December 08, 2007

BUBBLETALK - Open thread to talk about the housing, credit, dollar and mortgage meltdowns

And the pressure builds...

Post random thoughts, articles that I missed (use and hit the highlights only), and tell us what's on your mind


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Anonymous said...

Bought my house in 2004 for 366k. Now, who knows what I could get for it? Other houses in the subdivision are going anywhere from 300 to 350. Wife and I want to move next spring. Prolly have to eat a loss. At least we have some equity now. Only owe 280. This sucks.

Agent #777 said...

WOW - I am a time traveler now?
I wonder what the gold stock prices look like in Nov 2008? Help please? :)

Malcolm said...


(off topic but I didn't know where else to post)

FYI: I've featured you and Dr Housing bubble at my blog in an article titled "Some Web Sites Worth Looking At"

bradinsb said...

I saw a house listed at $234,000 and now is listed at $109,000
They must really want to sell it.The scary thing is its still not selling.

Anonymous said...

Update from Santa Fe

Neighbors on my street just managed to sell their house for $270,000. This is after originally listing it at $369,000. It languished for months, empty and they dropped the price several times. The last time was to $294,000 about 2 months ago.

The house is a 3/2/1 about 1900 square feet. Built in the early 80s. One big drawback it it only has electric heat and a one car garage.

Still $142/square foot is pretty reasonable for this area. Most everything else is still in the $200 - $300/square foot range. I sold my house last December for about $197/square foot, so that means a 28% price decline in a year! Even after considering that our house was nicer (newer, better features, 2 car garage, gas heat), that is still a shocking decline for such a short period of time!

These people got it and were able to sell their house, luckily they were in a position where they didn't have any debt on the property. I'm guessing a lot of people with more expensive homes for sale don't have that option.


Mammoth said...

So, where does this all mean we are headed?

In an recent interview, Gennady Zuganov – the leader of the Communist Party in Russia – was criticizing his country’s corruption and its effects on ordinary citizens.

“We wanted to become like America,” he said, “but instead what we got was Columbia.”

Guess what, Mr. Zuganov. We are also getting a very corrupt system here, too.

You know, I grew up at a time when the word, “Communism” meant something very dirty. But I must admit that at least right now, our whole capitalistic system leaves a LOT to be desired. Not that I believe that we should adopt the old Soviet system here in America, but you have to admit that this Zuganov guy is telling it like it is.

Damn, I can’t believe things have gotten to the point where I am even writing this.

Anonymous said...

Riverside California is getting hit hard!!! I have never seen so many stores close down in a two month span.

The yard sale bonanza has also begun. This past week I was offered a brand new whirlpool washer and dryer for $50 each. I have been browsing these sales for sterling silver and have found 5lbs worth so far.

Check out the y.o.y. numbers for coachella valley area, they are absolutely horrific.

Subcrime mess
Devaluation of dollar
Bank Implosions
Commodities inflation
Asset Deflation

Since when did The Sopranos start running this country!!!

Anonymous said...

Would things be different today if BOJ raise interest rate back in early 2006, while the US Federal Reserve hold rate at 5.25%.

Now with the point of no return passed and gone, can the damage be saved.

Wasn't it advocated that BOJ should have raised rate to stop "Yen Carry Trade" long time ago.

In May 2006, global investors and hedgies got spooked when the BOJ ostensibly withdrew excess liquidity of JPY12.2 trillion from the Japanese banking system. While much of the so-called excess liquidity in Japan was actually smoke and mirrors, the mere anticipation of a sudden shrinkage of available liquidity caused a global sell-off. Emerging markets like India gave up 30% in a month. U.S. stocks fell. Gold and oil retreated fast.

In effect, investors ran for cover in much the same way as an air raid siren in war-torn London during World War II. When the all clear signal was given, the hedgies and investors went back to their risk-taking ways.

Yet while hedgies and global investors were fixated on the dangers of the yen carry bugaboo, a subprime credit crunch came up and bit them on the butt. The feared yen carry debacle never really happened (at least to the degree feared), but the subprime liquidity-evaporating credit crunch continues today.

In fact, the growth of the yen carry trade is part of the same financial soup that created the explosion of structured credit in the US housing market and soaring BRICs and commodity markets, each driven by excess liquidity created through monetary inflation and easy credit that encourages excessive risk taking.

Anonymous said...

Citigroup Downgraded to `Sell' at Goldman Sachs

Citigroup Inc., the biggest U.S. bank, was lowered to ``sell'' by a Goldman Sachs Group Inc. analyst who said the lender's writedowns of collateralized debt obligations may total $15 billion over the next two quarters.

Anonymous said...

How many countries are at a breaking point with the fall of the US Dollar

The U.S. dollar's fall has been appropriate but the balance of the decline has not been very even, Bank of Canada Governor David Dodge said on Monday.

"It has been appropriate for the U.S. dollar to depreciate as it has," Dodge said on the sidelines of a gathering of central bankers in Cape Town.

"But the balance of that has not been very even. So it has been against (European currencies), it has been against Canada, it has been against Brazil but it hasn't really been against Asia," he told reporters.

Dodge said financial markets risk was now higher than a month ago.

Bank of Canada Governor David Dodge said some countries have borne too much of the burden of the U.S. dollar's decline this year.

``The problem is the depreciation of the U.S. dollar has been very uneven against different currencies,'' Dodge said in an interview today in Cape Town, where he was attending a meeting of central bankers from around the world. ``We have not had enough of a balance of depreciation.''

The dollar has dropped as slowing U.S. growth dulls its allure, encouraging investors to shift money into the currencies of other economies.

Canada-U.S. prosperity gap grows wider

In the past, Roger Martin, the institute's chairman and dean of the University of Toronto's Rotman School of Management, has not let the currency figure prominently in his analysis of Canada's competitiveness, since it was only a minor factor in competitiveness until recently.

He was uneasy with the dollar at 62 cents (U.S.), because it meant that Canada was essentially "holding a sale on everything in the store, a 20-per-cent-off sale on everything in the country."

Mitchell said...

Revaluation: one coyote dollar worth twelve old-style dollars.

Anonymous said...

Left with no other choice but to cut interest rate to zero to save the US Brokerage firms, would it be prudent that OPEC dump the US Dollar sooner than later.

Dollar is America's Achilles heel

Dump it or stay with it is a question being mulled over by private investors, financial institutions, major corporations and central banks around the world in relation to the weakened US greenback.

On Sunday it was the turn of the Organisation of Petroleum Exporting Countries (Opec).

Speaking at a press conference following the recent Opec meet in Riyadh, Iran's President Mahmoud Ahmadinejad said all member states are concerned about the falling US currency and have asked their finance ministers to study the feasibility of selling oil in another currency.

It's interesting to note, though, that for the first time Saudi Arabia declined to cut interest rates in concert with the last Federal Reserve decision.

Anonymous said...

With no CREDIT WORTHINESS for most US Credit products, why would foreign investors demand the US Dollar.

So shouldn't the supply of the US Dollar be cut, if there is less of a demand for it.

The value of the dollar is determined just like other commodity prices -- by supply and demand.

The main reason for the dollar's weakness is due to supply, in this case the over-supply of dollars by the Federal Reserve, the entity that has ultimate control of the printing presses. The Fed was too loose for far too long early in the current business cycle, raised interest rates too slowly, stopped too soon, and now it has cut rates multiple times before it ever got tight enough to bring down inflation. The dollar has lost 5% of its value versus the Euro since the Fed reversed course in September.

In the weeks and months ahead, expect more public pronouncements from prominent officials -- both US and foreign -- that attempt to bolster the dollar. It could be that there is even some intervention. But none of this will have any long-term impact on the dollar. Its fate is ultimately in the hands of the Fed. Without a change in policy by the Fed, any intervention gets mopped up immediately. In the end, if the Fed gives in to markets and cuts rates again, the dollar will keep falling. If it stands its ground and eventually retracts recent "emergency" rate cuts, the dollar will rebound.

Anonymous said...

Is it a matter of "if" or is it a matter of "when" Gulf Cooperation Council countries will decouple from the US Dollar.

As financial turbulence in the US intensifies GCC countries are exposing their economies to increased risk by maintaining a dollar peg, according to a prominent US economist.

Speaking to Khaleej Times, Robert J. Shiller, The Stanley B. Resor Professor of Economics at Yale University, commented, "Pegging to a currency on the other side of the world entails some risks. It may not be the right exchange rate." He noted that the reason many countries had adopted such a policy was to ensure confidence, but usually at some cost.

"The cost is that you have misalignment of exchange rates and probably any country that has confidence in its monetary institutions should not peg to the dollar," he added. "It seems plausible to me that they (the GCC) might want to de-link from the dollar." Noting the growing financial turmoil in the US, "where the dollar heads is fundamentally uncertain and wherever it heads it is going to bring the UAE along with it — so they might want to de-couple."

There does seem a little bit of decline in faith in the dollar

Anonymous said...

If GCC abandon dollar peg would commodities rich countries follow next, if so would it make sense that Hong Kong abandon dollar peg as well since many Derivatives Contractors will no longer need to be price in US Dollar

If that happens will it be to late for the US Federal Reserve wonder what was their primary function.

Will US Federal Reserve continue to bail out the US brokerage firms and met the same fate of BOJ.

Inflation may force GCC to abandon dollar peg

Rising inflation in the Gulf and a "toxic" dollar is increasing the likelihood that countries in the region will move away from pegging their currencies solely to the greenback, HSBC's senior economist for the Gulf said in Bahrain yesterday.Simon Williams said he expected inflation in Bahrain and other GCC countries to increase rest of the year and continue to rise in the first months of next year.

"In the last year to 18 months I have seen the Bahraini dinar, the dirham, and the riyal lose value because the dollar weakened - and I have seen booming Gulf economies required to reduce their interest rates because of the dollar peg. If the Gulf was running its own affairs and had independent monetary policy neither of those things would have taken place," he said.

Anonymous said...

Who are these six Gulf Arab states that want to de-pegged their currencies from the US Dollar.

The six Gulf Arab states of the Gulf Cooperation Council will discuss a proposal in December to revalue their currencies, Abdul Rahman al-Attiyah, the secretary general of the Council, said Nov. 18.

Anonymous said...

If the US Hedge Funds don't care, why should the GCC bail out US brokerage firms

A few in the industry have actually admitted that they're feeling queasy. In June, Nicholas Ferguson, chairman of SVG Capital, a British private equity shop, told the Financial Times that he couldn't figure out why he and his peers were "paying less tax than a cleaning lady." On this side of the pond, when Congress held hearings in September on the special tax rates for the alternative-investment industry, venture capitalist William Stanfill spoke out. Stanfill, the founder of TrailHead Ventures, in Denver, told Charles Rangel's House Ways and Means Committee that it isn't "fair for teachers and firefighters to subsidize special tax breaks for me and other venture capitalists or for private equity and hedge funds." Today, Stanfill says reaction in his office to his testimony was so negative, "I was tempted to ask Chairman Rangel if he could get me into the federal witness protection program."

During their recent rise to glory, the private equity and hedge fund industries built a gilded wall around themselves. Even as Stephen Schwarzman threw himself a $3 million sweet-60th birthday party and hedge funds racked up $4.8 billion through initial public offerings, the money industry typically ignored criticism. When asked to explain their work, hedge funds and private equity firms hid behind a law that forbids the hawking of unregistered securities to the public. Yet for the most part, no one cared. These guys were getting richer than most, but everyone was doing okay.

By summer, however, public sentiment had begun to shift. Homeowners were defaulting on subprime mortgages and credit markets had dried up. Suddenly, these risky investments had a human face: people being booted from their homes. Sure, investment banks, mortgage brokers, and others all had a hand in the mess, but those businesses were blowing up as well. There were no comments from the hedge fund managers who had helped contribute to the situation, nor did these people come forward to help ease the pain their partners, the investment banks, were going through: "Chutzpah, thy name is private equity," commented legendary short seller Jim Chanos at a conference this fall.

When the biggest players in the industry finally did begin to speak, all they talked about was, well, why they shouldn't have their taxes increased.

Anonymous said...

Sentence for Mortgage Fraud Includes Restitution

In addition to serving 30 months in federal prison, a Searcy woman who pleaded guilty to mortgage fraud and filing false income tax returns will have to pay $120,000 in restitution to victims.

Federal Judge Susan Webber Wright sentenced 54-year-old Debby Cossitt Monday. Acting U.S. Attorney Jane Duke says that Cossitt pleaded guilty during her trial in last December.

Wright ordered Cossitt to serve 30 months in prison, followed by three years of supervised release. The judge also ordered the restitution payments as well as payment of more than $9,500 to the IRS.

Mitesh Damania said...

Them MBAs are cutting time/costs once again.. Don't lick the hotel glasses. I've always had inklings that hotels/ and motels weren't healthy places to stay. What else are they cutting corners on?

Anonymous said...

Moody's Investors Service cut 23 classes of J.P. Morgan Alternative Loan Trust residential mortgage-backed securities supported by alternative-A mortgage loans while placing five others on review for downgrade.

Moody's cuts 14 classes of Merrill Lynch Alt-A loans

Moody's Investors Service cut the ratings of 14 classes of residential mortgage-backed securities supported by Alternative-A mortgage loans from 2006 while placing two others under review for downgrade.

Anonymous said...

I may seem about as much fun as a clown at a funeral in this post. But here goes:

The banking crisis appears to be affecting the retail industry. The spike in gold prices has set a downward trend in jewelry sales, with the market for bullion going to the speculators. The price of gold has declined to its lowest level in three weeks, and investors are questioning whether or not they wish to take any gambles with their investments. As of late, there has been some profit taking due to the banking situation and sub-prime credit. The stock market is off by over 200 points, and falling. I would take pleasure in a yearly loss in stock and gold prices after December.

Some may hate me for this, but I do believe that a collapse in gold and oil prices would be a good thing. It would hurt investors who place their bets in commodities. However, the consumers would most certainly benefit with prices that will likely stay within reason. It would be fabulous if the credit situation had an especially draumatic impact on the price of oil!

When on a fixed income, deflation can be a good thing. But unfortunately, it would also have a negative affect on the value of assets.

Anonymous said...

Will China dump more US Treasury.

China may make its exchange rate more flexible and, if necessary, consider widening the yuan's trading band, central bank (or the People's Bank of China) governor Zhou Xiaochuan has said.

But any change in the yuan's floating band will depend on the global economic situation and it's not the only tool the country would use to make its currency more flexible, Zhou was quoted as having said on Sunday.

Anonymous said...

It's a dead market almost everywhere . The buyer pool was exhausted by 2006 and the excess inventory is scary . You can reach a point where a market is just log-jammed . Best option is to hold long term if you can afford the payment and you have a good loan . Next best option is to try to get a re-write on your loan from the lender .

Anonymous said...

Could the US Dollar really plunge 90 percent.

U.S. Dollar Could Plunge 90 Percent

A financial crisis will likely send the U.S. dollar into a free fall of as much as 90 percent and gold soaring to $2,000 an ounce, a trends researcher said.

"We are going to see economic times the likes of which no living person has seen," Trends Research Institute Director Gerald Celente said, forecasting a "Panic of 2008."

"The bigger they are, the harder they'll fall," he said in an interview with New York's Hudson Valley Business Journal.

Celente -- who forecast the subprime mortgage financial crisis and the dollar's decline a year ago and gold's current rise in May -- told the newspaper the subprime mortgage meltdown was just the first "small, high-risk segment of the market" to collapse.

Derivative dealers, hedge funds, buyout firms and other market players will also unravel, he said.

Massive corporate losses, such as those recently posted by Citigroup Inc. and General Motors Corp., will also be fairly common "for some time to come," he said.

He said he would not "be surprised if giants tumble to their deaths," Celente said.

The Panic of 2008 will lead to a lower U.S. standard of living, he said.

A result will be a drop in holiday spending a year from now, followed by a permanent end of the "retail holiday frenzy" that has driven the U.S. economy since the 1940s, he said.

Anonymous said...

The Press Telegraph reports from California. “It would be hard to pick the best moment from the presidential inauguration at last week’s National Association of Realtors conference in Las Vegas. Incoming NAR President Richard ‘Dick’ Gaylord, a 30-year real estate veteran, was the centerpiece of a nightlong ceremony. He officially assumed the position as head of the nation’s largest trade organization Saturday.”

“Events before and after the installation were staged in Gaylord’s grandiose multi-room suite in the top penthouse of the Venetian Hotel, where several top ranking government officials and high ranking Realtors were on hand, including heads of many of state Realtors associations and real estate top producers from Manhattan Beach to the island of Manhattan.”

“As he headed to the stage, Gaylord was treated to a standing ovation. He continues to deliver a glass-is-half-full message even in the face of the current housing market, was filled with humility and it was more of a pep talk to Realtors and a thanks to everyone.”

“Gaylord went on to hail the accomplishments made by Realtors: ‘It is Realtors who have helped raise the homeownership rate to nearly 70 percent, by advocating for laws and policies that protect private property rights and make housing more affordable and accessible.’”

“‘Dick’s a genuine guy,’ said Randy Jeffers, incoming chairman for 2008 of the Texas Realtors Association. ‘Dick Gaylord is who he is every day. If Dick tells you something you can just bank on it. You can just take it to the bank.’”

LauraVella said...

"If the Fed gives in to markets and cuts rates again, the dollar will keep falling. If it stands its ground and eventually retracts recent "emergency" rate cuts, the dollar will rebound."


This is the big question. Can the Feds still save the dollar?

Either that, or gold will go to the moon.

Anonymous said...

Freddie Mac: $8.1 billion writedown
Government-backed mortgage finance firm becomes the latest to feel the bite of credit market woes as losses soar.

Anonymous said...

Anyone on to this game yet of the 13K dip? Whenever the DOW drops below that mark for the day, the next day a company announces a glowing profit report and it shoots back up over 13K to perhaps 200 or 300 points. This supports the next bad news fall of 250 or so points when another sub-prime holder is revealed to be bankrupt. Today (11/20) it was HP who announced big profits for the quarter. Who is next for bankruptcy? This will ultimately result in having all money lost when a BIG day hits. Same as in 1929. Roller Coaster ride then a big fall.

Vita said...

Interesting take on Ron Paul vis-a-vis Huckabee from a conservative point of view. Excerpt:

"And therein lies the chief difference between Paul and Huckabee. One is a culturally conservative libertarian. The other is a right-wing progressive.

Whatever the faults of the man and his friends may or may not be, Paul's dogma generally renders them irrelevant. He is a true ideologue in that his personal preferences are secondary to his philosophical principles. When asked what his position is, he generally responds that his position can be deduced from the text of the Constitution. ...

As for Huckabee -- as with most politicians, alas -- his personal preferences matter enormously because ultimately they're the only thing that can be relied on to constrain him. "

shtove said...

I've just come across the work of Martin Hutchinson, a former merchant banker - his article from April titled The Enronization of America is a scathing survey of the decline of free markets:

"The Cato Institute Thursday ran a seminar on “The Culture of Enterprise in an Age of Globalization” which brought up the question: to what extent is the United States still a free market economy? It certainly was a free market economy in 1925, or even in 1995, but in the last decade the balance of economic power has shifted substantially from profit-seeking free businesses to rent-seeking operations dependent on subsidy and regulation. What’s more, the balance appears to be shifting further in that direction. In honor of the late unlamented energy company that to a large extent epitomized the new tendency, one can typify the new outfits as Enrons and the economy as having been Enronized."

He's a conservative, sort of libertarian from England (living in Virginia). And there are lots of his articles at that link - well worth digging in to.

Chelle B. said...

I thought it was pretty ridiculous that in an article in the Santa Cruz Sentinel re: the housing bubble;

"these companies chose to insure bad loans rather than risk offending their customers"


"Rather than offend private equity buccaneers or hedge fund honchos, bankers decided to keep dancing as long as the music was playing.

So, this whole mess is because of the desire not to offend. Please!! Since when is that a practice in the banking and insurance business??

Chelle B.
The Offended Blogger
"Blogging the offended and the offensive, because they're out there."

Anonymous said...

When is Fannie a buy, any opinions? Down 25% today even after a rough last few years.

Maybe this is a good opportunity. Anyone?

Christiane said...

Everything that I read is very negative and doom and gloomy. While I agree with many of the poster's analysis I am disturbed that no one offers any real solutions. With all of the intellectual prowess and creativity here couldn't the discussion lead to some more productive solutions?

JerseyGirl said...

Anyone else see the nose-dive the market took? Holy moley.

Anonymous said...

"I am disturbed that no one offers any real solutions"

Are you kidding me? This Board is full of "real" solutions. Unfortunately, such solutions are not generally palatable.

Anonymous said...


Anonymous said...


Anonymous said...

Spain will see the most brutal housing crash. 95% of all mortgages in Spain are ARM based on LIBOR!

Libor soars as credit crunch returns

Anonymous said...

China will crash hard!

Anonymous said...

Please tell me where all the families who are leaving there homes are going to live,or move too?They have to be going somewhere,but where?

bryce in vancouver (Vncvr&Clgry bubbls) said...

Anonymous said...
Please tell me where all the families who are leaving there homes are going to live,or move too? They have to be going somewhere,but where?

They are going to live in an APARTMENT(or perhaps a basement suite) that they RENT.

And the homes weren't really "theirs" anyway -- the homes belonged to the banks except for some small fraction of equity that was truly "theirs".

Anonymous said...

In an recent interview, Gennady Zuganov – the leader of the Communist Party in Russia – was criticizing his country’s corruption and its effects on ordinary citizens.

“We wanted to become like America,” he said, “but instead what we got was Columbia.”

With El Presidente Jorge Bush it's a race to which former super power gets to Columbia first! I wonder if anybody told Laura that she is the 1st Lady of.....Columbia?

Anonymous said...

Here's a funny gag gift item for obnoxious real estate bubble deniers:

Princess Mononoke said...

Christiane said...
>>I am disturbed that no one offers any real solutions.
November 20, 2007 6:13 PM

I agree with Anon who wrote, "This Board is full of "real" solutions."

The iceberg has been struck! The Titanic has been filling up with water and sinking. We the People, have been locked up on the lower levels with guns pointed at us. While all of the elitist are escorted on to the limited amount of life boats. And the band just keeps playing!

Basically, all WE can do is BE PREPARED!

Another great analogy I like to use is more Tsunami waves are coming! You've been warned since you are reading this blog. You are not going to just stand there and wait for the waves to take you over? NO, you need to get to the highest ground for safety.

Anonymous said...

Please tell me where all the families who are leaving there homes are going to live,or move too?They have to be going somewhere,but where?

Where did these families lived before they brought their homes?

Anonymous said...

Is the Tupi Oil Field high-sulfur crude or is it sweet crude like those in Saudi Arabia.

Does High-sulfur crude cost more to refine than sweet crude.

How many US refineries are set up to refine high-sulfur crude.

Despite its size, the Tupi field poses significant engineering hurdles that will drive increased costs in tapping the field.

Petrobras currently pumps 1.8 million barrels daily from its Brazilian fields and expects to boost its $112 billion in planned spending over the next five years to assume the Tupi project.

Tupi could mean continued high-level growth well into the next decade, taking exports to a potential 1 million barrels a day by around 2015.

Brazil to consider joining OPEC after gauging monster oil discovery, ambassador to Riyadh says

Last week, Brazil confirmed a monster offshore oil discovery and promising fields near the find which could help the country join the ranks of the world's major oil exporters, although full-scale extraction is unlikely until 2013 and will be very expensive.

State-run Petroleo Brasileiro SA (PBR), or Petrobras, said reserves at the ultra-deep Tupi field could be up to a massive 8 billion barrels of oil equivalent, and initial production should exceed 100,000 barrels daily, though experts believe the amount will then go much higher.

Petroleo Brasileiro SA will start pilot pumping in 2010 or 2011 but it will take several more years for full production to get under way, at a cost of billions of dollars (euros).

Brazil imports easier and less costly to refine light crude in order to turn it into gasoline products. A lot of the oil Brazil produces is a heavier, high-sulfur crude more suitable as lubricant rather than transport fuel.

Anonymous said...

With the US Dollar Index at 75.171, is the currency market pricing in a December rate cut even if the Federal Reserve do not want to cut rate.

Date____Fed Fund Rate


New York markets also eked moderate gains following a prediction of worsening economic conditions by the U.S. Federal Reserve while the release of minutes from the last Fed minute sowed doubt about the Fed's next move on interest rates.

edd said...

A realtor told me that no potential
buyer may set foot on a vacant
property for sale at any time
without a realtor present.

Just a full employment program ?

Boycott the "genocide olympics".

Anonymous said...

January crude oil Last trade: 99.03

Anonymous said...

There have been speculations that the Federal Reserve were going to do an emergency rate cut.

Was the rumor before or after the FOMC meeting.

Dollar plunges to record lows

Earlier talk of an emergency interest rate cut from the Federal Reserve also weighed on the dollar and boosted stocks.

The central bank declined to comment.

Anonymous said...

You want a solution prior poster .

The lenders have to re-write the loans (at their own loss ) so a number of these people can be saved from foreclosure .Even if the banks lower the rate on loans for 5 to 10 years , it would be better than foreclosures .

On the rest of the loans that can't be saved ,the lenders take a loss . Than the lenders take out a loan from the taxpayers and pay it back in 5 to 10 years to stay afloat .

The builders sell at firesale prices to unload their inventory and make agreements with planning boards to withhold from building until inventory has gone down .Builders would have to prove to planning commissions in the future that the building is based on real demand .

The Fed Chairman needs to raise the interest rates to save the dollar and curb inflation .

Investigations and court cases need to take place to punish some of the major criminals in the housing corruption .

Loans will have to be insured for awhile to free up the market which will make loans over 75% loan to value more costly .

Until it can be determined what real values are in real estate and the market becomes stable ,lenders will need to back off from lending unless the buyer put a 25 to 30% down payment . After the market becomes stable in different areas than lenders can return to higher loan to value ratios ,but only if the corrupt appraisal system has been changed as well as the mortgage system that failed to make reasonable loans . Standards need to return to lenders bearing more of a burden for not underwriting loans proper and borrowers need more foreclosures .

After the above is all said and done ,Americans will still go through a recession ,and new industry needs to be established . Americans will need to overhaul the problems that created the bubble to begin with .

Anonymous said...

To said that the Federal Reserve did not have any knowledge of the level of trouble the brokerage firms were in, is like saying US Treasury Secretary Henry Paulson never talked to Federal Reserve Chief Ben Bernanke before the development of the credit crisis.

It would be a true statement if US Treasury Secretary Henry Paulson never understood his job at Goldman Sachs, or knew the level of risk Goldman Sachs was taking under his tenure.

Does it really take a pHD to add up the facts that if you lend people more money then they could pay back, chances are they will not be able to.

Many bankers lost focus of their traditional responsibilities and relied on financial engineering to hedge their risk.

Many bankers got complacent and lost all common sense, but one would hope that most CEO of the big brokerage firm knew the risk.

Like in the eighty when the saving and loan crisis happened, many priced in the risk that the Federal Reserve will bail them out, and this credit crisis is no different.

Thus the US Dollar must take the fall again, but the only question is "Can the US Dollar recovered".

On Nov. 20, stock markets were lifted on speculation that Ben Bernanke will call an emergency meeting at the Federal Reserve to further cut interest rates. This would be a remarkable turnaround for Chairman Bernanke.

First, the Fed has failed to grasp how the damage in the subprime market to the balance sheets of Citigroup, Merrill Lynch and others have damaged fundamental confidence in Washington's economic management and undermined the resiliency of the U.S. economy.

We have been suffering a crisis of confidence for many weeks, and the Fed doesn't get it. If it did, the Fed would not have precluded further action in its October 31 statement.

Anonymous said...

Remember Bernanke is following Greenspan foot steps.

So ask yourself the question what can Fed policy makers do other then to lower rate if his counter part BOJ does not want to raise rate.

Didn't "Yen Carry Trade" supply a great deal of excess global liquidity.

You seen the internal liquidity GAP which the Federal Reserve could controlled, how could the Federal Reserve provide the excess global liquidity with that narrow internal liquidity GAP.

So didn't the wide external liquidity GAP that BOJ should have controlled but did not. This wide external liquidity GAP allowed "Yen Carry Trade" to flood the world four markets with excess global liquidity.

You know: Bonds, Currencies, Commodities, and equities markets.

Second, unlike the European Central Bank, Fed policymaking primarily focuses on short-term interest rates and not money supply management. In large measure, the U.S. dollar's international status as the reserve currency -- other central banks use dollar holdings to back up their currencies -- makes both the supply of U.S. money and its impact on inflation unstable and difficult to manage.

The practical problem is that money is liquidity, and important segments of the U.S. economy are suffering from a liquidity crisis.

Anonymous said...

Wasn't Japan equally guilty of the same policy of undervaluing the yen and buying massive amounts of dollars and securities, to keep down the prices of yen and its exports Toyota, Honda, and Nissan on U.S. store shelves, yet did you accused BOJ of manipulating it's currency by keeping its interest rate artificially low.

It is true in a system were currencies should fluctuate freely no countries should be allow to manipulate their currencies, but then why should Hong Kong or the Gulf States be allowed to pegged their currencies to the US Dollar.

The reason the system is broken is because one party wants the other party to take the majority of the pain.

It will take global trust and all parties (central banks) to want to share in the responsibility equally to fix this problem.

Third, the Treasury and Fed have failed to come to terms with the impact of China on U.S. monetary policy. China's policy of undervaluing the yuan and buying massive amounts of dollars and securities, to keep down the prices of yuan and its exports on U.S. store shelves, has significantly unhinged U.S. short-term interest rates from U.S. mortgage and other long-term rates.

Anonymous said...

"GREED and FEAR" and "The Path of Less Resistance" are the only two rules of economic.

You want real FEAR tell the Treasury and Fed to temporary give up the US Dollar as the Reserve Currency of the World and rotate the Reserve Currency Status to the EURO.

Then make G20 force BOJ to raise rate, and ask all of world banks for more time for US to pay back subprime loans.

You want real GREED ask China and India to open up its markets to global investors, and force Bank of China to widen the Yuan trading band at the same time BOJ raise rate.

For giving up the US Dollar as the reserve currencies of the World tell China, Europe, Japan, India, and Russia they must provide the military for Iraq and Afghanistan so that the US can pull its military out and focus on its economy.

Then rotate the World Reserve Currencies status among all big Nationals every four years.

Fourth, the Treasury and Fed have failed to come to terms with the corrosive consequences on bond, mortgage and wider credit markets of self dealing at Standard and Poor's and other bond rating agencies. No one is going to buy many private U.S. securities as long as rating agencies are paid by Wall Street bankers who appear able to manipulate the process.

Anonymous said...

Orlando is in a real mess. This bog talks about the waitress in Denny's buying a $200K condo as an investment....

Mammoth said...

The bank is not your friend.

Thinking of giving your loved ones a gift card for Christmas?

WaMu’s MasterCard gift card charges a $5.45 issuance fee the first time you use it. After one year, it charges a $2.50 per month ‘maintenance fee’ abd then expires two years after the purchase date.

Read the fine print, damn it!

Ditto for when you’re making the biggest purchase of your life – read the mortgage papers. Duh!

shtove said...

Please check out this blog:

It's my latest find, and I'd rank it along with Market Ticker.

Anonymous said...

It's official. California is bailing out speculators with the program that the FDIC lady had proposed, to fix the gambling losers' interest rate permanant.

trailer flipper said...
A little chuckle for you Keith.

PS> Trailer Flippers even made money in The Bubble.

shtove said...

Containment spreading ... across the globe - from Japan:

"TOKYO, Nov 21 (Reuters) - Mitsubishi UFJ Financial Group Inc (8306.T: Quote, NEWS , Research), Japan's largest bank, posted a 49 percent drop in first-half profit on Wednesday, hit by subprime-related investments and hefty losses at its credit card unit."

... to Europe:

"Nov. 21 (Bloomberg) -- European banks agreed to suspend trading in the $2.8 trillion market for mortgage debt known as covered bonds to halt a slump that has closed the region's main source of financing for home lenders."

Surely not long to go now?!

Anonymous said...

I've got to transfer CD's this week. Is it crazy to put $'s in IndyMac or Countrywide with the highest rates out there, as long as it's fully FDIC insured? What to do!?!

ruprecht said...

Is one in six people in one metro area using a food bank just their own poor planning?

Is it a downturn, recession or depression?

Anonymous said...

What had they done wrong?

Nothing, according to Richard Styron, Freddie’s CEO.

Who could have seen that coming, he seemed to ask?

Seriously, this subprime housing meltdown …who could have seen that coming?

“Pssst…markets go up AND down. And by the way, when you lend out money recklessly…you gotta expect trouble.”

Apparently, no one said a thing. It is as if these guys had come to Wall Street on the back of a turnip truck…and signed up for work the next day.

Now, they find the work is not as easy as they had thought. This week, the cost of protecting against credit whammies rose to an 18-year high – based on two year interest rate swap prices. “More black clouds on the credit horizon,” the Financial Times reports.

Anonymous said...

Freddie Mac found itself the target of a shareholder lawsuit accusing the mortgage-funding giant of misleading investors about its risk-management practices.

The lawsuit in a Manhattan federal court seeks damages on behalf of investors, and it comes after a formal investigation by New York State Attorney General Andrew M. Cuomo into loan appraisals for banks that sold mortgages to Freddie Mac and its larger rival Fannie Mae.

The suit filed by the law firm of Coughlin Stoia Geller Rudman & Robbins alleges that Freddie Mac "made false and misleading statements concerning . . . its risk management and the procedures it put in place to protect the Company from problems in the mortgage industry," according to a statement on the firm's Web site. "Freddie Mac was not adequately implementing risk control measures. Moreover, the Company's procedures for appraisals led to many inflated appraisals, increasing the risk of defaults."

Cuomo earlier this month issued subpoenas to Fannie Mae of the District and Freddie Mac of McLean, and demanded they appoint independent examiners to review appraisals on the loans they purchased from banks. The attorney general's subpoenas also seek information on the due diligence performed by Fannie Mae and Freddie Mac and their evaluations of appraisals.

Anonymous said...

Will BOJ intervene if Yen drop below 104 yen/USD.

The euro hit a fresh record high against the dollar in Asian trade Thursday as investors fled from the greenback and shunned risk amid gloomy prospects for the US economy, dealers said.

The dollar has also been hurt by growing speculation that overseas investors may diversify from the US unit, they added.

The euro hit an all-time high of 1.4872 dollars in late Tokyo morning trade from its previous record of 1.4870 reached in New York on Wednesday.

Market participants are worried the greenback could go into free-fall against the Japanese unit, even to the 105-yen level, dealers said.

"There is no longer any emotional attachment nor aversion against the yen's appreciation among Japanese politicians and corporate executives which we saw a few years ago," said Toru Umemoto, chief forex strategist at Barclays Capital.

Suzuki agreed, saying: "While the euro continues to climb and the dollar to fall, their central banks are not considering intervention, so there is no reason why the Bank of Japan would do so."

Anonymous said...

With derivatives traders betting on an imminent default, GMAC steps in to rescue its Residential Capital mortgage unit.

The situation at Residential Capital, the second-largest independent U.S. mortgage lender, after Countrywide Financial Corp., is now so bad that it's pulling down the automaker and Cerberus Capital, the private equity firm that bought a controlling stake in GMAC last year.

One measure of how bad the situation is can be found in the price GMAC is offering for Residential Capital's debt. The offer ranges from 50 to 83 cents on the dollar. Even then, the offer is well above where that debt was recently trading in the secondary market.

GMAC acknowledged that it was forced to bail out Residential Capital because the subsidiary was in danger of violating the terms of its debts. The most restrictive provision requires ResCap, as the unit is known, to maintain a tangible net worth of at least $5.4 billion.

GMAC said it "currently intends to take steps, to the extent necessary," to make sure ResCap meets the net worth threshold at the end of this quarter. If necessary, executives said they intend to recommend that GMAC inject more capital into ResCap.

Anonymous said...

Fitch cuts ratings on 30 bln usd worth of US mortgage CDOs

Derivative Fitch lowered its ratings on 29.8 bln usd of collateralized debt obligations (CDOs) linked to US residential mortgage bonds.

So far, Fitch has cut its ratings on total 67 bln usd worth of CDOs across 158 transactions.

Anonymous said...

A shareholder derivative lawsuit was filed Tuesday against American International Group Inc., its top executives and directors over its exposure to the subprime mortgage crisis.

The lawsuit, filed in federal court in Manhattan, claims the insurance giant improperly concealed the true extent of its exposure to the subprime crisis, claiming its portfolio was sufficiently diversified and that the mortgage market would have to reach "Depression proportions" before it was negatively impacted.

Earlier this month, AIG said its third-quarter net income declined 27 percent in part because of its exposure to adverse conditions in the U.S. residential mortgage and credit markets.

The complaint, filed by Doris Staeher, a California resident and AIG shareholder, seeks damages for breaches of fiduciary duty and waste of corporate assets by AIG's top executives and directors. The suit also seeks a directive that the company reform and improve its corporate governance.

In a derivative lawsuit, shareholders file on behalf of the company and damages assessed are paid to the corporate entity, as opposed to direct payments to shareholders.

An AIG spokesman declined comment on Tuesday.

Anonymous said...

Standard & Poor's Ratings Services lowered its ratings on 5.03 bln usd of collateralized debt obligations (CDO) linked to US residential bonds, and signalled more cuts are on the horizon.

The agency cut the ratings on 136 tranches from 28 US CDO transactions.

All but 16 of the lowered ratings were on negative watch before the downgrades, and 58 tranches either remain on negative watch or were placed on creditwatch, indicating a high likelihood of future downgrades on these tranches.

Anonymous said...

Continued credit deterioration with respect to underlying collateral has led Fitch to initiate a formal review of collateralized debt obligations (CDOs) backed all or in part by trust preferred securities (TruPS) issued by real estate investment trusts (REITs), homebuilders and financial institutions specializing in residential mortgage lending.

As a result, Fitch has placed $5.4 billion of rated liabilities, across 120 classes of 15 TruPS CDOs, on Rating Watch Negative.

With respect to five of the 15 transactions affected, Fitch has placed the entire capital structure on Rating Watch Negative.

Anonymous said...

UBS faces "major" CDO losses

UBS AG, Europe's largest bank by assets, may have lost as much as $9 billion on collateralized debt obligations, according to CreditSights Inc.

The losses would be almost half the Zurich-based bank's $20 billion of top-rated CDOs, securities based on underlying assets. CreditSights, the independent research firm in New York, based its analysis on the bank marking down its holdings to prices indicated by benchmark indexes rather than methods used by UBS.

Anonymous said...

The unwillingness of banks to make loans to each other in the money market lifted the three-month rate on dollar deposits to 5.015 percent, its highest level in almost a month, from 5.000 percent on Tuesday.

The ten-year swap spread last traded at 81.00 basis points, compared with 80.75 basis points late on Tuesday. It moved out as much as 85.50 basis points, a level not seen since August 2001, according to RBS's Tata.

Anonymous said...

3rd Quarter GDP will be revised from 3.9% to 5.0%, sounds like a smoking gun to raise rate and not to lower them.

Key U.S. Data Releases and Events

Next week we expect the Bureau of Economic Analysis to report that the economy motored ahead by an upwardly revised 5% in the third quarter, with net exports providing some octane, and this will propel the productivity numbers up to stellar levels of close to 6%.

Personal income likely grew at a solid clip in October. The core PCE deflator is also expected to rise by only 0.1%.

The 3.9% third-quarter GDP growth that the financial markets took as surprisingly strong will look even stronger at our current estimate of 5.0% growth.

Almost every revision and formerly missing number turned out more robust than the Commerce Department had initially estimated.

The contribution from net exports will be revised up significantly, while we expect to see a downward revision to consumer spending and inventory gains.

Overall, this was a very strong quarter, with a noteworthy improvement in the sources of growth.

In addition, this will lead to an upward revision to third-quarter productivity by as much as a percentage point, to the neighborhood of a stellar 6%.

Princess Mononoke said...

Anonymous said...
>>The contribution from net exports will be revised up significantly...
November 22, 2007 9:11 AM

You can thank the decline in the dollar and BB for pumping up US exports and thus GDP!

FlyingMonkeyWarrior said...

Orlando realtwhores sold three times more homes than the giant Miami house market realtor clerks did.

Slump in existing-home sales not as great in Orlando-area

Jerry W. Jackson | Orlando Sentinel Staff Writer
November 22, 2007


Miami-Dade County, the state's largest metro area, has nearly twice as many people as Metro Orlando, yet Orlando Realtors sold more than three times as many single-family homes as their Miami counterparts. Miami's third-quarter total -- 1,250 -- was down 42 percent from the same period a year earlier, the biggest percentage decline of any of the state's large metro areas.


Anonymous said...

Most of you, as American citizens, are being robbed blind. Many suspect something is seriously wrong with our financial and economic structure. But few comprehend the true underlying problem. Fewer still know how to protect themselves or even prosper during chaotic economic times.

What is the root of the problem? Our money and the people who print and “manage” it do so for their own interests only. This system of money was designed to take from the unsuspecting. It was put in place to enrich the bankers that brought the Federal Reserve our way by deception in 1913. Planet Earth is now under its spell.

All know that “inflation” is a bad thing and costs us dearly. The underlying cause of inflation, an invisible tax, remains obscure. It has never been more important for you to see through the haze and protect yourself.

The U.S. and global banking systems remain under extreme duress. Still, the subprime real estate loans are only part of the problem. Banks and other financial institutions have greedily delved into trillions of dollars worth of weird private contracts known as “derivatives.” These are unregulated private bets that were supposed to eliminate risk in markets.

So far, so bad. These derivatives are coming unglued alongside all the junk U.S. real estate mortgages held by financial institutions in most foreign countries. Bank bailouts are now commonplace. I've seen a recent estimate of up to $2 trillion worth of bailouts. These are a hidden tax on you!

Anonymous said...

Where is the remaining 56.9 trillion in Derivatives going towards.

Global Derivatives Market Expands to $516 Trillion

The market for derivatives grew at the fastest pace in at least nine years to $516 trillion in the first half of 2007, the Bank for International Settlements said.

Derivatives are financial instruments derived from stocks, bonds, loans, currencies and commodities, or linked to specific events like changes in interest rates or the weather.

Credit-default swaps derivatives is $43 trillion by June.

The money at risk through credit-default swaps derivatives is $11.1 trillion

Interest-rate derivatives is $347 trillion outstanding by June.

Foreign exchange derivatives is $49 trillion.

Equity market derivatives is $9 trillion.

Anonymous said...

Will the attack on Iran going to be sooner rather than later.

The United Arab Emirates cut interest rates on Thursday as markets test Gulf pegs to dollar.

Central Bank Governor Sultan Nasser al-Suweidi told Reuters last week he was under growing social and economic pressure to drop the dirham's peg to contain inflation.

The dirham hit a five-year high on Wednesday and forward rates showed investors expecting a 3.1 per cent appreciation in a year in a currency which has been fixed at 3.6725 per dollar since 1997.

The Saudi riyal touched a 21-year high of 3.7050 on Monday after a source familiar with Saudi policy told Reuters earlier that Riyadh could consider a revaluation to keep monetary union plans alive. Saudi Arabia has fixed its riyal at 3.75 per dollar in June 1986.

Kuwait blamed rising inflation when it broke ranks with its neighbours and dropped its dollar peg in May, saying the U.S. currency's weakness was making some imports more expensive.

Kuwait's central bank said the dinar would trade around a mid point of 0.27415 per dollar on Thursday, compared with 0.27445 the previous day, allowing an appreciation of 0.11 per cent. Kuwait gets about a third of its imports from western Europe, as does the UAE.

Mr. Suweidi signalled he wants to follow Kuwait into a currency basket but would do so only in concert with Saudi Arabia and three other neighbours preparing for monetary union as early as 2010.

Anonymous said...

Zhou Xiaochuan, governor of the People's Bank of China, made the comment to U.S. Treasury Secretary Henry Paulson at a conference in South Africa, the Xinhua News Agency said.

"Zhou said he told Paulson China hopes to see a strong dollar," Xinhua reported. It said Zhou was responding to Paulson's prediction of a long-term recovery of the weakening dollar, which fell to another record low against the euro Thursday.

Zhou's comments put "weight behind the slumping currency," Xinhua said.

The U.S. dollar has been falling against the euro, yen and other major currencies amid fears for the health of the American economy, stoked by the subprime mortgage crisis. Concerns about the United States' huge trade deficit, which leaves more dollars in the hands of foreigners, also is weighing on the currency.

China keeps a large share of its $1.43 trillion in reserves in dollar-denominated assets such as U.S. Treasuries, which means a falling dollar erodes the value of its holdings. Financial markets are watching to see whether Beijing shifts to a stronger currency such as euros.

Zhou said that only when the dollar "devalues drastically can it be called weak, the scenario of which is likely to bring uncertainty to the world economy, to the reluctance of all parties concerned," Xinhua reported.

Zhou and Paulson were attending a meeting in South Africa of the G20, which groups together the world's 20 biggest economies.

Anonymous said...

Isn't it strange how every ABX Derivatives are at an all-time lows

ABX-HE-AAA 07-2__66.45
ABX-HE-AA 07-2___35.09
ABX-HE-A 07-2____23.97
ABX-HE-BBB 07-2__19.80
ABX-HE-BBB- 07-2_19.01
ABX-HE-AAA 07-1__69.73
ABX-HE-AA 07-1___39.93
ABX-HE-A 07-1____24.54
ABX-HE-BBB 07-1__17.67
ABX-HE-BBB- 07-1_16.89
ABX-HE-AAA 06-2__80.10
ABX-HE-AA 06-2___52.23
ABX-HE-A 06-2____33.66
ABX-HE-BBB 06-2__18.61
ABX-HE-BBB- 06-2_16.90
ABX-HE-AAA 06-1__90.09
ABX-HE-AA 06-1___78.24
ABX-HE-A 06-1____50.41
ABX-HE-BBB 06-1__25.46
ABX-HE-BBB- 06-1_22.75

Anonymous said...

Isn't strange that even AAA mortgage bond holders might not get paid.

Behind Wall Street's subprime fear index

The formerly obscure ABX index has become a closely watched gauge of just how bad the market for subprime securities is getting.

The ABX tracks the performance of a basket of credit default swaps based on U.S. subprime home loans. Credit default swaps, which are like insurance contracts, allow buyers and sellers to trade risk.

In the case of the ABX, these financial instruments allow traders and investors to take positions on subprime securities without actually holding them.

The index is by no means perfect - traders use credit default swaps as a betting tool, which can skew prices - and it doesn't reflect the true value of the underlying securities. But it does offer a gauge of the demand for them. A decline in the ABX suggests that the securities have become more risky and that investors have lost confidence in them.

The ABX has five separate indices based on the rating of the underlying subprime securities, ranging from AAA to BBB-minus. A new series is issued every six months to reflect the 20 largest current deals.

For instance, the inelegantly-named ABX-HE-A 07-2 tracks bonds with a rating of BBB issued in the first half of 2007.

The index prices are updated by Markit at

The part of the ABX linked to the riskiest subprime bonds has fallen about 67 percent since the mortgage wipeout began in the summer. Now subprime fears are spreading to segments of the market once considered ultra-safe.

For example, AAA-rated mortgage-backed debt has tumbled on the ABX in the last month, reflecting concerns that even those bond holders higher up in the capital structure - those who get paid first - may also suffer losses.

Anonymous said...

Should BOJ raise rate hike to 0.75 percent.

The BOJ's policy board meets next on Dec. 19-20.

Japan's exports hit a record high in October and the trade surplus jumped by two-thirds from a year earlier

Resilient exports helped push up Japan's economic growth to a firm 0.6 percent in the July-September quarter from the preceding three months, or an annualised 2.6 percent.

China is seen overtaking the United States as Japan's biggest export market this year for the first time in modern history as the booming Chinese economy attracts Japanese products ranging from machinery to steel.

China is already Japan's largest trading partner.

Firm shipments to Europe, China and other parts of Asia offset a decline in exports to the United States, figures issued on Wednesday showed, pushing overall exports up 13.9 percent from a year earlier and underscoring a view that exports remain solid.

Financial markets showed little reaction to the trade data but the yen rose to a two-year high

Anonymous said...

US Dollar Index Last trade at 74.629.

Is the US Dollar Index free falling.

The dollar hit a record low against the euro, the Swiss franc and a basket of currencies on Thursday, as the market upped the ante on the Federal Reserve to deliver an interest rate cut next month.

Adding to downward pressure on the dollar was a recovery in equity markets and a slight pick up in risk appetite, which made investors more willing to put on riskier trades in high-yielding or emerging market currencies.

The more risk-friendly mood also hit the yen -- a favourite source of cheap funding for the carry trades. The Japanese currency eased from the previous day's 2-1/2 year peaks versus the dollar, while high-yielding Australia and New Zealand units -- top carry targets -- gained broadly.

With the United States marking Thanksgiving holiday on Thursday and Japan shut on Friday, volumes were likely to remain subdued into the end of the week, potentially exacerbating market volatility.

"We are looking for continued dollar weakness and would not be surprised to see euro break $1.50 within weeks rather than months," said Teis Knuthsen, head of FX research at Danske Markets in Copenhagen.

Anonymous said...

Will ECB raise rate now that crude oil is near $100.

Cyprus expects the European Central Bank to raise interest rates "soon" to curb a rise in euro zone inflation, Finance Minister Michael Sarris told Reuters in an interview on Thursday.

Sarris said: "The European Central Bank will do the responsible thing, that is, you take one aspirin now which causes you some discomfort, or you take 10 aspirins a year from now."

Asked how the ECB would do this, he said: "By raising interest rates."

Economists say the Cyprus central bank is keen not to cut its main rate from 4.5 percent because it fears excessive credit growth is feeding into inflation and stoking property prices on the island. But even if the central bank takes no action at its next review on Dec. 10, Cyprus will adopt ECB rates anyway when it joins the euro zone on Jan. 1.

Sarris said an increase in ECB rates could be in the pipeline if oil prices, which are close to $100 a barrel, continued to climb.

Anonymous said...

Euro zone inflation projections have been revised upwards as oil and food prices surge

The monthly poll of over 60 economists, carried out Nov. 15-21, showed revisions to inflation forecasts this year and next after oil prices have edged ever closer to $100 a barrel.

Analysts see euro zone inflation averaging 2.1 percent this year, rising to 2.2 percent in 2008.

For the last five months inflation was seen at 2.0 percent this year and next, much closer to the European Central Bank's (ECB) target.

Economists expect the euro zone to turn in strong growth of 2.6 percent this year.

Anonymous said...

Germany: Inflation Indicator Rises

German producer-price inflation, an early indicator of price pressures in the economy, accelerated more than economists expected in October after the price of oil rose to a record and the cost of food surged.

Prices for goods ranging from newsprint to plastics climbed 1.7 percent from a year earlier after rising 1.5 percent in September, the Federal Statistics Office said.

Economists had expected a 1.6 percent gain. “Price pressures are now definitely building up,” said Rainer Guntermann, an economist at Dresdner Kleinwort in Frankfurt.

Anonymous said...

Will BOE be forced to raise rate.

Will the US Dollar continue to free fall.

New data Tuesday hardened rate expectations.

Higher sterling money market rates and indications that U.K. inflation isn't backing down as quickly as some hoped are helping to underpin the pound, especially against the dollar.

The outlook for the BOE's short-term interest rates has also become more hawkish.

The latest Confederation of British Industry's industrial trends survey not only showed that manufacturing orders rose unexpectedly in November, rather than falling as forecast, but that domestic price expectations surged.

"Given headline inflation is already above target and looks set to move further above on food and energy costs, this report will add to BOE inflation concerns," said James Knightley, an economist with ING Financial Markets in London.

L Ron Hubbard said...

Ron Paul Videos:
Ron Paul Videos

Anonymous said...

The euro may rise to a record 1.50 dollars on speculation the European Central Bank may increase interest rates to ward off inflation.

Consumer prices in the euro zone rose 2.6 percent in October from a year earlier, faster than the 2.1 percent gain in September.

Record oil prices may continue to pressure euro zone inflation.

The US dollar plunged to a record low against the euro and sank to its lowest level in more than two years against the yen in late morning Asian trade Friday.

The euro was trading at 1.4938 dollars, after rising to as high as 1.4966 earlier, its strongest level since it began trading in January 1999.

Anonymous said...

Will New Zealand Reserve Bank continue raising rate to fight inflation.

"The Reserve Bank has ongoing concerns about persistent inflation at or near the top of the 3 per cent band, and as will be known to all of you, the bank has a limited set of fairly blunt tools with which to keep inflation in check,"

Finance Minister Michael Cullen supports the Reserve Bank's focus on fighting inflation, despite the impact high interest rates and the strong currency is having on exporters.

He did not speculate about the New Zealand dollar's direction.

W.C. Varones said...

Why you should contribute to Ron Paul.

Anonymous said...

The dollar index, which tracks the value of the dollar against a basket of currencies, touched a new low of 74.485.

"The U.S. dollar started to look like on an overcooked turkey over the holiday recess, as fresh selling brought it to under the 75 mark on the index," said Jon Nadler, a senior analyst at Kitco Bullion Dealers. "The greenback's woes prompted renewed buying of gold."

The euro reached a new high of $1.4966 overnight

Anonymous said...

A chart of the US Dollar Index since 1973.

1973 = 100

There is one point of interest,during the peak of the seventy inflationary period the US Dollar Index never reach below 90.

This year it has gone below 75, but core inflation is still tame around 2%.

Knowing that is it possible the US Dollar Index can drop to 10, core inflation will still be tamed around 2%.

Why not as long as OPEC continue to take US Dollar for oil anything is possible.

If so at what point can the US Dollar Index free fall too until the US Dollar stop being the World Reserve Currency.

Anonymous said...

Under current conditions how can Freddie Mac and Fannie Mae take on more bad debt from failing subprime companies without dropping their share price even more.

Freddie Mac said today that not only did it lose $1.2 billion in the third quarter, but it bounced up against capital requirements imposed by federal regulators, forcing it to sell $45 billion in loans in September and October....

Freddie Mac estimated its core capital at the end of the quarter was $34.6 billion-- a mere $600 million above the 30 percent capital surplus requirement set by the Office of Federal Housing Enterprise Oversight (OFHEO).

If it can't raise more capital-- one move being considered is to cut shareholder dividends by 50 percent-- then Freddie executives say they may have to limit growth or reduce the size of the company's retained loan portfolio, and slow down the pace at which it guarantees loans.

Fannie Mae, which on Nov. 9 reported $1.4 billion in third-quarter losses, has a little more leeway-- its core capital at the end of the third quarter was $41.7 billion, or $2.3 billion above OFHEO's requirements.

Anonymous said...

If big banks CEO are people too and can make the same big mistake, then can it be said that the US Federal Reserve are people too and can lead this National back to a period of UNCONTROLLABLE INFLATION then to a GREAT DEPRESSION.

Why do history always repeat itself.

Individual investors frequently lose money by chasing past returns, deciding on future investments by looking at past performance instead of future market conditions.

Investment banks did just that amid the booming housing market. They mirrored each other's moves as they raced into ever-shakier lending. Some estimates suggest that collectively they'll lose more than $400 billion.

"They are basically a herd of sheep. They all go into it together," said A. Gary Shilling, a financial consultant and television commentator who warned in 2005 and 2006 of troubles to come. In the 1980s, banks followed each other into Latin American debt. Later, he said, they all got burned together by losses in manufactured housing.

Anonymous said...

For now inflation can be tamed in Hong Kong, but can that be said when the Yuan become much stronger and the Hong Kong dollar is still pegged to the US Dollar.

A government spokesman said Hong Kong’s inflation was on a slowly rising trend because of the city’s growing economy, he added.

HONG KONG: Inflation in Hong Kong has risen to 3.2 percent in October driven by rising food and oil prices, a weakening US dollar and an appreciation of the Chinese currency, the government said Thursday.

Consumer prices rose 1.6 percent in September.

A government spokesman said Hong Kong’s inflation was on a slowly rising trend because of the city’s growing economy, he added.

Anonymous said...

I'm digging this recession so far. I bought a practically new laptop that retails for $1200 off someone desperate to sell on craigslit. I paid $400.

I signed for a gym membership for $8.33 a month. Yep, $8.33 a month. I told the manager I'll give you $100 for a year's membership, take it or leave it. She took it. Last membership I had was $22 a month and this is a nice club.

I also bought a used BMW for $13,000. Buyer asked $18,000 initially and KBB said $16,000 for private party.

There are insane deals out there to be had out there for people with cash.

Anonymous said...

"With all of the intellectual prowess and creativity here couldn't the discussion lead to some more productive solutions?"
This is where you went wrong with your post! You have a mistaken premise!! ;)

Anonymous said...

The 'news' poster is RUINING this section of the blog.


Anonymous said...

Real Estate Appraisal books
Reply to:
Date: 2007-11-23, 12:02PM PST

All the books used in the Anthony Schools Real Estate Appraisal course, 2004.
Fundamentals of Real Estate Appraisal
Legal Considerations in Appraisal
USPAP book and student manual
Math and Regulations for Appraisers
California Real Estate Power Test Program
How to Pass the California Appraiser Exam Home Study Course

Free to the first taker.


Anonymous said...


Real estate course manuals don't even make good toilet paper,

their already full of S**T!


Anonymous said...

Since when did The Sopranos start running this country!!!

November 20, 2007 2:50 AM<<<<

the sopranos are small time pimps compared to these guys. the answer to your question is that it started sometime probably around 1850 or so..after andy jackson got out of office they started getting help from on high to achieve their aims of a national bank and to keep the nation in debt in order to control it.

Anonymous said...

Before you can find a solution to fix you must recognize the real problem, and not just the symptoms cause by the real problem.

And only then can the root cause be determined and fixed.

As you journey into the housing bubble problem and the root cause of this problem one could point fingers at subprime loans.

But if you stopped there then you would have missed all of the other problems and these problems connection to the subprime loan problem.

The mystery is just beginning to unfold, now if you can only find the connections to all of those problems previously mentioned in housingpanic to the growth of the derivatives market then perhaps you can get to the true root cause of the one problem that is spilling over the symptoms of all the other problems you have been reading in housingpanic.

If the US Dollar continue to fall you will probably see another problem developed in the European Housing market.

Anonymous said...

With derivatives escalating to over TEN times the sum total of the planet's GDP, isn't this the Mother of all Bubbles

516,000,000,000,000 US dollars.

Up by 25% in the six months to June 30 compared with a 12% rise in the second half of 2006, according the Bank for International Settlements (BIS), in the biggest hike seen since the Basel-based Bank started amassing data.

Eminent authorities like the World Bank and International Monetary Fund (IMF) quote global GDP (gross domestic product, that is the total value of all goods and services produced) for 2006 at $48 trillion.

For the current year, the IMF has forecast overall annual output increasing by nearly 5%, leaving world GDP standing at just over $50 trillion by end-December. Roughly in line with the total worth of global stock markets.

So the aggregate amount of derivatives sloshing round the system has now escalated to over TEN times the sum total of the planet's human endeavours, having grown at its fastest rate in at least nine years during the first half of 2007.

Anonymous said...

Bank Panic Uncovers Fantasy Bonds

"Covered bonds" are very much uncovered this afternoon in the worsening dollar crash, and the entire European market for trading these asset-backed securities among banks, has been shut down for a week, in another grave sign of a gathering bank panic.

European banks were ordered by the European Covered Bond Council to cease trying to market these bonds to each other, at least until Monday, November 26. Reuters reports that this action became necessary after the price of buying derivatives contracts to insure these securities against default, shot upwards, in extremely volatile conditions. "In light of the current market situation and in order to avoid undue over-acceleration in the widening of [default] spreads," the Bond Council said it had to act.

This is a big escalation in the global financial meltdown, which is now in exponential hyper inflationary status, like Wiemar Germany was before the rise of Hitler. The covered-bond suspension hits Europe's banks in particular, because this trillion-dollar market is dominated by German banks such as Deutsche Bank. Covered bonds are one of the oldest, largest, and supposed-to-be safest parts of the bond market, even considered "surrogates for government bonds." Yet now, they cannot even be traded by banks; because "anybody would be crazy to buy them now," Lyndon LaRouche noted.

Anonymous said...

Covered bonds are asset-backed securities created from either mortgage loans, or municipal and state loans. Unlike the notorious mortgage-backed securities (MBS), the bank that owns these loan assets doesn't sell them, but rather issues its own bonds with the loans as collateral.

So covered bonds are bank debt (bonds of banks, on their own credit) and now the banks of Europe are unable to sell their own bonds, even to each other. The interbank-lending "freeze-up" in deadly effect since August, has just gotten worse.

As for issuing debt, based on "assets", which is really super inflated mortgage debt, and calling that "safe"; well, that's where the "crazy" came in, commented LaRouche.

Anonymous said...

Remember cover bond was having problem back in September 2007 during the height of the credit crunch.

The market for covered bonds, considered one of the safest kinds of debt, saw a significant disruption on Wednesday after two new deals indicated that coupon rates, or yields, should be much higher than the market had been pricing.

Covered bonds from HBOS and Nationwide, two large UK mortgage lenders, led to a fundamental re-pricing of all UK deals in the secondary markets and had a knock-on effect for other mortgage-backed and public sector-backed deals across Europe.

Market makers convened a number of emergency phone conferences in order to help set new trading levels and drastically increased the spread, or gap, between bid and offer prices they were willing to publish.

The main reason behind the repricing appeared to be related to fears over a substantial increase in mortgage-backed covered bond issuance from banks less able to fund their lending from other sources, according to bankers.

There is particular concern that a number of banks would be forced to rely more heavily on covered bonds instead of residential mortgage backed securities – similar instruments, but which do not have the same kind of guarantee from the issuing bank.

Anonymous said...

Didn't GMAC wanted Northern Rock

Moody's Investors Service said it was reviewing the Aaa covered bonds issued by Northern Rock Plc for a possible downgrade.

Moody's on Monday had downgraded the U.K. mortgage lender's bank financial strength rating to D+ from C-, with a developing outlook.

Anonymous said...

The European Covered Bond Council, which represents traders and issuers of the securities, has for the first time advised banks not to trade, after rates demanded by buyers rose to the highest for at least 12 years.

An industry source said: "It is not necessarily disastrous, but the securitisation market has closed and this is another leg gone. To have a commission that is responsible for trading in a market to suspend it for such a long time is pretty much unprecedented. Suspension of a market could endanger confidence in that market."

Covered bonds, which are securities backed by assets such as mortgages, originated in Germany and are the main source of finance for mortgage banks in continental Europe. A version of the bonds has become increasingly popular in the UK in recent years after HBOS issued the first British covered bonds in 2003.

Investor appetite for covered bonds had held up until this week, three months after the market for securitised assets shut when the credit crunch hit. Unlike securitised assets, covered bonds remain on a bank's balance sheet, allowing the buyer to claim against the issuing bank but still ring-fencing the underlying assets if an issuer goes bust.

Investors are steering clear of securities linked to mortgages because of fears of losses caused by infection from the US sub-prime crisis. The trigger for the shutdown in covered bonds was Abbey National's scrapping of an offering on Tuesday, the third cancellation in a week. The others were an arm of Allied Irish Bank and an investment unit controlled by Spanish savings banks.

UK banks, including Northern Rock, have used the bonds to raise capital.

Anonymous said...

Didn't a major US bank wanted to get into covered bond last year.

How does the derivative market tie into this problem.

Remember hedging is dynamic and not static.

French banks buy out monoline insurer w Covered-bond market in unprecedented shutdown

The market had continued to trade after others froze up in August because covered bonds were bought by a different group of investors who viewed them as more like bank debt.

But fear has spread through the market and buyers of the bonds were demanding uneconomically high returns to take on the risk.

Anonymous said...

Who was that major US bank that wanted to get into covered bonds.

Bankinter Suspends Sale of Mortgage Bonds Amid Market Shutdown

Bankinter SA became the fourth financial institution in the past week to pull a planned sale of mortgage debt amid a suspension of trading in the $2.8 trillion covered bond market by European banks.

Investors are avoiding bank debt worldwide including Europe's covered bonds on concern that the $66 billion of writedowns related to subprime mortgages will continue to rise.

The European Covered Bond Council this week agreed to halt interbank dealing following a slump that has shut the region's biggest funding source for home lenders.

Anonymous said...

Was the September Credit Crunch Crisis of 2007 just a prelude of what about to come as the Derivative Market begin to show its pain.

Gloomy Outlook For Financial World

As the USA got back to work today after the Thanksgiving celebrations, stock brokers there could be forgiven for wanting to run the holiday on for a day or two – or possibly a few weeks.

However, faced with whole housing developments of empty, un-saleable houses - with thousands left homeless - the US mortgage industry is now agreeing to offer special "pay-what-you-can" deals to struggling borrowers, to avoid triggering a wave of repossessions that could precipitate an even more serious housing market crisis.

Four major players, including Countrywide, signed up to a state-wide plan in California.

However, it could be too little, too late, as financial losses from the collapse of the US mortgage market could hit as much as $300bn.

Anonymous said...

Is UK subprime problem going to get worse before it is going to get better.

Kensington's sub prime loans are credit crunch's latest victim

Kensington, the first British lender to offer sub prime mortgages, has withdrawn its range of bad credit loans, effective from close of business today, amid a lack of appetite for portfolios of adverse debt because of the credit crisis in the US which is spreading globally.

Instead of providing mortgages to those with bad credit histories, for which it is well established, Kensington will concentrate its efforts on more low-risk products, re-pricing its range and removing other services such as self-certified buy-to-let mortgages, until conditions in the global capital markets have stabilised.

In September, Kensington's total mortgage assets were £6.5 billion, of which about 90 per cent is in sub prime loans. Cracks were appearing in September when the lender reduced the amount of the property price it would offer to 75 per cent "in direct response to the lack of investor appetite".

Anonymous said...

Mortgage approvals hit a record low

MOST can't buy without a mortgage, so here is more evidence that houses globally are crashing.

Anonymous said...

As the Ohio case set a new legal precedent across the USA, what impact will that have on pension funds that invest in these banks bad bonds.

Sub-Prime problem is but the tip of a colossal iceberg that is in a slow meltdown.

A new unexpected factor

The Ohio ruling that dismissed Deutsche Bank's (DB) claim to foreclose and take back the 14 homes for non-payment, is far more than bad luck for the bank of Josef Ackermann.

It is an earth-shaking precedent for all banks holding what they had thought were collateral in form of real estate property.

How this? Because of the complex structure of asset-backed securities and the widely dispersed ownership of mortgage securities (not actual mortgages but the securities based on same) no one is yet able to identify who precisely holds the physical mortgage document.

Oops! A tiny legal detail our Wall Street Rocket Scientist derivatives experts ignored when they were bundling and issuing hundreds of billions of dollars worth of CMO’s in the past six or seven years.

As of January 2007 some $6.5 trillion of securitized mortgage debt was outstanding in the United States.

In the Ohio case Deutsche Bank is acting as “Trustee” for “securitization pools” or groups of disparate investors who may reside anywhere.

But the Trustee never got the legal document known as the mortgage.

Judge Boyko ordered DB to prove they were the owners of the mortgages or notes and they could not.

Anonymous said...

The Federal Reserve are expected to bail out the banks, subprime borrowers, lenders, pensions plans, mortgage brokers, brokerage firms, and etc.

But how many more cycle can the Federal Reserve lower interest rate, before they collapse US Dollar and compromise the Derivative Market.

Over the past several years, U.S. pension funds have been among the top investors in the mortgage-backed securities (MBS) and collateralized debt obligation (CDO) markets, along with their real-money partners, insurance companies and money managers. After years of funnelling money into MBS and CDOs -- portfolios of mortgages bundled and sold as debt securities -- the total size of pension funds' securitization holdings are massive.

With thousands of pension funds invested in housing debt either directly or through hedge funds, the figure could add up to tremendous losses for many of the nation's employees.

Thomas Martin, president of the Homeowners Consumer Center, a Washington, D.C.-based consumer advocacy group, estimates that pension funds will take a $1 trillion hit from the devalued securities. 'This is going to be scary,' he said in an interview with Thomson Financial News. 'We think the Fed will have to step in and bail out at least the pension funds.'

Anonymous said...

In the end the only things that matter is "GREED and FEAR" and "Path of Less Resistance"

Banks gone wild

Excessive corporate salaries breed bad decisions

"What were they smoking?" asks the cover of the current issue of Fortune magazine. Underneath the headline are photos of recently deposed Wall Street titans, captioned with the staggering sums they managed to lose.

The answer, of course, is that they were high on the usual drug -- greed. And they were encouraged to make socially destructive decisions by a system of executive compensation that should have been reformed after the Enron and WorldCom scandals, but wasn't.

Anonymous said...

Didn't the experts said that the Subprime problem was over blown just last year. What a difference a year makes.

Can the same thing happen to the derivatives markets.

Explosive derivative growth expected to withstand credit crunch shockwaves

"When you want to do something, you tend to do it in derivatives, so as the result of that, when there are blowups, you can always find a derivative in the area," said John Schumacher, co-head of Scotia Capital. "So they get blamed for a lot of stuff - but derivatives don't get enough credit for what they've done."

The focus right now is on credit derivatives, the fastest-growing segment of the market. Credit derivatives, which include popular credit-default swaps, are mainly used to hedge against bad loans or to speculate on whether loans will be repaid. They are also a key part of building so-called structured credit products such as collateralized debt obligations, which have been at the heart of this summer's financial turmoil.

The credit derivatives market soared more than 10-fold in the three years, to $51-trillion, and with complex products such as CDOs in the doghouse of the global investment community, that growth is sure to slow for a while.

Anonymous said...

if romney is elected your housing and private property will include a health insurance tax if you do not pay your health insurance, as it is normal that governors win elections for will have been placed into slavery and lost all property rights and to support exactly who and what and whose and what means.....exactly...

Anonymous said...

this enslavement method of uncontroled assesment is the going politician methods modus operi of both the republicans and democrats running and not being discussed as to the financing like the local teachers
union and school tax assessments as happenming as to if the elections are to be held once a week until the public tires of comming to elections and the taxes are raised over and over and over.

Anonymous said...

From now on houses will be nothing more then depriciating commodities. You will only be able to sell and buy them at the lowest price. Just like used cars.

LauraVella said...

"Because of the complex structure of asset-backed securities and the widely dispersed ownership of mortgage securities (not actual mortgages but the securities based on same) no one is yet able to identify who precisely holds the physical mortgage document.

Oops! A tiny legal detail our Wall Street Rocket Scientist derivatives experts ignored when they were bundling and issuing hundreds of billions of dollars worth of CMO’s in the past six or seven years."


What a mess! The dirty look secret is exposed. The MBS's "bundler"? didnt consider forclosure when selling these HOT investment "products" to everyone on earth, thats why they didnt consider details like "title ownership" was important....(these MBS's make tons of money, but only if RE keeps going up!)

I can't even imagine... Compared to this, spliting hairs is easy....What to do? Coin flip?

Anonymous said...

Just keep voting for Democrats and all will be well. When she confiscates all your assets in order to fund the village that raises your kid life will be good. And as soon as this nation's official language is enacted as Espanol all will be well.

Long live Hillary!

Long live Kennedy!

Long live Pelosi!

Long live SOCIALISM!!

Anonymous said...

Tide turns for world economy as Asian nations desert greenback

The housing market has plummeted, causing huge losses in equity values, liquidity and a big negative wealth effect. The effect of the fall-out from the housing market has only started and is spreading to other markets. In short, the forces that drove the market up are now in reverse, driving it down.

There are other factors at work. Indeed, one of the crucial factors that has allowed the US consumers to go on a debt and consumption binge for so long has been an overpriced US dollar. Despite a big, growing and chronic current account deficit, the US dollar has remained high for decades. This was brought about by the fact that the dollar is the world currency and that a number of countries, particularly in Asia and the Middle East, have pumped trillions into the US in an effort to keep the dollar high and their currencies low.

This is coming to an end, as it must. The world currency market is too big to be rigged for too long. The Chinese, Japanese, Singaporeans and Middle East oil-rich countries have tried but now are suffering the consequences. They have placed a huge proportion of their countries’ wealth in US debt instruments — mostly low-return government debt.

They have done this to keep the dollar high. Now they are in a dilemma. They have vast amounts of funds in the US at risk from a devaluation. However, if they stop pumping money into the US, the dollar will decline, generating huge losses for them.

Their only rational option is a cautious, slow extraction. They have begun this. They are investing less money in the US.

Anonymous said...

Do you believe that house price can fall 40% in cities from Sacramento to Bakerfields, California along highway 99.

The already severe housing slump would be exacerbated by even more empty homes on the market, causing prices to plunge by up to 40 percent in once-hot real estate spots such as California, Nevada and Florida.

The worst-case scenario is anyone's guess, but some believe it could become very bad.

"We haven't faced a downturn like this since the Depression," said Bill Gross, chief investment officer of PIMCO, the world's biggest bond fund. He's not suggesting anything like those terrible times -- but, as an expert on the global credit crisis, he speaks with authority.

"Its effect on consumption, its effect on future lending attitudes, could bring us close to the zero line in terms of economic growth," he said. "It does keep me up at night."

Anonymous said...

Bush−Bernanke − the men who will destroy the dollar

New records on the market set the dollar after the continue rumors that the crisis with the U.S. housing sector is not over and the new Building licenses down to 14-years low, while the starting new housing up for first time this year.

The combination of the two men Ben Bernanke and G. Bush is the worst for the dollar.

These two men don’t care about the dollar and don’t know what to do. The interests of Mr. Bush are the wars and terrorists while Ben Bernanke is just usual Federal Reserve employ.

Therefore Alan Greenspan is often in the camera focus with advises and interviews with warns about the starting crisis.

The crisis in U.S. is on the way to become into recession with very deep problems that will take effect over the whole world economy few years.

Anonymous said...

Is the US Federal Reserve buying back their own Treasury through the use of derivative.

Examining the Treasury's TIC data, the only remarkable thing about them is how - unremarkable they are.

The picture hasn't drastically changed since last year and the years before - so why is there this sudden surge of alleged demand for US long term debt that causes yields to freefall?

Although the Fed doesn't publish any figures showing its actual OMOs, the general investment climate and world-wide dollar aversion makes it pretty clear that it isn't the foreigners who are buying into long-term US Treasury bondage.

There is likewise little reason to believe that the majority of Americans are really dumb enough to fall for that ruse - although there undoubtedly are some, at least. That leaves only the US Fed as a major player.

Whether this is done directly and exclusively by the Fed or by it in conjunction of major banks' manipulating interest rates through their various derivative instruments as first-rate commentator Jim Willie noted in his latest post - or whether it is a combination of both - is difficult to determine.

However, knowing how these people operate, the combo-approach is probably the most likely scenario.

Bernie has signaled his willingness to buy long term government debt way back in 2002. It is not too far of a 'fetch' to expect that he is now further pushing on the door knob he turned and opened, way back then.

So, what can we expect if this continues?

Inflation, on the one hand. On the other - deflation.

Anonymous said...

Is Alan Greenspan correct.

What is this global phenomenon.

Could this global phenomenon in part be due to "Yen Carry Trade"

“Markets are becoming aware of the fact that the decline in house prices is not stopping”, he said. “I have no particular regrets. The housing bubble is not a reflection of what we did, as it is a global phenomenon”.

Greenspan also said that the US dollar's slump to a record low against the Euro may have to be addressed by U.S. Federal Reserve policy makers. “Stable prices are necessary for maximum sustainable economic growth”, Greenspan said.

“To an extent that a weaker dollar is of such a magnitude that it creates serious problem, it needs to be addressed by policy makers”, he concluded.

Anonymous said...

The Fed, Treasury and the Taxpayer Funded Superfund BAILOUT

The Fed, Treasury and the Taxpayer Funded Superfund Bailout is being organized right now, however the superfund SIV that will be funded by the “banks” is bunk. The market for securities is severely depressed.

How are these banks/broker dealers going to mark to the market, and account for these securities with a watchful eye of the auditors looking over their shoulder? This taxpayer funded Superfund SIV bailout will likely be arranged as follows.

1) The Banks are thin on liquidity, and long on inventory. Make no mistake, There is a secondary market, however it is so unappetizingly discounted, “it must be wrong”. However it is not.

2) The bank CPA and auditors said to the banks and the Treasury 2 weeks ago, “We are not going to roll over. You need to address these SIV’s, your commercial paper, or I will not sign your annual report. I know you have SIV’s and we will be watching how you mark these very closely. We got burned by Enron, not again.”

6) Here is what will likely happen. With a slight of hand, the banks will go directly to the Fed/Treasury, and will "borrow" billions. It wouldn’t be fun unless the Fed/Tres provided leverage/gearing, because $100bln is nothing if you cant leverage it up to a Trillion. $100bln is an "odd lot" for a few SIV's.

Anonymous said...

The Fed, Treasury and the Taxpayer Funded Superfund BAILOUT

7) Imagine for a second that Chase puts in $20bln of TIER 1 capital; it would stand to reason they would then be entitled to transfer $20bln of assets to the fund. However their inclination is to transfer as much garbage as possible. This superfund is a zero sum game unless the government provides significant gearing.

And if the Superfund SIV issues CP, (rated by the agencies) who is likely to buy CP in a superfund SIV loaded with the rejected assets the banks don’t want to keep on their own balance sheets? Headlines will read, “Super fund set up by banks oversubscribed by banks”

8) Banks will take money from the back door, either from a new facility set up by the Fed and the Treasury or the Treasury will be the only buyers of the CP. Does a trillion sound unreasonable?

Anonymous said...

The Fed, Treasury and the Taxpayer Funded Superfund BAILOUT

9) Then the Superfund SIV will buy the near worthless junk CDO pieces at unrealisticly high prices, so the auditors will take those prices as “good marks, good prices” for the remaining securities that don't make it to the Superfund SIV, yet remain on the banks balance sheets. This is all so nicely organized; essentially, mis-marking the book, with the Fed/Treasury’s approval.

The first assets to likely find their way into this Superfund SIV are going to be sub prime second mortgages (LTV’s up to 105%) that were jammed into some CMOs or shuttered to some SIV. These individual notes now are worth NOTHING. The original borrower handed back the keys, the house is worth 80% of the value it was when these loans were extended, and the borrower is Chapter 13 BK. These notes are not worth chasing down the borrowers for repayment. They are not even worth .01 cent on the dollar. They are a write off, never get the money back. My guess is that they will be sold or transfer to the Superfund at a much higher level then they are worth. 70.00? I would not venture to guess.

Anonymous said...

The Fed, Treasury and the Taxpayer Funded Superfund BAILOUT

3) Paulson, at the suggestion of Citibank, brings the Banks and auditors all together and says, “Lets make a $100bln in a bucket, so you can dump your CDO's, CP, and other junk in there, and we will skirt the auditors pencils, and stretch the pain out over many years”

4) The banks say to Paulson, “We’re broke and thin on capital…brother can you spare a dime?”

5) Paulson checks with the Fed, and says to the banks, “Do as I say, set up the Superfund...we’ll get you the money”. Read this:

10) And as sure as the sun will come up tomorrow, the banks will dump the rejected CDO, SIV assets, commercial paper, on their balance sheets, into the Superfund. The Superfund SIV will pay the banks for their paper. The auditors will “bless” the Superfund SIV and won't pass judgement on the prices; It will be loaded with garbage securities, albeit at a prices higher then the current marketplace is accepting. Again, IF the marketplace was paying the prices that the Superfund SIV was purchasing these assets at, there would be NO NEED for a Superfund. That is the crux. It screams obfuscation of the truth, and is penalizing every single “value investor” and prudent banker in the world.

11) And each year, the Superfund SIV will be marked down incrementally, and in 5-10 years when it all doesn’t pay back, the government / taxpayer will eat it.

That is what is going on right now. A major bail out of the country’s biggest banks.

Anonymous said...

Dang keith, you've been getting spammed for months with long-winded quotes. It wears me out, I don't even read this section any longer.

Anonymous said...

Can it happen, can housing price go down 40% or more in California.

California homeowner Dana Frank is resisting the temptation to sell her three houses near Los Angeles, worth $2 million altogether. Values around L.A. are shrinking, and Frank is haunted by the memory of the state's last housing slump in the early 1990s.

She watched it grind down her Ukrainian immigrant parents and rob them of their prized 3,000-square-foot home in a fancy suburb north of the city. They'd borrowed too much and were missing mortgage payments by the time they sold in 1997 for a price roughly equal to the $550,000 they owed on it--and less than half its 2007 value, Frank points out ruefully. "You have to be able to hang on until prices rise," she says.

The new bear market in housing, says the very man who fathered the bubble, Alan Greenspan, is likely to continue

Even if you have no problem making your mortgage payments, watching the value of your home nose-dive is a grim business.

ApleAnee said...
This comment has been removed by the author.
Princess Mononoke said...

Anonymous said...
>>Just keep voting for Democrats and all will be well. When she confiscates all your assets...
November 24, 2007 3:37 PM

You are the TRUE definition of a moron! Your a-hole president right now has us all in such a $hithole and continues to blatantly lie to the American people and the World saying, "We have a solid economy and everything is GREAT!". Please snap out of it you IDIOT...

Whoever the new president will be, will most definitely have the GREATEST challenge ahead of them!

Anonymous said...

"Whoever the new president will be, will most definitely have the GREATEST challenge ahead of them!"

True, but Hillary is not the person to handle this. She is pro elite and hates the middle class. She also supports outsourcing tech jobs to India.

Cecilia Sherrard said...

The situation is partly due to the mortgage industry. That may be a no brainer statement, but they are the ones who dished out frivolous irresponsible loans to Americans that love to spend money. It's necessary to their existence. There's the other side of the blame stick.

Grab a house with $0 down and don't even make payments towards the principal...In fact, let's really gamble and in 2-3 years we'll almost double your payment. How does that sound?

"Sounds great as long as I'm liked and my house is impressive. Oh and I can get the 7 series and the Gucci bag."

Foreclosure and despair is "hawt"

Americans need to tighten the belt and prioritize as billions are poured into wars and education and real jobs are sailing off into the sunset hitting warmer shores.

Mortgage lenders are finally seeing a slap and quick to follow are the current holders of these loans.

Lesson time has come and unfortunately we're a society that focuses on what we have now, not what we'll have later...

A high-speed race. Standing in line on black Friday for the double sided sticky tape. Finger pointing inevitable.

Cleveland Real Estate May Be The Cheapest In The Country At The Moment.

ukhousingbubble said...

The Northern Rock thing goes from bad to worse. This story didn't get sufficient attention when the UK guardian first published it.

To say the least, the NR balance sheet lacks a certain transparency. The Guardian found that £53bn of NR mortgages - over 70% of its mortgage portfolio - is not owned by the beleaguered bank, but by a separate offshore company

Here are a few other shocking revelations.....

Mortgage loans of over 90% of the purchase price of a house have soared to £16bn, from £2.7bn, in the space of three years.

Loans have exceeded the value of the property on nearly 2,500 mortgages, with a value of £263m. Three years ago, the figure was just £13m on 158 properties.

10,000 Northern Rock customers are a month or more in arrears on their mortgages, on loans worth nearly £1.2bn. At the end of 2003, there were only 2,500 in the same difficulties, with mortgages worth £168.8m.

In 2003 Northern Rock repossessed 80 properties. Last year more than 1,000 properties were repossessed. By the end of September this year 912 properties had already been repossessed.


FlyingMonkeyWarrior said...

Finger pointing inevitable.

Yea, well my working class, home owner (fixed 30 year, big down payment and 2% RE commission, split, was too much) entrepreneur finger is pointed right at the likes of YOU, Cecilia Sherrard, real estate clerk, REIC shill.

Why do you all put your picture on your business cards, when no other industry does except fashion models?

You wouldn't be a hypocrite hanging out here, would you?

trailer flipper said...

Cecilia Sherrard, you can post here all you want, we like to play with our food.

Anonymous said...

washington post article on the guy in maryland who killed kids, ex-wife, then self says their situation was partly due to declining real estate/bad investment.

LauraVella said...

"The already severe housing slump would be exacerbated by even more empty homes on the market, causing prices to plunge by up to 40 percent in once-hot real estate spots such as California, Nevada and Florida."

With subdivisions full of empty homes and lending standards so tight, no one can get approved for a loan... I imagine 40% is only the starting point...

LauraVella said...

"Can it happen, can housing price go down 40% or more in California".

Most definitely! I have seen it happen in the late 1980's - however this time it will be much worse.

Back then, banks were giving out "balloon mortgages" (that would explode on you 5 years down the road) including Neg AM loans and adjustable rate mortgages.

However back then, banks still had to qualify a buyer...that hasnt been the case this time around for many years.

This time around its going to be a lot worse, and I wouldnt be surprised if prices fell back to 1990 levels.

In CA the median house price in 1996 was just 186K.

Don't think we'll see that median again?

Tell that to the woman who bought a home up in the San Carlos Hills in 1991 for 640K, who quickly proceeded to pull out 100k to build a hidious-looking Sauna Room, and in the end - seeing it get forclosed in just 3 years after relentlessly trying to rent out bedrooms to make her mortgage.

Sound familiar??

The couple that bought this 2 year vacant home in 1996 paid 340k, and saw the value skyrocket to 1 million by 1999.

Who says real estate never goes down in desirable areas?

Anonymous said...

Bottom Line: Back in 2002, Ben Bernanke highlighted what he would like to do if faced with the problem of deflation. Well, his test has just begun and deflation is now standing at our doorstep. Thus far, with consumer price inflation raging and the dollar tanking around the globe, Ben and the Boyz have been working overtime in an attempt to bail out our banking/financial sectors. They see the approaching financial train wreck, barreling downhill at ever increasing speed, and although they would really like to back Treasury Secretary Paulson’s Smoke and Mirrors “Strong Dollar Policy”, it is far too late for that. They are now stuck between a rock and a hard place (Deflation/financial collapse is the rock; Hyperinflation is the hard place) and they have chosen the hard place--Hyperinflation

With bank losses mounting, Ben and the Boyz know that they are waay behind the power curve in their rescue attempts and that deflation is setting in. Therefore, I feel pretty confident in predicting that come December 11th, rates WILL once again be cut.

bickerer said...

Wow, wsj following HP's lead again.

W.C. Varones said...


What's the deal with the Schwarzenegger / Countrywide ARM bailout?

Does anyone really think the investors who bought the loans are going to accept a 5-year rate freeze at teaser rates?


Anonymous said...

Call me irresponsible...on December 6th, 2007 COUNTRYWIDE will close it's doors. Massive layoffs, no money to continue. This begins the big slide. It will be on a Thursday. Coming to an economy near you!
P.S. If you put money in Countrywide CD's Good luck!Remember-December 6th.

Anonymous said...

Washington Post admits that owning in the D.C. area is twice as expensive as tu MSM ??!!

Anonymous said...

Kind of make you wonder if the trend on owners’ equivalent rent is going to shoot up next year when many of these lair loans reset.

Anonymous said...

The hardest thing about the "Path of Less Resistance" is understand the flow funds.

For example "Carry Trade" which is widely used in the Derivative Market.

When does "Yen Carry Trade" ends and "Dollar Carry Trade" begins.

Dollar Displaces Yen, Franc as Favorite for Funding Carry Trade

Using the dollar to pay for purchases of currencies with higher yields is proving to be the most profitable trade in the foreign-exchange market.

A basket of currencies including the British pound, Brazilian real and Hungarian forint financed with dollars returned 17 percent this year, compared with 9 percent when funded in yen and 7 percent in Swiss francs, according to data compiled by Bloomberg. Falling U.S. interest rates and increasing volatility in the yen and franc are making the trade even more appealing.

``With the dollar giving the appearance of being in free fall, it increases the attractiveness of using the currency to fund investments,'' said Avinash Persaud, chairman of London- based Intelligence Capital Ltd., which advises hedge funds that manage more than $89 billion. ``That process will only add more fuel to the decline.''

The last time the U.S. currency was used for so-called carry trades was in 2004, when the Federal Reserve's target rate for overnight loans between banks was 1 percent.

Anonymous said...

Didn't Warren Buffet put his money in Brazil recently. He is always one step ahead of the hedge funds.

What is the relationship between "Carry Trade" and the Derivative Market.

How does "Dollar Carry Trade" works.

The article was written in 2004.

Dollar carry trade, it works like this: A new hedge fund raises money, say $100 million, in U.S. dollars. The money is deposited with a prime broker; The Bear Stearns Cos., The Goldman Sachs Group and Morgan Stanley are some of the most active.

To juice returns, brokers will lend the hedge fund as much as ten times the initial investment. As long as interest rates are low, there is an incentive to leverage as much as possible.

Even a modest return can cover the interest charged by a broker. And as long as the dollar is falling, as it has for the last two years, there is an incentive to invest overseas.

Much of the $170 billion in profits and new money raised that flowed into hedge funds last year, plus the billions they borrowed, poured into Brazilian debt, high-yield bonds and commodities.

These trades made money, so hedge funds and trading desks at Wall Street firms all piled in.

Anonymous said...

Wow - I have uncovered Fannie Mae's secret internal management structure.

Check this out if you truely want to understand how a quasi government entiy is run!!!

Anonymous said...

Cecilia Sherrard said...

The situation is partly due to the mortgage industry. That may be a no brainer statement, but they are the ones who dished out frivolous irresponsible loans to Americans that love to spend money. It's necessary to their existence. There's the other side of the blame stick.

Grab a house with $0 down and don't even make payments towards the principal...In fact, let's really gamble and in 2-3 years we'll almost double your payment. How does that sound?

"Sounds great as long as I'm liked and my house is impressive. Oh and I can get the 7 series and the Gucci bag."

Foreclosure and despair is "hawt"

Americans need to tighten the belt and prioritize as billions are poured into wars and education and real jobs are sailing off into the sunset hitting warmer shores.

Mortgage lenders are finally seeing a slap and quick to follow are the current holders of these loans.

Lesson time has come and unfortunately we're a society that focuses on what we have now, not what we'll have later...

A high-speed race. Standing in line on black Friday for the double sided sticky tape. Finger pointing inevitable.

Cleveland Real Estate May Be The Cheapest In The Country At The Moment.

November 25, 2007 11:36 AM<<<

do you know how to flip burgers?

Jason Hartman said...

Dollar depreciation can result in enticing the foreign market though. Who wouldn't want a beachfront property in Miami!
There need not be cause for worry in the long run.

Anonymous said...


Have you seen "The Bubbleman" video?

bickerer said...

Damn isn't it fun to watch citigroup plummet?

Wonder if Ben Stein loaded up at 47, or if that was just supposed to be for you and me (the folks) to load up.

Just wondering.

Anonymous said...

Ahhhhh!!! I'm am packing and moving to mexico!! the space between Canada and Mexico known as the united states is going to become a vast waste land! The last few people will burn the paper formerly know as the US Dollar, for heat. I warn you all, get out of the United States NOW! I read a report saying that the peso is more valuable, and any remaining dollars can be recycled, for free!

George L said...

I predict that in the very near future bologna sandwiches will be the rave.they will be cheap and tasty as long as you don't try to figure out what bologna it's made of.

Anonymous said...

"...prices are near the complete bottom. I'm optimistic that we're heading back the way we came and not lower...

...don't be too discouraged by all the negative press."

Anonymous said...

Holy Crap!!!

A&E renames "Flip that House" as "Flip that Turd".

In related news, despite no reports of pigs flying, there have been sightings that suggest many are taking up the banjo.

Anonymous said...


I live in the Bubble Capital of So Cal called
Santa Monica. The prices are still horribly out of whack---700 plus K for a 1 bedroom Moonshine
shack built in the 20's.
Astonishing as it is.....every other listing now says
"Looking for Backup" Check it out! The MLS link
Who is qualifying for these and who in their right mind is closing on these?????????????????????????????
I am at a complete loss.

Anonymous said...

ApleAnee said...
This comment has been removed by the author.
Anonymous said...

WOW! Sold our soul to the Devi....Allah.

Citi take Abu Dhabi money

Abu Dhabi's purchase of a stake in Citigroup will make the Gulf Arab state one of the bank's largest shareholders. Sheikh Ahmed Bin Zayed Al Nahayan called Citi "a premier brand and with tremendous opportunities for growth."

Mammoth said...

"China isn't capable of taking Taiwan"
Wait until AFTER the 2008 Olympics, and then we'll see what transpires.

And no, the US will NOT come to Taiwan's rescue - we are spread way too thin as it is; also, Taiwan does not have oil.

My guess is that when China makes it's move, it will not be a full-scale military invasion, but instead an activation (i.e. call to action) of a number of well-placed Chinese agents who are already stationed in Taiwan.

Taiwan will simple wake up one day and discover that it is again a part of China.


Anonymous said...

Can we post people we like in giving us accurate information on the housing bubble, the credit industry, and the economy as a whole?

I like Peter Schiff, Jim Roberts, Robert Shiller, and Ron Paul. I have seen some people on CNBC that I like but I don't remember their names. Anyone else have any names of people they think are intelligent and in the know when it comes to these topics?

ApleAnee said...
This comment has been removed by the author.
Anonymous said...

Freddie amd Fannie just announced that they will hold to their limits ($417,000) and will NOT accept jumbo loans.

FINALLY, something from the banana-eating monkeys in Gooberment that goes our way.


meg said...

I predict that in the very near future bologna sandwiches will be the rave.they will be cheap and tasty as long as you don't try to figure out what bologna it's made of. bologna, then?

shtove said...

Here's Ambrose Pritchard Evans from September 06 (although he has his usual anti-Europe bias) -
the distressed debt guys were fairly prescient about the credit crunch:

"Stealthily, the elite City banks are beefing up their bad debt teams to profit from the likely wave of defaults and corporate debacles as Europe's mini-boom grows long in the tooth.

"Lehman Brothers, Goldman Sachs, Morgan Stanley, Deutsche Bank and Credit Suisse are all recruiting trouble-shooters to exploit the next credit crunch, prizing veterans who cut their teeth in the Asian banking crisis of the late 1990 – and its lucrative aftermath."

ApleAnee said...
This comment has been removed by the author.
FlyingMonkeyWarrior said...

And no, the US will NOT come to Taiwan's rescue - we are spread way too thin as it is; also, Taiwan does not have oil.
Good point. I reckon the Taiwanese will pick up American Commercial Real Estate and companies for a song and move here.

FlyingMonkeyWarrior said...

This poll is active here;

With the dollar plunging, is it time to take a look at a N. American currency?

No, how about going back to the gold standard for the dollar? 46.20% (2408)

No, unless we want to commit suicide as an independent nation 31.52% (1643)

No, they can have my U.S. dollar when they pry it from my cold, dead fingers 15.68% (817)

No, it's the billionaires who are promoting it 2.59% (135)

Other 1.06% (55)

Yes, sincerely, David Rockefeller 0.86% (45)

Yes, it would stabilize our currency and return it to status of the world's reserve currency 0.83% (43)

Yes, look at the success of the euro 0.54% (28)

Yes, Americans would be the beneficiaries 0.36% (19)

Yes, the more the dollar is devalued, the more atrractive a regional currency looks 0.36% (19)


Anonymous said...

Heres something else;

If you get wounded in the military you have to give back your bonus!

Anonymous said...

WOW! Sold our soul to the Devi....Allah.

Citi take Abu Dhabi money

Abu Dhabi's purchase of a stake in Citigroup will make the Gulf Arab state one of the bank's largest shareholders. Sheikh Ahmed Bin Zayed Al Nahayan called Citi "a premier brand and with tremendous opportunities for growth."

Yeah, guess who my fucking mortgage is with?

Anyway, I thought muslim doctrine doesn't allow the receiving of interest!! So why are they in the banking business?

Ruprecht said...

cecilia sherrard said...


Her website looks like the local news action team, and we all know how they are always looking out for the public.

I always hated those realtor photos and hers epitomises the worst of them.

So Cleveland real estate may be the cheapest right now,
wow, I'm packing my bags and moving there for no other reason than that. Thank-you cecilia sherrard for letting me in on that great piece of information.

(i remember a couple of years back playing online poker, and having a Las Vegas realtor join in so he could give his spiel)

Anonymous said...

The key mechanism that pushes the economy towards a crisis is the accumulation of debt. Here is why.

During "good" times, businesses in profitable areas of the economy are handsomely rewarded for raising their level of debt. In short, the more one borrows, the more profit one seems to make.[1] The rising profit attracts other entrepreneurs to join in and encourages them to raise their level of debt. Since the economy is doing well and borrowers' financial health shows visible improvement, this makes lenders more eager to lend. As time goes by, the pace of debt accumulation starts to rise much faster than borrowers' ability to repay and serve the debt. It is at this stage that the foundation for an economic bust is set in motion.

Minsky makes a distinction between three types of borrowers. The first type he labels hedge borrowers who can meet all debt payments from their cash flows.

The second type are speculative borrowers who can meet interest payments but must constantly roll over their debt to be able to repay the original loan.

The third group of borrowers Minsky labeled Ponzi borrowers; they can repay neither the interest nor the original loan. These borrowers rely on the appreciation of the value of their assets to refinance their debt.

Anonymous said...

Freddie Mac's planned sale of $6 billion in special stock to help shore up its battered finances will be closely watched by investors gauging the damage inflicted by the turmoil this year in the credit and housing markets.

The nation's No. 2 buyer and guarantor of home loans said Tuesday it was slicing its quarterly dividend in half, to 25 cents, and selling $6 billion of preferred stock as it anticipates additional losses from mortgages gone sour. It was Freddie Mac's first dividend cut since it became a public company in 1989 and is expected to reduce its expenses by as much as $646 million a year.

The money raised from the stock sale will be used to buttress the company's balance sheet "in light of actual and anticipated losses," government-sponsored Freddie Mac said in a statement.

Anonymous said...

The subprime mortgage fiasco stands to cost the Bay Area economy more than $5.4 billion next year, according to the latest report intending to put a dollar figure on the rising wave of real estate foreclosures.

The lending crisis will cost the national economy $166 billion and 524,000 potential jobs, said the report, to be released today in Detroit at a meeting of the U.S. Conference of Mayors. In addition, homeowners across the country will lose $1.2 trillion in property values in 2008.

"Not that long ago, economists said housing was the backbone of our economy,"

Anonymous said...

As I keep saying,the NAR stats are a bunch of lies. Just like the "new home" listings I get every day for homes that have been on the market for many months, but now appear with a brand new lisitng number and price every time the price is reduced. When the house finally does sell, the stats say it had only sat on the market for the number of days at the lower-price listing.See how they skew the statistics? See below link for another way they message the numbers--

Ruprecht said...

Cecilia Sherrard said...

Cleveland Real Estate May Be The Cheapest In The Country At The Moment.

Why is that?

How is the employment situation in Cleveland right now?

Oh that's right;
In Cleveland, 6,000 apply for 300 Wal-Mart jobs.
"That's Depression-era kind of imagery,"

Princess Mononoke said...

There are so many Anonymous people on this BLOG we can't tell who is who????????????

Pick a name, be creative, have fun! You'll still be Anonymous! Just click "Other" if you don't want to sign up with Google.

That way HPer's can give credit where credit is due....

Blowfly said...

Hello retarded renter morons in your shit-hole 1BR rental shacks.

Take a look at this beauty:

This is the ultimate luxury to be owned by a sophisticated person such as myself. You really think that you can rent or own this for pennies on the dollar?

Oh yes, shit for brains deadbeats living with mom and pop. The only crash that you'll experience is the one when your 1995 Nissan pile of junk connects with my H3.

Why am I even wasting my time. Renting is the dumbest thing you can do in a government subsidized ownership society. Just get out of my way imbeciles!!!

Mammoth said...

Didn't the river running through Cleveland actually catch on fire some years back?

Anonymous said...

i was listening to a small local station this morning and the talk show host was talking to someone from england. they were talking about ron paul. this man said that america is the final frontier. the world is watching. they are for ron paul. they realize what is at stake. they talked about how the guns have been taken away from the english people. they said to never, ever, give up your guns, never. so the world watches , people. what are we to do?

Anonymous said...

I sold my Fannie bonds yesterday and am glad that worry is over. Funny thing though after fluctuating (mostly downward) over the past three years they are back up to my purchase price of $98. My IRA custodian/advisor Say's people a flocking to the safety provided by these bonds. I don't see it though.

Now I have to find a place for these coins.

What too do???

Anonymous said...

So, what's the deal? Is it up and down for the next few months so Wall Street can make their money back? When is the final act? In the interim, I would like to make some money, too...

Anonymous said...


Gee kids, blowhard's got a H3!

Anybody believe it or give a shit?


ApleAnee said...

Queen Mononoke said...

There are so many Anonymous people on this BLOG we can't tell who is who????????????

Why would you care?

Pick a name, be creative, have fun! You'll still be Anonymous! Just click "Other" if you don't want to sign up with Google.

Thanks for the technical instruction.

That way HPer's can give credit where credit is due....

I am so waiting for Queen MonkeyNookie to give me credit. My life is going to be totally worthless without her validation. BTW isn't Keith the moderator?

I have learned a lot here over the last 2 years, and one anonymous poster actually steered me in the right direction with our 401k and thank you anonymous poster, but I am getting tired of listening to you HPer's talk incessantly about yourselves. (FMW & Mammoth aside).

The world is changing and your not. Not only are you not changing but you seem to consider yourselves total experts in every subject under the f**ng sun. Nope ur not.

The problem we have in the ole U.S.A. is total self absorption and showing off. Although I understand Andrew Hoc's rage with it all, I just think its gotten really boring. Gotta go and lay some hardwood floors now. Oooooh Brazilian Cherry eat your hearts out. Oh, and West666 you look so much like Ron Paul it is freaky.

Thanks for everything.


Lost Cause said...

Montgomery Bracing for A Record Shortfall
In sobering terms, Montgomery County's elected leaders began to confront the government's deepest-ever projected budget shortfall yesterday, warning residents of possible tax increases and tempering expectations for what the county can afford as they try to close a $401 million gap.

County Executive Isiah Leggett (D) has called on departments and agencies to shave 2 percent of existing spending, including $36 million from the public schools, a figure that education officials said would be "extraordinarily difficult to meet."

"Our worst fears, as it relates to the housing market and the national economy, are being realized," Leggett said yesterday. "There may be delays and outright cuts; it means we will not be hiring as readily as we may have anticipated, and it could mean some local revenue enhancements."

Anonymous said...

Anonymous said...

So, what's the deal? Is it up and down for the next few months so Wall Street can make their money back? When is the final act? In the interim, I would like to make some money, too...

November 28, 2007 5:38 PM<<<<

its a bear rally! be careful!

DaveO said...

You will not believe the sh*t I read at, under the "More Good News" section:

"The weak dollar will also help in foreign purchases of American properties. The latest NAR survey on international buying trends – buyers from foreign countries purchasing U.S. homes – shows that more REALTORS® experienced increased activity from foreign buyers than decreased activity by more than a two-to-one margin. Mexico, Britain, and Canada were the top three countries of origin for those foreigners buying second homes in the U.S."

Does that mean that as a potential buyer here in the US, I should be happy that my purchasing power has been reduced because foreigners are more easily able to afford houses here than I am, and that I should go ahead and buy a house that costs me 8X my salary (due to the fact that my wages have not kept up with inflation)? WTF?

Anonymous said...

mammoth sed:

My guess is that when China makes it's move, it will not be a full-scale military invasion, but instead an activation (i.e. call to action) of a number of well-placed Chinese agents who are already stationed in Taiwan.

Taiwan will simple wake up one day and discover that it is again a part of China.


There will be no hot war with China. The fighting will be, as it is now, done through subterfuge and economic methods. Nuclear powers fighting conventional wars is just silly, and fighting nuclear, chemical, and biological wars is insane.

Anonymous said...

So, why do they keep saying that housing is going to "rebound." I

Do they actually think that the environment that led to the boom is going to return? How many banks are going to be lending out cash to anyone but the best credit risks with deposits?

"Well, we were in an unsustainable bubble that wasn't based on fundamentals, but yet we fully expect a return to bubble idiocy sometime next year?"


Coke adds life said...


Dow up over 300 point on the hope of a rate cut??


Memo to Wall Street (tm):

Aint no rate cut gona save you from the drubbing you have earned. The best you can hope for is a classic pump-and-dump while you get liquid -- which seems to be the plan.

Coke out.

Paul E. Math said...

There's something I don't understand about homes sitting vacant - why doesn't the owner just lower the price and sell them?

I mean, I assume these homes have gone through the foreclosure process and are now owned by the bank - so why doesn't the bank lower the price and sell them?

If they just lowered the price low enough then someone would buy them. So this blight of abandoned homes is really caused by the banks refusal to lower the price and sell the home, is it not?

Perhaps I don't understand the dynamics here but, if they were selling these homes for 10 or 20 grand then, shit, I'd buy several, fix them up and rent them out good and cheap. It seems like that would benefit everyone except the banks would would have to declare these losses on the financial statements.

Anonymous said...

I am surprised that Congress cannot get their hands on the “real” story.

Everyone in the mortgage banking business knows what a Yield Spread Premium is versus an “Overage” on the Retail lending side. Having worked for Countrywide in the past, I too was paid a “commission” on increasing the rate to the borrower above and beyond what Countrywide told me I had to charge someone.

Loan Officers in Countrywide branches were paid 50% commission on any “overage” at that time. They were also paid another commission as a percentage of the loan amount commonly referred to as “basis points”. These basis points averaged about one-half to three-quarter percent of a loan amount.

As far as FHA, once again, EVERYONE in the mortgage business knows that FHA pays HUGE! The proof is right on evryone’s rate sheets. All Congress has to do is get some rate sheets and they can see this is true. The bottom line is that lenders such as Countrywide, Bank of America, Wells Fargo, Chase, Citi, etc. get to HIDE their revenue made from loans due to a loop hole in the system that essentially states that since they are FDIC labeled they need not disclose compensation earned.

As if that isn’t crazy enough, NO ONE HAS EVEN MENTIONED SERVICING RELEASED PREMIUMS! What’s this you may wonder? This is whereby lenders like Countrywide earn even more money on loans when they sell the loan in the secondary market known as Wall Street. This compensation can add up quick.

And finally, how about the servicing dollars earned each year on the overall portfolio? This tacks add even more profits. Ladies and Gentlemen, this industry is awash with nothing other than semantics and greed. Everyone is pretending they don’t know a thing when all they need to do is ask. You know why they don’t?

Tyrone said...

2007 California Housing Crash
set to the Red Hot Chili Peppers.


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