It's over folks. I'm actually a bit sad to admit it. The good days for America are done. We're no longer the world's sole superpower. We're no longer the shining city on a hill.
Ben Bernanke and The Fed have destroyed the US dollar. If you make or save dollars, you're in trouble. Ben Bernanke has chosen hyperinflation as the way out of this mess. You should invest accordingly.
This is a sad, sad day for America. It's over. There is no hope. Every man for himself.
"Bullish crude, bullish gold," said Zachary Oxman, a senior trader at Wisdom Financial. "I think the Fed had a choice, housing or inflation, and they chose housing. As such, you've got inflationary pressures running rampant despite what the government tells us."
October 31, 2007
The US dollar has been destroyed. Hyperinflation is here. The Fed hates the middle class. And the housing crash has destroyed America
Countrywide Toxic Mortgage - We lend money to people who have absolutely no chance of ever paying it back!
Knowing what we know now, this Countrywide TV commercial should explain everything.
Political races are about two thing - money and momentum. Ron Paul has both.
October 30, 2007
Open thread to let Ben Bernanke and The Fed know what you think they should do next. Trick or treat?
I doubt Bernanke reads HP, but ya never know. Hell, I doubt if Bernanke reads much of anything up in his ivory tower. But we have lots of MSM, columnists and reporters reading, and they'd likely be interested in what you have to say about The Fed and what they should do next, and what you think of 'em.
Open up with both barrels HP'ers.
My out-there long-shot prediction - they hold tight. Oil at $100, gold at $800, a crashing US dollar, a since-corrected jobs report, and stocks at all-time highs (in dollar terms) should scare the f*ck out of 'em.
Hyperinflation ain't pretty.
Trick or treat Ben? Trick or treat?
A picture is worth 1000 vacant homes... thanks to HousingBubbleBust for the ugly graph...
They ain't makin' more land.. but damn, they sure made too many houses during this speculative orgy
Remember when people mocked HP'ers for saying gold and oil would soar and the dollar would collapse? Bet they feel like fools today.
Ben Bernanke hates you, especially if you earn or save US dollars. So invest accordingly, especially if the idiot cuts rates again this week.
Dollar and oil hit new records
Oil hit a new record high of $93.80 and the dollar struck a new low yesterday as investors showed their growing certainty that the US Federal Reserve will cut interest rates on Wednesday.
The same conviction also saw gold approach $800 a troy ounce – its highest price for 28 years – while equities made gains. The move into gold reflects how investors fear rising inflation from the twin forces of higher oil prices and a weaker dollar
17.9 million empty homes that nobody needed. 17.9 million empty homes that won't sell. 17.9 million empty homes that stand as a testament to American greed, largess and folly. 17.9 million empty homes for bitter renters to choose from. And 17.9 million reasons why this housing crash will be the biggest in US history.
The Census Bureau report also found that a record 17.9 million U.S. homes stood empty in the third quarter as lenders took possession of a growing number of properties in foreclosure.
The figure is a 7.8 percent gain from a year ago, when 16.6 million properties were vacant, the Census Bureau said. About 2.07 million empty homes were for sale, compared with 1.94 million a year earlier, the report said.
With inventories of unsold homes piling up near record levels, housing prices will have to fall further, economists say.
Hint - it'll be in the hundreds of billions, and it'll make the S&L mess seem like child's play. Yet not one single dollar has been written off so far.
Some days you gotta wonder if these two agencies have competent (and not corrupt) public auditors. Obviously they didn't when they were cooking the books a few years back. And they DEFINITELY don't today.
Come on Deloitte. Come on PriceWaterhouseCoopers. Do your f*cking jobs.
Three little words for starters:
Mark to Market.
October 29, 2007
At what point do screwed Americans take to the streets? At what point in this downfall does violence break out? At what point do people say enough is enough?
Or does that point never come?
Interesting results so far in the HP flash poll on the Fed meeting this week. 95% of HP'ers think the Fed should hold or raise rates. Yet 73% think Ben will cut. Can you say disconnect? Can you say Screw America?
Washington Post: Is Bailing Out Reckless Investors Wise? Don't Bank on It
Last summer, the bill started to come due on our debt-fueled economy. We should have let it -- and let reckless speculators, subprime lenders and banks finally get what they had coming. But instead, the financial authorities let them off the hook. Rather than simply letting markets be markets, they bailed out both the fools and the knaves.
We'll all live to regret it.
But bad investments do not become good ones just because a central bank lends more money to the investors who made the rash choices. Problems caused by too much credit do not disappear when you hand out even more credit. And the syndrome that such moves create only makes our economic woes worse.
Posted by blogger at 10/29/2007
Debt = Slavery. And credit-addicted, live-beyond-their-means Americans are about to find out that no, money doesn't grow on trees and yes, Congress tightened bankruptcy laws at a very interesting time.
Oh, this will end so ugly. So, so ugly.
Rising mortgage payments and tighter lending standards for refinancing amid the subprime credit crisis have dried up once-easy access to home equity loans for many middle-income borrowers -- so desperate borrowers are using credit cards to cover basics while trying to keep up with home payments.
"When credit conditions dry up, marginal borrowers turn to plastic," said Merrill Lynch North American Economist David Rosenberg. "We're seeing signs of that already."
In an October 5 research note, Rosenberg called rising credit- card delinquency rates as the "next skeleton in the closet."
It is one scary skeleton -- and a specter of bankruptcy.
The problem with using credit cards -- with their high interest rates -- to stave off default brought on by "reset" adjustable mortgage interest is that it merely postpones an inevitable crisis, said Gregary Brown, social policy director at Metropolitan Family Services in Chicago.
"Our biggest concern right now is that there are lot of people who will face a choice between bankruptcy or foreclosure," he said. "Either way, it's going to suck."
At what point do foreign investors realize that Ben Bernanke hates them too, and get out of US stocks and bonds?
1) Uh, they already are
2) They know if they flee it'll collapse the whole Ponzi Scheme
3) This whole dollar collapse thing makes my head hurt, make it just go away
4) They already own us, and now they're stuck with us
Do I hear $800k? Nope? How about $750k? No? How 'bout $725k? Still no? How 'bout $650k? Yes! Oh thank god!
Here's one homedebtor's desperate rush to unload a rapidly sinking asset in the middle of the greatest housing crash of all time.
Funny when your home plummets $150,000 in value in 12 months and you still feel lucky to get rid of it.
It's called a Ponzi Scheme folks. And 25% off firesales are just the start. I feel sorry for anyone dumb enough to buy for such a small discount.
But then again a lot of people thought pets.com stock looked attractive at 25% off too...
The Mortgage Crisis Lost Me $140,000 - By Suzanne Barlyn, Special to TheStreet.com
The subprime mortgage crisis that dragged the country's housing market down this year hit our family's pocketbook in a big way. How big? We came up $140,000 short of our expectations.
Our home's value peaked at over $800,000 in 2006, nearly twice what we paid seven years ago (even we had commented on the absurdity of the home being worth so much). In that context, letting it go in the high $700,000s seemed fair. But we lowered the price another $25,000 after a few weeks passed with just a trickle of interest.
The process wore us down -- enough to tolerate a second price reduction, down to $749,900. But interest -- not offers -- was all we attracted as the "resale inventory" (other homes for sale in the same price range) ratcheted up to 15 in our community.
Some neighborhood houses, meanwhile, finally sold in the $680,000 range -- the first scary indication that we'd have to let the house go for less than we imagined. Our bottom line sales price of $725,000 was slowly slipping away, we realized, as we lowered the price yet again.
The chance to unload our house -- for $650,000 -- finally arrived in August.
Here's a look at the 30-year Jumbo mortgage trend from bankrate.com. And now you know why the sh*t is really hitting the fan now.
And that's the rate for the 50% of people who can still get a loan in the first place...
Remember folks, our incompetent and reckless Fed doesn't control mortgage rates when they lower the discount rate.
When foreign investors lose confidence in our currency, interest rates are going to soar even higher.
Lending criteria tightened. Buyer pool down. Inventory up. Interest rates up. Home prices down. Sheeple slaughtered. And we go right back where we started from (and lower).
It hath been foretold.
October 28, 2007
BUBBLETALK - new thread to talk about the housing crash, mortgage meltdown, dollar debacle and realtor famine
Post articles (use tinyurl and hit the highlights), let me know what I missed, talk about what's on your mind, and have a good chat
Ah, the smell of housing napalm in the morning...
Posted by blogger at 10/28/2007
October 27, 2007
Glad my CFC puts covered last Friday. After this pump and dump, might be time to get back in...
Meanwhile, gold is at what today? $785? Oil at all-time high. Stocks flying. And Bernanke is gonna CUT the fuc*king rate again? You gotta be kidding me.
The middle class is gonna get crushed.
October 25, 2007
I'm always leaving when the real sh*t hits the fan, but off to Paris tomorrow for the weekend. Yup, on the very day that Angelo comes clean. I'll try to find an internet cafe to check in and get comments up. Let me know what I missed.
I'll miss Angelo. Place won't be the same without him to kick around anymore...
Posted by blogger at 10/25/2007
How crappy was the construction of the illegal-immigrant built, pump-em-out-as-fast-as-you-can stucco and wood crapboxes built 2003 - 2007?
1) They'll tear them down within 20 years
2) If they don't tear them down they may just fall apart
3) Who needs block and cement when you can fool the suckers into buying 2 x 4 construction
4) We throw everything else away why not throw our houses away too
5) One word: Lawsuits
6) All of the above
Will Countrywide Toxic Mortgage's Angelo Mozilo resign tomorrow after announcing horrific results and more layoffs?
I think so.
Here's the internal memo from yesterday Angelo sent to soon-to-be-former Countrywide employees.
Message from the CEO
Message to all employees from Angelo Mozilo, Chairman and CEO.
There is no question that all of us at Countrywide and all those involved in the financial services industry have been impacted by this unprecedented world wide credit crisis. Over the past 40 years, since the founding of our Company, there have been many global and domestic events that challenged the will, the tenacity, the strength and the character of the Countrywide family. Each and every time we have risen to the occasion and, in fact, we have led not only our Company but also the industry through many periods of crisis.
During this time, I have received many kind messages from employees throughout the country. I want to take this opportunity to thank all of those who have expressed their support for me personally, and to convey my deepest appreciation for all members of the Countrywide family who continue to work very hard and who have made tremendous sacrifices on behalf of our Company. I would also like to recognize Dave Sambol and the entire team who have worked tirelessly for the past several months in managing the many and varied challenges that have arisen as the result of the disruption in the credit markets.
Again, thank you for your continuing dedication to Countrywide. I commit to each and every one of you that I will do everything in my power to make certain that our management team utilizes all of its resources as we migrate through to a new and different chapter in the history of our Company and in our industry.
My only questions - who the hell is sending Angelo kind messages? Two words - suck ups. And if management is utilizing all its resources, does that mean that they'll take their hundreds of millions of dollars in ill-gotten gains from insider trading and use them to repurchase shares or contribute to an employee assistance program? Yeah, didn't think so.
Angelo Mozilo is KenLay. Angelo Mozilo is Bernie Ebbers. And Angelo Mozilo will come to represent the greed and corruption of the Late Great Housing Ponzi Scheme.
Time to kick 'em when they're down. Here's Tom Adkins, REMAX realtor, and Mike Norman on Fox News a year ago saying home prices would soar 10% in '07
How does this Adkins freak get on Faux? Is it the 70's hair? Is it the wild spin, disinformation and lies? How is this jerk an "expert"?
You'll also love Mike Norman, the "Economic Contrarian", who agreed with the REMAX hack that homes would soar 10% this year, and that there was no problem in the mortgage market. Whoops! That advice didn't sound very "contrarian" to me.
But hey, what do you expect from Faux Business. At least they had the sense to have Schiff on, who looks like a genius, especially when bookended against these two discredited goobers. It'd be great if they had all three back on, replayed this video, and had them comment. But that would be responsible journalism. Not gonna happen.
Watch the video, have a good laugh, then feel free to visit Adkins' website and send him a note or give him a ring. You can mock Mike Norman personally by visiting his website and contacting him here. Let us know what you had to tell 'em. Be nice.
$2,400,000,000,000 - The Congressional Budget Office finally admits the truth about George Bush's Wars
George Bush stole at least $2.4 Trillion from the American people, and Congress (and 51% of voters) went along for the ride. $2.4 Trillion? I thought oil revenues would pay for the war? I thought it was only $110 billion? I thought we'd be greeted as liberators? I thought the mission was accomplished?
Folks, you wonder why our dollar is becoming worthless and our nation's infrastructure is falling apart? Look no farther than the $2.4 Trillion George Bush and Dick Cheney wasted on their wars. And the fact that we financed these wars by borrowing from China and foreigners versus asking for any sort of sacrifice on the home front will make matters down the road that much worse.
2001 - 2008 will be looked at as a wasteful, shameful and corrupt period of American history, with the short-lived housing bubble gains (we're rich! we're rich! who cares about anything else!) having helped cause a mass hypnosis.
Your kids, their kids, their kids, their kids and their kids will be paying for George Bush's mistakes. And Americans who voted for this trainwreck (twice) will be to blame.
The U.S. wars in Iraq and Afghanistan could cost taxpayers a total of $2.4 trillion by 2017 when counting the huge interest costs because combat is being financed with borrowed money, according to a study released on Wednesday.
With President George W. Bush indicating a large contingent of U.S. troops likely will be engaged in Iraq and Afghanistan for many years to come, the nonpartisan Congressional Budget Office estimated the total tab for the wars from 2001 through 2017.
CBO estimated that interest costs alone from 2001-2017 could total more than $700 billion.
October 24, 2007
FLASH: Used home sales crash 29% versus last month, and 23% versus last year. Yet the lazy and corrupt MSM reports sales down only 8%
Gotta love our incompetent MSM. Reporters are no longer reporters, they're copy/pasters who take business and government press releases and report them as the news, with no critical analysis and no oversight.
The performance of the mainstream media in America is shameful. They should disgust you, and you should not trust a word they say. Lazy. Simply lazy. They helped get us into the Iraq mess, and they helped cause the housing bubble. Shameful.
That said, the monkey-run NAR today put out their disastrous existing home sales report, complete with Excel spreadsheet. Of course, nobody in the MSM bothered to check the numbers or question the NAR spin. Nope, they just reported sales down 8%, and made that sound bad enough, but if they had reported the REAL numbers - down 29% versus last month and 23% versus last year, now THAT would have really freaked people out. Of course, the MSM is too stupid to realize that the NAR goes with the "annualized" number because that takes longer to crash.
Do your own search - good luck finding any report that shows the -23% or -29% true numbers. And why won't you find it? Because the NAR didn't report it in their PR, so nothing to copy and paste for the lazy MSM.
Here's the simple numbers from the NAR:
Sept 2007: 409,000 sales (down 29% versus last month, down 23% versus last year)
Sept 2006: 529,000 sales
August 2007: 575,000 sales
Why do blogs have to do the job of the MSM? Pathetic. Absolutely pathetic.
Here's the NAR release that everyone copy/pasted with some laughable Yun quotes, and some of the lazy MSM reports
Existing-Home Sales Tumble 8%
Wall Street Journal
Existing Home Sales Plunge by 8 Percent
The Associated Press
Home sales sink 8%
FLASH: Merrill Lynch just announced another $7.9 billion in mortgage cancer write-offs, and to think we're still just getting started
That's gotta hurt.
And you ain't seen nothing yet. Just wait until Countrywide Toxic Mortgage reports on Friday. Major companies will go away during this downfall. Banks will fail. And the financial community will be shaken to its core.
The losses when this whole Ponzi Scheme are counted up will be in the trillions. Yes, the trillions. Nobody can stop it, and the truth is getting tougher and tougher to hide.
Merrill 3Q Roiled by Mortgage Crisis - Merrill Lynch Posts Steep Third-Quarter Loss, Roiled by Mortgage and Credit Crisis
NEW YORK (AP) -- Merrill Lynch & Co., the world's biggest brokerage, on Wednesday said the summer's credit crisis triggered a bigger-than-expected $7.9 billion writedown during the third quarter.
Bad bets on mortgage securities and leveraged loans used for corporate takeovers caused it to post its first loss in six years. The blow makes Merrill Lynch the hardest-hit investment bank on Wall Street amid the recent market turmoil.
The losses were a big miss from what Merrill said it expected on Oct. 5. The company warned Wall Street at that time that it would take an almost $5 billion writedown for the quarter, because of its exposure to risky mortgage-related securities.
Chief Executive Stan O'Neal said the company continues to face uncertainty on the impact of its mortgage-related investments.
"The level of terror that must exist in the boardrooms of the banks and regulators that peered into Pandora's box this summer must be extreme."
Great rant from Fleckenstein on the Paulson/Banker "Super SIV" house of cards
No need to beat around the bush. The banks (and US Treasury) are trying to create this SIV super-fund in order to avoid or delay a significant "mark to market" of the mortgage cancer they have on their books. Period. The losses are real, the cancer is spreading, and they're doing all they can to keep the truth from their shareholders and the financial community.
Even Alan Greenspan and Warren Buffet think this whole thing stinks. And it does. To high heaven.
Here's Fleck. And get ready for the crash when this whole deceptive plan caves in, and even the bankers rush to the exits.
This week I have another entity of entitlement to add to the list: "SIV Mae" (SIV = structured investment vehicle). That seems a fitting description of the super-duper bailout put together by the Goldman Sachs (GS, news, msgs) subsidiary known as the U.S. Treasury Department. (Goldman itself doesn't appear to be participating in the bailout, which is interesting.)
When I first heard about this, I was outraged, disgusted and slightly depressed. I thought, here we go, another bailout.
Barney Frank and friends are trying to bail out the homeowners. Wall Street, the Treasury Department and the Bank of England appear determined to do whatever it takes so that we have absolutely no price discovery on any mortgage-related assets that may have gone bad -- thereby giving a pass to the folks who've made obscene amounts of money conceiving and marketing them.
To quote a knowledgeable friend of a friend: "How anyone can look at the creation of this fund as anything other than a cynical way of moving an existing pile of crap from one place to another is beyond me. The fact that no one seems to think there is anything wrong with it (and I include the regulators) tells you just how 'fixed' the markets' problems are.
"The level of terror that must exist in the boardrooms of the banks and regulators that peered into Pandora's box this summer must be extreme."
It's a week until the next Fed meeting where Ben can cut rates to destroy the dollar while bailing out the mortgage gambler hedge funds and banks.
So shouldn't we be seeing some more blatantly wrong government data coming out to support a rate cut (that will later be revised)?
Will the Fed:
Countrywide Toxic Mortgage announces earnings (or lack of 'em) on Friday. Can you feel the excitement in the air? Some ENRON-like excitement!!?
1) Angelo has dumped his shares, selling the last load of 'em last week. Now he can finally tell the world what he knew all along
2) They didn't pre-announce to lower expectations (so that Angelo could dump all his shares of course). All the other financials pre-announced, except for CFC. Gee, ya wonder why?
3) They are a public company that you would think has auditors
4) Angelo will likely go to jail for his insider stock trades, but you'd think he'd want to submit correct financial statements to avoid Sarbanes-Oxley jail time too
5) Subprime cancer has now spread to option ARMs and prime mortgages too, just as we predicted. This news will REALLY freak the market out
The only thing that'll keep CFC from shocking the market on Friday is convincing their auditors that they DON'T have to "mark to market" and that "mark to fantasy" is GAAP in the REIC world. But again, with Angelo having sold off his shares as of last week, he should feel free to come clean Friday. REALLY clean.
I'm no longer short CFC, since my October put options closed Friday (god bless 'em). But for those of you that still are, enjoy. You're probably enjoying your FED, IMB and WM puts too eh?
Countryfried is toast. And Angelo needs a pair of cuffs. And note - don't adjust your screen. Dude really is that color.
Staring into Countrywide's abyss
Giant mortgage lender's third-quarter results will offer a view into the depth of the problems facing lenders, housing industry and the economy as a whole.
"For a while, this is going to be a bumpy ride," said Stuart Plesser, an equity analyst for Standard & Poor's. "The expenses they have to pare down are huge, and getting it right will take a quarter or two. They've been operating in just-survival mode. All these margins are going to be way out of whack."
Subprime mortgages aren't the only challenge facing Countrywide Financial Corp., the nation's biggest home-mortgage lender. Some loans classified as prime when they were originated are now going bad at a rapid pace.
October 23, 2007
* What's the latest - any reports from the scene?
* How in the world will they value the destroyed houses? Comp or Mark to Market?
* Is there any benefit in having your home go up in flames vs. foreclosure or debt slavery?
* Will disasters like this make it even tougher to get (and keep) home insurance?
* Is Bush on this or is he doing another Katrina?
I truly feel sorry for anyone who has their home go up in flames (who didn't set the fire themselves).
Take a look around your home today - if you had 5 minutes to get out, what would you grab?
Exactly. 99% of your possessions are worthless or can be easily replaced. The other 1% and your family and pets - priceless.
Donate to the Red Cross here
Posted by blogger at 10/23/2007
Do materialistic, consumer-spending-addicted Americans need to learn a lesson?
(Bonus Question - why did rap music change a few years ago from drugs, crime, cop killing and shooting people to today's out-of-control spending, Cristal, materialism and bling? Doesn't that say something about current American society too? Is this connected to the housing bubble)
Countrywide Toxic Mortgage supposedly renegotiating $15 Billion in toxic loans. Trust us, it's not because of the kindness of their hearts
You just know the scum at toxic lender Countrywide are using this "crisis" to their benefit - they're not "refinancing" these toxic loans because of any type of empathy toward the suckers, I mean customers, who have Countrywide toxic loans. Anyone want to bet they're:
1) Extending payment terms to 40 year and 50 years, thus keeping the payments the same or even lower
2) Putting in huge prepayment penalties
3) Pushing the reset out a year or two, but it'll still reset and at a worse rate down the road
4) Doing pretty much anything and everything they can to screw the homedebtor and protect their asses, while making it appear that they're doing good
A $1500 a month payment on a 30 year loan that's about to reset can easily become a $1500 a month payment on a 40 year loan. Preso! No problema! Meanwhile Angelo and Countrywide would be laughing to the bank at the new terms..
You know that Countrywide is up to dirty tricks because with this PR, they didn't announce any cost for the program. In other words, THERE IS NO COST FOR THE PROGRAM. Yet our lazy MSM failed to ask how this could be, or what the new terms would be.
A HOUSINGPANIC MESSAGE TO ALL CURRENT COUNTRYWIDE HOMEDEBTORS - THIS TIME READ YOUR DAMN MORTGAGE PAPERS AND DO THE MATH. DON'T LET THEM SCREW YOU AGAIN. IF IT SOUNDS TOO GOOD TO BE TRUE, IT'S TOO GOOD TO BE TRUE!!!
Countrywide Launches Program to Refinance or Modify $16B in Adjustable-Rate Mortgages
CALABASAS, Calif. (AP) -- Countrywide Financial Corp., the nation's largest mortgage lender, said Tuesday it will begin calling borrowers to offer refinancing or modifications on $16 billion in loans whose interest rate is set to adjust by the end of 2008.
Countrywide has been under fire since early July -- it has had difficulties with loan financing, its chief executive has been criticized for selling hundreds of millions of dollars in stock and it faces pressure from the government to help keep people from losing their homes.
"Unprecedented times call for unprecedented remedies," Countrywide President and Chief Operating Officer David Sambol said in a statement. "We are determined to assist borrowers who have the willingness and wherewithal to remain in their homes, but need a little help to do it."
Posted by blogger at 10/23/2007
Now this is interesting... Congress considering legislation that would allow housing gamblers to sue mortgage companies for giving them a mortgage
You've gotta be kidding me.
I guess Barney Frank didn't get his checks from the REIC this year.
I wonder if he'll also introduce legislation that would allow mortgage companies to sue housing gamblers who lie on their mortgage applications?
Two words: Personal Responsibility.
Meanwhile, if this passes, there will be no more stated income BS, no more 5-times income loans, and lenders who go from reckless to overly-cautious. And that means significantly less buyers, even more unwanted supply, and prices will fall even further.
OK, sure, go ahead, pass this one. You have the HP endorsement Barney.
Bill Allowing Mortgage Lawsuits Expected to Stir Fierce Opposition
WASHINGTON, Oct. 22 — House Democrats introduced legislation on Monday that would for the first time let homeowners sue Wall Street firms for relief from mortgages that the borrowers never had a realistic chance of repaying.
Critics warn that the bill could chill and perhaps freeze a huge source of capital that has helped push homeownership in the United States to its highest level.
The legislation, introduced by Representative Barney Frank, Democrat of Massachusetts and chairman of the House Financial Services Committee, would require any mortgage lender to verify that the borrower has a “reasonable ability to repay” based on documented income, credit history and debt level.
The monkeys at the NAR want you to believe it's a great time to be financially ruined (and take out a mortgage on a depreciating asset)
Monkeys I tell ya..
I especially liked these out-and-out lies and disinformation (with my comments of course)
* When you have a family it's always a good time to buy (why, is it a good idea to bankrupt your family? odd.)
* It didn't make sense for us spend the same amount of money renting something when we can own it (what, someone offer you an negative-am, no-down, teaser rate option-arm?)
* In this market there's a lot of options (well, that is true. 100,000 unwanted homes on the market in Phoenix alone. But why is that? Because they're WAY overpriced!)
* Prices are favorable (huh! prices are not even close to where they're going to be a year from now - much much much lower!)
Want a sense of how bad debt-saddled and spending-addicted Americans are doing? "Cash-strapped Americans raiding their 401(k)s"
Housing-addicted Americans thought the party would never end. They stopped saving, they spent like millionaires, they raided their homes for spending loot, and now they're starting to suck dry their 401ks.
THIS IS SICK!!!! NOTE TO AMERICANS - YOU DON'T NEED MORE CHEAP CRAP FROM CHINA!!! PUT DOWN THE DAMN VISA CARD AND LIVE WITHIN YOUR DAMN MEANS!!!
What's next? Peeling off drywall to heat the home? Putting your kids on eBay? Addicts I tell ya. Addicts.
Despite potential tax and investment problems, more investors have been borrowing from their 401(k) plans or taking hardship withdrawals in recent months, some retirement plan providers say.
Many in the field expect more borrowing in 2008, as consumers struggle with tighter credit and potentially higher mortgage payments.
Increased borrowing on 401(k)s could be because of the credit crunch and slumping housing prices. To be sure, the indications are preliminary; it's too early to say why it's happening, according to the Hartford Financial Services Group.
Why the lies and deception?
Because they have to.
There's no way they could do social security cost of living allowance increases to match true inflation, otherwise the US would go bankrupt even faster than it eventually will.
Here's a look at CPI based on how the government computed it prior to the recent changes. Yup, 10% this year. Feels about right. And you ain't seen nothin' yet. Because Ben Bernanke hates you.
Better start making more, spending less or investing wiser America. Or else your standard of living is about to plummet.
Prices are the Cart, Money Supply is the Horse - By Peter Schiff
The sad truth is that despite the best efforts of monetary economists everywhere, fundamental misconceptions about inflation remain entrenched in government, business, and the media.
Inflation has only one cause and that is the Federal Reserve itself. In the United States, the supply of money and credit is regulated by the Fed. Since inflation is by definition an increase in the supply of money and credit, only the Fed can create it. If the money supply were held constant, increases in some prices would be offset by decreases in others.
For example, on Wednesday the government told us that consumer prices as measured by the CPI rose by only 2.8% over the past year. My estimate is that the actual rise was at least three times as great.
Posted by blogger at 10/23/2007
October 22, 2007
1) Should be a matter of months
2) This is gonna take awhile - likely a few years
3) No timeframe - will rent until the fundamentals make sense again
4) Don't plan on ever "owning" again
5) I'm not renting yet - still can't unload my debt-trap
Take Housing Watch for a spin. Lots of 10% price drops now over the past six months as the Ponzi Scheme ends and the credit crunch takes hold.
If you "own" a home and want to salvage any of your paper gains these past few years, get your home on the market immediately, and price it below any home in the neighborhood, significantly below if you need to.
The speculators are gone. The flippers are gone. 50% of the buyers are gone. If you're going to sell a home in the next couple of years, it'll be at a "drama price" or it'll be sold to a complete and total fool (aided by a realtor on commission of course).
Courtesy of Morgan over at BlownMortgage. Damn good question. Wonder if Chris Dodd, Hillary Clinton, Chuck Schumer and the rest of the idiots calling for interest rate freezes and housing gambler bailouts ever stopped to consider such a thing.
"If you lied on your loan application why is the lender supposed to bail you out with a loan modification?"
Posted by blogger at 10/22/2007
Wouldn't a Hillary Clinton vs. Ron Paul race be interesting?
* The Democrat would be pro-war while the Republican would be get us out now
* The Democrat would be religion, flags and apple pie while the Republican would be just the facts jack
* The Democrat would be big government, higher taxes and big social programs, while the Republican would be limited government, abolish the IRS and cut spending
* The Democrat would be a polarizing hated figure, while the Republican would be an unknown
Here's youtube debate highlights from last night's propaganda-fest Faux News Rupert Murdoch mind control stacked audience Chris Wallace hatchet job GOP "event". Faux News and the loony-right GOP are getting scared of Paul. You can feel it.
Donate to Ron Paul here
October 21, 2007
At one point the market is going to have to come to terms with the worldwide housing crash, mortgage meltdown and dollar destruction.
Ben Bernanke wanted to delay that day of reckoning. But we're living on borrowed time.
After taking advantage of the Fed Party, I'm back to extreme defensive as of last week. Let's get it on.
Ah, ya gotta love the first truly worldwide Ponzi Scheme. Who'd have thunk that Irish people would be losing their shirts in Spain or that Brits would be getting slaughtered in Latvia.
The worldwide credit bubble is over. And people around the globe have seen what's happened in Phoenix and Miami and Boston and San Diego and more and they're pulling out of the scam as fast as they can, at any price.
It's over. Ding dong the Global Housing Ponzi Scheme is over.
Thanks to HP'er Christophe in France for the link
Foreign property dreams crash - Irish investors face meltdown as real estate prices plummet throughout Europe and US
Tens of thousands of Irish homeowners may be facing financial meltdown as hugely hyped overseas property investments turn sour.
Lured by unrealistic promises of extraordinary returns, Irish investors borrowed heavily to pick up cheap buy-to-let apartments abroad. But property prices in these so called "hotspots" have begun to plummet in recent months.
Along with rising mortgage rates, the strong euro and dismal rental markets, dark clouds are forming for a so- called "Perfect Storm" that could decimate the investment nest eggs of the househunters in the sun.
About 150,000 Irish investors are thought to have bought properties in Spain. However, the oversupply of apartments in Spain's Costa del Sol has pushed the price of some properties down by as much as 20 per cent.
Last month, the Kyero Spanish house price index revealed massive price falls across the country, with the average value of a two-bed home in Mallorca falling €33,000 to €292,000 in the past four months.
Similar slumps have been logged in areas from Gran Canaria to Girona and Cadiz. Estate agents are now advertising "price-reduced" homes in almost every region.
The slowdown in the overseas property market comes at a time when Irish investors in properties promoted by Michael Lynn, the solicitor and property developer at the centre of an investigation by the Law Society, are already worried. Some of these investors have paid deposits on overseas property but have not yet secured the title.
"If you look at a typical two-bedroom apartment in the Costa del Sol, its paper value could be about €250,000," said Darren Costello, managing director of propertyinvestments.ie, a Dublin firm that offers advice on overseas property investment.
"But you'd be hard-pressed to find a buyer for €200,000."
Bulgaria has been touted as a investment "hotspot" by Irish property promoters. But new figures from investor.bg, reveal that apartment prices in Sunny Beach fell by 4 per cent in July alone.
Similar slumps have been experienced in Ahtopol, Prmorsko and SvetiVlass, as a massive oversupply of tourist apartments remains unsold.
Other hugely popular eastern European or Baltic markets have skidded to a halt, with dramatic price-falls in some countries. Latvia's bubble has well and truly burst, with the Latio Investment agency revealing falls of almost 11 per cent since April.
Estonia and Lithuania have also experienced decreasing property prices. The central statistics office in Poland has also reported values slipping in the second quarter of the year. In Budapest, Hungary, some 3 per cent has been snipped off prices of new apartments, according to the Global Property Guide.
One Irish investor is facing losses of about €30,000 after buying a Budapest property for about €79,855 three years ago. The investor, who is now trying to sell his property, was advised that the best sale price he can secure now is €69,000. By the time he sells the apartment, he will have paid about €20,000 in fees, taxes and renovations.
"Brutal" and "Perfect Storm". Arizona's fake housing-based economy spinning out of control as real estate market crashes
Everyone in Arizona glad they listened to idiot realtors on commission these past couple of years?
But what about all the jobs! What about all the immigrants! What about the fact they're not making any more land! What about the 365-days of golf!
Sorry. Something called gravity has now taken hold. Buckle up. Arizona housing prices are going to crash right back to pre-speculation inflation-adjusted 2001 levels, and might not even stop there. And the general Arizona housing-based economy will go into depression levels soon. When you build your fake economy on one fake industry full of fakes and fake promises, and then that fake industry blows up, things get real ugly, and that ain't fake.
Thanks to Doom for the great (and ugly!) charts. 17 month supply of homes in Phoenix. Ugly. I guess there aren't 21 reasons to buy homes today in housing-crash central Arizona.
Housing worries generally optimistic Valley experts
"Brutal" and "perfect storm" are some of the descriptions local economists now use to describe economic conditions in Maricopa County.
"I think this will be a brutal year," said Dennis Hoffman,an Arizona State University economist who helps guide sales tax forecasts for the state.
In an interview, he said "I think it has a lot to do with the fact that our local sales tax revenues are tied to this new house-new car phenonomen, decorating the house, doing maintenance and repairs and adding new carpeting, furniture and fixtures."
Economist Elliott Pollack reiterated that the housing market is a serious worry because there are so many houses on the market and lending standards have become tougher. Also the housing slump could slow migration into the state because homeowners in other states can't sell their houses to move here, he said.
"We especially have a perfect storm in the housing market," he said.
Local reality show exposes housing woes of the rich
The Landrys say they think viewers will warm up to their subjects for courageously airing their financial woes in public, something many in their social stratum consider the greatest taboo.
“There are actually a lot of people at the Mahans' economic level who are facing those same foreclosure fears now, but they cover it up,” said John Landry, a retired architect who now works as a real-estate agent, “so nobody ever knows.”
Many sellers slash prices to sell homes
A Chandler man slashed his price by $60,000 to sell his home so he and his wife could move to Ahwatukee.
An east Mesa women accepted about $25,000 less than her original asking price even after installing carpet, remodeling a bathroom, upgrading the swimming pool and adding a $7,000 hot tub and a $2,000 shed.
Their tactics weren't extraordinary in the ongoing housing downturn, where prices are falling by double-digit percentages in some cases.
"Realtors need to have a discussion with sellers because appraisal value and market value are two different things now," she said.
DOJ sues the corrupt and monkey-run National Association of realtors for antitrust. Goodbye realtors, and good riddance.
I wonder if the buggy whip makers had an association too?
I guess the NAR can't buy off everyone. Just Congress, your local goverments, and the Bush Administration. Here's the anti-trust complaint (pdf). I'm truly amazed to see the DOJ go after the NAR. Government doing its job? Amazing. Someone deserves a raise.
And here's the DOJ's new anti-NAR website. Enjoy! The days of realtors and their 6% are over, and the least respected and least trusted profession on earth is on its way out, whether they realize that or not.
Buggy whip salesmen. Travel agents. Dinosaurs. realtors.
You don't have to register to have a name. Just click "Other" instead of "anonymous" and type in any old name - YOU DON'T HAVE TO REGISTER. If you're too lazy to do that, just sign your posts with a made-up name at the bottom so we can keep track of your place in the conversation
flyingmonkeywarrior of course is the all-time best HP'er nome de plume. Beat that one.
Some name suggestions for inspiration:
* former realtor conman
* i didn't vote for bush
* jack tripper is god
* david lereah love child
For extra credit, for those of you who do have profiles, to add a picture to your posts, go find a picture on the internet somewhere, click on it, and copy the url. Then click on your blogger profile, click edit, and paste that url into the open field, and hit save. Presto. Go for something cool. Someone should be Angelo Mozillo or David Lereah. Now they're scary.
Posted by blogger at 10/21/2007
October 20, 2007
Ron Paul is trying to raise $430,000 in the next three days to pay for an advertising blitz in the early primary states.
Give the guy $10 or more. It'll make a difference, and you should sleep better knowing you went down with a fight.
The only anti-war Republican
The only anti-Fed, pro-dollar candidate
The only pro-constitution, anti-government candidate
The only hope
HP identified Ron Paul as the only member of Congress who cared about our issues back in early 2006. Then he goes off and runs for President, and starts to catch fire! It's the duty of all HP'ers to give $10 or more. Make a difference. Take a stand.
Ron Paul will not quit. He's going to the GOP convention with a message, and if this housing crash and dollar meltdown worsen, and America starts to pay attention, Ron Paul can win.
Who else do the Republicans have? Mitt Romney? Rudy? Pahh-lease!
It's about time the MSM woke up to the fact that realtors played an incredibly unethical, corrupt, evil and dishonest role in the Late Great Housing Bubble and Crash.
One more time for HP'ers and our realtor guests, to be crystal clear:
realtors are uneducated, immoral, unnecessary, commission-hungry leeches, who conned people into "buying" homes they couldn't afford, homes that the realtors knew were overpriced, homes that the realtors knew their suckers (oops, I mean their "clients") wouldn't be able to keep.
Ponzi Schemes need Ponzi's. Scams need scamsters. realtors may have made a killing these past few years, but now it's over. Never again. The profession of "realtor" is dead, never to return. Good riddance bloodsuckers. Go find an honest job.
Forbes: Where Were The Realtors?
To hear real estate agents tell it, they are indispensable guides through the hazardous home-buying terrain.
How is it, then, that millions of borrowers took on toxic subprime mortgages that could cost them their homes? Why did their agents not warn them off? While much criticism has been leveled at subprime lenders and mortgage brokers, real estate agents have yet to receive their fair share of the blame for the subprime mess, says Shanna Smith, president of the National Fair Housing Alliance. "I think the greed factor works with agents as well as loan originators," she recently noted.
Others say it's not that simple. "The broker, 99% of the time, is the agent of the seller, so the broker doesn't have any duty to the buyer," said Wharton real estate professor Georgette Chapman Phillips.
"It is my experience that real estate agents have been pushing people to buy more expensive homes than they were initially qualified to buy under 30-year, fixed-rate [loan]s," said Smith of the National Fair Housing Alliance.
The US Government, taking you for fools, stopped publishing the money supply figures (M3) a year and a half ago. Now we know why.
The government truly takes the governed for fools in America today.
Sadly, in most cases, they're right.
For the informed, here's M3 reconstructed. And it's ugly. REALLY ugly.
I remember the day the government stopped publishing M3 (March 23, 2006). Hardly a story to be found in the MSM. Of course, we made a big deal out of it. Looking back since then, I should have continued to make a big deal out of it. So now I will.
Because Ben Bernanke hates you.
Posted by blogger at 10/20/2007
Ben Bernanke hates the poor and middle class.
And he's just getting started. Inflation will roar. And the little guy, as always, gets killed.
Maybe you should have your employer pay you in eggs or milk, instead of dollars.
Want a tip? DBA. 25% wheat, 25% soy beans, 25% sugar, 25% corn. It's gonna take a lot more of those worthless dollars to buy that Denny's Grand Slam and ramen noodles too. Or even fill up your tank to go buy groceries.
Why? Because Ben Bernanke hates you.
Industry analysts and some economists fear the strain will get worse as people are hit with higher home heating bills this winter and mortgage rates go up.
Food costs have increased 4.5 percent over the past 12 months, partly because of higher fuel costs. Egg prices were 44 percent higher, while milk was up 21.3 percent over the past 12 months to nearly $4 a gallon, according to the Bureau of Labor Statistics.
The average family of four is spending $7 to $10 extra a week — $40 more a month — on groceries alone, compared to a year ago, according to retail consultant Burt Flickinger III.
Percent of Year UnOccupied 5%
Take out for Vacancy for Annual Cash In of $27,360.00
Property Acquisition Cost $300,000.00
Less Down Payment - Cash In $60,000.00
Amount of the loan $240,000.00
Payment Monthly Pricipal/Interest $1,556.64
Annual Insurance Cost $1,200.00
Annual Taxes $1,400.00
Annual Repairs Budget $600.00
Percent of Rent Mgmt Fee of 6%
These expenses total to Annual Cash Out of $23,521.28
Income of $27,360 minus cost of $23,521 = $3839 cash return over cash out
$3839 divided by cash investment of $60,000 = Rental Yield of 6.4%
Monthly Rental Amount $1,100.00
Percent of Year UnOccupied 10%
Take out for Vacancy for Annual Cash In of $11,880
Property Acquisition Cost $300,000.00
Less Down Payment - Cash In $60,000.00
Amount of the loan $240,000.00
Payment Monthly Pricipal/Interest $1,556.64
Annual Insurance Cost $1,200.00
Annual Taxes $1,400.00
Annual Repairs Budget $600.00
Percent of Rent Mgmt Fee of 6%
These expenses total to Annual Cash Out of $23,521.28
Income of $11,880 minus cost of $23,521 = NEGATIVE $11,641 cash return over cash out
PLUS: Unit is now depreciating at least 20% in 2007, 10% in 2008 and 10% in 2009, total value decline of $105,600 over three years.
Add in the three years of $34,923 in negative income and you've lost $139,923 on your $60,000 investment in 36 months. Add in inflation every year, or what you could have made investing in gold, oil or even CD's and your real loss is even greater.
Bottom line - if you listened (or listen) to a realtor on commission and buy a place with negative cash flow today that is also dropping in price, you're a fool, and you'll likely go bankrupt.
And that's the math. Housing crash style.
1) Leverage on a level never before seen
2) Millions of unregulated enablers propagating The Great Housing Lie (for commissions of course)
3) Stability is in the end destabilizing (Minsky)
4) Financial innovation run amok (CDO's, SIV's, Option-ARMs, Negative-Am, Interest-Only)
5) Globalization of risk and information
6) REIC corruption (shout out to Angelo, Nicholas and Bob)
7) A corporate MSM who did not do their jobs
8) Stupid Fed policy
9) The unchecked greed and ignorance of the greediest and most ignorant generation ever (baby boomers)
What'd I miss?
October 19, 2007
Why are you destroying the dollar?
Why are you so corrupt (or incompetent)?
Why are you killing the poor and middle class?
Why are you devaluing the savings of honest, hard working Americans?
Why are you kissing the boots of your masters?
Why did you lie to Congress and the American people?
Why did you lower rates when you should have raised them?
Why did you destroy the credibility of the US financial markets?
Why didn't you crack down on REIC fraud and corruption?
Why did you not fight inflation as you were hired to do?
Why do you hate America and Americans so?
Why are you such a dick?
Ben Bernanke is a declared enemy of the American people folks. A traitor, and a scoundrel. Not a lot of people understand this yet, but oh, they will.
So what can you do about it? Not a lot. But try to protect yourself from this force of evil by getting completely out of US dollars. For those of you earning US dollars, your incomes are plummeting. For those of you investing in US markets, you better follow the foreigners and get the hell out of dodge.
Ben Bernanke, Hank Paulson and George Bush have declared war on the US dollar and the American people. Fight back by surrendering, and moving on. The US dollar and current corrupt US government are no longer worthy of your support.
What's funny for the Faux News and CNBC crowd is that they don't even realize that in gold or Euro terms, the US market is already in trouble. You may feel rich (dollar holders) but trust me, you aren't. Ben Bernanke will make sure of that.
Happy 20th anniversary everyone. Right on schedule. I told you I had a funny feeling this week. Ultrashort financial and commodities (DBA) were great today, and REIC stocks like Countrywide and Wash Mutual fell off the cliff. And of course home prices continue to plummet.
Some days, you see why it pays to be a HP'er. We're as ready as you can be.
Stocks Plunge; Dow Down More Than 360
NEW YORK (AP) -- The Dow Jones industrial average dropped more than 360 points Friday -- the anniversary of the Black Monday crash 20 year ago -- as renewed credit concerns, lackluster corporate earnings and rising oil prices spooked investors.
1) iPhones are selling
2) Airplanes are full
3) You can golf year round in Phoenix
Need we say more? Didn't think so. Regardless of the fundamentals, regardless of the record and growing supply, regardless of plummeting demand, regardless of the meltdown in the credit markets, home prices have bottomed, and it's up up and away from here on out!
So get out there and buy three, four maybe even five homes, get yourself a few iPhones and book those flights now!!!
Today is the 20th anniversary of Black Monday - the great 1987 stock market crash. How will you celebrate?
Remember it like it was yesterday...
Nice thing about a good crash is that people do remember it (for awhile) and don't do such stupid things.
You know, like lending trillions to people who had no chance of ever paying it back. You know, like buying an apartment in Phoenix for $1 million. You know, like having no oversight of mortgage brokers and realtors as they conned America. You know, like doing massive insider stock sales (while having their company buy back stock).
Happy 20th Anniversary, Mr. Stock Market Crash. How's today's market lookin' to ya?
After '87, today's fear is the mini-crash
20 years after the Dow plunged 22% in a day, Wall Streeters aren't too worried about a repeat. But what about a smaller version of that disaster?
NEW YORK (CNNMoney.com) -- A lot of Wall Streeters are reminiscing this week about where they were during the 1987 crash. The more recent tumult - in 2001 and even earlier this year - gets lost in the chatter.
The combination of circuit breakers instituted by the NYSE, and the Federal Reserve's willingness to intervene, means a crash on the level of Oct. 19, 1987 - in which the Dow plunged 22.6 percent on a 508-point loss - probably won't happen again.
But that doesn't mean the market won't - and hasn't already - experienced severe mini-crashes that crush investors and roil the markets for days or even weeks at a time.
I just had to post... Department of Homeland Security running "what if a dirty bomb went off in Scottsdale" drills
We are still searching for new victims. . . . Our communications capacity, disaster-relief and evacuation planning will all be under severe strain before the crisis passes.
Actually, Tuesday's disaster was a drill. No more real than an episode of 24. No bomb was actually detonated. No citizens were hurt.
The catastrophe and its aftermath are still being played out this week in several command centers, one in a Chandler hotel.
It's part of TOPOFF 4, a federal emergency exercise, conducted simultaneously in Arizona, Guam and Oregon.
Coordinated by the Department of Homeland Security, it is the fourth and largest of its kind, mandated by Congress before 9/11.
Ben Bernanke youtube parody. Who ever thought we'd have common people criticizing the Fed chief for LOWERING rates.
The Big Bernanke Put will go down as the most shameful, corrupt and stupid Fed move of all time. Even people on main street will come to understand that soaring prices and massive dollar devaluation are NOT in the nation's (or their) best interests.
Screw Ben Bernanke. When the nation needed a Volker, and a strong and independent Fed chief, we got a corrupted kiss ass owned by the banks, Bush and Wall Street.
You should have no confidence in the American dollar or credibility of the financial markets going forward.
Posted by blogger at 10/19/2007
Here's Warren Buffet on the big banks' desperate and sneaky attempt to keep the mortgage meltdown reality off their balance sheets
He also said he had no interest in buying failing REIC companies like Countrywide and Hovnanian, who he still sees today as "overvalued".
Yes, I love Warren Buffet. Want to protect your money? Just buy Berkshire.
Buffett said he was skeptical about the U.S. Treasury's plan to create an $80 billion fund to buy distressed assets from structured investment vehicles linked to home lending.
``I don't see any way that pooling a bunch of mortgages, changing the ownership, is going to change the viability of the mortgage instrument itself -- whether people can make the payments,'' he said. ``It would be better to have them on the balance sheets so everyone would know what's going on''
October 18, 2007
Why are people who listened to realtors on commission and bought homes with toxic loans in 2005, 2006 or 2007 in Phoenix, Sacramento, Tucson, Tampa, Miami, Vegas, Orlando, Ft. Lauderdale, LA, San Diego, Miami, DC, Atlanta, Boston, Naples, Detroit, Stockton, Riverside, Fresno, Jacksonville or Reno (and probably a few more) still paying their monthly mortgage payments, taxes and association fees?
Don't they know by now that they'll probably go bankrupt and be foreclosed on?
Don't they know that they're free to stop making payments today, horde as much cash as they can, and eventually just turn in the keys?
Ruh-Roh... Foreign investors flee the crumbling US debt markets like never before. Get ready for disaster.
Foreign investors, having been burned by the lies and deception of Wall Street, and Bernanke's desperate dollar devaluation, pulled BILLIONS out of the US last month, and they won't be coming back. And I can't blame them. They bought rock-solid AAA paper, thinking they were buying gold, and instead they found out they bought a pile of choice grade-A US financial crap.
So the big banks set up a $100 Billion SIV fund why? Because no foreign investors will touch this mortgage-backed junk ever again, and they think this smokescreen will help avoid a true mark-to-market. We'll see.
Foreign money isn't going near US asset-backed paper for a long, long time. You can thank Moody's and S&P for destroying the credibility of the US financial markets, and you can thank the foreign investor exodus for taking the US housing and economic collapse to levels not even predicted here.
This is going to get massively, horrifically ugly now. And Bernanke, Paulson and their banker buddies can't stop it. They can only continue the lies and distortion for a bit longer. And then reality will set in.
Foreign Investors Flee Crumbling U.S. Credit Market
IF ANYBODY STILL IS WONDERING WHY the Treasury brokered the $100 billion superfund to clean up banks' off-balance sheet vehicles, the department's latest data on foreign investment in U.S. securities should dispel any confusion.
In August, at the height of the subprime-induced credit meltdown, some $163 billion of capital fled from U.S. securities, money markets and bank accounts, a record outflow and a stunning reversal from the July's $94 billion of inflows, according to Treasury International Capital data released Tuesday.
Foreign investors dumped $69 billion of long-term securities in August, including $39 billion in equities, an unusually big swing for the month, which was anything but usual. While small in size, the $4 billion liquidation of corporate debt securities was even more significant because it was the first in over 16 years.
Clearly, foreign investors are abandoning the U.S. credit market as conditions deteriorate. Whether contraptions such as M-LEV can replace them is an open question.