Buckle your seatbelts HP'ers - 2008 is gonna be wild. You ready?

Just when you thought it couldn't get worse, it does.

And the real fun starts now.

Get ready.

Death of a Salesman 2007: The Mortgage Broker Profession Goes Away

Not a moment too soon.

Good riddance mortgage brokers. You f*cked America for a commission (like your realtor buddies). Yes, there are some decent and honest ones amongst you. But for the other 90%+, one simple piece of advice:

Hire a good lawyer.

Good luck in your new jobs as debt collectors, call center jockeys and crack dealers. You will not be missed.

It saddens me that now a mortgage professional (Broker or Banker) has about the same credibility as a used car salesman

I guess as an industry we’ve earned that reputation. We sold too many of the wrong types of loans to the wrong types of people. There were too many crooks out looking out for their own paychecks, and not their customers best interests.

Its really a shame because mortgage transactions are usually the biggest financial transaction the average American makes. Mistakes in this industry can really damage peoples lives.

FLASH: Sales of unwanted used homes crash 20% from last year (media reports 0.4% increase), Lawrence Yun again says things will be just fine

This is the infamous NAR report, not really worth our time, but thought you'd all like to know what Lawrence Yun and the Monkeys had to say today for sh*ts and giggles...

(note - I'm back in London now after a week of looking at an amazing sea of for sale signs in Arizona)

"Near term, existing-home sales should continue to hover in a narrow range, just as they have since September, and that's good news because it'll be a further sign that the housing market is stabilising," said Lawrence Yun, NAR chief economist.

"Mortgage interest rates are near historic lows and the most current data shows decelerating price declines, along with a modest reduction in the number of homes on the market."

We need more housing crash videos like this one.

Got Unicorns? The government does.

Lawrence Yun, the NAR's Chief Dip, says we're seeing just a "blip", blames the media in a bizarre rip

I'm tired of this guy's lip. But here's a tip: Using a realtor is one big gyp.

You would think Yun and the NAR have no understanding of the credit implosion happening all around them. You would think they still don't understand that the Great Housing Ponzi Scheme was just a fraud-propelled free-for-all that is now unwinding. You would think they don't know about the SIVs and CDOs and failing banks.

You would think.

Media coverage of housing trends faulted

Media coverage of housing trends often gives the impression that the market is worse off than it really is, according to the chief economist for the National Association of Realtors.

Lawrence Yun, in presentations Wednesday to Kansas City area real estate agents, said the media’s biggest mistake was too much reporting on nationwide real estate trends. National trends alone, he said, don’t apply to many parts of the country, and reporting of them usually lacks perspective.

A more accurate perspective, he suggested, was that this year’s down market was merely a blip in the long-term growth of housing prices in the area and elsewhere. He said anyone who has owned a home for more than a couple of years has seen good housing appreciation overall.

Here's a letter to the editor from last May, saying there was no housing bubble in Phoenix. Didn't quite turn out that way, eh?

Maricopa County Arizona Median Home Price (Zillow.com)

[UPDATE - THANKS HP'ERS LIKE OC FOR DIGGING A BIT ON THIS ONE]

This F'd realtor paid $379,576 for his/her overpriced debt-trap in real-estate-hell Buckeye, Arizona (evidently never hearing the phrase "location, location, location" in August 2006.

It's now worth $266,571 and falling like a rock. A nice 16 month loss of $113,000, or $7,000 a month (so far).

Folks, it's tough to lose this kind of money this fast. Instead of writing letters to the editor bitching about the negative nellies, he/she should have picked up a copy of Manias, Panics and Crashes, and listened to HP.

You have permission to enjoy the schadenfreude on this one. Amazing.

[UPDATE]

What this writer didn't disclose in the letter is that she's not just a desperate homedebtor, but also a realtor. But hey, we should have guessed it. Like coke dealers doing coke. Bad idea.

What's sad is that these "blame the media" realtors and homedebtors will continue to blame the media during and after the crash. They won't blame the lying realtors, or the corrupt mortgage brokers, or the greedy builders, or the mortgage fraudsters, or the failed flippers, or the illegals, or the Fed, or anyone really responsible for this mess.

No, they'll just blame the media for exposing the truth. That's easier.

Well, I think HP'ers are happy to have played a part in exposing the big scam. No matter what realtors on commission and housing gamblers wanted.

Letter to the Editor - Arizona Republic

No housing 'bubble' bursting in the Valley
May. 27, 2006 12:00 AM

I see an awful lot written about the real estate "bubble" bursting, but I've yet to see evidence of this happening in Phoenix.I'm buying a home in Buckeye, a town that has seen a 4 percent increase in sales this quarter compared with the same time last year and where price appreciation has increased every month during the past three months.

In the overall Phoenix market, inventory is up more than 10 times year-ago levels; prices are up 70 percent over 2004 levels; yet sales dipped only 7 percent in the first quarter of 2006. Is this evidence of a bubble bursting? I think not.

- Sonny Shrivastava, Tolleson

The Fed just lent out $20 Billion to desperate banks with dubious collateral AND DOESN'T WANT ANYONE TO KNOW WHO THE 93 F*CKED BANKS ARE

This, HP'ers, is sick. And I hope to see the MSM and Congress do their jobs and follow up on it (but I'm not holding my breath).

Bernanke and the Federal Reserve just auctioned off $20,000,000,000 to "cash-strapped" banks, with blatantly overvalued mortgages shockingly serving in many cases as collateral, and they will not disclose who these banks are. There were 93 desperate bidders, and over $60 billion was requested, and there's more of these auctions to come.

Bottom line: The super-secretive puppet-masters at the Fed are pissing money away to banks that are on the verge of failure, and they do NOT want ANYONE to find out who these desperate debtors are.

I think we all know who was likely in the front of the line (hint, he's orange). But if we knew the full list of bidders, I think the financial community would be shocked. And their shareholders panicked.

And that's why the Fed will not let you know.

Here's a reply I got from the Fed after seeking information on this issue, and then an article on the scam.

Thank you for your recent correspondence in which you requested bid and award data for the Term Auction Facility (TAF) auction.

I regret but the Federal Reserve Board not publish individual bid and award data. Data on aggregate awards broken down by Federal Reserve District will be posted on the H.4.1 statistical release. You can use the following link to access that release: http://www.federalreserve.gov/releases/h41/.

I hope this information is helpful.

Sincerely,

JPD Board Staff

________________

WASHINGTON - Cash-strapped banks took the Federal Reserve up on its offer of $20 billion in short-term loans to help them overcome credit problems, but the interest rate wasn't as low as some had hoped.

The central bank said Wednesday that it had received bids for $61.6 billion worth of loans, more than three times the amount that was made available.

Want to know why local newspapers like the Arizona Republic did (& do) such a crap job reporting on the bubble and crash? Just look to their REIC ads

Nothing was more annoying during the bubble than watching Rolodex-of-Realtors Catherine Reagor and the Arizona Republic cheerleading the bubble and allowing realtors to serve as unbiased "experts" worthy of quotes, when sane people knew it was just a big corrupt ponzi scheme doomed to collapse.

Their amateur-hour reporting actually inspired me to start HP, and I'm sure most of the other bubble bloggers have similar stories. The media failed America (again) and it was up to individuals to do the job that the local media wouldn't or couldn't do.

So, why did this segment of the media fail? Why do they still quote government and NAR housing numbers as gospel? Why isn't Lawrence Yun mocked? Why do they rip-and-read versus analyze, dig and report? Why do discredited realtors get to write unedited cheerleading pieces masquerading as articles? And why don't local papers capture true local market conditions?

Simple. Because of REIC ads.

They didn't want to bite the hand that feeds them. And they chose their REIC masters over their readers. And now America pays the price.

Nice thing though is that these ads are going away (along with the realtors and builders who placed them). What rises from the ashes, time will tell. America needs a strong and UNBIASED media. And the downfall of the REIC may be the best thing that ever happened. Take away the crack, and hopefully the junkie recovers.

Subprime crisis hits papers' property adverts

The subprime mortgage crisis is tearing through the newspaper industry as US papers suffer sharp falls in real estate advertising.

The extent of the damage was visible this month when Tribune Company, which owns the Los Angeles Times and Chicago Tribune, reported a 40 per cent decline in November for its real estate classified advertising revenues.

Gannett, the largest chain, said recently it was on track for a 27 per cent drop in real estate advertising for the fourth quarter after reporting a 23 per cent slide in the third quarter.

Edward Atorino, an analyst at Benchmark Capital, said: "It's spiralling downward at an accelerating pace." He predicted that the problem would "get worse before it gets better".

$50,000 in "free" furniture when you buy a Hovnanian home? Here's a better idea: LOWER THE DAMN PRICE!!!

Love all the cute ways builders tried to protect their comps, and manipulate the new home sales report's median price.

Love all the sheeple who fell for it (ooh, look ma! we get a free TV if we buy this home today! ooh!!! who cares what the price is!! free TV! free TV!! now we can watch Dancing with the Stars and America's Top Model!!! oohhh!!!!)

One thing about Hovnanian, they have been able to lower their stock price pretty good - down 90% now from the peak.

Oh, remember this attempt by their CEO at illegal price fixing? Where he told his competitors to go out and RAISE the prices, right before he went out and slashed his.

Frog marches. We want frog marches. Or at least some tar and feathers. And for crying out loud, no more "free" stuff to con people into buying your overpriced debt-traps.

"Raise prices," he said. "Buyers aren't buying because they think you're going to lower prices again. There's interest but there's fear. Raise prices 3-4 percent. And quit giving discounts.''

- Ara Hovnanian, July 2007

Spooky housing crash / mortgage meltdown youtube compilation video - with Ron Paul telling people how it is and how it's gonna be

One person stood up and told the truth about the Fed, about housing and about our corrupted Congress.

And America evidently wasn't ready for him.

They weren't ready for the truth.

Too bad.

OK, pretend you're a realtor...

Nooo, not the part about having been a failure in your past careers so you ended up slinging houses...

Noooooo, not the part about having no understanding of economics or business...

Nooooooooo, not the part about being embarrassed to admit what you do for a living...

No, for today's exercise, simply pretend you're a realtor, and tell us why we should buy a $600,000 1-bedroom "luxury condo" in Miami, San Diego, DC, Boston, Tampa, OC, Sacramento, Phoenix or any other of our favorite bubble cities.

Tell us why we should buy that depreciating debt-trap even though it's significantly cheaper to rent.

Tell us why we should invest in real estate and not in stocks, bonds, currencies, commodities, cd's or any other asset class.

Tell us why you think the crash is over, and the media is just making it all up.

Have at it. Convince us. Give us your 21 reasons. Or hell, just one.

Good luck!

And then the f**ked borrowers started suing Countrywide Toxic Mortgage, and the lawyers got real excited

Countrywide, IndyMac, First Fed, WaMu, Wells Fargo and the rest of the toxic lenders who put people into teaser rates and option ARMs (to earn higher commission), and whose agents knowingly falsified loan applications and appraisals "to make the numbers work" (to earn higher commissions), will find out soon enough that there aren't enough lawyers in the land to handle the onslaught of lawsuits coming their way.

The 1980's had asbestos. The 1990's had tobacco. The 2000's will have housing.

Quick! Someone call John Edwards!

(note, I'm short WaMu and WFC)

Borrowers sue Countrywide Financial

Several people who took on home loans from Countrywide Financial Corp. are suing the company, claiming they and other borrowers were steered unnecessarily into taking on risky loans with built-in payment hikes, which ultimately led them to go bankrupt or lose their homes.

The seven plaintiffs filed an amended complaint Friday against the Calabasas-based company and several of its subsidiaries.

Among the allegations are claims that Countrywide tried to "induce as many borrowers as possible into expensive and dangerous subprime loans, because such loans are the most lucrative for Countrywide."

Hanging the discredited paid shills of the corrupt National Association of realtors with their own words

"Price growth during the boom was clearly unsustainable. This is the payback"

- Lawrence Yun, discredited NAR Chief Economist, December 2007

"There is no national price bubble. Never has been; never will be"

- David Lereah, discredited NAR Chief Economist, September 2004


(And any reporter who quotes these professional liars without mocking them should also be seen as discredited, corrupt or incompetent)

They knew, and they did nothing. And now the world will pay the price.

They called them "liar's loans" folks. Liar's loans. And these bastards and many more did nothing about it. Why? Because everyone was getting rich, rich, rich.

They knew it was a big scam. They knew the money wasn't gonna get paid back. They knew it was a bubble. They knew fraud was everywhere. And they did nothing about it.

And then, as it always does, the entire Ponzi Scheme came crashing down.

And now they know what's coming next. Whether they admit it publicly or not. It hath been foretold. And no matter what they do, no matter how they spin, the cleansing will now take place, one way or another.

Man, I never thought I'd see the day. And yet we will. Take care everyone.

Crisis may make 1929 look a 'walk in the park'

As central banks continue to splash their cash over the system, so far to little effect, Ambrose Evans-Pritchard argues things are rapidly spiralling out of their control

Twenty billion dollars here, $20bn there, and a lush half-trillion from the European Central Bank at give-away rates for Christmas. Buckets of liquidity are being splashed over the North Atlantic banking system, so far with meagre or fleeting effects.

As the credit paralysis stretches through its fifth month, a chorus of economists has begun to warn that the world's central banks are fighting the wrong war, and perhaps risk a policy error of epochal proportions.

"Liquidity doesn't do anything in this situation," says Anna Schwartz, the doyenne of US monetarism and life-time student (with Milton Friedman) of the Great Depression.

"It cannot deal with the underlying fear that lots of firms are going bankrupt. The banks and the hedge funds have not fully acknowledged who is in trouble. That is the critical issue," she adds.

Lenders are hoarding the cash, shunning peers as if all were sub-prime lepers. Spreads on three-month Euribor and Libor - the interbank rates used to price contracts and Club Med mortgages - are stuck at 80 basis points even after the latest blitz. The monetary screw has tightened by default.

York professor Peter Spencer, chief economist for the ITEM Club, says the global authorities have just weeks to get this right, or trigger disaster.

Bernard Connolly, global strategist at Banque AIG, said the Fed and allies had scripted a Greek tragedy by under-pricing credit long ago and seem paralysed as post-bubble chickens now come home to roost. "The central banks are trying to dissociate financial problems from the real economy. They are pushing the world nearer and nearer to the edge of depression. We hope they will eventually be dragged kicking and screaming to do enough, but time is running out," he said.

And more on the way...

Want to know why the government's employment numbers are bullsh*t?

Because the millions of REIC jobs that have gone away simply don't count.

The mortgage brokers and agents, all the illegal Mexican builders, the hundreds of thousands of ramen eating realtors, the appraisers, the roofers, the title agents - none of 'em count according to the government. They didn't count on the way up, when the Fed should have been trying to stop the bubble, and now they don't count on the way down, when it's too late.

Why don't they count?

Because they're not salaried employees. They're simply independent contractors and agents. Or were. Now they're just unemployed. And to add to the misery, they have no jobless benefits, they can't make their mortgage payments, and they have no employable skills.

Think we have a foreclosure problem now? Just wait. And remember, anything the government tells you these days is a lie.

Experts predict ugly 2008 as housing slump drags on

The housing slump stands to exact a sizable toll on the broader economy as jobs, retail spending and credit availability could likely take a hit.

During the peak of housing from January 2003 to March 2006, the housing market helped to create 1.3 million jobs. Since then, only 500,000 of those have been lost. Another 800,000 could be on the chopping block.

Major real estate broker shuts down

A major Valley real estate broker shut its doors just days before Christmas, leaving 350 agents without a home, and about 20 salaried employees without a job. RE/MAX 2000, based in Gilbert, is closing its 13 offices around the Valley.

Mortgage industry needs more layoffs, analysts say

"We believe that employment in the industry needs to drop by roughly 30 percent over the next year to flush out overcapacity," analysts Paul Miller and Annett Franke wrote for financial-research firm Friedman, Billings, Ramsey.

Mortgage-industry employment stands at 450,000, down from 500,000 last year.

"We believe employment needs to decline by approximately 100,000 to 150,000 workers to bring employment levels in line with industry origination volumes," the FBR report said.

FLASH: Ho-hum, Case/Shiller US home price report crashes faster and farther than ever recorded. Any questions?

SUZANNNNNEEEEE!!!!!

BTW, I'm reporting from housing-crash-central Arizona this week. I've got four words:

"For Sale" signs everywhere.

And I mean EVERYWHERE.

Worst decline in American house prices may not be finished yet

American house prices declined at their fastest rate for more than six years in October, with homes in Miami losing 12 per cent of their value, it emerged yesterday.

According to the Standard & Poor’s/Case Shiller index of house prices in the US, the value of existing, single-family homes fell 6.7 per cent in October compared with the same period the year before.

The figures indicate that America’s housing recession – already the worst for 16 years – is far from over. Professor Robert Shiller, co-founder of the index and an economics academic at Yale University, said: “No matter how you look at these data, it is obvious that the state of the single-family housing market remains grim.”

The 6.7 per cent fall surpasses a 6.3 per cent drop in April 1991.

Check out these quotes today from Schiff and the discredited laugh-riot Lawrence Yun as well:

"This is just the beginning," said Peter Schiff, a Darien, Conn.-based investment adviser known for his bearish views of the housing market (and being really f*cking right). "Pressure is there for much, much lower prices."

According to Schiff, one factor that will drive prices lower is a change in buyer psychology. "The prices that existed were completely artificial, a function of speculators who are no longer in the market," he said. "Some buyers thought they were going to get rich."

Today, however, that demand has all but disappeared. "More people want - or have - to sell," said Schiff, "because prices aren't going up, so buyers have to look at the actual cost of owning a home."

Lawrence Yun, (the laughable and discredited) chief economist for the National Association of Realtors and among the most optimistic of industry insiders, conceded that large inventories will mean further price declines. "Price growth during the boom was clearly unsustainable. This is the payback," he said.

And then the debt addicts couldn't pay for their next fix

What the hell happened in America these past few years?

Was it HGTV and MTV Cribs?

Was it rap music switching from ghetto to bling bling materialism?

Was it the general decay of morals and personal responsibility?

Was it the ads?

Whatever it is, it's disgusting, it's unsustainable, and now the whole house of cards collapses. The real interesting thing will be finding out who in the end actually holds the bag (hint - it ain't the junkies)

Unpaid credit cards bedevil Americans

Americans are falling behind on their credit card payments at an alarming rate, sending delinquencies and defaults surging by double-digit percentages in the last year and prompting warnings of worse to come.

An Associated Press analysis of financial data from the country's largest card issuers also found that the greatest rise was among accounts more than 90 days in arrears.

Experts say these signs of the deterioration of finances of many households are partly a byproduct of the subprime mortgage crisis and could spell more trouble ahead for an already sputtering economy.

Even when you really do "own" a home (vs. rent money from a bank), do you really "own" the home? Or does the government "own" you?

One more nice thing about renting during the crash - no stress about soaring property taxes and insurance.

There will be a housing-led revolution in the United States soon HP'ers. Even sheeple have point where they get mad as hell and won't take it anymore.

Thanks to the housing crash, soaring insurance costs and greedy and needy states jacking up property tax bills based on false valuations, we're getting to that point.

Wake up America. You've been had.

Skyrocketing property taxes leave homeowners struggling

Maurice Gunyon thought he was set for his twilight years.

He bought a deteriorating house on Indianapolis' north side, had it torn down and a new one built. The 73-year-old retired from his government job in 2004, thinking he was financially secure. His income included his pension, personal savings, Social Security and rent from the other side of his two-family house.

Then he got his property tax bill that had nearly tripled. His bill in 2005 was about $2,900 and was $4,600 last year. This year's bill — $7,568.

"I almost had a heart attack," said Gunyon. "My reaction was one of pure anger."

Latest Century 21 ad (from the brilliant ad makers who brought you Suzanne). You guys take this one. Fill in your own taglines and jokes here

I've just finished this book - "Bubbles and How to Survive Them", and it's joined Manias, Panics and Crashes as one of my all-time favorites

The author John P. Calverley does a great job talking about what makes a bubble, what to look for, how leaders react, what to expect from the central banks, what the impact is on inflation and the currency, and how to preserve your wealth when the masses go mad and then recover their sanity one by one.

Some of my favorite quotes:
_______

"At some stage the bubble reaches a phase variously called euphoria or mania, where speculation mounts on top of genuine investment and expectations for potential returns reach wild heights. Strong market performance is extrapolated endlessly forward and any consideration of fundamental valuation criteria is swept aside"

_______

"The worst point of the Depression came in March 1933, when the wave of bank failures led to a general panic and the closure of all banks. The Dow Jones index actually bottomed before then with the close on July 8th, 1932 at 41.88, a drop of 90 percent from its peak."

_______

"Governments have even less interest in drawing attention to the dangers of asset bubbles. Voters generally like bubbles. Many people profit from them, though for some the gains turn out to be only on paper and disappear later... But in general it is easy to win elections during bubble periods, because people feel wealthy and the economy is doing well."

_______

In the end the author calls for an "Asset Evaluation Committee" and a warning system for when our financial system (stocks, bonds, real estate, etc) venture into bubble territory, so at least investors are warned. I like the idea, and instead of a committee of humans, I'd recommend a computer. The fundamentals are the fundamentals, and when people are paying 8 times income for a house, it's a bubble. When stocks' P/E is 40, it's a bubble. When renting is a fraction of the cost of "owning", it's a bubble. When people are camping out to buy an asset, it's a bubble.

Give us a nice color coded warning system, instead of Greenspan's "Froth" or "Irrational Exuberance" parlance, and even the masses will get it.

I highly recommend this book for all HP'ers. You owe it to yourself. Then pick up "Crash Proof" by Peter Schiff so you know how to invest, and for god's sake read Manias, Panics and Crashes. I'm not that smart - everything I predicted came from reading that one classic book.

Interesting movie on consumerism, commercialism, retail and religion - "What Would Jesus Buy"

The movie opens this month, maybe in your city too. I'd love to see it, looks right in HP's sweet spot.

I do hope that as housing and the economy melt down next year, that people think more about what they're buying, who they're buying it from, why they're buying it, how they're paying for it, how it was made, how it was marketed, how it was shipped, who made it, and where it comes from.

Our culture has a problem, perhaps even an addiction. But the collective consciousness is changing. And that's a good thing.

FLASH: Bank of America CEO predicts Americans might wise up and stop making payments on their depreciating homes. Uh-oh. Someone let the truth out!!

Bottom line: The banks and the mortgage CDO bagholders are screwed.

Really, really, really screwed.

Sorry, it's just the way it is.

Whose stupid idea was it to allow no-down loans in the first place?

Idiots. Frigging idiots. And they deserve to fail. They need to be taught a lesson about fiscal and lending responsibility that will last for generations.

Turn in the keys Underwater Homedebtors of America!!! Run from that debt-trap as fast as you can!!!

Oh, dear, is this gonna get ugly. And you can thank our idiot Congress and Bush for pouring fuel on the fire last week by allowing homedebtors to short sell or foreclose with no tax hit now too! Monkeys I tell ya. Monkeys.

Bank of America CEO Ken Lewis told editors of the Wall Street Journal that he's worried about borrowers with strong credit scores not making loan payments if the housing crisis worsens.

Such concerns by the head of California's largest bank could trigger a tightening of credit availability beyond the subprime customer base.

"There's been a change in social attitudes toward default," Lewis told the Wall Street Journal. "We're seeing people who are current on their credit cards but are defaulting on their mortgages. I'm astonished that people would walk away from their homes."

Apparently even borrowers with strong credit scores are finding it easier to walk away from their mortgages, especially if they put little or no money down on houses and condos purchased for investment purposes.

Merry Christmas HP'ers

I'm gonna be flying all day on Christmas - heading back to housing-crash-central Phoenix for the holidays. But I'll still be blogging - and might even have time to pop into some new home developments. Won't that be fun!

Here's a tip - do NOT bring up the housing crash at family gatherings. Even HP'ers deserve a break.

Jim Cramer says if bond insurers MBIA and Ambac aren't bailed out, the banks will fail. Quick - someone call the Arabs!

So yes, they'll get bailed out, even if that means wiping out their shareholders. That will stop the banks from having to mark to market their CDO cancer for another few weeks or months.

But eventually, as sure as night turns into day, some of the banks will have a come-to-jesus moment (auditors anyone? SEC anyone? Sarbanes Oxley anyone?), and they will fail or be taken over for a song. And the most toxic of the toxic lenders - Countrywide, IndyMac, WaMu and First Fed - will be amongst the first. (I'm short WaMu and should be short a lot more of these houses of mortgage fraud).

Here's Cramer's highlights. Love him or hate him, he knows what's going on out there, and he's using his platform to try to influence the bail-out-players now (like he did with his Fed rant).

Bottom line - watch for the Saudis, Kuwaitis and hell any old Arab with coin to come riding in on a pale horse to bail out these turds.

ABK, MBI Need -- and Will Find -- Capital

So let's go find some bailout money for the monolines, for the Ambacs and the MBIAs. Let's just get it. Let's hold hands and make sure these don't collapse because they could take us with them.

That's the tenor right now of the banks and brokers as these two institutions threaten to bring down the whole CDO house of cards.

Yet, still, they are in the "too big to fail" category. If you capitalize these companies, then you can maintain the AAA ratings on the higher CDO tranches and not have to take the hit to capital that would force banks to collapse.

These are the epicenter of ground zero. If you had to save one or two institutions to rescue the system, these two are actually more important than WaMu or Countrywide.

That's saying something.

The Federal Reserve Bank was created 94 years ago today. So, how much do you know about the unaccountable organization that controls your life?

Probably not enough.

Start here

Read a bit more here and here.

I liked this rant.

And this video series.

And this Ron Paul speech calling for the abolishment of The Fed.

And when the US financial system, the US housing market and the US dollar all collapse even further next year due to the treasonous acts committed by Alan Greenspan and friends, get ready to join with other awakened Americans in one hell of a fight.

When it comes to the future of the US Federal Reserve Bank, the Great Housing Crash changes everything.

Americans, for good or for bad, are gonna be pissed.

Revolution anyone?

HousingPANIC Stupid Question of the Day

Are we still anti-establishment contrarian tin foil hatters, chicken littles, brown shirts and flying monkeys?

Or have HP'ers gone mainstream, now that events are proving us correct?

Just when you think you've hit bottom, you'll fall again, and again, and again...

"This market is really, really bad. It’s a horrible market, but it’s a horrible market that’s going to get better. We are very close to the bottom. Unfortunately, the turnaround is not going to happen overnight."

-Las Vegas realtor Mike Altishin

Ah, living the dream! Waterfront property in Scottsdale Arizona. Only $1,775,000 for this wine and cheese slice of heaven! BTW, what's that smell?

$1,775,000 financed with a 7.25 jumbo is $12,000 a month. Condo fee on this Scottsdale Waterfront unit probably about $1,000 a month (no, that's not a typo) and taxes and expenses let's just say another $1,000. So $14,000 a month easy.

You could probably rent this unit out for $2,000 a month. $3,000 if you found a real sucker.

Or, flipside, take the $1.8 million, invest it at 6%, that spits off $9,000 cash a month. Rent one of these units for $2,000 and buy all the fricking wine you can drink with the rest!

Anyone see the problem?

Holy crap people lost their minds in Arizona and around the country. Suckered into condos by slick marketing brochures filled with wine and cheese and babes at the pool. Meanwhile, that's not the blue cheese you smell on your patio. That's sh*t!

Nice view though of the Scottsdale sewer. Reminds me of the canals of Venice - possibly even more charming!

[UPDATE] - Unit just lowered to $1,695,000. Anyone want to guess how low this one will go?

And the Great Housing Ponzi Scheme ends. Get ready for the carnage.

Another GREAT housing crash expose in the New York Times. Nice to have good writers out there doing their jobs (hint hint Catherine Reagor).

You wonder how this kind of information can be out there, and the NAR and realtors are still out there lying and spinning. It's over folks. It's all over. And with the crash of housing comes the crash of everything. Get ready.

This Is the Sound of a Bubble Bursting

Southwestern Florida is in the midst of this gathering storm. It was here that housing prices multiplied first and most exuberantly, and here that the deterioration has unfolded most rapidly. As troubles spill from real estate and construction into other areas of life, this region offers what may be a foretaste of the economic pain awaiting other parts of the country.

National home builders poured in, along with construction workers, roofers and electricians. But as a kingdom of real estate materialized, growth ultimately exceeded demand: investors were selling to one another, inflating prices. When the market figured this out in late 2005, it retreated with punishing speed.

“It was as if someone turned off the faucet,” Mr. Carey said. “It just came to a screeching halt. When it stopped, people started dumping property.”

Throughout Lee County, a sense of desperation has seized the market as speculators try to unload property or lure renters. On many lawns, a fierce battle is under way for the attention of passers-by, with “for rent” signs narrowly edging out “for sale.”

Mr. Jarrett hasn’t closed a deal in three months. He is on track to earn about $50,000 for the year, he said. Yet he needs $17,000 a month just to pay the mortgages, insurance, taxes and utility bills on his four properties — all worth less than half what he owes. Rental income brings in only about $3,500 a month.

“It started with housing, the loss of construction jobs, mortgage companies, title companies, but now it’s spread through the entire economy,” Mr. Kest says as he walks a strip of mostly empty condo towers on the riverside in downtown Fort Myers. “It now has permeated everything.”

“All the local governments were drunk with money,” says Mr. Kest, the finance professor. “Now, they’re going to have to cut back and learn how to manage.”

Yum! It's Ben Bernanke Credit Crunch for Breakfast Again! Free helicopter included!

Note to the MSM: We are not having a SUBPRIME PROBLEM. We are having a CREDIT PROBLEM as the smart people in the room and many on this blog point out.

SUBPRIME was just the start. Now we move into Alt-A, Option ARMs, Piggybacks, Prime loans, credit card loans, student loans, auto loans, commercial loans and every other credit instrument known to man.

Get those helicopters ready. And say goodbye to the American Dollar, thank you Alan Greenspan and Ben Bernanke.

Boston Legal takes on the housing bubble and mortgage meltdown. "Kill all the bankers"

When the housing crash finds its way into silly little primetime TV shows in America, game on. The collective consciousness on housing has changed.

Now even housewives and grandpas on Main Street who don't read the newspaper are coming to understand that something really bad is happening when it comes to housing prices, debt and the American financial system.

No matter what realtors on commission and Fox News broadcasters tell them.

Ron Paul on the housing bubble, bogus CPI data and stupid Fed policy

When it comes to the housing bubble, the Fed and even bogus government CPI data, Ron Paul gets it. Hands down. The dude just gets it.

Everyone else running by comparison is an imbecile.

And yet that's what America wants. Vote Imbecile 2008!

HousingPANIC Mystery Quote of the Day - guess who said it...

"The stuff I did is technically mortgage fraud, but it's not officially called that until someone prosecutes me and proves that that is indeed mortgage fraud"

- ????, June 2007

Meanwhile, want to know why mortgage fraud ran rampant (and likely still does)? Because nobody is out there prosecuting the perpetrators, including the world's most famous (or infamous) mortgage fraudster.

If everyone thinks they can get away with crime because laws are no longer enforced in the United States, all bets are off. Rape? Murder? Bank Robberies? Hey, why not, because under George Bush's corrupt Justice Department and keystone-cops FBI, the US is obviously no longer a nation of laws.

Just ask the Mystery Quote guy...

Washington Mutual (finally) under SEC investigation for its role in inflated and bogus home appraisals

Cool.

But what the f*ck took so long?

Wasn't it OBVIOUS that corrupt toxic lenders like WaMu, Countrywide, IndyMac and First Fed were systematically and blatantly encouraging and participating in rampant illegal mortgage fraud?

It sure was to HP'ers.

(Note - I'm short WaMu and don't see any way this pig survives, especially when they're found guilty of mortgage fraud and have to buy back all the worthless crap paper they issued. Tilt. And if you have money in a WaMu account, GET IT OUT NOW!!!)

WaMu Says Cooperating with SEC on Home Appraisals

NEW YORK (Reuters) - Washington Mutual said on Thursday it is cooperating with a U.S. Securities and Exchange Commission inquiry into the handling and reporting of mortgage loans that may have been based on inflated home appraisals.

The SEC is also looking into whether the company, one of the largest U.S. mortgage lenders, properly accounted for its loans in financial disclosures to investors, according to the Journal, which cited people familiar with the situation.

It's funny watching MSM reporters who are obvious desperate homedebtors trying to spin the housing crash into happy talk

Spin, spin, spin

Happy talk, happy talk, happy talk.

Note to MSM homedebtor talking heads watching the value of their own houses plummet, while depending on REIC advertising for their salaries, and above all (in this case) not wanting Bush and the GOP to be blamed for the worst housing crash in American history:

Nobody is buying your crap anymore (and p.s. you should have rented)

The housing crash and mortgage meltdown is AP's #2 news story of 2007. Yet TIME and Newsweek have yet to put it on their covers. Go figure.

Memo to TIME and Newsweek - if you pretend to be America's news weeklies, you might want to cover the biggest story in the land - the Great Housing Crash and Mortgage Meltdown. Especially since it's a story that impacts every one of your readers (or potential readers).

Ah, screw it. We'll do it for you since you're asleep at the switch and incapable of doing your jobs. Man, something's not right there. Do REIC advertisers have TIME and Newsweek in their pocket too? Or are they just that lazy and incompetent?

It is nice to see the AP writers on the ball though this year. Too bad they all didn't do a better job reporting though BEFORE the car crashed.

Want to know who is doing a great job covering the housing crash and mortgage meltdown? Easy. Hands-down. The Financial Times. Other MSM on the ball now include the New York Times, the Washington Post, The Economist, the WSJ, the San Diego Union-Tribune and CNBC's Diana Olick. Unfortunately the list of lazy and incompetent (and REIC-ad-supported) MSM is too long to mention.

The mortgage crisis, which roiled the U.S. housing market, was the No. 2 story, and the war in Iraq placed third. Iraq was the No. 1 story in 2006, and has finished in the top three since 2002 — the year of the prewar buildup.

Here are 2007's top 10 stories, as voted by AP members:

2. MORTGAGE CRISIS: A record-setting wave of mortgage foreclosures, coupled with a steep slump in the housing market, buffeted financial markets, caused multibillion-dollar losses at major banks and investment firms, and became an issue in the presidential campaign.

Greg Swann does not want you to see this video - "How to sell your home in black & white" by realestatezebra

Ending his career today, HP favorite (/sarcasm off) Greg Swann ("he who shall not be linked to") pissed off his fellow ramen eaters by ripping on this video from another six-percenter, lecturing his fellow bloggers as if he were king of the ramen eaters.

Needless to say, he's now universally recognized not just as a discredited hack, but as a jerk. Nice to see so many finally figure out what HP'ers have known for years.

Meanwhile, enjoy the video HP'ers. realtor dude's got a point. It's all about the price. Want to sell us your home? We don't care what you paid, and we don't care what you owe. We do care what the place would rent for, and what the price to income ratio is.

Now if the NAR would just get the message, and quit with the hilarious lies and distortion, we'd be getting somewhere.

And then another ramen eating realtor who doesn't understand economics pleaded with the sheeple to stop panicking. And of course they panicked more.

When crowds see panic, they panic. It's just human behavior. When people buy financial assets solely for the promise of future appreciation and then that promise goes kaput, the value of the financial asset goes kaput too.

When Ponzi Schemes and classic financial manias end, and they always do, it's simply every man for himself in a desperate rush for the exits. Appeals to "remain calm" from the bagholders and scheme enablers do the exact opposite.

Here's the letter to the editor (thanks doom) from the simplistically clueless and yet oh, so naively optimistic Scottsdale realtor who doesn't understand manias and panics, and also doesn't understand that realtors like him are to blame.

How to help the real-estate market

Here is a moderate solution to the real-estate market:

There are more than 58,000 homes on the market. If each and every person who does not need to sell his or her home, or can wait to sell, takes his or her home off the market, the market will correct very quickly.

What we would see is all the homes that the banks have had to take back or the short-sale homes. After a few months, we would have a strong housing market. In fact, if many Realtors would educate their sellers about this, everyone would be happy.

Sellers would get closer to their asking price, buyers would feel more confident when making a decision to purchase, and Realtors would not be throwing their hard-earned money out the window to market a property that will not sell.

I honestly believe that the greed of the banks and mortgage companies are to blame for a majority of this mess. We are helping them out. But in order to keep happy customers and create a strong housing market, we all must work together.

If you are planning to sell your home in this market, think again. Waiting just a little longer could mean extra money in your pocket. - Jason Grandon, Scottsdale

And then, running out of money thanks to the housing crash, the states let the convicted criminals out of the jails

Can't make this sh*t up.

Got guns?

Mass inmate release possible in California

Gov. Arnold Schwarzenegger is considering the early release of more than 20,000 low-risk prison inmates from the nation's largest prison system as a way to save money amid a worsening budget crisis, a newspaper reported Thursday.

And then we found the rabbit hole of creative finance: The Bond Insurers go Belly Up

When the companies who insured the cards go bankrupt, the whole house of cards falls apart.

And that's where we are today.

You're going to need to do your own reading and research on this one, and if you take the time and effort, you'll be amazed what you find. Get ready to go down the rabbit hole of "creative finance". But be warned - you'll be frightened at what you find. Banks and the government bailing out bond insurers so that the banks and government themselves don't fail. Amazing.

Here's a good start. Good luck. Report back.

Ambac, MBIA Outlook Lowered by S&P, ACA Cut to CCC
``The hits keep coming,'' said Gregory Peters, head of credit strategy at Morgan Stanley in New York. ``It's been our view that these guys are in a much more difficult predicament than investors or the companies themselves believed.''

``Everyone got greedy and thought they were smart enough to write structured product insurance like it was the same as insuring municipal bonds,'' said Rob Haines, an analyst with CreditSights Inc. in New York.

Analyst warns Merrill's write-downs may mount
"We believe Merrill, like its peers, has entered hedging contracts with ACA [Capital Holdings]," Trone said. "Should ACA falter, Merrill would end up with more subprime exposures as those hedging contracts terminate. This will in turn lead to more write-downs."

US$ & Monoline Bond Insurers
The main theme of the banking debacle in 2008 will be the extension far beyond subprimes into PRIME mortgages, as fully detailed in the article last week. The impact fallout from the bond insurers might hit home soon, as Wall Street will be forced to bring countless more wrecked billion$ in mortgage bonds onto balance sheets.

Comments like this one show just how F'd Desperate Homedebtors are

God, I love comments from Desperate Homedebtors stuck in denial and debt who think they're going to get bailed out by the government.

One unintended effect of the Bush/Paulson "bailout" announcement is that it got a lot of people's hopes up, like this one.

Oh, won't they be surprised to find out.

Dear HP'ers:

You guys are a bunch of losers. You folks actually want America to enter into a depression. Well losers, keep buying more gold, silver, canned foods and fresh water. Keep thinking the world will end. Stay in your maman's basement.

I bought a house I could not afford with an exotic mortgage. My property increased dramatically and I took cash out. Now times are tough and guess what? I will be bailed out while you still hope for the impending financial crash/depression. So who has had the last laugh? You or me? I lived beyond my means and still get rewarded while suckers like you don't.

Watch this pre-housing-crash video - "Let's Make a Boom". WARNING - you're gonna get sick

Straight out of the textbook HP'ers. Bidding wars. Lines of sheeple. Tony Robbins. "It's different this time" and realtors saying "there is no bubble". Hell, even Nicholas Retsinas shows up to cheerlead and say prices wouldn't fall. 'Nuff said.

Here's the video. (on the BNN - takes a few seconds to load)

The scenes of housing gamblers yelling and screaming and dancing at the get-rich-quick seminar will turn your stomach. And make you even madder at Congress and Greenspan calling to bail out these "poor people who were taken advantage of". People gambled, they lost, and now it's time for the market to do its thing.

Bleech!

HP Open Thread to talk about how disgusted you are with realtors and mortgage brokers

Crack dealers

Child pornographers

Pedophile priests

Pimps

realtors

Mortgage brokers

After this whole thing melts down, and people are disgusted by real estate, right or wrong the realtors and mortgage brokers are going to take most of the blame. Sure, there's probably some nice and honest folks hidden amongst 'em. But as a class, these two professions are doomed.

Their commission-fueled lies and bad behavior these past few years will not be forgotten soon.

Sarbanes and Oxley must be wondering what's taking so long to raid the offices of MBIA (and all the other corrupt REIC)

Frog marches and seizures. We want frog marches and seizures!!!

But they better hurry. The paper shredders are probably working overtime today at places like MBIA, IndyMac, Countrywide, WaMu, Fannie Mae, Freddie Mac, Sallie Mae and oh so many more...

MBIA Bond Risk Soars on $8.1 Billion CDO Disclosure

"We are shocked management withheld this information for as long as it did,'' Ken Zerbe, an analyst with Morgan Stanley in New York, wrote in a report yesterday. ``MBIA simply did not disclose arguably the riskiest parts of its CDO portfolio to investors.''

Here's another hilarious condo development in Scottsdale Arizona - "The Mark" - where 2-bedroom dorms are going for $900,000 (cheese not included)

I don't think they could've picked a funnier name. "The Mark" is always "The Sucker" right? In a three-card monty game, "The Mark" is the unsuspecting fool about to get his wallet lifted. "The Mark" is the set-up in a rigged poker game.

Well, in Scottsdale, "The Mark" is anyone stupid enough to spend $900,000 or more for a Toll Brothers apartment in a fake REIC town where real estate is crashing fast and furious.

A 2-bedroom unit might be able to fetch $1500 a month in rent. That'll just barely cover the condo association fees, expenses and taxes on one of these gems. The $6,000+ a month payment - that's yours to eat.

What were they thinking people? What were they thinking?

I did a quick count and 16 of the 58 units on their website are showing "SOLD!", and you just know that all 16 of those fools are gonna cancel if they can. NO WAY anyone is stupid enough to go through with their sale. Much better off walking away from the deposit, and buying at the foreclosure sale if they really want to live there.

Oh, check out the splashy marketing website too. Massages, babes at the pool, art galleries, and of course wine and cheese. Yup, that's worth $900,000. What a joke. Here's a hint - rent one, and you'll have enough money left over to buy all the cheese you want!

When the Housing Bubble's history is written, it wasn't Greenspan and The Fed that started it. Nope, it was the 1997 Taxpayer Relief Act

This corruption-enabled big-wet-kiss to their REIC masters, passed by the Republican Congress and stupidly signed by Clinton on August 5, 1997, kicked off the housing bubble. Which of course has now led to the housing crash, and the destruction of the entire worldwide financial system.

Ah, ya gotta love unintended consequences. You gotta love NAR and NAHB congressional bribe money. And ya gotta love it when the corrupt monkeys in DC do something so fricking stupid, just because it "felt good" at the time (if ya know what I mean...).

Congress needs to repeal the cap-gains exclusion on home sales, and tax them just like all other cap gains. Or just junk the entire tax code (and IRS) and go with a Fair Tax. But of course, with our current corrupted Congress that won't happen, since their REIC masters just LOVE this stupid law and the mortgage interest deduction.

Taxpayer Relief Act of 1997

HOME SALES

The law exempts from taxation profits on the sale of a personal residence of up to $500,000 for married couples filing jointly and $250,000 for singles. To qualify, sellers must have owned and used the home as their principal residence for at least two of the last five years before the sale. Effective for sales after May 6, 1997, this new provision replaces the prior rollover provision on home sales and the $125,000 exclusion of gain for those 55 and over. There was no change in the rule that prohibits taxpayers from deducting losses on home sales.

The US, EU and UK Central Banks: Making pretty colored pieces of paper more and more worthless by the day

US Fed (Ben Bernanke): I'll take my dollars and cut 100 basis points. Take that.

European Central Bank (Jean-Claude Trichet): I'll see your incompetence and panic, Ben Bernanke, and I'll raise you 350,000,000,000 Euros. As a matter of fact I'll get in my helicopter and personally spread them all through Europe. Take that Ben Bernanke and your stupid filthy American dollar!

Bank of England (Mervyn King): OK, you two wankers can bugger off. I'll take your 100 basis points and your $500,000,000,000 dropping from helicopters and I'll raise you a £55 billion failed bank bailout - and there's plenty more where that came from! I'll bail out every bank in England you fools!

US Fed (Ben Bernanke): Oh, you silly Europeans. You forget, we've got the unchecked FHLB money printers playing at their own side table! And they've just pissed out $163,000,000,000 over the last few days bailing out the likes of Countrywide and WaMu! And there's TRILLIONS more where that came from! Just wait 'til they get to Fannie and Freddie!

US, EU and UK taxpayers: Why do we trust these pretty colored pieces of paper and incompetent central bankers again? Hmmm... f*ck it, maybe we should just buy gold!

Seeking Alpha columnist throws Harvard's idiot-in-residence housing-cheerleader Nicholas Retsinas under the bus

You all remember the laughable and discredited Nicholas Retsinas, head of the REIC-supported "Joint Center for Housing Studies" at Harvard. The guy who called all of you "chicken littles" and said there was no housing bubble or crash to come.

Well, nice to see someone besides HP calling this guy a moron. Why Harvard hasn't fired him is beyond me.

Here's Tim Iacono, who also does The Mess that Greenspan Made, writing at Seeking Alpha

Adding to the growing evidence that you can work at Harvard and still be a moron, Nicolas Retsinas, director of Harvard University's Joint Center for Housing Studies commented "The fundamental problem with housing is oversupply.''

No, the fundamental problem is that a speculative bubble just burst and now everyone is thinking rationally again - home prices are still too high, potential buyers realized home prices are still too high, lenders are now interested in the borrower actually paying back the home loan, and investors don't want to go near securitized debt.

Could someone aside from Robert Shiller and about a thousand people with blogs say this just once?

Here's the blaring headline from housing-crash-central San Diego. I think this one probably stopped traffic. HousingPANIC anyone?

Ignoring the cold hard truth, living in denial and listening to realtors on commission was possible for awhile.

And then it wasn't.

RUN FOR THE HILLS!!! The panic starts now.

HousingPANIC Stupid Question of the Day

Where do you live?

How far (%) from the peak do you think your local housing market has fallen so far?

How far do you think it'll fall from peak to trough?