first so as to not embarrass her in front of company. She'll be much more impressed than we are.

Striking out against spelling and punctuation is a sure sign that you have nothing intelligent to add to the conversation. There's a whole world of idiot savant spellers out there big boy.

The spelling harang [did you phonetically understand this misspelled word?]stopped for along time on this blog, it appears the spellers have saved up enough to bring the internet connection bill out of arrears.

p.s. Just in case; If you're 10 years old, great job. If you're older than 10 years old, get a job.

Anonymous said...

'WOW! A share of AHM now costs less than a rubber in a filling station vending machine'


A rubber?

A filling station?

Someone tell this guy it's 2007, not 1957.


Yea, like in you would have seen a condom dispenser in a gas station in 1957. I guess I missed the episode of Leave it to Beaver where Wally finds a rubber...

borkafatty said...

WOW! A share of AHM now costs less than a rubber in a filling station vending machine'


A rubber?

A filling station?

Someone tell this guy it's 2007, not 1957.

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

ROTFLMFAO!!

Anonymous said...

HUD announced that as part of the Expanding American Homeownership Act of 2007 it wants enacted, that millions more seniors would be eligible for its reverse mortgage program (HECM), if congress increases the maximum loan amount to match FNMA/FHLMC conforming loan limits. According to HUD the volume of reverse mortgages it has funded has increased 10 fold in the past 6 years. However, eligible seniors have been limited to very modest FHA loan limits. This will help bring the product into the mainstream.

I haven't seen this issue addressed yet.

Any comments?

financial accountant said...

I don't get this supposed credit cruch. The ten year is down to 4.7%. How's a credit cruch happening when rates are falling? Shouldn't the reverse be happening?

Dude, the 10-year bond is the US treasury rate. It is not tied to the corporate bond rate or retail rate. there is no risk premium for the US T-bills because there is no risk. The government can always print the money to pay the holders back. Right now, investors are demanding a huge risk premium be priced into private bonds.

Anonymous said...

financial accountant said...
I don't get this supposed credit cruch. The ten year is down to 4.7%. How's a credit cruch happening when rates are falling? Shouldn't the reverse be happening?

Dude, the 10-year bond is the US treasury rate. It is not tied to the corporate bond rate or retail rate. there is no risk premium for the US T-bills because there is no risk. The government can always print the money to pay the holders back. Right now, investors are demanding a huge risk premium be priced into private bonds.

August 04, 2007 3:36 AM

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

Dude,

You're an idiot if you think the 10 year has no influence on lending policies.

Anonymous said...

The illiterates always get irked when someone points out their lack of education. That is why you rent and work for $11 an hour friend.

Oh I know, I know it's all Bush's fault. It's his fault you dropped out in the 10th grade. It's his fault you thought learnin' wasn't worth nothin' to nobody.

Enjoy the basement apartment Cletus.